SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

____________________________________________________

FORM 10-K

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2017.

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to _________________.

Commission File No. 000-55030

GREENWAY TECHNOLOGIES, INC.

(Exact name of issuer as specified in its charter)

  

Texas 90-0893594
( State or other jurisdiction of incorporation or organization) (I.R.S.  Employer Identification No.)
   

8851 Camp Bowie Blvd.  West,  Suite 240
Fort Worth, Texas
(principal executive offices)

76116
(Zip Code)

Registrant’s telephone number, including area code: ( 817) 346-6900

   
Securities registered under Section 12(b) of the Exchange Act: None
   
Securities registered under Section 12(g) of the Exchange Act: Common stock, par value $0.0001 per share
  (Title of class)
     

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirement for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]

 

 

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12(b)-2 of the Exchange Act). Yes [ ] No [X]

The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant on June 30, 2017 reported on the OTCQB operated by The OTC Markets Group, Inc. on that date was approximately $40,315,332. Common stock held by each officer and director and by each person known to the registrant to own five percent or more of the outstanding common stock has been excluded in that those persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. At March 26, 2018, the registrant had outstanding 282,747,010 shares of common stock, par value $0.0001 per share.

 

 

Table of Contents

PART I 1
Item 1.   Business. 1
Item 1A.   Risk Factors. 6
Item 1B.   Unresolved Staff Comments. 13
Item 2.   Properties. 13
Item 3.   Legal Proceedings. 14
Item 4.   (Removed and Reserved). 15
PART II 15
Item 5.   Market for Registrant’s Common Equity, Related Stockholder Matters and    Issuer Purchases of Equity Securities. 15
Item 6.   Selected Financial Data. 16
Item 7.   Management’s Discussion and Analysis of Financial Condition and Results of Operations. 17
Item 7A.   Quantitative and Qualitative Disclosures About Market Risk. 25
Item 8.   Financial Statements and Supplementary Data. 25
Item 9.   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. 25
Item 9A.   Controls and Procedures. 25
Item 9A(T).   Controls and Procedures. 25
Item 9B.   Other Information. 26
PART III 27
Item 10.   Directors, Executive Officers and Corporate Governance. 27
Item 11.   Executive Compensation. 31
Item 12.   Security Ownership of Certain Beneficial Owners and Management and    Related Stockholder Matters. 32
Item 13.   Certain Relationships and Related Transactions and Director Independence. 33
Item 14.   Principal Accounting Fees and Services. 33
PART IV 34
Item 15.   Exhibits, Financial Statement Schedules. 34
 

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

In light of the risks and uncertainties inherent in all projected operational matters, the inclusion of forward-looking statements in this Form 10-K, should not be regarded as a representation by us or any other person that any of our objectives or plans will be achieved or that any of our operating expectations will be realized. Our revenues and results of operations are difficult to forecast and could differ materially from those projected in the forward-looking statements contained in this Form 10-K, as a result of certain risks and uncertainties including, but not limited to, our business reliance on third parties to provide us with technology, our ability to integrate and manage acquired technology, assets, companies and personnel, changes in market condition, the volatile and intensely competitive environment in the business sectors in which we operate, rapid technological change, and our dependence on key and scarce employees in a competitive market for skilled personnel. These factors should not be considered exhaustive; we undertake no obligation to release publicly the results of any future revisions we may make to forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

PART I

Except for historical information, this report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such forward-looking statements involve risks and uncertainties, including, among other things, statements regarding our business strategy, future revenues and anticipated costs and expenses. Such forward-looking statements include, among others, those statements including the words “expects,” “anticipates,” “intends,” “believes” and similar language. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in the section entitled “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances taking place after the date of this document.

Item 1. Business.

The following discussion and analysis of financial condition, results of operations, liquidity, and capital resources, should be read in conjunction with our audited consolidated financial statements and notes thereto appearing elsewhere in this report, which have been prepared assuming that we will continue as a going concern. As discussed in the condensed consolidated financial statements, our recurring net losses and inability to generate sufficient cash flows to meet our obligations and sustain our operations raise substantial doubt about our ability to continue as a going concern. Management’s plans concerning these matters are also discussed in the condensed consolidated financial statements. This discussion contains forward-looking statements that involve risks and uncertainties, including information with respect to our plans, intentions and strategies for our businesses. Our actual results may differ materially from those estimated or projected in any of these forward-looking statements.

Unless the context otherwise suggests, “we,” “our,” “us,” and similar terms in this report, as well as references to “UMED” and “Greenway Technologies,” all refer to Greenway Technologies, Inc, and our wholly-owned subsidiary, Greenway Innovative Energy, Inc., unless the context requires otherwise.

Company Overview

Greenway Technologies was originally incorporated as Dynalyst Manufacturing Corporation (“Dynalyst”) under the laws of the State of Texas on March 13, 2002. 

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In connection with the merger with Universal Media Corporation (“UMC”), a Nevada corporation, on August 17, 2009, we changed our name to Universal Media Corporation. The transaction was accounted for as a reverse merger, and Universal Media Corporation was the acquiring company on the basis that Universal Media Corporation’s senior management became the entire senior management of the merged entity and there was a change of control of Dynalyst. The transaction was accounted for as recapitalization of Dyanlyst’s capital structure. In connection with the merger, Dynalyst issued 57,500,000 restricted common shares to the shareholders of Universal Media Corporation for 100% of Universal Media Corporation.

On August 18, 2009, Dynalyst approved the amendment of its articles of incorporation and filed with the Texas Secretary of State an amendment to change our name to Universal Media Corporation and approved the increase in authorized shares to 300,000,000 shares of common A stock, par value $0.0001 and 20,000,000 shares of common B, par value $0.0001.

On March 23, 2011, Universal Media Corporation approved the amendment of its articles of incorporation and filed with the Texas Secretary of State an amendment to change our name to UMED Holdings, Inc.

On June 22, 2017, Greenway Technologies, Inc. approved the amendment of our certificate of formation and filed on June 23, 2017, with the Texas Secretary of State, to change our name to Greenway Technologies, Inc.

GTL Technology

In August 2012, Greenway Technologies (formerly, UMED) acquired 100% of Greenway Innovative Energy, Inc. (“GIE”) which owns patents and trade secrets for a proprietary technology to convert natural gas into synthesis gas (“syngas”). Based on a new, breakthrough process called Fractional Thermal Oxidation™ (“FTO”), GIE’s G-Reformer™, combined with a Fischer-Tropsch (“FT”) process, offers an economical and scalable method to converting natural gas to liquid fuel (the “GTL Technology”).

On June 26, 2017, Greenway Technologies, in conjunction with the University of Texas at Arlington (“UTA”), announced that it had successfully demonstrated its GTL technology at the Conrad Greer Laboratory at UTA proving the viability of the GTL Technology. Greenway Technologies now plans to commercialize the GTL Technology and is in discussions with several oil and gas companies, and other individuals and organizations regarding joint venture funding for its first GTL plant using our proprietary processes. Should an agreement be made, the joint venture relationship will provide funding at a level of $15M to $30M with an ongoing profit-sharing arrangement between Greenway Technologies and the joint venture partner. Our GTL Technology is unique in that it allows for plants with a smaller footprint, versus legacy large-scale technologies, combined with lower up-front and ongoing costs.

One of several important applications for our GTL Technology is the harvesting of stranded natural gas. There is an abundance of stranded natural gas located throughout the United States and the world with no practical way to transfer the gas to existing distribution systems for sale. This valuable energy resource sits untapped, unused, or more harmfully, is vented to the atmosphere. Our GTL Technology allows this valuable energy resource to be harvested and monetized.

Greenway Technologies’ breakthrough patented GTL Technology offers a solution to this energy challenge. Our system allows for relatively small by comparison, scalable plants, to be deployed at geographically dispersed locations to convert natural gas into synthetic fuel that is transportable and can be sold directly to markets without the need for additional processing at a refinery.

Our research has been centered on developing a production-scale FT system (“the Technology”) to accommodate the needs of smaller gas plays that are increasingly beginning to characterize natural gas production within the United Stated and elsewhere. We are currently seeking funding of $20M to build the initial GTL plant.

Besides the fuel products, the Company will produce water and can produce electricity using the heat from the G-reformer.

Since March 1, 2016, we have raised approximately $3,746,750 and have built a small-scaled prototype unit at UTA, pursuant to an SRA with UTA.

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Mining Interest

In December 2010, UMED acquired the mineral mining rights to approximately 1,440 acres of BLM placer mining claims in Mohave County, Arizona for 5,066,000 shares of our restricted common stock. We staked the claims in September 2011, and, since then, have maintained them and plan to establish an exploration and development plan, when capital is available. We plan to drill test holes and test the samples on our claims to determine the potential value of the various metals that may be located on the claims. Early indications, from samples taken and processed, provides reason to believe that the potential recovery value of the metals located on the 1,440 acres is significant, but actual mining and processing will determine the ultimate value which may be realized. Funding of $500,000 is being sought to begin certified assaying, to determine the viability of continued development of our mining claims. However, it should be noted that at no time has Greenway Technologies been a mining operator.

Going Concern

As shown in the accompanying consolidated financial statement, the Company has liabilities in excess of assets by $2.8 million as of December 31, 2017. During the twelve months ended December 31, 2017, we used net cash of $2,230,759 for operating activities. Our ability to continue as a going concern is in doubt and dependent upon necessary capital and financing to fund ongoing our operations and achieving a profitable level of operations. We do not have the financial resources and do not have any commitments for funding from unrelated parties or any other firm agreements that will provide working capital to our business segments. We cannot give any assurance that we will locate any funding or enter into any agreements that will provide the required operating capital. We have been depended on the sale of equity and advances from shareholders to provide it with working capital to date.

These factors raise substantial doubt about our ability to continue as a going concern. Our independent registered public accounting firm issued a going concern qualification in their report dated April 4, 2018, which raises substantial doubt about our ability to continue as a going concern.

While we are attempting to commence operations and generate revenues, our cash position may not be sufficient to support our daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that the actions presently being taken to further implement our business plan and generate revenues provides the opportunity for the registrant to continue as a going concern. While we believe in the viability of our strategy to generate revenues and in our ability to raise additional funds, there can be no assurances to that effect. Our ability to continue as a going concern is dependent upon the implementation of our business plan and generate revenues.

Risks Related to Our Proposed GTL Operations

We are affected by the risks faced by natural gas owners who we expect will be our future customers. Our prospective customers are engaged in economically sensitive and competitive businesses. As a result, we will be indirectly affected by all the risks facing natural gas owners, which are beyond our control. Our results of operations will depend, in part, on the financial strength of our customers and our customers’ ability to compete effectively in the marketplace and manage their risks. Many of these risks are discussed below.

Our Legal Rights and Remedies are Uncertain in the Event of a Default by a Joint Venture Partner. In the event we are required to take any legal action under a joint venture agreement, such as to repossess our equipment, we would be required to do so in the courts, and under the laws, of the country where the equipment is located. The legal systems of foreign countries may not allow for the repossession of equipment as quickly and as cost-effectively as in the U.S., with the result that we may face greater delays and expenses in exercising any rights under our joint venture agreement. Consequently, losses due to a default by a lessee may be greater than otherwise would be the case.

Competition

We believe that existing and new competitors will continue to improve their GTL offerings and introduce new GTL methods with competitive price and performance characteristics. We expect that we will be required to continue to invest in product development and productivity improvements to compete effectively in our markets. Our competitors could develop a

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more efficient GTL product or undertake more aggressive and costly marketing campaigns than ours, which may adversely affect our marketing strategies and could have a material adverse effect on our business, results of operations and financial condition. Important factors affecting our ability to compete successfully include:

· Sales and marketing efforts;
· Rapid and effective development of new, unique GTL techniques; and
· Pricing.

In periods of reduced demand for our GTL Technology, we can either choose to maintain market share by reducing our prices to meet competition or maintain prices, which would likely sacrifice market share. Sales and overall profitability could be reduced in either case. In addition, if competitors enter our existing markets, we may be unable to compete successfully against existing or new competition.

Most of our potential competitors have far greater resources than we have and have far greater experience in the GTL industry than we possess.

Currently, there is significant competition for personnel and financial capital to be deployed in the oil and gas extraction industries and mining and mineral extraction industries. Therefore, it is difficult for smaller companies such as Greenway Technologies to attract investment for its various business activities. We cannot give any assurances that we will be able to compete for capital funds, and without adequate financial resources management cannot assure that we will be able to compete in our business activities.

Patents and Intellectual Property

As of December 31, 2017, GIE, our wholly-owned subsidiary, owns United States Patents Nos. 8,574,501 B1 and 8,795,597 B2 covering its mobile GTL conversion technology for the purpose of converting natural gas to clean synthetic fuels.

In the United States, a patent’s term may be up to 21 years if the earliest claimed filing date is that of a provisional application. Other legal provisions may, however, shorten or lengthen a patent’s term. In the United States, a patent’s term may, in certain cases, be lengthened by patent term adjustment, which compensates a patentee for administrative delays by the U.S. Patent and Trademark Office in examining and granting a patent. Alternatively, a patent’s term may be shortened if a patent is terminally disclaimed over a commonly owned patent or a patent naming a common inventor and having an earlier expiration date.

GIE also owns a provisional patent for its G-Reformer™ front-end reforming process.

Impact of Inflation

We are affected by inflation along with the rest of the economy. Specifically, our costs to complete our proposed GTL units could rise if specific components needed see a rise in cost.

Adequacy of Working Capital

We will apply great efforts to raise through equity or debt offerings what we feel is sufficient working capital for our intended business plan by various means. If we are not able to raise additional capital, we would not be able to continue operations and our business may fail.

Disruptions in the financial markets could have an adverse effect on our ability to raise additional financing. To properly deploy our GTL Technology, we will need to construct GTL units. We currently do not have any arrangements to obtain debt or equity capital to finance the construction of GTL units, and if we do not obtain such capital we may be unable to expand our anticipated operations. Severe disruptions in the commercial credit markets in the recent past have resulted in a

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tightening of credit markets worldwide. Liquidity in the global credit markets was severely contracted by these market disruptions, making it difficult and costly to obtain new lines of credit or to refinance existing debt. The effect of these disruptions was widespread and difficult to quantify. While economic conditions have recently improved, that trend may not continue and the extent of the current economic improvement is unknown. Any future disruptions in the commercial credit markets may impact liquidity in the global credit market as greatly, or even more, than in recent years.

Our business and financing plan may be dependent upon completion of future financings. If the credit environment worsens, it may be difficult to obtain any additional financing on acceptable terms, which could have an adverse effect on our ability to complete our planned projects, and as a consequence, our results of operations and business plans. Should general economic conditions not improve, if we are unable to obtain sufficient funding such that completion of planned projects is not probable, or should management decide to abandon certain projects, all or a portion of our investment to date in our planned projects could be lost and would result in an impairment charge.

Our Financial Results May Be Affected by Factors Outside of Our Control

We will be unable to pay our obligations in the normal course of business or service our debt in a timely manner throughout 2018 without raising additional debt or equity capital. There can be no assurance that additional debt or equity capital will be raised.

Greenway Technologies is currently evaluating strategic alternatives that include the following: (i) raising of capital, or (ii) issuance of debt instruments. This process is ongoing and can be lengthy and has inherent costs. There can be no assurance that the exploration of strategic alternatives will result in any specific action to alleviate our 12 month working capital needs or result in any other transaction.

We currently have a need of approximately $150,000 per month to sustain operations and to pay UTA for the SRAs until our first GTL unit is completed and deployed.

Our future operating results may vary significantly from quarter to quarter due to a variety of factors, many of which are outside our control. Our anticipated expense levels are based, in part, on our estimates of future revenues and may vary from projections. We may be unable to adjust spending rapidly enough to compensate for any unexpected revenues shortfall. Accordingly, any significant shortfall in revenues in relation to our planned

expenditures would materially and adversely affect our business, operating results, and financial condition. Further, we believe that period-to-period comparisons of our operating results are not necessarily a meaningful indication of future performance.

Key Personnel

Our future financial success depends to a large degree upon the personal efforts of our key personnel, D. Patrick Six, our chairman, president, chief financial officer, and director, Raymond Wright, our corporate secretary officer, and director, and president of GIE, our subsidiary, and Thomas Phillips, the vice president of operations of GIE, all of whom will play a major role in securing the services of those persons who can develop our business strategy upon receipt of sufficient funds to pay for such services either from success through receipt of funds from earnings, borrowing or sales of our securities. Greenway Technologies has only one employee, D. Patrick Six, at the date of this report. GIE has two employees, Raymond Wright and Thomas Phillips, at the date of this report. We do not have any other employees at this time. In the future, when we need other persons for aspects of our GTL work and other functions, we will hire persons under service agreements as consultants, part-time and full-time employees as necessary. While we intend to employ additional personnel in order to minimize the critical dependency upon any one person, there can be no assurance that we will be successful in attracting and retaining the persons needed. We do not have any arrangements for the hiring of any persons at this time. We do not anticipate any difficulty in securing the services of required personnel.

Consultants

We plan to use outside consultants to perform the engineering and design work on the GTL Technology, until such time as capital funds are available to hire in-house staff. In that regard we have Sponsored Research Agreements with UTA

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 for catalyst and heat exchange research and have contracted with UTA to build a small-scale GTL unit at the university. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Consulting Agreements.”

Adequacy of Working Capital

We hope to generate sufficient capital to fund our business plan through investments in our securities, revenues from operations, or borrowings. See Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Financing Activities.” If we are not able to raise additional capital as described above, we would not be able to continue and our business would fail. As of the date of this report, we do not have any commitments for financing.

Transfer Agent

Our transfer agent is Transfer Online, Inc. whose address is 512 SE Salmon Street, Portland, Oregon 97214-3444, 2nd Floor, telephone number (503) 227-2950.

Company Contact Information

Greenway Technologies has its corporate offices at 8851 Camp Bowie West, Suite 240, Fort Worth, Texas 76116, and telephone number (817) 346-6900. Our wholly-owned subsidiary, Greenway Innovative Energy, Inc. (“GIE”), has offices at 1521 North Cooper Street, Suite 207, Arlington, Texas 76011. Our Internet website is www.gwtechinc.com . The information contained in our Internet website shall not be deemed to constitute a part of this report.

Item 1A. Risk Factors.

Risks Relating to Our Business

Our limited operating history may not serve as an adequate basis to judge our future prospects and results of operations.

We are a development stage company and have a limited operating history upon which you can evaluate our business and prospects. We have yet to develop sufficient experience regarding actual revenues to be received from our GTL Technology. You must consider the risks and uncertainties frequently encountered by early stage companies in new and rapidly evolving markets. If we are unsuccessful in addressing these risks and uncertainties, our business, results of operations and financial condition will be materially and adversely affected. The risks and difficulties we face include challenges in accurate financial planning as a result of limited historical data and the uncertainties resulting from having had a relatively limited time period in which to implement and evaluate our business strategies as compared to older companies with longer operating histories.

We need additional financing to implement our business plan.

To undertake the full commercialization program for our GTL Technology in a manner that not only introduces GTL Technology across the United States, but also allows Greenway Technology to move aggressively and decisively into the marketplace to establish our GTL Technology, we will need additional financing. We will need substantial additional funds to:

· Construct our first full-scale 125 barrel per day GTL unit, currently estimated at $15 million;
· File, prosecute, defend and enforce our intellectual property rights; and
· Produce and market our GTL units.

We may not be able to secure future funding on favorable terms or at all. If additional funding is not obtained, we will need to reduce, defer or cancel the construction of our full-scale GTL unit, planned initiatives, or overhead expenditures to the extent necessary. The failure to fund our full-scale GTL unit could have a material adverse effect on our business, financial

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 condition and results of operations. Moreover, the sale of additional equity securities to raise financing could result in additional dilution to our shareholders and the incurrence of indebtedness would result in increased debt service obligations that could result in operating and financing covenants that would restrict our future operations.

Our GTL Technology is subject to the changing applicable laws and regulations.

Our business is particularly subject to changing federal and state laws and regulations with respect to the oil and gas and mining industry. Our success depends in part on our ability to anticipate and respond to these changes, and we may not respond in a timely or commercially appropriate manner to such changes.

We may encounter substantial competition in our business and failure to compete effectively may adversely affect our ability to generate revenue.

We believe that existing and new competitors will continue to improve their GTL offerings and introduce new GTL methods with competitive price and performance characteristics. We expect that we will be required to continue to invest in product development and productivity improvements to compete effectively in our markets. Our competitors could develop a more efficient GTL product or undertake more aggressive and costly marketing campaigns than ours, which may adversely affect our marketing strategies and could have a material adverse effect on our business, results of operations and financial condition. Important factors affecting our ability to compete successfully include:

· Sales and marketing efforts;
· Rapid and effective development of new, unique GTL techniques; and
· Pricing.

In periods of reduced demand for our GTL Technology, we can either choose to maintain market share by reducing our prices to meet competition or maintain prices, which would likely sacrifice market share. Sales and overall profitability could be reduced in either case. In addition, if competitors enter our existing markets, we may be unable to compete successfully against existing or new competition.

Establishing our revenues and achieving profitability will depend on our ability to develop and commercialize our GTL Technology.

Much of our ability to establish revenues and to achieve profitability and positive cash flows from operations will depend on the successful introduction of our GTL Technology. Our prospective customers will not use our GTL Technology unless they determine that the benefits provided by our GTL Technology are greater than those available from competing service providers. Even if the advantage from our GTL Technology is established, prospective customers may elect not to use our GTL Technology for a variety of reasons.

We may be required to undertake time-consuming and costly development activities and seek regulatory clearance or approval for new GTL Technology. The completion of the development and commercialization of our GTL Technology remains subject to all of the risks associated with the commercialization of a GTL Technology based on innovative technologies, including unanticipated technical or other problems, manufacturing difficulties and the possible insufficiency of the funds allocated for the completion of such development.

We rely on the services of certain key personnel.

Our business relies on the efforts and talents of our management team. The loss of their services could adversely affect the operations of our business and could have a very negative impact on our ability to fulfill on our business plan.

We may not be able to hire and retain qualified personnel to support our growth and if we are unable to retain or hire such personnel in the future, our ability to improve our GTL Technology and implement our business objectives could be adversely affected.

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  If one or more of our senior executives or other key personnel are unable or unwilling to continue in their present positions, we may not be able to replace them easily or at all, and our business may be disrupted and our financial condition and results of operations may be materially and adversely affected. Competition for senior management and senior personnel is intense, the pool of qualified candidates is very limited, and we may not be able to retain the services of our senior executives or senior personnel or attract and retain high-quality senior executives or senior personnel in the future. Such failure could materially and adversely affect our future growth and financial condition.

We may have difficulty in attracting and retaining management and outside independent directors to our board of directors as a result of their concerns relating to their increased personal exposure to lawsuits and shareholder claims by virtue of holding these positions.

The directors and management of companies are increasingly concerned with the extent of their personal exposure to lawsuits and shareholder claims, as well as governmental and creditor claims which may be made against them, particularly in view of recent changes in securities laws imposing additional duties, obligations and liabilities on management and directors. Due to these perceived risks, directors and management are also becoming increasingly concerned with the availability of directors’ and officers’ liability insurance to pay on a timely basis the costs incurred in defending such claims. We currently carry directors’ and officers’ liability insurance. Directors’ and officers’ liability insurance has recently become much more expensive and difficult to obtain. If we are unable to continue or provide directors’ and officers’ liability insurance at affordable rates or at all, it may become increasingly more difficult to attract and retain qualified outside directors to serve on our board of directors.

We may lose potential independent board members and management candidates to other companies that have greater directors’ and officers’ liability insurance to insure them from liability or to companies that have revenues or have received greater funding to date which can offer more lucrative compensation packages. The fees of directors are also rising in response to their increased duties, obligations and liabilities as well as increased exposure to such risks. As a company with limited operating history and resources, we will have a more difficult time attracting and retaining management and outside independent directors than a more established company due to these enhanced duties, obligations and liabilities.

Our future success relies upon our proprietary GTL Technology. We may not have the resources to enforce our proprietary rights through litigation or otherwise. The loss of exclusive right to our GTL Technology could have a material adverse effect on our business, financial condition and results of operations.

We believe that our GTL Technology does not infringe upon the valid proprietary rights of others. Even so, third parties may still assert infringement claims against us. If infringement claims are brought against us, we may not have the financial resources to defend against such claims or prevent an adverse judgment against us. In the event of an unfavorable ruling on any such claim, a license or similar agreement to utilize the intellectual property rights in question relied upon by us in the conduct of our business may not be available to us on reasonable terms, if at all.

Operating hazards and insurance.

The oil and natural gas business involves a variety of operating risks, including the risk of fire, explosions, blow-outs, pipe failure, abnormally pressured formations and environmental hazards such as oil spills, natural gas leaks, ruptures or discharges of toxic gases. If any of these should occur, we could incur legal defense costs and could suffer substantial losses due to injury or loss of life, severe damage to or destruction of property, natural resources and equipment, pollution or other environmental damage, clean-up responsibilities, regulatory investigation and penalties, and suspension of operations.

We will carry a comprehensive general liability umbrella policy and a pollution liability policy and will provide workers’ compensation insurance coverage to employees in all states in which we operate. While we believe these policies are customary in the industry, they do not provide complete coverage against all operating risks. In addition, our insurance may not cover penalties or fines that may be assessed by a governmental authority. A loss not fully covered by insurance could have a material adverse effect on our financial position, results of operations and cash flows. Our insurance coverage may not be sufficient to cover every claim made against us or may not be commercially available for purchase in the future.

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Our future revenues are unpredictable and our quarterly operating results may fluctuate significantly.

Since we were formed on March 13, 2002, we only have a limited operating history. We cannot forecast with any degree of certainty whether our GTL Technology will generate revenue or the amount of revenue to be generated by our GTL Technology. In addition, we cannot predict the consistency of our quarterly operating results. Factors which may cause our operating results to fluctuate significantly from quarter to quarter include:

· Our ability to attract new and repeat customers;
· Our ability to keep current with the evolving requirements of our target market;
· Our ability to protect our proprietary GTL Technology;
· The ability of our competitors to offer new or enhanced GTL services; and
· Unanticipated delays or cost increases with respect to research and development.

Acts of terrorism, responses to acts of terrorism and acts of war may impact our business and our ability to raise capital.

Future acts of war or terrorism, national or international responses to such acts, and measures taken to prevent such acts may harm our ability to raise capital or our ability to operate, especially to the extent we depend upon activities conducted in foreign countries. In addition, the threat of future terrorist acts or acts of war may have effects on the general economy or on our business that are difficult to predict. We are not insured against damage or interruption of our business caused by terrorist acts or acts of war.

We may fail to establish and maintain strategic relationships.

We believe that the establishment of strategic partnerships will greatly benefit the growth of our business, and the deployment of our GTL Technology, and we intend to seek out and enter into strategic alliances. We may not be able to enter into these strategic partnerships on commercially reasonable terms, or at all. Even if we enter into strategic alliances, our partners may not attract significant numbers of customers or otherwise prove advantageous to our business. Our inability to enter into new relationships or strategic alliances could have a material and adverse effect on our business.

Legislative actions and potential new accounting pronouncements are likely to impact our future financial position and results of operations.

There have been regulatory changes, and there may potentially be new accounting pronouncements or additional regulatory rulings, which will have an impact on our future financial position and results of operations. These and other potential changes could materially increase the expenses we report under accounting principles generally accepted in the United States, and adversely affect our operating results.

Risks Relating to Our Mining Properties

As we discussed above, although we still own our mining properties, we do not currently conduct operations. However, there are still some risks associated with our mining properties, including those risks described below.

We have had no revenue to date from our mining properties, which may negatively impact our ability to achieve our business objectives.

Since acquiring our mining properties in December 10, we have not conducted any mining operations and have not generated any revenues. We do not have any operating history as a mining company upon which to base an evaluation of our current business and future prospects.

  9  

 

Our mining properties do not have any known reserves.

None of the properties in which we have an interest have any known reserves. To date, we have engaged in only limited preliminary exploration activities on the properties. Accordingly, we do not have sufficient information upon which to assess the ultimate success of our exploration efforts.

There are uncertainties as to title matters in the mining industry. Any defects in such title could cause us to lose our rights in mineral properties and jeopardize our business operations.

Our mineral properties consist of mineral rights on Bureau of Land Management (“BLM”), a department of the United States Government. Our mining properties in the United States are mining claims located on lands administered by the U.S. Bureau of Land Management (“BLM”), to which we have only mining rights to recover minerals. The mining claims are renewable annual and if not paid revert back to the BLM. These uncertainties relate to such things as sufficiency of mineral discovery, proper location and posting and marking of boundaries, and possible conflicts with other claims not determinable from descriptions of record. We believe a substantial portion of all mineral exploration, development and mining in the United States now occurs on unpatented mining claims, and this uncertainty is inherent in the mining industry.

The present status of our mining claims located on BLM lands allows us the right to mine and remove valuable minerals, such as precious and base metals, from the claims conditioned upon applicable environmental reviews and permitting programs. We also are generally allowed to use the surface of the land solely for purposes related to mining and processing the mineral-bearing ores. However, legal ownership of the land remains with the United States. We remain at risk that the mining claims may be forfeited either to the United States due to failure to comply with statutory requirements. Prior to 1994, a mining claim locator who was able to prove the discovery of valuable, locatable minerals on a mining claim, and to meet all other applicable federal and state requirements and procedures pertaining to the location and maintenance of federal unpatented mining claims, had the right to prosecute a patent application to secure fee title to the mining claim from the Federal government. The right to pursue a patent, however, has been subject to a moratorium since October 1994, through federal legislation restricting the BLM from accepting any new mineral patent applications. There may be challenges to title to the mineral properties in which we hold a material interest. If there are title defects with respect to any properties, we might be required to compensate other persons or perhaps reduce our interest in the affected property. Also, in any such case, the investigation and resolution of title issues would divert our management’s time from ongoing production, exploration and development programs.

We are required to share our profits derived from properties in which we do not own 100% fee title.

Under BLM law, we are required to pay the BLM 10% of revenues derived from sales of minerals from the leased property.

Risks Relating to Our Stock

Voting control of our shares is possessed by our management team. Additionally, this concentration of ownership could discourage or prevent a potential takeover of Greenway Technologies that might otherwise result in your receiving a premium over the market price for your shares.

D. Patrick Six, Raymond Wright, Craig Takacs, Kevin Jones, Ransom Jones, Kent Harer, and Thomas Phillips, the management team of Greenway Technologies, and its subsidiary, GIE, own approximately 20.59% of our outstanding shares. As a result, our management team has the power to significantly influence all matters submitted to our shareholders for approval and to control our management and affairs, including extraordinary transactions such as mergers and other changes of corporate control. Additionally, this concentration of voting power could discourage or prevent a potential takeover of Greenway Technologies that might otherwise result in your receiving a premium over the market price for your shares. See “Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.”

We may need to raise additional capital. If we are unable to raise necessary additional capital, our business may fail or our operating results and our share price may be materially adversely affected.

  10  

 

  Because we have no record of profitable operations, we need to secure adequate funding. If we are unable to obtain adequate funding to construct our first full-scale GTL unit, we may not be able to successfully develop and market our GTL Technology and our business will most likely fail. We do not have any commitments for financing. To additional financing, we may need to borrow money or sell more securities, which may reduce the value of our outstanding securities. We may be unable to secure additional financing on favorable terms or at all.

Selling additional shares, either privately or publicly, would dilute the equity interests of our shareholders. If we borrow money, we will have to pay interest and may also have to agree to restrictions that limit our operating flexibility. If we are unable to obtain adequate financing, we may have to curtail business operations, which would have a material negative effect on operating results and most likely result in a lower share price.

Even though our shares are publicly traded, an investor’s shares may not be “free-trading.”

Investors should understand that their shares of our common stock are not “free-trading” merely because Greenway Technologies is a publicly-traded company. In order for the shares to become “free-trading,” the shares must be registered, or entitled to an exemption from registration under applicable law.

The market price for our common stock will most likely continue to be particularly volatile given our status as a relatively unknown company with a small and thinly traded public float, limited operating history and lack of net revenues which could lead to wide fluctuations in our share price. The price at which you purchased our common stock may not be indicative of the price that will prevail in the trading market.

The market for our common stock is characterized by significant price volatility when compared to seasoned issuers, and we expect that our share price will continue to be more volatile than a seasoned issuer for the indefinite future. As a consequence of this lack of liquidity, the trading of relatively small quantities of shares by our shareholders may disproportionately influence the price of those shares in either direction. The price for our shares could, for example, decline precipitously in the event that a large number of shares of our common stock are sold on the market without commensurate demand, as compared to a seasoned issuer which could better absorb those sales without adverse impact on its share price.

Secondly, we are a speculative or “risky” investment due to our lack of current revenues. As a consequence of this enhanced risk, more risk-adverse investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares on the market more quickly and at greater discounts than would be the case with the stock of a seasoned issuer.

An investor may be unable to sell his common stock at or above his purchase price, which may result in substantial losses to the investor.

The following factors may add to the volatility in the price of our common stock: actual or anticipated variations in our quarterly or annual operating results; government regulations, announcements of significant acquisitions, strategic partnerships or joint ventures; our capital commitments; and additions or departures of our key personnel. Many of these factors are beyond our control and may decrease the market price of our common stock, regardless of our operating performance. We cannot make any predictions or projections as to what the prevailing market price for our common stock will be at any time, including as to whether our common stock will sustain the current market price, or as to what effect the sale of shares or the availability of common stock for sale at any time will have on the prevailing market price.

We may need to raise additional capital. If we are unable to raise necessary additional capital, our business may fail or our operating results and our stock price may be materially adversely affected.

We need to secure adequate funding. We hope to be able to fund our business through the revenues from operations. If our revenues are insufficient, we will need to raise the necessary capital through equity or debt offerings, which may reduce the value of our outstanding securities. We may be unable to secure additional financing on favorable terms or at all.

Selling additional shares of our common stock, either privately or publicly, would dilute the equity interests of our shareholders. If we borrow more money, we will have to pay interest and may also have to agree to restrictions that limit our operating flexibility. If we are unable to obtain adequate financing, we may have to curtail our operations and our business would fail.

  11  

 

Volatility in our share price may subject Greenway Technologies to securities litigation.

There is only a limited current market for our shares. In the future, the market for our shares will likely be characterized by significant price volatility when compared to seasoned issuers, and we expect that our share prices will be more volatile than a seasoned issuer for the indefinite future. In the past, plaintiffs have often initiated securities class action litigation against a company following periods of volatility in the market price of its securities. We may in the future be the target of similar litigation. Securities litigation could result in substantial costs and liabilities and could divert management’s attention and resources.

Our issuance of additional common stock in exchange for services or to repay debt would dilute a shareholder’s proportionate ownership and voting rights and could have a negative impact on the market price of our common stock.

Our board of directors may generally issue shares of common stock to pay for debt or services, without further approval by our shareholders based upon such factors as our board of directors may deem relevant at that time. It is likely that we will issue additional securities to pay for services and reduce debt in the future.

Absence of dividends.

We have never paid or declared any dividends on our common stock. Likewise, we do not anticipate paying, in the near future, dividends or distributions on our common stock or our common stock which may be sold in the future. Any dividends will be declared at the discretion of our board of directors and will depend, among other things, on our earnings, our financial requirements for future operations and growth, and other facts as we may then deem appropriate.

Our directors have the right to authorize the issuance of additional shares of our common stock.

Our directors, within the limitations and restrictions contained in our certificate of formation and without further action by our shareholders, have the authority to issue shares of common stock from time to time. Should we issue additional shares of our common stock at a later time, each shareholder’s ownership interest in our stock would be proportionally reduced. No shareholder will have any preemptive right to acquire additional shares of our common stock, or any of our other securities.

If we fail to remain current in our reporting requirements, we could be removed from the OTCQB, which would limit the ability of broker-dealers to sell our securities and the ability of shareholders to sell their securities in the secondary market.

Companies trading on the OTCQB must be reporting issuers under Section 12 of the Exchange Act and must be current in their reports under Section 13 of the Exchange Act, in order to maintain price quotation privileges on the OTCQB. If we fail to remain current in our reporting requirements, we could be removed from the OTCQB.

Our common stock is subject to the “penny stock” rules of the Securities and Exchange Commission, and the trading market in our common stock will be limited, which would make transactions in our stock cumbersome and may reduce the investment value of our stock.

The term “penny stock” generally refers to a security issued by a very small company that trades at less than $5.00 per share. Penny stocks generally are quoted over-the-counter, such as on the OTCPK or OTCQB which are owned by OTC Markets Group, Inc. (our shares are traded on the OTCQB); penny stocks may, however, also trade on securities exchanges, including foreign securities exchanges. In addition, the definition of penny stock can include the securities of certain private companies with no active trading market.

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 Penny stocks may trade infrequently, which means that it may be difficult to sell penny stock shares once you own them. Moreover, because it may be difficult to find quotations for certain penny stocks, they may be difficult, or even impossible, to accurately price. For these, and other reasons, penny stocks are generally considered speculative investments. Consequently, investors in penny stocks should be prepared for the possibility that they may lose their whole investment (or an amount in excess of their investment if they purchased penny stocks on margin).

Because of the speculative nature of penny stocks, Congress prohibited broker-dealers from effecting transactions in penny stocks unless they comply with the requirements of Section 15(h) of the Exchange Act and the rules thereunder. These SEC rules provide, among other things, that a broker-dealer must (1) approve the customer for the specific penny stock transaction and receive from the customer a written agreement to the transaction; (2) furnish the customer a disclosure document describing the risks of investing in penny stocks; (3) disclose to the customer the current market quotation, if any, for the penny stock; and (4) disclose to the customer the amount of compensation the firm and its broker will receive for the trade. In addition, after executing the sale, a broker-dealer must send to its customer monthly account statements showing the market value of each penny stock held in the customer's account.

The market for penny stocks has suffered in recent years from patterns of fraud and abuse.

Stockholders should be aware that, according to SEC Release No. 34-29093, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include:

· Control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer;
· Manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases;
· Boiler room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced salespersons;
· Excessive and undisclosed bid-ask differential and markups by selling broker-dealers; and
· The wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequential investor losses.

Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities. The occurrence of these patterns or practices could increase the volatility of our share price.

Item 1B. Unresolved Staff Comments.

None.

Intentionally Left Blank 

 

  13  

 

Item 2. Properties.

Our principal office is at 8851 Camp Bowie Boulevard West, Suite 240, Fort Worth, Texas 76116, where we lease approximately 1,800 square feet of office space, at a rate of $2,417 per month. GIE rents approximately 600 square feet of office space at 1511 North Cooper St., Suite 207, Arlington, Texas 76011, at a rate of $1,369 per month. We believe that all of our facilities are adequate for at least the next 12 months. We expect that we could locate other suitable facilities at comparable rates, should we need more space.

Greenway Technologies has staked 72 placer mining claims in Mohave County, Arizona on BLM land (BLM file no. AMC 403533) covering approximately 1,440 acres in Mohave County southeast of Kingman, Arizona.

A description of our mining properties is included in “Item 1. Business” and is incorporated herein by reference. We believe that we have satisfactory title to our mining properties, subject to liens for taxes not yet payable, liens incident to minor encumbrances, liens for credit arrangements and easements and restrictions that do not materially detract from the value of these properties, our interests in these properties, or the use of these properties in a business. We believe that the mining properties are adequate and suitable for the conduct of a mining business in the future.

A patented mining claim is one which the federal government has passed title to the claimant, making the claimant the owner of the surface and mineral rights. An unpatented mining claim is one which is still owned by the federal government, but which the claimant has a right to possession to extracted minerals, provided the land is open to mineral entry.

Item 3. Legal Proceedings.

The Company has been named as a co-defendant in an action brought against the Company and Mamaki Tea, Inc., alleging, among other things, that the Company was named as a co-guarantor on an $850,000 foreclosed loan. Management does not believe the ultimate resolution will have an adverse impact on the Company’s financial condition or results of operations.

 

On April 22, 2016, Greenway Technologies filed suit under Cause No. DC-16-004718, in the 193rd District Court, Dallas County, Texas against Mamaki of Hawaii, Inc. (“Mamaki”), Hawaiian Beverages, Inc.(“HBI”), Curtis Borman and Lee Jenison for breach of a Stock Purchase Agreement dated October 29, 2015, wherein we sold our shares in Mamaki to HBI for $700,000 (along with the assumption of certain debt). The Defendants failed to make payments of $150,000 each on November 30, 2015, December 28, 2015 and January 27, 2016. On January 13, 2017, we executed a Settlement and Mutual Release Agreement with the Defendants. However, the Defendants defaulted in their payment obligations under Settlement and Mutual Release Agreement. Due to the bankruptcy proceedings involving Curtis Borman, all action in this matter has been stayed.

  14  

 

On September 14, 2017, in The Third Judicial District Court of Salt Lake City, Utah, Tonaquint, Inc., a Utah corporation, filed suit against Greenway Technologies, Inc. (F.K.A. UMED Holdings, Inc.) under Case No. 170905756. Pursuant to a Securities Purchase Agreement (the “Purchase Agreement”) between Tonaquint and Greenway Technologies, Tonaquint acquired a Convertible Promissory Note (the “Note”), issued by UMED, and a Warrant to Purchase Shares of Common Stock (the “Warrant”). The suit asserts that the Warrant allegedly provided Tonaquint with the right to purchase at any time on or after September 18, 2014, a number of fully paid and non-assessable shares of UMED's common stock equal to $47,400 divided by the Market Price (as defined in the Note, as of September 18, 2014), as such number may be adjusted from time to time pursuant to the terms and conditions of the Warrant. As of the date of this report, the parties have agreed to settle the dispute by a dismissal of this action with prejudice in return for a mutual release of claims and a one-time issuance from Greenway Technologies of 1,600,000 shares of our common stock subject to a weekly leak out restriction equal to the greater of $10,000.00 and 8% of the weekly trading volume. Further, the issuance of stock will be done in connection with a legal opinion pursuant to Rule 144.

As of the date of this report, we are not aware of any other asserted or unasserted claims. Management will seek to minimize further disputes but recognizes the inevitability of legal action in today’s business environment as an unfortunate price of conducting business.

Item 4. (Removed and Reserved).

Not applicable. 

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Our common stock has trades on the OTCQB, under the symbol “GWTI.”

The following table sets forth the high and low bid prices for our common stock on the OTCQB as reported by various market makers. The quotations do not reflect adjustments for retail mark-ups, mark-downs, or commissions and may not necessarily reflect actual transactions.

    High   Low
Fiscal 2015 Quarter Ended:        
  March 31, 2015     $ 0.2300     $ 0.1201  
  June 30, 2015     $ 0.18875     $ 0.1000  
  September 30, 2015     $ 0.2000     $ 0.1001  
  December 31, 2015     $ 0.1400     $ 0.0510  
                     
  Fiscal 2016 Quarter Ended:                  
  March 31, 2016     $ 0.0650     $ 0.0650  
  June 30, 2016     $ 0.1000     $ 0.0610  
  September 30, 2016     $ 0.2000     $ 0.2000  
  December 31, 2016     $ 0.1400     $ 0.1100  
                     
  Fiscal 2017 Quarter Ended:                  
  March 31, 2017     $ 0.1500     $ 0.9500  
  June 30, 2017     $ 0.3600     $ 0.1200  
  September 30, 2017     $ 0.2500     $ 0.1000  
  December 31, 2017     $ 0.1400     $ 0.0799  

 

As of December 31, 2017, we had 287,681,826 shares of our common stock outstanding. Our shares of common stock are held by approximately 498 shareholders of record. The number of record holders was determined from the records of our transfer agent and does not include beneficial owners of our common stock whose shares are held in the names of various securities brokers, dealers, and registered clearing agencies.

  15  

 

Dividends

We have not paid or declared any dividends on our common stock, nor do we anticipate paying any cash dividends or other distributions on our common stock in the foreseeable future. Any future dividends will be declared at the discretion of our board of directors and will depend, among other things, on our earnings, if any, our financial requirements for future operations and growth, and other facts as our board of directors may then deem appropriate.

Securities Authorized for Issuance under Equity Compensation Plans

None.

Recent Sales of Unregistered Securities

On the dates specified below, we have issued shares of our common stock to various parties:

· During the three months ended December 31, 2017, the Company issued 2,200,000 shares of restricted class A common stock to four individuals through private placements for cash of $220,000 at average of $0.10 per share.

 

· During the three months ended December 31, 2017, the Company issued 3,050,000 shares of restricted class A common stock for consulting services at average price of $0.094 per share.

 

· During the period from January 1, 2018 to March 31, 2018, the Company issued 5,065,000 shares of restricted class A common stock to 19 individuals through private placements for cash of $526,500 at average of $0.104 per shares.

 

Our unregistered securities were issued in reliance upon an exemption from registration pursuant to Section 4(a)(2) of the Securities Act or Rule 506(3) of Regulation D promulgated under the Securities Act. Each investor took his securities for investment purposes without a view to distribution and had access to information concerning us and our business prospects, as required by the Securities Act. In addition, there was no general solicitation or advertising for the purchase of our securities. Our securities were sold only to an accredited investor and current shareholders as defined in the Securities Act with whom we had a direct personal preexisting relationship, and after a thorough discussion. Each certificate contained a restrictive legend as required by the Securities Act. Finally, our stock transfer agent has been instructed not to transfer any of such securities, unless such securities are registered for resale or there is an exemption with respect to their transfer.

All of the above described investors who received shares of our common stock were provided with access to our filings with the SEC, including the following:

· The information contained in our annual report on Form 10-K under the Exchange Act.
· The information contained in any reports or documents required to be filed by Greenway Technologies under sections 13(a), 14(a), 14(c), and 15(d) of the Exchange Act since the distribution or filing of the reports specified above.
· A brief description of the securities being offered, and any material changes in our affairs that were not disclosed in the documents furnished.
Item 6. Selected Financial Data.

Not applicable.

  16  

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

THE FOLLOWING DISCUSSION SHOULD BE READ TOGETHER WITH THE INFORMATION CONTAINED IN THE FINANCIAL STATEMENTS AND RELATED NOTES INCLUDED ELSEWHERE IN THIS ANNUAL REPORT ON FORM 10-K.

The following discussion reflects our plan of operation. This discussion should be read in conjunction with the financial statements which are attached to this report. This discussion contains forward-looking statements, including statements regarding our expected financial position, business and financing plans. These statements involve risks and uncertainties. Our actual results could differ materially from the results described in or implied by these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this report, particularly under the headings “Special Note Regarding Forward-Looking Statements.”

Unless the context otherwise suggests, “we,” “our,” “us,” and similar terms in this report, as well as references to “UMED” and “Greenway Technologies,” all refer to Greenway Technologies, Inc, and our wholly-owned subsidiary, Greenway Innovative Energy, Inc., unless the context requires otherwise.

GTL Technology

Our research has been centered on developing a movable production-scale FT system (the “Technology”) to accommodate the needs of smaller gas plays that are increasingly beginning to characterize natural gas production within the United States and elsewhere. Based on preliminary estimates with new, improved and more efficient technology than previously projected, Greenway Technologies is currently seeking funding of $15 million in conjunction with a joint venture partner to manufacture an initial (125 barrel per day) GTL unit. Locations are currently being reviewed for the first several 125 barrels per day units. The GTL unit will be composed of GIE’s G-Reformer™ on the front end to produce the syn -gas that will be processed by the FT section and the resulting liquid will be separated into diesel, jet fuel and other products in the fractionation tower.

We have completed a small-scale GTL unit at UTA in conjunction with an SRA agreement and are now seeking financing to construct the initial GTL field unit.

Mining Interest

In December 2010, Greenway Technologies acquired the rights to approximately 1,440 acres of placer mining claims in Mohave County, Arizona for 5,066,000 shares of our restricted common stock. Actual mining and processing will determine the ultimate value of the holdings. Our current expectations are that we will need approximately $2,000,000, to begin certified assaying ($500,000), develop a mining plan with the BLM ($500,000) and acquire exploration equipment ($1,000,000). The total requirement will not be known until reports from a consulting geologist are received. Since we have not produced any revenues from our BLM mining leases since our acquisition of the leases, achieving a position of producing cash flow levels to fund the development of our BLM mining leases and not having current resources for an appraisal, we recognized an impairment charge of $100,000 during the year ended December 31, 2014.

Going Concern

We remain dependent on outside sources of funding for continuation of our operations. Our independent registered public accounting firm issued a going concern qualification in their report dated April 4, 2018, which raises substantial doubt about our ability to continue as a going concern.

    2017     2016  
Net loss   $ (9,147,397 )   $ (2,018,704 )
Cash flow (negative) from operations     (2,226,753 )     (1,845,765 )
Negative working capital     (2,748,201 )     (2,422,202 )
Stockholders' deficit     (2,812,201 )     (2,416,853 )

 

  17  

 

As of December 31, 2017, Greenway Technologies has liabilities in excess of assets by $2.8 million. Also, during the year ended December 31, 2017, we used net cash of $2,230,759 for operating activities. These factors raise substantial doubt about our ability to continue as a going concern.

 

These factors raise substantial doubt about our ability to continue as a going concern. The financial statements contained herein do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should we be unable to continue in existence. Our ability to continue as a going concern is dependent upon our ability to generate sufficient cash flows to meet our obligations on a timely basis, to obtain additional financing as may be required, and ultimately to attain profitable operations. However, there is no assurance that profitable operations or sufficient cash flows will occur in the future.

The Company is in discussions with several oil and gas companies and other organizations regarding joint venture funding for its first gas-to-liquids (GTL) plant using the Company’s unique GTL system. Should an agreement be made, the joint venture relationship will provide funding at a level of $20M with an ongoing profit-sharing arrangement between the Company and the partner organizations and/or individuals with an economic profile previously not achievable in the GTL industry segment. While there are no assurances that financing for the first plant will be obtained on acceptable terms and in a timely manner, the failure to obtain the necessary working capital may cause the Company to move in one or more alternate directions to shepherd this revolutionary GTL system into production. Several alternate paths are under consideration in conjunction with the joint venture/profit sharing approach.

 

Our ability to achieve profitability will depend upon our ability to finance, manufacture and market/operate GTL units. Our growth is dependent on attaining profit from our operations and our raising additional capital either through the sale of stock or borrowing. There is no assurance that we will be able to raise any equity financing or sell any of our products at a profit. We will be unable to pay our obligations in the normal course of business or service our debt in a timely manner throughout 2018 without raising additional debt or equity capital. There can be no assurance that additional debt or equity capital will be raised.

 

Greenway Technologies is currently evaluating strategic alternatives that include the following: (i) raising of capital, or (ii) issuance of debt instruments. This process is ongoing and can be lengthy and has inherent costs. There can be no assurance that the exploration of strategic alternatives will result in any specific action to alleviate our 12 month working capital needs or result in any other transaction.

 

Greenway Technologies currently has a need of approximately $150,000 per month to sustain operations and pay the University of Texas at Arlington (UTA) Sponsored Research Agreements until the first gas to liquids (“GTL”) Unit is completed. We will be unable to pay our obligations in the normal course of business or service our debt in a timely manner throughout 2017 without raising additional debt or equity capital. There can be no assurance that additional debt or equity capital will be raised.

 

While we are attempting to commence operations and generate revenues, our cash position may not be significant enough to support our daily operations. Management intends to raise additional funds by way of an offering of our securities. Management believes that the actions presently being taken to further implement our business plan and generate revenues provide the opportunity for Greenway Technologies, Inc. to continue as a going concern. While we believe in the viability of our strategy to generate revenues and in our ability to raise additional funds, we may not be successful. Our ability to continue as a going concern is dependent upon our capability to further implement our business plan and generate revenues.

Results of Operations

Year Ended December 31, 2017, Compared to Year Ended December 31, 2016.

We had no revenues for consolidated operations for the years ended December 31, 2017 and 2016. We reported consolidated net losses during the years ended December 31, 2017, and December 31, 2016, of $9,056,153 and $2,018,074, respectively.

  18  

 

 The following table summarizes consolidated operating expenses and other income and expenses for the years ended December 31, 2017, and December 31, 2016:

  2017 2016
General and administrative $8,262,988 $1,050,101
Research and development $867,052 $967,348
Depreciation and amortization $349 $396
Gain from debt forgiveness 0 $30,076
Gain (loss) on derivative ($15,933) ($7,129)
Net interest expense (income) $(1,075) ($14,676)
  Loss on debt settlement 0 ($8,500)

Operating Expenses . During the year ended December 31, 2017, operating expenses increased to $9,130,389 as compared to $2,017,845 for the year ended December 31, 2016. The increase was due primarily increase of stock-based compensation to $5,650,938 for the year ended December 31, 2017, compared to $41,280 for the year ended December 31, 2016 and $1,412,286 recorded as settlements of shareholder disputes in the year ended December 31, compared to $8,500 in the year ended December 31, 2016. Major operating expense categories consisted of the following from year to year;

  • Officer Compensation . During the year ended December 31, 2017, officer compensation (including Greenway Innovative Energy, Inc. executive) increased to $3,645,000 (inclusive of $3,290,000 of stock-based compensation) as compared to $456,500 (inclusive of $37,500 of stock-based compensation) for the year ended December 31, 2016. Officer compensation increased due to $3,290,000 in stock-based compensation.

 

  • Consulting Fees . During the year ended December 31, 2017, consulting expense increased to $234,950 as compared to $214,460 for the year ended December 31, 2016. The increase was primarily the result of consultants added for the Greenway Technologies GTL project.

 

  • Professional Fees . During the year ended December 31, 2017, professional fees increased to $19,909 as compared to $5,963 for the year ended December 31, 2106. Professional fees increased primarily because of listing fees charged by the OTC Market.

 

  • Travel Expenses . During the year ended December 31, 2017, travel expenses increased to $67,699 in the year ended December 31, 2017, compared to $39,880 in the year ended December 31, 2016. The increase was primarily due to travel related to presentations to potential investors.

 

  • Legal Expenses . During the year ended December 31, 2017, legal expenses increased to $225,229 in the year ended December 31, 2017, compared to $200,171 in the year ended December 31, 2016. The increase was due primarily to legal fees related to securities and exchange reporting and corporate lawsuits.

 

  • Research and Development Costs . During the year ended December 31, 2017, research and development costs decrease to $867,052 in the year ended December 31, 2017, compared to $967,348 in the year ended December 31, 2016. The decrease was due to the Company reaching the completion of its GTL demonstration model at UTA.

Interest Expense. During the year ended December 31, 2017, interest expense decreased to $1,075 as compared to interest expense of $14,676 for the year ended December 31, 2016. The increase was primarily due to the convertible promissory note being paid in March of 2017.

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  Derivative Adjustment. During the year ended December 31, 2017, gain on derivative adjustment was $15,933 as compared to gain of $7,129 for year ended December 31, 2016. The change was due to the derivative liability calculated using the Black-Scholes Model pursuant to the outstanding convertible note payable and warrants.

Net Loss from Operations. Our net loss from operations increased to $9,147,397 for the year ended December 31, 2017, compared to $2,017,845 for the year ended December 31, 2016. The increase was due primarily increase of stock-based compensation to $5,607,938 and $1,412,286 recorded as settlements of shareholder disputes.

Consolidated net loss was $9,147,397 or $0.03 per basic and diluted earnings per share for the year ended December 31, 2017, compared to $2,018,704 or $0.02 per share for the year ended December 31, 2016. The weighted-average number of shares used in the earnings per share for the basic and dilutive computation was 273,028,802 for the year ended December 31, 2017, and 202,062,054 for the year ended December 31, 2016.

Liquidity and Capital Resources

We do not currently have sufficient working capital to fund our future operations. We cannot assure that we will be able to continue our operations without adequate funding. We had $91,518 in cash, total assets of $269,018 and total liabilities of $3,081,219 as of December 31, 2017. Total stockholder's deficit at December 31, 2017, was $23,623,602.

Liquidity is the ability of a company to generate adequate amounts of cash to meet its obligations. The following table provides certain selected balance sheet comparisons between December 31, 2017, and December 31, 2016:

            $   %
    2017   2016   Change   Change
Working Capital                
Cash   $91,518   $67,964   $23,554   35%
Total current assets   $249,018   $81,440   $167,578   206%
Total assets   $269,018   $86,789   $182,229   210%
Accounts payable and accrued liabilities   $2,696,550   $2,313,332   $383,218   17%
Notes payable and accrued interest   $304,675   $134,253   $170,422    127%
Derivative liability   $105,643   $56,057   $49,586   88%
Total current liabilities   $2,997,219   $2,503,642   $493,577   20%
Total long term debt   $        84,000   $              0   $      84,000    
Total liabilities   $3,081,219   $2,503,642   $577,577   23%

Operating Activities

Net cash used in continuing operating activities during the year ended December 31, 2017, was $2,230,759 as compared to $1,845,765 for the year ended December 31, 2016. Items totaling approximately $7,276,368 contributing to the net cash used in continuing operating activities for the year ended December 31, 2017, include:

$9,147,397 net loss, offset by:

· $5,650,938 increase in stock-based compensation.
· $1,412,286 increase in settlement of stockholder dispute.
· $349 of depreciation.
· $212,765 increase in accounts payable and accrued expenses.

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 Net cash used for continuing operating activities for the year ended December 31, 2016, was $1,845,765. Items totaling approximately $728,369 contributing to the net cash used in continuing operating activities for the year ended December 31 2016, include:

$2,018,074 net loss, offset by:

· $41,280 increase in stock-based compensation.
· $8,500 increase in settlement of stockholder dispute.
· $349 of depreciation.
· $678,240 increase in accounts payable and accrued expenses.

Investing activities

There were no cash flows from investing activities for the years ended December 31, 2017 and 2016. 

F inancing Activities

Net cash provided by financing activities was $2,250,307 for the year ended December 31, 2017, composed of $2,191,750 in sales of common stock, $318,008 proceeds from notes, $131,753 of payments on note payable, $58,190 repayment of shareholder advance, $69,508 purchase of treasury shares.

Net cash provided by financing activities was $1,913,729 for the year ended December 31, 2016, composed primarily of $1,755,000 in sales of common stock, $118,500 shareholder advances, $237,500 proceeds from notes, $94,024 in of repayments of shareholder advances, $89,600 repayments on notes payable and debt issue costs of $13,647.

We are in discussions with several oil and gas companies and other organizations regarding joint venture funding for our first GTL plant using our unique GTL system. Should an agreement be made, the joint venture relationship will provide funding at a level of $20M with an ongoing profit-sharing arrangement between Greenway Technologies and the partner organizations and/or individuals with an economic profile previously not achievable in the GTL industry segment. While there are no assurances that financing for the first plant will be obtained on acceptable terms and in a timely manner, the failure to obtain the necessary working capital may cause Greenway Technologies to move in one or more alternate directions to shepherd this revolutionary GTL system into production. Several alternate paths are under consideration in conjunction with the joint venture/profit sharing approach.

Further, until there is a more complete assessment of the mining property, we cannot determine the necessary capital requirements and our operating budgets, if it is decided to pursue full exploration and development. We also will be subject to environmental expenses in connection with these activities. We will also have the expense of maintaining and defending any patents obtained, our claims, and seeking further patents and claims to be able to garner sufficient area to make our operations more viable, once we have shown appropriate mineral deposits present in our claims, if at all. After building the first GTL Unit and determining the commercial viability of the mining claims, we will need substantial capital or financial partners to build additional GTL units, develop the mining claims, acquire plant and equipment and hire personnel.

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business. The general business strategy of Greenway Technologies is to first develop our GTL Technology to maintain Greenway Technologies’ viability, while seeking capital and then explore and research its existing mining leases properties. As shown in the accompanying consolidated financial statement, Greenway Technologies has incurred cumulative deficits of $23,623,602 and $14,476,205 as of December 31, 2017, and December 31, 2016, respectively. The ability of Greenway Technologies to continue as a going concern is in doubt and dependent upon achieving a profitable level of operations and on the ability of Greenway Technologies to obtain necessary financing to fund ongoing operations.

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Commitments

Employment Contracts

In May 2011, Greenway Technologies entered into employment agreements with its chief executive officer, president and chief financial officer. The agreements were for a term of five years, ending on May, 31, 2016. No management fees were accrued during 2017. During the year ended December 31, 2016, Greenway Technologies accrued a total of $150,000 as management fees in accordance with the terms of these agreements.

In August 2012, Greenway Technologies entered into employment agreements with the president and chairman of the board of GIE for a term of five years with compensation of $90,000 per year. In September 2014, the president’s employment agreement was amended to increase his annual pay to $180,000. During the years ended December 31, 2017 and 2016, respectively, the Company paid and accrued a total of $180,000 and $191,250, respectively, towards the employment agreement.

 

In the August 2012 acquisition agreement with GIE, Greenway Technologies agreed to issue an additional 7,500,000 shares of restricted common stock when the first GTL unit is built and becomes operational and is capable of producing 2,000 barrels of diesel or jet fuel per day and pay GIE a 2% royalty on all gross production sales on each unit placed in production.

Consulting Agreement

 

On November 28, 2017, the Company entered into a three-year consulting agreement with Chisos Equity Consultants, LLC for public relations, consulting and corporate communications services. The initial payment was 1,800,000 shares of the Company’s restricted common stock. Additional payments upon the Company’s common stock reaching certain price points as follows;

 

  • 500,000 shares at the time the Company’s common stock reaches $0.25 per share during the first year
  • 500,000 shares at the time the Company’s common stock reaches $0.45 per share during the first year
  • 1,000,000 shares at the time the Company’s common stock reaches $0.90 per share during the first or second year
  • 2,000,000 shares at the time the Company’s common stock reaches $1.50 per share during the first or second year
  • 3,000,000 shares at the time the Company’s common stock reaches $2.00 per share during the term of the agreement
  • 1,000000 shares at the time the Company’s common stock reaches $10.00 per share during the term of the agreement

 Mining Leases

We have a minimum commitment for 2018 of approximately $11,160 in annual maintenance fees for its United States Bureau of Land Management (“BLM”) mining lease, which is due by September 1, 2018. Once Greenway Technologies enters the production phase, royalties owed to the BLM will be equal to 10% of production. There is no actual lease agreement with the BLM; Greenway Technologies files an annual maintenance fee form to hold the claims.

Financing

our financing has been provided by loans, advances from shareholders and by issuing shares of its common stock in various private placements to related parties and individuals.

Seasonality

We do not anticipate that our business will be affected by seasonal factors.

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Impact of Inflation

General inflation in the economy has driven the operating expenses of many businesses higher. We will continuously seek methods of reducing costs and streamlining operations while maximizing efficiency through improved internal operating procedures and controls. While we are subject to inflation as described above, our management believes that inflation currently does not have a material effect on our operating results. However, inflation may become a factor in the future.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, and results of operations, liquidity or capital expenditures.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon financial statements which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate these estimates. We base our estimates on historical experience and on assumptions that are believed to be reasonable. These estimates and assumptions provide a basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, and these differences may be material.

We believe that the critical accounting policies discussed below affect our more significant judgments and estimates used in the preparation of our financial statements.

Revenue Recognition

The FASB issued ASC 606 as guidance on the recognition of revenue from contracts with customers in May 2014, with amendments in 2015 and 2016. Revenue recognition will depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented, or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the cumulative catch-up transition method). Greenway Technologies adopted the guidance on January 1, 2018 and applied the cumulative catch-up transition method. The transition adjustment to be recorded to shareholders’ equity upon adoption of the new standard is not expected to be material.

Greenway Technologies has not, to date, generated any revenues.

Stock-Based Compensation

Accounting Standard 718, “Accounting for Stock-Based Compensation” (“ASC 718”) established financial accounting and reporting standards for stock-based employee compensation plans. It defines a fair value-based method of accounting for an employee stock option or similar equity instrument. In January 2006, Greenway Technologies implemented ASC 718, and accordingly, we account for compensation cost for stock option plans in accordance with ASC 718.

Greenway Technologies accounts for share-based payments to non-employees in accordance with ASC 505-50 “Accounting for Equity Instruments Issued to Non-Employees for Acquiring, or in Conjunction with Selling, Goods or Services”.  

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Use of Estimates

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during the reported period. Actual results could differ materially from the estimates.

Income Taxes

Greenway Technologies accounts for income taxes in accordance with FASB ASC 740, “Income Taxes,” which requires that Greenway Technologies recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when it is more likely than not that some or all deferred tax assets will not be realized.

Greenway Technologies has adopted the provisions of FASB ASC 740-10-05 Accounting for Uncertainty in Income Taxes . The ASC clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The ASC prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The ASC provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Open tax years, subject to IRS examination include 2013 – 2016.

Net Loss Per Share, Basic and Diluted

Greenway Technologies has adopted Accounting Standards Codification Subtopic 260-10, Earnings Per Share (“ASC 260-10), specifying the computation, presentation and disclosure requirements of earning per share information. Basic loss per share has been computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding for the period. Shares issuable upon conversion of notes payable and the exercise of warrants has been excluded as a common stock equivalent in the diluted loss per share because their effect is anti-dilutive on the computation.

Derivative Financial Instruments

Greenway Technologies accounts for derivative instruments in accordance with Accounting Standards Codification 815, Derivatives and Hedging (“ASC 815”), which establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. They require that an entity recognize all derivatives as either assets or liabilities in the balance sheet and measure those instruments at fair value.

If certain conditions are met, a derivative may be specifically designated as a hedge, the objective of which is to match the timing of gain or loss recognition on the hedging derivative with the recognition of (i) the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk, or (ii) the earnings effect of the hedged forecasted transaction. For a derivative not designated as a hedging instrument, the gain or loss is recognized in income in the period of change.

See Notes 5, 6 and 7 to the financial statements for discussions regarding convertible notes payable and warrants.

Concentration and Credit Risk

Financial instruments and related items, which potentially subject Greenway Technologies to concentrations of credit risk, consist primarily of cash, cash equivalents and trade receivables. Greenway Technologies places its cash and temporary cash investments with high credit quality institutions. At times, such investments may be in excess of the FDIC insurance limit.

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Impact of New Accounting Standards

Greenway Technologies has reviewed all other recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on its results of operation, financial position or cash flows. Based on that review, Greenway Technologies believes that none of these pronouncements are expected to have a significant effect on its consolidated financial statements.

Subsequent Events

None that have not been reported herein.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 8. Financial Statements and Supplementary Data.

The financial statements and related notes are included as part of this report as indexed in the appendix on page F-1, et seq .

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

See Item 9A(T) below.

Item 9A(T). Controls and Procedures.

Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Annual Report on Form 10-K. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Based on our evaluation, our Principal Executive Officer and Principal Financial Officer, after considering the existence of material weaknesses identified, determined that our internal control over financial reporting disclosure controls and procedures were not effective as of December 31, 2017.

Management's Annual Report on Internal Control over Financial Reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

Our internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management, including our principal executive officer and principal financial officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2017. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSOII) in Internal Control over Financial Reporting - Guidance for Smaller Public Companies.

We identified the following deficiencies which together constitute a material weakness in our assessment of the effectiveness of internal control over financial reporting as of December 31, 2017:

· Greenway Technologies has inadequate segregation of duties within its cash disbursement control design.
· During the year ended December 31, 2017, Greenway Technologies internally performed all aspects of its financial reporting process, including, but not limited to the underlying accounting records and record journal entries and responsibility for the preparation of the financial statement due to the fact these duties were performed often times by the same people, a lack of review was created over the financial reporting process that might result in a failure to detect errors in spreadsheets, calculations, or assumptions used to compile the financial statements and related disclosures as filed with the SEC. These control deficiencies could result in a material misstatement to our interim or annual financial statements that would not be prevented or detected.
· Greenway Technologies does not have a sufficient number of independent directors for its board and audit committee. We currently have two independent directors on our board, which is comprised of six directors, and we do not have a functioning audit committee. As a publicly-traded company, we should strive to have a majority of our board of directors be independent.

Greenway Technologies is continuing the process of remediating its control deficiencies. However, the material weakness in internal control over financial reporting that has been identified will not be remediated until numerous internal controls are implemented and operate for a period of time, are tested, and Greenway Technologies is able to conclude that such internal controls are operating effectively. We cannot provide assurance that these procedures will be successful in identifying material errors that may exist in our financial statements. We cannot make assurances that we will not identify additional material weaknesses in its internal control over financial reporting in the future. Management plans, as capital becomes available to us, to increase the accounting and financial reporting staff and provide future investments in the continuing education and public company accounting training of our accounting and financial professionals.

It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control system, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.

Changes in Internal Controls over Financial Reporting

We regularly review our system of internal control over financial reporting to ensure we continue to work towards an effective internal control environment.  There were no changes that occurred during the fourth quarter of the fiscal year covered by this annual report on Form 10-K that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Item 9B. Other Information.

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

The following table sets forth information concerning the directors and executive officers of Greenway Technologies as of December 31, 2017:

Name Age Position Director Since
D. Patrick Six 65

Chairman of the Board, Chief Financial Officer,

President, and Director

2016
Raymond Wright 81 Secretary and Director 2016
Ransom Jones 70 Director 2016
Craig Takacs 52 Director 2002
Kevin Jones 54 Director 2016
Kent J. Harer 61 Director 2017

The members of our board of directors are subject to change from time to time by the vote of the shareholders at special or annual meetings to elect directors. Our current board of directors consists of three directors, who have expertise in the business of Greenway Technologies.

The foregoing notwithstanding, except as otherwise provided in any resolution or resolutions of the board, directors who are elected at an annual meeting of shareholders, and directors elected in the interim to fill vacancies and newly created directorships, will hold office for the term for which elected and until their successors are elected and qualified or until their earlier death, resignation or removal.

Whenever the holders of any class or classes of stock or any series thereof are entitled to elect one or more directors pursuant to any resolution or resolutions of the board, vacancies and newly created directorships of such class or classes or series thereof may generally be filled by a majority of the directors elected by such class or classes or series then in office, by a sole remaining director so elected or by the unanimous written consent or the affirmative vote of a majority of the outstanding shares of such class or classes or series entitled to elect such director or directors. Officers are elected annually by the directors. Ransom Jones and Kevin Jones are brother. Otherwise, there are no other family relationships among our directors and officers.

We may employ additional management personnel, as our board of directors deems necessary. Greenway Technologies has not identified or reached an agreement or understanding with any other individuals to serve in management positions but does not anticipate any problem in employing qualified staff.

A description of the business experience for each of the directors and executive officers of Greenway Technologies is set forth below.

D. Patrick Six was elected a director on March 7, 2016 and president and chief financial officer on April 24, 2017. Mr. Six has served as a vice-president of Greenway Innovative Energy, Inc., our wholly-owned subsidiary, since 2013. He has also provided consulting serves to the registrant, since May 2011. He has been in the oil and gas industry for 37 years as an independent operator of oil and gas properties both as an owner and consultant. He received a BBA in marketing from Texas Tech University in Lubbock, Texas.

Raymond Wright was elected a director on March 7, 2016. Mr. Wright has served as the president of Greenway Innovative Energy, Inc. since August 2012. Mr. Wright was a co-founder of DFW Genesis in 2009, where he began working on the GTL process and worked through 2012, when he and Conrad Greer formed Greenway Innovative Energy, Inc. to continue working on the GTL process. Previously, Mr. Wright worked with Dallas based Texas Instruments (TI) operations where he managed and opened up new markets for TI in England. He developed and built a materials manufacturing facility for TI’s European operation and introduced TI’s light sensor technology in Europe.

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 Ransom Jones was appointed interim chief executive officer on January 14, 2016, director on March 7, 2016, and president on August 4, 2016. Mr. Jones was replaced as president by D. Patrick Six on April 24, 2017. Mr. Jones has over 40 years of diverse business experience. He is a retired partner of KPMG Peat Marwick and former chief financial officer of two publicly traded corporations, Western Preferred Corporation and El Paso Refining, Inc. He has also served as an officer of some of the largest and most prestigious global financial institutions including Goldman Sachs, Citicorp, ABN-AMRO Bank and AIG. After resigning from AIG, Mr. Jones created a very successful small business for life insurance lending. He graduated from the University of Texas at El Paso in 1971 with a BBA, Accounting.

Craig Takacs has served a director of Greenway Technologies since its incorporation in March 2002. Mr. Takacs served as president and chief executive officer of our predecessor, Dynalyst Manufacturing Corporation, from March 2002 until his resignation in August 2009. Prior to Dynalyst, Mr. Takacs worked for Institutional Capital Management, where he served as the firm’s technology analyst. Mr. Takacs received his BBA in Business Management in 1984 from Texas A&M University.

Kevin Jones was elected a director on March 7, 2016. Mr. Jones founded All Commercial Floors in 1999 and is responsible for its overall operation. Under his leadership ACF has grown from a two-person business in the corner of his garage to one of the largest and, we feel, one of the most respected commercial flooring companies in the country with offices throughout the United States, and with annual sales exceeding $40 million. Mr. Jones attended Texas Tech University in Lubbock, Texas.

Kent J. Harer was elected a director on February 3, 2017. Since 1996, he has served as Senior Account Manager for Air Liquide Industries US LP, an affiliate of Air Liquide, S.A., a large French multinational industrial gas company.

Other Significant Personnel

In addition to the officers and directors described above, on October 31, 2017, effective as of September 18, 2017, Thomas Phillips was elected as Vice President of Operations for Greenway Innovative Energy, Inc., a Nevada corporation, and a wholly-owned subsidiary of the registrant.

There are no material plans, contracts or arrangements (whether or not written) with respect to Mr. Phillips’ election as Vice President of Operations for Greenway Innovative Energy, Inc. Any such plans, contracts or arrangements, if any, will be worked out at a later date.

Mr. Phillips, age 50, holds a Bachelor of Science in Industrial Engineering from Texas A&M University. In addition, Mr. Phillips has been designated a Distinguished Alumnus of Texas A&M University.

Mr. Phillips is a highly experienced and accomplished deal making executive with a very successful acquisition and divestiture track record. He has developed and executed strategies for profitable business plans across a wide range of industries ( i.e. , banking, finance, private equity, technology, real estate, oil and gas). After starting his career with Lone Star Gas building and operating pipelines and natural gas processing plants, Mr. Phillips joined JP Morgan FCS/Financial Computer Software (a spinoff of Highland Capital Management), where he built and managed a sales team that allowed the company to grow revenues from $2.5 MM annually to over $85 MM. Soon after the company was purchased, Mr. Phillips was asked to join senior management at BCR Environmental/NuTerra Management LLC, a municipal wastewater treatment technology company and related solutions provider. A transaction of roughly $11 million was completed involving a shift in the ownership of the firm to provide liquidity and expansion capital. Early in 2017, Mr. Phillips was brought aboard to guide the registrant’s operations with Raymond Wright, the president of Greenway Innovative Energy, Inc. Presently, Mr. Phillips is working with the Conrad Greer Lab professors at the University of Texas at Arlington to optimize the registrant’s GTL process and move the registrant from a research and developmental stage to a commercial production stage.

Committees of the Board

We do not currently have any committees of our board of directors. However, we do plan to adopt various committees in the near future.

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The responsibilities of the committees to be adopted in the future are currently are fulfilled by our board of directors and all of our directors participate in such responsibilities, only two of whom are “independent” as defined under Rule 4200(a)(15) of the NASD’s listing standards described below, as our financial constraints have made it extremely difficult to attract and retain other qualified independent board members. Since we do not have any committees, our entire board of directors participates in all of the considerations with respect to our audit, compensation and nomination deliberations.

Rule 4200(a)(15) of the NASD’s listing standards defines an “independent director” as a person other than an executive officer or employee of the company or any other individual having a relationship which, in the opinion of the issuer’s board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The following persons shall not be considered independent:

· A director who is, or at any time during the past three years was, employed by the company;
· A director who accepted or who has a Family Member who accepted any compensation from the company in excess of $120,000 during any period of twelve consecutive months within the three years preceding the determination of independence, other than the following: (i) compensation for board or board committee service; (ii) compensation paid to a Family Member who is an employee (other than as an executive officer) of the company; or (iii) benefits under a tax-qualified retirement plan, or non-discretionary compensation. Provided, however, that in addition to the requirements contained in this paragraph, audit committee members are also subject to additional, more stringent requirements under Rule 4350(d).
· A director who is a Family Member of an individual who is, or at any time during the past three years was, employed by the company as an executive officer;
· A director who is, or has a Family Member who is, a partner in, or a controlling shareholder or an executive officer of, any organization to which the company made, or from which the company received, payments for property or services in the current or any of the past three fiscal years that exceed five percent of the recipient’s consolidated gross revenues for that year, or $200,000, whichever is more, other than the following: (i) payments arising solely from investments in the company’s securities; or (ii) payments under non-discretionary charitable contribution matching programs.
· A director of the issuer who is, or has a Family Member who is, employed as an executive officer of another entity where at any time during the past three years any of the executive officers of the issuer serve on the compensation committee of such other entity; or
· A director who is, or has a Family Member who is, a current partner of the company’s outside auditor, or was a partner or employee of the registrant’s outside auditor who worked on the company’s audit at any time during any of the past three years.

We hope to add more qualified independent members of our board of directors at a later date, depending upon our ability to reach and maintain financial stability.

Audit Committee

The entire board of directors performs the functions of an audit committee, but no written charter governs the actions of the board when performing the functions of what would generally be performed by an audit committee. The board approves the selection of our independent accountants and meets and interacts with the independent accountants to discuss issues related to financial reporting. In addition, the board reviews the scope and results of the audit with the independent accountants, reviews with management and the independent accountants our annual operating results, considers the adequacy of our internal accounting procedures and considers other auditing and accounting matters including fees to be paid to the independent auditor and the performance of the independent auditor. At the present time, D. Patrick Six, our chief executive officer and chief financial officer, and Ransom Jones, one of our directors, are considered to be our experts in financial and accounting matters.

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Nomination Committee

Our size and the size of our board, at this time, do not require a separate nominating committee. When evaluating director nominees, our directors consider the following factors:

· The appropriate size of our board of directors;
· Our needs with respect to the particular talents and experience of our directors;
· The knowledge, skills and experience of nominees, including experience in finance, administration or public service, in light of prevailing business conditions and the knowledge, skills and experience already possessed by other members of the board;
· Experience in political affairs;
· Experience with accounting rules and practices; and
· The desire to balance the benefit of continuity with the periodic injection of the fresh perspective provided by new board members.

Our goal is to assemble a board that brings together a variety of perspectives and skills derived from high quality business and professional experience. In doing so, the board will also consider candidates with appropriate non-business backgrounds.

Other than the foregoing, there are no stated minimum criteria for director nominees, although the board may also consider such other factors as it may deem are in our best interests as well as our shareholders. In addition, the board identifies nominees by first evaluating the current members of the board willing to continue in service. Current members of the board with skills and experience that are relevant to our business and who are willing to continue in service are considered for re-nomination. If any member of the board does not wish to continue in service or if the board decides not to re-nominate a member for re-election, the board then identifies the desired skills and experience of a new nominee in light of the criteria above. Current members of the board are polled for suggestions as to individuals meeting the criteria described above. The board may also engage in research to identify qualified individuals. To date, we have not engaged third parties to identify or evaluate or assist in identifying potential nominees, although we reserve the right in the future to retain a third-party search firm, if necessary. The board does not typically consider shareholder nominees because it believes that its current nomination process is sufficient to identify directors who serve our best interests.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our officers, directors and persons who beneficially own more than 10% of our common stock to file reports of ownership and changes in ownership with the SEC. These reporting persons also are required to furnish us with copies of all Section 16(a) forms they file. Based solely on the reports received by us, the transaction report of Company transactions supplied by our transfer agent and our shareholders list as of December 31, 2017, to the best of our knowledge all required directors, officers and greater than 9.99% percent shareholders complied with applicable filing requirements during the fiscal year ended December 31, 2017.

 

Communication with Directors

Shareholders and other interested parties may contact any of our directors by writing to them at Greenway Technologies, Inc. at 8851 Camp Bowie West, Suite 240, Fort Worth, Texas 76116, Attention: Corporate Secretary.

Our board has approved a process for handling letters received by us and addressed to any of our directors. Under that process, one of our officers will review all such correspondence and regularly forwards to the directors a summary of all such correspondence, together with copies of all such correspondence that, in the opinion of such officer, deal with functions of the board or committees thereof or that he otherwise determines requires their attention. Directors may at any time review a log of all correspondence received by us that are addressed to members of the board and request copies of such correspondence.

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Conflicts of Interest

With respect to transactions involving real or apparent conflicts of interest, we have adopted written policies and procedures which require that:

· The fact of the relationship or interest giving rise to the potential conflict be disclosed or known to the directors who authorize or approve the transaction prior to such authorization or approval;
· The transaction be approved by a majority of our disinterested outside directors; and
· The transaction be fair and reasonable to us at the time it is authorized or approved by our directors.

Code of Ethics for Senior Executive Officers and Senior Financial Officers

We have adopted an amended Code of Ethics for Senior Executive Officers and Senior Financial Officers that applies to our president, chief executive officer, chief operating officer, chief financial officer, and all financial officers, including the principal accounting officer. The code provides as follows:

· Each officer is responsible for full, fair, accurate, timely and understandable disclosure in all periodic reports and financial disclosures required to be filed by us with the Securities and Exchange Commission or disclosed to our shareholders and/or the public.
· Each officer shall immediately bring to the attention of the audit committee, or disclosure compliance officer, any material information of which the officer becomes aware that affects the disclosures made by us in our public filings and assist the audit committee or disclosure compliance officer in fulfilling its responsibilities for full, fair, accurate, timely and understandable disclosure in all periodic reports required to be filed with the Securities and Exchange Commission.
· Each officer shall promptly notify our general counsel, if any, or the president or chief executive officer as well as the audit committee of any information he may have concerning any violation of our Code of Business Conduct or our Code of Ethics, including any actual or apparent conflicts of interest between personal and professional relationships, involving any management or other employees who have a significant role in our financial reporting, disclosures or internal controls.
· Each officer shall immediately bring to the attention of our general counsel, if any, the president or the chief executive officer and the audit committee any information he may have concerning evidence of a material violation of the securities or other laws, rules or regulations applicable to us and the operation of our business, by us or any of our agents.
· Any waiver of this Code of Ethics for any officer must be approved, if at all, in advance by a majority of the independent directors serving on our board of directors. Any such waivers granted will be publicly disclosed in accordance with applicable rules, regulations and listing standards.

We have posted a copy of our Code of Ethics on our website. We will provide to any person without charge, upon request, a copy of our Code of Ethics. Any such request should be directed to our corporate secretary at the address listed below in the next paragraph. The information contained in our website shall not constitute part of this report.

Item 11. Executive Compensation.

Summary of Cash and Certain Other Compensation

At present, Greenway Technologies has two executive officers, Messrs. Six and Wright.

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 Greenway Technologies Summary Compensation Table

The following table sets forth, for our named executive officers for the two completed fiscal years ended December 31, 2017, and December 31, 2016:

Name and
Principal Position
Year Salary ($) Bonus ($) Stock Awards ($) Option Awards ($) Non-Equity Incentive Plan Compensation ($)

Nonqualified

deferred

compensation

earnings

($)

All Other Compensation ($)

Total

($)

Patrick Six (1) 2017 135,000 -0- 1,400,000 -0- -0- -0- -0- 1,535,000
R. Jones (2) 2017 40,000 -0- 490,000 -0- -0- -0- -0-    530,000
  2016 20,400 -0- 37,500 -0- -0- -0- -0-      57,900
R. J. Halden (3) 2016 48,985 -0- -0- -0- -0- -0- -0-      48,985
Ray Wright (4) 2017 150,000 -0- 1,400,000 -0- -0- -0- -0- 1,550,000
  2016 180,000 -0- -0- -0- -0- -0- -0-   180,000
R. Moseley (5) 2016 40,000 -0-   -0- -0- -0- -0-    40,000

__________

(1) Mr. Six was elected as our chief executive officer on April 24, 2017. On January 4, 2017, Mr. Six received 10,000,000 shares of our common stock valued at $0.14 per share.
(2) Mr. Jones was our interim chief executive officer, effective January 14, 2016, and president from August 4, 2016, through April 24, 2017. On January 4, 2017, Mr. Jones received 3,500,000 shares of our common stock valued at $0.14 per share. On October 2, 2016, Mr. Jones received 375,000 shares of our common stock valued at $0.10 per share.
(3) Mr. Halden was our former president and a director. He resigned from both positions on January 14, 2016.
(4) Mr. Wright was elected as our corporate secretary on January 4, 2017. On January 4, 2017, Mr. Wright received 10,000,000 shares of our common stock valued at $0.14 per share.
(5) Mr. Moseley was our former chief financial officer and a former director. He resigned from both positions on November 21, 2016.

 

Outstanding Equity Awards at Fiscal Year-End

 

The following table provides information for each of our named executive officers as of the end of our last completed fiscal year, December 31, 2017:

  Option Awards (1) Stock Awards
Name Number of Securities Underlying Unexercised Options (#) Exercisable Number of Securities Underlying Unexercised Options (#) Unexercisable Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) Option Exercise Price ($) Option Expiration Date Number of Shares or Units of Stock That Have Not Vested Market Value of Shares or Units of Stock That Have Not Vested Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)
Patrick Six (1) -0- -0- -0- N/A -0- -0- -0- -0- -0-
R. Jones (2) -0- -0- -0- N/A -0- -0- -0- -0- -0-
Ray Wright (3) -0- -0- -0- N/A -0- -0- -0- -0- -0-

__________

(1) Mr. Six was elected as our chief executive officer on April 24, 2017.
(2) Mr. Jones was our interim chief executive officer, effective January 14, 2016, and president from August 4, 2016, through April 24, 2017.
(3) Mr. Wright was elected as our corporate secretary on January 4, 2017.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table presents information regarding the beneficial ownership of all shares of our common stock and preferred stock as of December 31, 2017, by:

 

· Each person who owns beneficially more than five percent of the outstanding shares of our common stock;
· Each director;
· Each named executive officer; and
· All directors and officers as a group.

 

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  Shares of Common Stock Beneficially Owned (2)
Name of Beneficial Owner (1) Number Percent
D. Patrick Six (3)   15,700,000 5.46%
Raymond Wright (4) 18,000.000 6.26%
Craig Takacs (5) 3,157,563 1.10%
Ransom Jones (6) 3.375,000 1.17%
Kevin Jones (7) 19,000,000 6.61%
Kent Harer (8) 0 0%
All directors and officers as a group (six persons) 59,232,563 20.59%
Randy Moseley (9) 22,178,302 7.71%
Richard Halden (10) 16,500,279 5.74%
Paul Alfano 21,250,000 7.39%

________

(1) Unless otherwise indicated, the address for each of these shareholders is c/o Greenway Technologies, Inc., at 8851 Camp Bowie West, Suite

240, Fort Worth, Texas 76116. Also, unless otherwise indicated, each person named in the table above has the sole voting and investment power with respect to our shares of common stock which he beneficially owns.

(2) Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission. As of December 31, 2017, there were outstanding 287,681,826 shares of our common stock.
(3) Mr. Six is our chairman of the board, chief executive officer, chief financial officer, and director.
(4) Mr. Wright is our corporate secretary and director, and president of Greenway Innovative Energy, Inc., our wholly-owned subsidiary.
(5) Mr. Takacs is a director.
(6) Mr. Ransom Jones is a director and was formerly our interim chief executive officer, effective January 14, 2016, and president from August 4, 2016, through April 24, 2017. Ransom Jones and Kevin Jones are brothers.
(7) Mr. Kevin Jones is a director. Kevin Jones and Ransom Jones are brothers.
(8) Mr. Harer is a director.
(9) Mr. Moseley was our former chief financial officer and a former director. He resigned from both positions on November 21, 2016.
(10) Mr. Halden was our former president and a director. He resigned as president on January 14, 2016 and as a director on February 1, 2017.

Other than as stated herein, there are no arrangements or understandings, known to us, including any pledge by any person of our securities:

· The operation of which may at a subsequent date result in a change in control of the registrant; or
· With respect to the election of directors or other matters.
Item 13. Certain Relationships and Related Transactions and Director Independence.

Other as stated above, there are no other agreements with any of our officers and directors.

Shareholders made loans and advances to the Company in the amounts of $219,509 (Tunstall Canyon Group $166,667, Kevin Jones $51,342 and Pat Six $1,500) and $141,040 (Kevin Jones $121,040 and Tunstall Canyon Group $20,000) during the years ended December 31, 2017 and 2016, respectively.  During the year ended December 31, 2107, a shareholder Richard Halden purchased 2,250,000 shares of class A common stock for $225,000 ($0.010 per shares and Kevin Jones received repayment of $59,690 loan. During the year ended December 31, 2016, Tunstall Canyon elected to convert advances of $51,500 to shares of class A common stock at an average value of $0.0775 per share and Kevin Jones received repayment of $151,000 loan. A shareholder forgave $30,077 of advances during the year ended December 31, 2016.

 

Item 14. Principal Accounting Fees and Services.

The following table presents fees for professional services rendered by SolesHeyn CPA, our independent auditors for the audit of our financial statements for the years ended December 31, 2017, and December 31, 2016:

    2017   2016
Audit Fees   $ 28,700     $ 26,300  
Audit Related Fees     -0-       -0-  
Tax Fees     -0-       -0-  
Total   $ 28,700     $ 26,300  

  33  

 

Audit Fees were for professional services for auditing and reviewing our financial statements, as well as for consents and assistance with and review of documents filed with the Securities and Exchange Commission.

Pre-Approval Policy for Services of Greenway Technologies, Inc. Independent Auditors

Our board of directors reviews the Form 10-Q and Form 10-K filings before their filing. In addition, our board of directors reviews the audit plans and anticipated fees for audit and tax work prior to the commencement of that work. All fees paid to the independent auditors are pre-approved by our board of directors. These services may include audit services, audit-related services, tax services and other services.

PART IV

Item 15. Exhibits, Financial Statement Schedules.
(a) All financial statements are included in Item 8 of this report.
(b) All financial statement schedules required to be filed by Item 8 of this report and the exhibits contained in this report are included in Item 8 of this report.
(c) The following exhibits are attached to this report:
Exhibit No. Identification of Exhibit
2.1** Combination Agreement executed as of August 18, 2009, between Dynalyst Manufacturing Corporation and Universal Media Corporation, filed as Exhibit 10.2 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
3.1** Articles of Incorporation of Dynalyst Manufacturing Corporation filed with the Secretary of State of Texas on March 13, 2002, filed as Exhibit 3.1 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
3.2** Articles of Amendment of Articles of Incorporation of Dynalyst Manufacturing Corporation filed with the Secretary of State of Texas on June 7, 2006, filed as Exhibit 3.2 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
3.3** Articles of Amendment of Articles of Incorporation of Dynalyst Manufacturing Corporation filed with the Secretary of State of Texas on August 28, 2009, changing the corporate name to Universal Media Corporation, filed as Exhibit 3.3 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
3.4** Articles of Amendment of Articles of Incorporation of Universal Media Corporation filed with the Secretary of State of Texas on March 23, 2011, changing the corporate name to UMED Holdings, Inc., filed as Exhibit 3.4 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
3.5** Articles of Amendment of Certificate of Formation of UMED Holdings, Inc. filed with the Secretary of State of Texas on June 23, 2017, changing the corporate name to Greenway Technologies, Inc., filed as Exhibit 3.1 to the registrant’s Form 8-K/A on July 20, 2017, Commission File Number 000-55030.
3.6** Bylaws of Dynalyst Manufacturing Corporation, filed as Exhibit 3.5 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
3.7** Articles of Incorporation of Greenway Innovative Energy, Inc. filed with the Secretary of State of Nevada on July 6, 2012, filed as Exhibit 3.7 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
3.8** Bylaws of Greenway Innovative Energy, Inc., filed as Exhibit 3.8 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
10.1** Code of Ethics for Senior Financial Officers, filed as Exhibit 10.1 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.

  34  

 

  

10.2** Purchase Agreement dated as of May 1, 2012, between Universal Media Corporation and Mamaki Tea & Extract, Inc., filed as Exhibit 10.3 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
10.3** Addendum and Modification to Purchase Agreement dated as of December 31, 2012, between Universal Media Corporation and Mamaki of Hawaii, Inc. formerly Mamaki Tea & Extract, Inc., filed as Exhibit 10.4 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
10.4** Second Addendum and Modification to Purchase Agreement dated as of December 31, 2012, between Universal Media Corporation and Mamaki of Hawaii, Inc. formerly Mamaki Tea & Extract, Inc., filed as Exhibit 10.5 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
10.5** Purchase Agreement dated August 29th, 2012, between Universal Media Corporation and Greenway Innovative Energy, Inc., filed as Exhibit 10.6 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
10.6** Purchase Agreement dated as of February 23, 2012, between Rig Support Services, Inc. and UMED Holdings, Inc., filed as Exhibit 10.7 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
10.7** Asset Purchase Agreement dated as of October 2, 2011, between Jet Regulators, L.C., R/T Jet Tech, L.P. and UMED Holdings, Inc., filed as Exhibit 10.8 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
10.8** Employee Agreement dated May 27, 2011, between UMED Holdings, Inc. and Kevin Bentley, filed as Exhibit 10.9 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
10.9** Employee Agreement dated May 27, 2011, between UMED Holdings, Inc. Randy Moseley, filed as Exhibit 10.10 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
10.10** Employee Agreement dated May 27, 2011, between UMED Holdings, Inc. and Richard Halden, filed as Exhibit 10.11 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
10.11** Employee Agreement dated August 29, 2012, between UMED Holdings, Inc. and Raymond Wright, filed as Exhibit 10.12 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
10.12** Employee Agreement dated August 29, 2012, between UMED Holdings, Inc. and Conrad Greer, filed as Exhibit 10.13 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
10.13** Consulting Agreement dated May 27, 2011, between UMED Holdings, Inc. and Jabez Capital Group, LLC, filed as Exhibit 10.14 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
10.14** Promissory Note in the amount of $850,000 dated August 17, 2012, executed by Mamaki Tea, Inc. payable to Southwest Capital Funding, Ltd., filed as Exhibit 10.15 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
10.15** Modification of Note and Liens effective as of October 1, 2012, between Southwest Capital Funding, Ltd. and Mamaki Tea, Inc., filed as Exhibit 10.16 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
10.16** Second Modification of Note and Liens effective as of December 20, 2012, between Southwest Capital Funding, Ltd., Mamaki Tea, Inc., and Mamaki of Hawaii, Inc., filed as Exhibit 10.17 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
10.17** Promissory Note in the amount of $150,000 dated August 17, 2012, executed by Mamaki Tea, Inc. payable to Robert R. Romer, filed as Exhibit 10.18 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
10.18** Addendum and Modification to Purchase Agreement dated as of December 31, 2012, between Rig Support Services, Inc. and UMED Holdings, Inc., filed as Exhibit 10.19 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.

 

  35  

 

 

10.19** Securities Purchase Agreement dated September 18, 2014, between UMED Holdings, Inc. and Tonaquint, Inc., filed as Exhibit 10.19 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
10.20** Promissory Note in the amount of $158,000 dated September 18, 2014, executed by UMED Holdings, Inc. payable to Tonaquint, Inc., filed as Exhibit 10.20 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
10.21** Warrant dated September 18, 2014, for $47,400 worth of UMED Holdings, Inc. shares issued to Tonaquint, Inc., filed as Exhibit 10.21 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
10.22** Office Lease Agreement dated October 2015, between UMED Holdings, Inc. and The Atrium Remains the Same, LLC, filed as Exhibit 10.22 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
10.23** Warrant dated October 31, 2015, for 4,000,000 shares issued to Norman T. Reynolds, Esq, filed as Exhibit 10.23 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
10.24** Promissory Note in the amount of $36,000 dated March 8, 2016, executed by UMED Holdings, Inc. payable to Peter C. Wilson, filed as Exhibit 10.24 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
10.25** Convertible Promissory Note in the amount of $224,000 dated May 4, 2016, executed by UMED Holdings, Inc. payable to Tonaquint, Inc., filed as Exhibit 10.25 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
10.26** Severance and Release Agreement by and between UMED Holdings, Inc. and Randy Moseley dated November 11, 2016, filed as Exhibit 10.26 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
10.27** Settlement and Mutual Release Agreement dated January 13, 2017, executed by UMED Holdings, Inc. in connection with Cause No. DC-16-004718, in the 193rd District Court, Dallas County, Texas against Mamaki of Hawaii, Inc., Hawaiian Beverages, Inc., Curtis Borman, and Lee Jenison, filed as Exhibit 10.27 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
10.28** Warrant dated February 1, 2017, for 2,000,000 shares issued to Richard J. Halden, filed as Exhibit 10.28 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
10.29** Warrant dated February 1, 2017, for 4,000,000 shares issued to Richard J. Halden, filed as Exhibit 10.29 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
10.30** Severance and Release Agreement by and between UMED Holdings, Inc. and Richard Halden dated February 1, 2017, filed as Exhibit 10.30 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
10.31** Assignment Agreement dated December 27, 2010, between Melek Mining, Inc., 4HM Partners, LLC, and UMED Holdings, Inc., filed as Exhibit 10.31 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
10.32**

Consulting Agreement by and between the registrant and Chisos Equity Consultants, LLC, as

amended on February 16, 2018, and March 19, 2018, filed as Exhibit 10.1 to the registrant’s Form 8-K, on March 21, 2018, Commission File Number 000-55030.

10.33* Promissory Note in the amount of $100,000 dated November 13, 2017, executed by Greenway Technologies, Inc. payable to Wildcat Consulting Group LLC.
10.34* Subordinated Convertible Promissory Note in the amount of $166,667 dated December 20, 2017, executed by Greenway Technologies, Inc. payable to Tunstall Canyon Group LLC.
10.35* Warrant dated November 30, 2017 for 1,000,000 shares issued to MTG Holdings, LTD
10.36* Greer Family Trust Promissory Note and Settlement

 

  36  

 

 

31.1* Certification of D. Patrick Six, Chief Executive Officer of Greenway Technologies, Inc., pursuant to 18 U.S.C. §1350, as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.
31.2* Certification of D. Patrick Six, Chief Financial Officer and Principal Accounting Officer of Greenway Technologies, Inc., pursuant to 18 U.S.C. §1350, as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.
32.1* Certification of D. Patrick Six, Chief Executive Officer of Greenway Technologies, Inc., pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.
32.2* Certification of D. Patrick Six, Chief Financial Officer and Principal Accounting Officer of Greenway Technologies, Inc., pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.

____________

*         Filed herewith.

**       Previously filed.

 

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

GREENWAY TECHNOLOGIES, INC.

Date: April 5, 2018.

By /s/ D. Patrick Six

D. Patrick Six, President and Chief Executive Officer

 

 

By /s/ D. Patrick Six

D. Patrick Six, Chief Financial Officer and

Principal Accounting Officer

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature   Title   Date
/s/ D. Patrick Six
D. PATRICK SIX
  Chairman, Chief Executive Officer, and Director   April 5, 2018
/s/ Craig Takacs
CRAIG TAKACS
  Director   April 5, 2018
/s/ Ransom Jones
RANSOM JONES
  Director   April 5, 2018
/s/ Kevin Jones
KEVIN JONES
  Director   April 5, 2018
/s/ Kent Harer
KENT HARER
  Director   April 5, 2018

/s/ Raymond Wright
RAYMOND WRIGHT

 

 

  Secretary and Director   April 5, 2018
  37  

 

 

 

Greenway Technologies, Inc.

 

Financial Statements

 

Years Ended December 31, 2017 and 2016

 

Contents

 

Financial Statements:    
   
Report of Independent Registered Public Accounting Firm   F- 1
Balance Sheets   F- 2
Statements of Operations   F- 3
Statements of Stockholders' Deficit   F- 4
Statements of Cash Flows   F- 5
Notes to Financial Statements   F- 6

 

 

 

 

 

 

 

 

 

 

 

  38  

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and shareholders of

Greenway Technologies, Inc.

Fort Worth, Texas

 

We have audited the accompanying balance sheets of Greenway Technologies, Inc. (the Company) as of December 31, 2017 and 2016 and the related statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2017 and 2016, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2017 and 2016, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financials have been prepared assuming the Company will continue as a going concern. As of December 31, 2017, the Company had accumulated losses of approximately $23,624,000, has generated limited profit, and may experiences losses in the near term. These factors and the need for additional financing in order for the Company to meet its business plan, raise substantial doubt about its ability to continue as a going concern. Management's plan to continue as a going concern is also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

/s/ Soles, Heyn & Company, LLP

Soles, Heyn & Company, LLP

   
We have served as the Company’s auditor since 2015.
   
West Palm Beach, Florida
   

April 4, 2018

  F- 1  

 

GREENWAY TECHNOLOGIES, INC.

Consolidated Balance Sheet 

 

    December 31,   December 31,
    2017   2016
Assets                
Current Assets                
Cash   $ 91,518     $ 67,964  
Prepaid expenses     157,500       13,476  
    Total Current Assets     249,018       81,440  
                 
Fixed assets                
Property & equipment     4,015       4,015  
Less depreciation     4,015       3,666  
      0       349  
Other Assets                
Other assets   $ 20,000     $ 5,000  
           Total Assets   $ 269,018     $ 86,789  
                 
     Liabilities & Stockholders' Deficit                
Current Liabilities                
Accounts payable   $ 140,039     $ 86,518  
Advances from stockholders     1,500       59,690  
Accrued management fees     1,666,602       1,916,602  
Notes payable     153,841       13,500  
Accrued expenses     778,760       250,522  
Current portion of convertible note payable, net of discounts of $81,833 and $13,647     150,834       120,753  
Derivative liability     105,643       56,057  
           Total Current Liabilities     2,997,219       2,503,642  
Long term convertible note payable, less current portion of $66,000     84,000       0  
Total Liabilities     3,081,219       2,503,642  
Commitments and Contingencies                
Stockholders' Deficit                
Class B stock, 20,000,000 shares authorized, par value $0.0001,                
0 issued and outstanding at December 31, 2017 and                
126,938 at December 31, 2016     0       13  
Class A stock 300,000,000 shares authorized, par value $0.0001,                
287,681,826 and 231,118,372 issued and outstanding at                
December 31, 2017 and December 31, 2016, respectively     28,771       23,114  
Additional paid-in capital     20,782,630       12,036,225  
Accumulated deficit     (23,623,602 )     (14,476,205 )
           Total Stockholders' Deficit     (2,812,201 )     (2,416,853 )
Total Liabilities & Stockholders' Deficit   $ 269,018     $ 86,789  

 

See accompanying notes to consolidated financial statements


 

  F- 2  

 

GREENWAY TECHNOLOGIES, INC.

Statements of Operations

For the years ended December 31, 2017 and 2016 

    2017  

 

2016

         
Loss from operations                
  General and administrative   $ 8,262,988     $ 1,050,101  
  Research and development     867,052       967,348  
  Depreciation     349       396  
Total Expense     9,130,389       2,017,845  
                 
                 
Operating loss     (9,130,389 )     (2,017,845 )
                 
Other income (expenses)                
  Debt forgiveness     0       30,076  
 Loss on debt settlement     0       (8,500 )
  Loss on change in fair value of derivatives     (15,933 )     (7,129 )
  Interest expense     (1,075 )     (14,676 )
Total other expenses     (17,008 )     (229 )
                 
                 
Loss before income taxes     (9,147,397 )     (2,018,074 )
                 
Provision for income taxes     0       0  
                 
Net loss   $ (9,147,397 )   $ (2,018,074 )
                 
Basic loss per share;                
Net loss per share   $ (0.03 )   $ (0.01 )
                 
Weighted average shares                
Outstanding;                
  Basic and diluted     273,028,802       202,062,054  

 

See accompanying notes to consolidated financial statements  

 

  F- 3  

 

GREENWAY TECHNOLOGIES, INC.

Consolidated Statement of Stockholders' Deficit

For the years ended December 31, 2017 and 2016

   

 

 

Class B

Number of

Shares

 

 

Stock

Par Value

$0.0001

Amount

 

 

 

Class A

Number of

Shares

 

 

 

Par Value

$0.0001

Amount

 

 

Additional

Paid-In-

Capital

 

 

 

 

Accumulated

Deficit

 

 

 

 

 

Total

Balance

December 31, 2015

    15,126,938     $ 1,513       183,882,132     $ 18,389     $ 10,167,670     $ (12,458,131 )   $ (2,270,559 )
                                                         
Sale of common stock     —         —         31,055,955       3,107       1,751,913       —         1,755,000  
                                                         
Conv of class B                                                        
common to class A common     (15,000,000 )     (1,500 )     1,500,000       1,500               —         —    
                                                         

Convert

shareholders' advances to common stock

    —         —        

664,285

      66       51,434       —         51,500  
                                                         
Shares issued for services     —         —         516,000       52       41,228       —         41,280  
                                                         
Shares issued for note settlement     —         —         200,000       20       23,980       —         24,000  
                                                         
Net loss     —         —         —         —         —         (2,018,074 )     (2,018,074 )

Balance

December 31, 2016

    126,938     $ 13       231,118,372     $ 23,114     $ 12,036,225     $ (14,476,205 )   $ (2,416,853 )
                                                         
Conv of class B                                                        
common to class A common     (126,938 )     (13 )     693,932       70       (57 )     —         —    
                                                         
Sale of common stock     —         —         21,004,716       2,100       2,189,650       —         2,191,750  
                                                         
Shares issued to settle shareholder     disputes     —         —         7,346,000       735       898,205       —         898,940  
                                                         
Shares issued for services     —         —         35,856,666       3,586       4,965,064       —         4,968,650  
                                                         
Shares returned to be cancelled                     (8,337,860 )     (834 )     (68,673 )             (69,507 )
                                                         
Beneficial conversion feature                                     27,083               27,083  

 

Warrants issued for services

                                    735,133               735,133  
                                                         
Net loss     —         —         —         —         —         (9,147,397 )     (9,147,397 )
Balance                                                        
December 31, 2017     0     $ 0       287,681,826     $ 28,771     $ 20,782,630     $ (23,623,602 )   $ (2,812,201 )

 

  See accompanying notes to consolidated financial statements

  F- 4  

 

 

GREENWAY TECHNOLOGIES, INC.

Consolidated Statements of Cash Flows

For the years ended December 31, 2017 and 2016

 

    2017  

 

 

2016

Cash Flows from Operating Activities                
Net Loss from Operations   $ (9,147,397 )   $ (2,018,074 )
                 
Adjustments to reconcile net loss to net cash used in                
 operating activities:                
    Depreciation     349       395  
    Stock based compensation     5,650,938       41,280  
  Loss on shareholder disputes and debt settlement     1,412,286       8,500  
  Interest and amortization of debt discounts     3,744       206  
  Debt forgiveness     0       30,076  
  Loss (gain) change in fair value of derivatives     8,908       7,129  
  Changes in operating assets and liabilities:                
 Prepaid insurance     (144,024 )     (13,476 )
 Other assets     (15,000 )     (5,000 )
  Accounts payable     53,521       973  
  Accrued management fees     (250,000 )     122,985  
  Derivative liability     40,678          
  Accrued expenses     159,244       (20,759 )
                 
Net Cash Used in Operating Activities     (2,226,753 )     (1,845,765 )
                 
Cash Flows from Investing Activities     0       0  
                 
Cash Flows from Financing Activities                
   Advances from shareholders converted to common stock     0       118,500  
   Repayment of advances from shareholders     (58,190 )     (94,024 )
   Increase in notes payable     151,342       13,500  
   Payments on note payable     (11,000 )     0  
  Proceeds from convertible note payable     166,667       224,000  
   Payments on convertible note payable     (120,754 )     (89,600 )
   Purchase of treasury shares     (69,508 )     0  
  Debt issuance costs     0       (13,647 )
   Proceeds from sale of common stock     2,191,750       1,755,000  
Net Cash Provided by Financing Activities     2,250,307       1,913,729  
                 
Net Increase in cash for the year     23,554       67,9644  
Cash Beginning of Year     67,964       0  
Cash End of Year   $ 91,518     $ 67,964  
                 
Supplemental Disclosure of Cash Flow Information:                
   Cash Paid during the period for interest   $ 0     $ 14,537  
   Cash Paid during the period for taxes   $ 0     $ 0  
   Conversion of class B common stock to class A common stock   $ 13     $ 1,500  

 

 

The accompanying notes are an integral part of these financial statements 

 

 

  F- 5  

 

GREENWAY TECHNOLOGIES, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2017

 

 

NOTE 1 – ORGANIZATION

 

Nature of Operations

 

Greenway Technologies, Inc. ("Greenway” or the "Company") was organized on March 13, 2002 under the laws of the State of Texas as Dynalyst Manufacturing Corporation.  On August 18, 2009, in connection with a merger with Universal Media Corporation, a privately held Nevada company, the Company changed its name to Universal Media Corporation ("UMC").  The company changed its name to Greenway Technologies, Inc. on March 23, 2011. 

The Company’s mission is to operate as a holding company through the acquisition of businesses as wholly-owned subsidiaries that meet some key requirements: (1) solid management that will not have to be replaced in the near future (2) the ability to grow with steady growth to follow and (3) an emphasis on emerging core industry markets, such as energy and metals.  It is the Company’s intention to add experienced personnel and select strategic partners to manage and operate the acquired business units.

In September 2010, the Company acquired 1,440 acres of placer mining claims on Bureau of Land Management land in Mohave County, Arizona. Due to the Company not producing any revenues from its BLM mining leases since its acquisition of the leases, achieving a position of producing cash flow levels to fund the development of its BLM mining leases in December 2010 and not having current resources for an appraisal, we recognized an impairment charge of $100,000 during the year ended December 31, 2014.

In August 2012, the Company acquired 100% of Greenway Innovative Energy, Inc. (sometimes, “GIE”) which owns patents and trade secrets for a proprietary process and related technology to convert natural gas into synthesis gas (syngas). Syngas is an important intermediate gas used by industry in the production of ammonia, methane, liquid fuels, and other downstream products. The Company’s unique process is called Fractional Thermal Oxidation™ (FTO). When combined with Greenway Technologies’ Fischer-Tropsch (FT) system, we offer a new economical, relatively small scale (125 to 2,475 bbls/day) method of converting gas-to-liquids (GTL) that can be located in field locations where needed.

 

NOTE 2 - BASIS OF PRESENTATION AND GOING CONCERN UNCERTAINTIES

 

Principles of Consolidation

 

The accompanying consolidated financial statements include the financial statements of Greenway and its wholly-owned subsidiaries. The Company entered into an agreement with Jet Regulators at December to return its ownership interest for the return of 300,000 shares of the Company's common stock. All significant inter-company accounts and transactions were eliminated in consolidation.

 

The accompanying consolidated financial statements include the accounts of the following entities:

 

Name of Entity %   Entity Incorporation Relationship
Greenway Technologies, Inc.     Corporation Texas Parent
Universal Media Corporation 100  % Corporation Wyoming Subsidiary
Greenway Innovative Energy, Inc. 100  % Corporation Nevada Subsidiary
Logistix Technology Systems, Inc. 100  % Corporation Texas Subsidiary

 

 

 

  F- 6  

 

  Going Concern Uncertainties

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying consolidated financial statements, the Company sustained a loss of approximately $9 million for the year ended December 31, 2017 and has a working capital deficiency of approximately $2.7 million and liabilities in excess of assets of approximately $2.8 at December 31, 2017. The ability of the Company to continue as a going concern is in doubt and dependent upon achieving a profitable level of operations or on the ability of the Company to obtain necessary financing to fund ongoing operations. Management believes that its current and future plans enable it to continue as a going concern for the next twelve months.

The Company is in discussions with several oil and gas companies and other organizations regarding joint venture funding for its first gas-to-liquids (GTL) plant using the Company’s unique GTL system. Should an agreement be made, the joint venture relationship will provide funding at a level of $20M with an ongoing profit-sharing arrangement between the Company and the partner organizations and/or individuals with an economic profile previously not achievable in the GTL industry segment. While there are no assurances that financing for the first plant will be obtained on acceptable terms and in a timely manner, the failure to obtain the necessary working capital may cause the Company to move in one or more alternate directions to shepherd this revolutionary GTL system into production. Several alternate paths are under consideration in conjunction with the joint venture/profit sharing approach.

The accompanying consolidated financial statements do not include any adjustment to the recorded assets or liabilities that might be necessary should the Company have to curtail operations or be unable to continue in existence.

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of significant accounting policies applied in the presentation of the consolidated financial statements are as follows.

Property and Equipment

Property and equipment is recorded at cost. Major additions and improvements are capitalized. The cost and related accumulated depreciation of equipment retired or sold, are removed from the accounts and any differences between the undepreciated amount and the proceeds from the sale or salvage value are recorded as a gain or loss on sale of equipment. Depreciation is computed using the straight-line method over the estimated useful life of the assets.

Impairment of Long-Lived Assets

The Company assesses the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, in accordance with Accounting Standards Codification, ASC Topic 360, Property, Plant and Equipment .  An asset or asset group is considered impaired if its carrying amount exceeds the undiscounted future net cash flow the asset or asset group is expected to generate.  If an asset or asset group is considered impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds its fair value.  If estimated fair value is less than the book value, the asset is written down to the estimated fair value and an impairment loss is recognized.

Revenue Recognition

 

The FASB issued ASC 606 as guidance on the recognition of revenue from contracts with customers in May 2014 with amendments in 2015 and 2016. Revenue recognition will depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented, or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the cumulative catch-up transition method). The company will adopt the guidance on January 1, 2018 and apply the cumulative catch-up transition method. The transition adjustment to be recorded to stockholders’ equity upon adoption of the new standard is not expected to be material.

  F- 7  

 

 The Company has not, to date, generated any revenues.

 

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during the reported period.  Actual results could differ materially from the estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three-months or less to be cash equivalents.  There were no cash equivalents at December 31, 2017, or December 31, 2016.

Income Taxes

The Company accounts for income taxes in accordance with FASB ASC 740, “Income Taxes,” which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when it is more likely than not that some or all deferred tax assets will not be realized.

The Company has adopted the provisions of FASB ASC 740-10-05 Accounting for Uncertainty in Income Taxes . The ASC clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements.  The ASC prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  The ASC provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.  Open tax years, subject to IRS examination include 2014 – 2017.

Net Loss Per Share, basic and diluted

Basic loss per share has been computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding for the period. Shares issuable upon the exercise of warrants (12,810,625) have been excluded as a common stock equivalent in the diluted loss per share because their effect would be anti-dilutive.

Derivative Instruments

The Company accounts for derivative instruments in accordance with Accounting Standards Codification 815, Derivatives and Hedging (“ASC 815”), which establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities.  They require that an entity recognize all derivatives as either assets or liabilities in the balance sheet and measure those instruments at fair value.

If certain conditions are met, a derivative may be specifically designated as a hedge, the objective of which is to match the timing of gain or loss recognition on the hedging derivative with the recognition of (i) the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk or (ii) the earnings effect of the hedged forecasted transaction. For a derivative not designated as a hedging instrument, the gain or loss is recognized in income in the period of change.

See Note 7 below for discussion regarding convertible notes payable and warrants.

 

  F- 8  

 

  Fair Value of Financial Instruments

 

Effective January 1, 2008, fair value measurements are determined by the Company’s adoption of authoritative guidance issued by the FASB, with the exception of the application of the statement to non-recurring, non-financial assets and liabilities, as permitted. Fair value is defined in the authoritative guidance as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy was established, which prioritizes the inputs used in measuring fair value into three levels as follows:

Level 1 – Valuation based on unadjusted quoted market prices in active markets for identical assets or liabilities.

Level 2 – Valuation based on, observable inputs (other than level one prices), quoted market prices for similar assets such as at the measurement date; quoted prices in the market that are not active; or other inputs that are observable, either directly or indirectly.

Level 3 – Valuation based on unobservable inputs that are supported by little or no market activity, therefore requiring management’s best estimate of what market participants would use as fair value.

Original Issue Discount

For certain convertible debt issued, the Company provides the debt holder with an original issue discount (“OID”).  An OID is the difference between the original cash proceeds and the amount of the note upon maturity. The Note is originally recorded for the total amount payable. The OID is amortized into interest expense pro-rata over the term of the Note.

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The valuation of the Company’s notes recorded at fair value is determined using Level 3 inputs, which consider (i) time value, (ii) current market and (iii) contractual prices.

The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, receivables, accounts payable, notes payable and other payables, approximate their fair values because of the short maturity of these instruments.

The following table represents the Company’s assets and liabilities by level measured at fair value on a recurring basis at December 31, 2017 and 2016:

 

Description   Level 1     Level 2   Level 3  
2017 Derivative Liabilities   $                       $     $ 105,643  
2016 Derivative Liabilities   $                       $     $ 56,057  

The following assets and liabilities are measured on the balance sheets at fair value on a recurring basis utilizing significant unobservable inputs or Level 3 assumptions in their valuation. The following tables provide a reconciliation of the beginning and ending balances of the liabilities:

 

All gains and losses on assets and liabilities measured at fair value on a recurring basis and classified as Level 3 within the fair value hierarchy are recognized in other interest income and expense in the accompanying consolidated financial statements.

 

  F- 9  

 

 The change in the notes payable at fair value for the year ended December 31, 2017, is as follows:

 

    Fair
Value
  Change in   New       Fair Value
    January 1,
2017
  Fair
Value
  Convertible
Notes
  Conversions   December 31, 2017
                                         
Derivative Liabilities   $ (56,057 )   $ (49,586 )   $ 0     $ 0     $ (105,643 )

  

Stock Based Compensation

The Company follows Accounting Standards Codification subtopic 718-10, Compensation (“ASC 718-10”) which requires that all share-based payments to both employees and non-employees be recognized in the income statement based on their fair values.

At December 31, 2017, the Company did not have any outstanding stock options.

Concentration and Credit Risk

Financial instruments and related items, which potentially subject the Company to concentrations of credit risk consist primarily of cash. The Company places its cash with high credit quality institutions.  At times, such deposits may be in excess of the FDIC insurance limit.

Research and Development

The Company accounts for research and development costs in accordance with Accounting Standards Codification subtopic 730-10, Research and Development (“ASC 730-10”). Under ASC 730-10, all research and development costs must be charged to expense as incurred. Accordingly, internal research and development costs are expensed as incurred. Third-party research and development costs are expensed when the contracted work has been performed or as milestone results have been achieved as defined under the applicable agreement. Company-sponsored research and development costs related to both present and future products are expensed in the period incurred. The Company incurred research and development expenses of $867,052 and $967,348 during the years ended December 31, 2017 and 2016, respectively.

Issuance of Common Stock

The issuance of common stock for other than cash is recorded by the Company at market values.

Impact of New Accounting Standards

 

The FASB issued ASC 606 as guidance on the recognition of revenue from contracts with customers in May 2014 with amendments in 2015 and 2016. Revenue recognition will depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented, or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the cumulative catch-up transition method). The company will adopt the guidance on January 1, 2019 and apply the cumulative catch-up transition method. The transition adjustment to be recorded to stockholders’ equity upon adoption of the new standard is not expected to be material.

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements.

  F- 10  

 

  NOTE 4 – PROPERTY, PLANT AND EQUIPMENT

 

Property, plant and equipment, their estimated useful lives, and related accumulated depreciation at December 31, 2017 and 2016, respectively, are summarized as follows:

 

 

  Range of              
    Lives in        
    Years     2017     2016  
Equipment     5       2,032       2,032  
Furniture and fixtures     5       1,983       1,983  
              4,015       4,015  
Less accumulate depreciation             (4,015 )     (3,666 )
            $ 0       349  
                         
Depreciation expense for the year ended December 31, 2017 and 2016.           $ 349     $ 396  

 

NOTE 5 – TERM NOTES PAYABLE

 

Term notes payable consisted of the following at December 31, 2017 and 2016;

    2017    

 

2016

 
             

Unsecured note payable dated March 8, 2016 to an individual at 5% interest, payable upon

the Company’s availability of cash (1)

  $ 2,500     $ 13,500  

Unsecured note payable dated November 13, 2017 to a corporation at $10,000 lump

sum interest at maturity on February 28, 2018

    100,000       0  
Unsecured note payable dated December 28, 2017 to a corporation, payable on January 8, 2018     51,342       0  
                 
Total term notes   $ 153,842     $ 229,763  

 

             
(1) The Company negotiated a $15,500 reduction of the note in November 2016 for 200,000 shares of common stock valued at $0.12 per share of $24,000. The Company recognized a $8,500 loss on the settlement.

  

NOTE 6 – 2017 CONVERTIBLE PROMISSORY NOTES

 

The Company issued a $166,667 convertible promissory note bearing interest at 4.50% per annum to an accredited investor, payable in equal installments of $6,000 commencing February 1, 2018 plus interest at rate of 4% per annum on December 20, 2018 and $80,000 plus accrued interest on December 20, 2019.   The holder has the right to convert the note into common stock of the Company at a conversion price of $0.08 per share for each one dollar of cash payment which may be due (which would be 1,083,333 shares for the $86,667 payment and 1,000,000 shares for the $80,000 payment. 

The Company evaluated the terms of the convertible note in accordance with ASC 815-40, Contracts in Entity’s Own Equity, and concluded that the Convertible Note did not resulted in a derivative. The Company evaluated the terms of the convertible note and concluded that there was a beneficial conversion feature since the convertible note was convertible

 

  F- 11  

 

into shares of common stock at a discount to the market value of the common stock. The discount related to the beneficial conversion feature on the note was valued at $27,083 based on the $0.013 difference between the market price of $0.093 and the conversion price of $0.08 times the 2,083,325 conversion shares. The discount related to the beneficial conversion feature will amortized over the term of the debt beginning in 2018.

 

The Company issued a $150,000 convertible promissory note bearing interest at 4.50% per annum to an accredited investor, payable in equal installments of $6,000 plus accrued interest until the principal and accrued interest are paid in full.   The holder has the right to convert the note into common stock of the Company at a conversion price of equal to 70% of the prior twenty (20) days average closing market price of the Company’s common stock. 

The Company evaluated the terms of the convertible note in accordance with ASC 815-40, Contracts in Entity’s Own Equity, and concluded that the Convertible Note resulted in a derivative. The Company evaluated the terms of the convertible note and concluded that there was a beneficial conversion feature since the convertible note was convertible into shares of common stock at a discount to the market value of the common stock. The discount related to the beneficial conversion feature on the note was valued at $58,494 based on the difference between the fair value of the 1,578,947 convertible shares at the valuation date and the $150,000 note value. The discount related to the beneficial conversion feature will amortized over the term of the debt beginning in 2018. The discount related to the beneficial conversion feature on the note was valued at $150,000 based on the Black-Scholes Model . The derivative ($58,494) was will be amortized over the term of the debt (25 months) beginning in 2018 and was computed as follows;    

 

    Commitment Date  
Expected dividends     0%  
Expected volatility     115.58%  
Expected term: conversion feature                              2 years  
Risk free interest rate     1.89%  

  

NOTE 7 – MAY 4, 2016 CONVERTIBLE PROMISSORY NOTE

 

May 2016 Convertible Note

On May 4, 2016, the Company issued a $224,000 convertible promissory note bearing interest at 10.0% per annum to an accredited investor, payable beginning November 10, 2016, in monthly installments of $44,800 plus accrued interest and a cash premium equal to 10.0% of the installment amount.  The convertible promissory note was paid in full on March 4, 2017.  The holder had the right under certain circumstances to convert the note into common stock of the Company at a conversion price equal to 70% of the average of the 3 lowest volume weighted average trading prices during the 20-day period ending on the latest complete trading day prior to the conversion date.

The Company evaluated the terms of the convertible note in accordance with ASC 815-40, Contracts in Entity’s Own Equity, and concluded that the Convertible Note resulted in a derivative. The Company evaluated the terms of the convertible note and concluded that there was a beneficial conversion feature since the convertible note was convertible into shares of common stock at a discount to the market value of the common stock. The discount related to the beneficial conversion feature on the note was valued at $224,000 based on the Black-Scholes Model . The discount related to the beneficial conversion feature ($51,829) was amortized over the term of the debt (10 months).  For the year ended December 31, 2017, the Company recognized interest expense of $9,327 related to the amortization of the discount.

In connection with the issuance of the $224,000 note, the Company recorded debt issue cost and discount as follows:

 

  ·

$20,000 original issue discount and $4,000 debt issue cost, which was amortized over 10 months, with amortization

of $4,000 for twelve-months ended December 31, 2017.

 

  ·

The convertible promissory note was paid in full on March 10, 2017, reducing the embedded derivative for the

2016 beneficial conversion right to zero at December 31, 2017.

  F- 12  

 

 September 2014 Convertible Note

In connection with the issuance of a $158,000 convertible promissory note in 2014 (repaid in July 2015), the Company issued warrants to purchase shares of common stock.

 

  ·

Warrants – recorded at fair value ($79,537) upon issuance, and marked -to-market on the balance sheet at $47,149

as of December 31, 2017, and $20,820 as of December 31, 2016, which was computed as follows:

 

    Commitment Date  
Expected dividends     0%  
Expected volatility     115.58%  
Expected term: conversion feature                              2 years  
Risk free interest rate     1.89%  

  

NOTE 8 – ACCRUED EXPENSES

 

Accrued expenses consisted of the following at December 31, 2017 and 2016;

    2017    

 

2016

 
             
Accrued consulting fees   $ 249,500     $ 249,500  
Accrued expense related to shareholder dispute     330,000       0  
Accrued expense related to warrant exercise     180,000       0  
Accrued consulting expense     12,000       0  
Accrued interest expense     7,260       1,022  
Total accrued expenses   $ 778,760     $ 250,522  

 

NOTE 9– CAPITAL STRUCTURE

 

The Company is authorized to issue 300,000,000 shares of class A common stock with a par value of $.0001 per share and 20,000,000 shares of class B stock with a par value of $.0001 per share.  Each common stock share has one voting right and the right to dividends, if and when declared by the Board of Directors.

 

Class A Common Stock

 

At December 31, 2017, there were 287,681,826 shares of class A common stock issued and outstanding.

 

During the year ended December 31, 2017, the Company: issued 21,004,716 shares of restricted class A common stock to sixty-five individuals through private placements for cash of $2,191,750 at average of $0.104 per share.

        

 

 

 

  F- 13  

 

  

 

During the year ended December 31, 2016, the Company: issued 31,055,955 shares of restricted class A common stock to forty-two individuals through private placements for cash of $1,755,000 at average of $0.057 per share.

 

 

 

 

 

 

Class B Stock

 

At December 31, 2017 and 2016, there were 0 and 126,938 shares of class B stock issued and outstanding, respectively.

 

During the year ended December 31, 2017, the Company; exchanged 630,000 shares of class A common stock for 62,986 class B shares with a shareholder who held class B shares from the 2009 merger agreement between the Company and Dynalyst Manufacturing Corporation which set a conversion rate of 15 to 1. The Company negotiated the 630,000 shares when the class B shareholder elected to convert.

 

During the year ended December 31, 2016, the Company issued 15,000,000 shares of class A shares in exchange for 15,000,000 class B shares issued in 2011.

 

Stock options, warrants and other rights

 

At December 31, 2017, the Company has not adopted any employee stock option plans.

On February 3, 2017, the Company issued 6,000,000 warrants (4,000,000 at $0.35 for two years and 2,000,000 at $0.45 for three years) as part of a separation agreement with a co-founder and former president. The Company valued the warrants as of March 31, 2017, at $639,284 using the Black-Scholes Model with expected dividend rate of 0%, expected volatility rate of 455%, expected conversion term of two and three years and risk-free interest rate of 1.75%.

On November 30, 2017, the Company issued 1,000,000 warrants at $0.30 for three years as part of a settlement of a shareholder dispute with MTG Holdings, Inc. he Company valued the warrants as of December 31, 2017, at $95,846 using the Black-Scholes Model with expected dividend rate of 0%, expected volatility rate of 116%, expected conversion term of two and three years and risk-free interest rate of 1.37%.

 

  F- 14  

 

NOTE 10 - RELATED PARTY TRANSACTIONS

 

Shareholders made loans and advances to the Company in the amounts of $219,509 (Tunstall Canyon Group $166,667, Kevin Jones $51,342 and Pat Six $1,500) and $141,040 (Kevin Jones $121,040 and Tunstall Canyon Group $20,000) during the years ended December 31, 2017 and 2016, respectively.  During the year ended December 31, 2107, a shareholder Richard Halden purchased 2,250,000 shares of class A common stock for $225,000 ($0.010 per shares and Kevin Jones received repayment of $59,690 loan. During the year ended December 31, 2016, Tunstall Canyon elected to convert advances of $51,500 to shares of class A common stock at an average value of $0.0775 per share and Kevin Jones received repayment of $151,000 loan. A shareholder forgave $30,077 of advances during the year ended December 31, 2016.

 

NOTE 11 – INCOME TAXES

 

At December 31, 2017 and 2016, the Company had approximately $9.5 million and $5.6 million, respectively, of net operating losses ("NOL") carry forwards for federal and state income tax purposes.  These losses are available for future years and expire through 2034.  Utilization of these losses may be severely or completely limited if the Company undergoes an ownership change pursuant to Internal Revenue Code Section 382.  

 

The provision for income taxes for continuing operations consists of the following components for the years ended December 31, 2017 and 2016:

 

  2017   2016  
         
Current   $ -     $ -  
Deferred     -       -  
   Total tax provision for (benefit from) income taxes   $ -     $ -  

 

 

A comparison of the provision for income tax expense at the federal statutory rate of 34% for the years ended December 31, 2017 and 2016 the Company's effective rate is as follows:

 

    2017     2016  
             
Federal statutory rate     (21.0 ) %     (34.0 ) %
State tax, net of federal benefit     (0.0 )     (0.0 )
Permanent differences and other including surtax exemption     0.0       0.0  
Temporary difference     (15.9 )     (3.7
Valuation allowance     36.9       37.7  
Effective tax rate     0.0 %     0.0 %

 

 

 

 

  F- 15  

 

 The net deferred tax assets and liabilities included in the financial statements consist of the following amounts at December 31, 2017 and December 31, 2016: 

    2017    

 

2016

 
Deferred tax assets            
Net operating loss carry forwards   $ 16,403,873     $ 4,921,910  
Deferred compensation     821,572       860,947  
Stock based compensation     2,900,734       1,756,142  
Other     581,639       383,964  
Total     20,707,818       7,922,963  
Less valuation allowance     (20,707,818 )     (7,922,963 )
Deferred tax asset     -       -  
Deferred tax liabilities                
Depreciation and amortization   $ -     $ -  
Net long-term deferred tax asset   $ -     $ -  

 

 

 The change in the valuation allowance was $12,784,855 and $2,018,074 for the years ended December 31, 2017 and 2016, respectively.  The Company has recorded a 100% valuation allowance related to the deferred tax asset for the loss from operations, interest expense, interest income and other income subsequent to the change in ownership, which amounted to $23,623,602 and $14,476,205 at December 31, 2017 and 2016, respectively. 

 

Utilization of the Company’s net operating losses may be subject to substantial annual limitation if the Company experiences a 50% change in ownership, as provided by the Internal Revenue Code and similar state provisions.  Such an ownership change would substantially increase the possibility of net operating losses expiring before complete utilization.

 

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, historical taxable income including available net operating loss carry forwards to offset taxable income, and projected future taxable income in making this assessment.

 

NOTE 13 – COMMITMENTS 

 

Employment Agreements

 

In May 2011, the Company entered into employment agreements with its chief executive officer, president and chief financial officer.  The Agreements were for a term of 5 years, ending on May 31, 2016.  The employment agreements also provide for the officers to receive 1,250,000 shares of restricted common stock annually for each year of the employment agreement.  The agreements were not renewed. During the year ended December 31, 2016, the Company accrued $150,000, respectively, as management fees for the president and chief financial officer.

 

In August 2012, the Company entered into employment agreements with the president and chairman of the board of Greenway Innovative Energy, Inc. for a term of 5 years with compensation of $90,000 per year. In June of 2014, the president's employment agreement was amended to increase his annual pay to $180,000.  During the years ended December 31, 2017 and 2016, respectively, the Company paid and accrued a total of $180,000 and $191,250, respectively, towards the employment agreement. 

  F- 16  

 

In the August 2012 acquisition agreement with Greenway Innovative Energy, Inc., the Company agreed to issue an additional 7,500,000 shares of restricted common stock when the first GTL unit is built and becomes operational and is capable of producing 2,000 barrels of diesel or jet fuel per day and pay Greenway Innovative Energy a 2% royalty on all gross production sales on each unit placed in production.

 

Consulting Agreement

 

On November 28, 2017, the Company entered into a three-year consulting agreement with Chisos Equity Consultants, LLC for public relations, consulting and corporate communications services. The initial payment was 1,800,000 shares of the Company’s restricted common stock. Additional payments upon the Company’s common stock reaching certain price points as follows;

 

  Leases

 

In October 2015, the Company signed a new two-year lease for new office space of approximately 1,800 square feet at the rate of $2,417 for the first twelve months and $2,495 for the second twelve months.  During the years ended December 31, 2017 and 2016, the Company expensed $35,000 and $33,512, respectively, in rent expense.

 

Greenway Innovative Energy, Inc. rents approximately 600 square feet of office space at 1511 North Cooper St., Suite 207, Arlington, Texas 76011, at a rate of $1,369 per month.

 

The Company pays approximately $11,600 in annual maintenance fees on its Arizona BLM mining leases, in addition to 10% royalties based on production.

 

Legal

 

The Company has been named as a co-defendant in an action brought against the Company and Mamaki Tea, Inc., alleging, among other things, that the Company was named as a co-guarantor on an $850,000 foreclosed loan. Management does not believe the ultimate resolution will have an adverse impact on the Company’s financial condition or results of operations.

 

  F- 17  

 

On April 22, 2016, Greenway Technologies filed suit under Cause No. DC-16-004718, in the 193rd District Court, Dallas County, Texas against Mamaki of Hawaii, Inc. (“Mamaki”), Hawaiian Beverages, Inc.(“HBI”), Curtis Borman and Lee Jenison for breach of a Stock Purchase Agreement dated October 29, 2015, wherein we sold our shares in Mamaki to HBI for $700,000 (along with the assumption of certain debt). The Defendants failed to make payments of $150,000 each on November 30, 2015, December 28, 2015 and January 27, 2016. On January 13, 2017, we executed a Settlement and Mutual Release Agreement with the Defendants. However, the Defendants defaulted in their payment obligations under Settlement and Mutual Release Agreement. Due to the bankruptcy proceedings involving Curtis Borman, all action in this matter has been stayed.

On September 14, 2017, in The Third Judicial District Court of Salt Lake City, Utah, Tonaquint, Inc., a Utah corporation, filed suit against Greenway Technologies, Inc. (F.K.A. UMED Holdings, Inc.) under Case No. 170905756. Pursuant to a Securities Purchase Agreement (the “Purchase Agreement”) between Tonaquint and the Company, as buyer, and UMED, as seller, Tonaquint acquired a Convertible Promissory Note (the "Note"), issued by UMED, and a Warrant to Purchase Shares of Common Stock (the “Warrant”). The suit asserts that the Warrant allegedly provided Tonaquint with the right to purchase at any time on or after September 18, 2014, a number of fully paid and non-assessable shares of UMED's common stock equal to $47,400 divided by the Market Price (as defined in the Note, as of September 18, 2014), as such number may be adjusted from time to time pursuant to the terms and conditions of the Warrant. As of the date of this report, the parties have agreed to settle the dispute by a dismissal of this action with prejudice in return for a mutual release of claims and a one-time issuance from Greenway Technologies of 1,600,000 shares of our common stock subject to a weekly leak out restriction equal to the greater of $10,000.00 and 8% of the weekly trading volume. Further, the issuance of stock will be done in connection with a legal opinion pursuant to Rule 144.

 

NOTE 14- SUBSEQUENT EVENTS

 

During the period from January 1, 2018 through March 31, 2018, the Company issued 5,065,000 shares of restricted class A common stock to 11 individuals for $751,500 at average price of $0.1484 per share.

 

On February 16, 2018, a former executive returned 8,633,164 to the Company to be cancelled.

 

On February 21, 2018, the Company issued 3,000,000 shares of restricted class A common stock and a $150,000 promissory note (payable over 25 months) to the Greer Family Trust as part of a settlement agreement.

 

On January 8, 2018, the Company issued 4,000,000 warrants (exercisable on or before January 8, 2021 at a price of $.10 per shares) to Kent Harer, a member of the Company’s Board of Directors.

 

During the week of February 28 and March 2, 2018, operational activation of the first 125 BPD G-reformer was completed at the manufacturer in Fort Worth, Texas. The results of the activation confirmed our expectation for syn-gas production in the field.  

 

  F- 18  

 

 

 

 

 

 

 

 

 

Exhibit 10.33 Wildcat Note Payable

 

 

Promissory Note

Borrower: Greenway Technologies, Inc.

8851 Camp Bowie West, Suite 240

Fort Worth, TX 76116

Lender: Wildcat Consulting Group LLC PO Box 81175

Las Vegas, NV 89180-1175

I. Promise to Pay

Borrower agrees to pay Lender the total amount of $ 100,000.00, together with interest payable on the unpaid principal at the flat one-time rate of 10 0 /0.

Payment will be delivered to Lender at: PO Box 81175, Las Vegas, NV 891801175 or such other address mutually agreed upon both parties.

Il. Repayment

The amount owed under this Promissory Note will be repaid in a lump sum of $ 110,000.00 . The lump sum payment will be due on or before February 28, 2018 . In addition, the Borrower agrees to honor its commitment to pay the $4,000.00 monthly consulting fee due Lender, beginning with the November 1, 2017 payment. Borrower agrees to bring current the August 1, 2017 through October 1, 2017 payments totaling $12,000.00 that are past due.

 

111. Late Payment Fees

If Borrower defaults on the lump sum payment of $110,000.00 by more than five (5) days from the time set forth herein, then Borrower shall issue an additional 500 Warrants at $.30 each to Lender, along with an additional 500 Warrants for every whole or partial thirty (30) day period thereafter, until the $110,000.00 is paid in full. In addition, the Borrower shall issue an additional 500 Warrants for every whole or partial month after February 28, 2018, until the August through October 2017 past due amount of $12,000.00 in consulting fees is paid in full. No pre-payment penalties will apply in either case.

 

 

 

IV. Additional Costs

In case of default in the payment of this Promissory Note, Borrower will pay to

Lender such further amount as will be sufficient to cover the cost and expenses of collection, including, without limitation, reasonable attorney's fees, expenses, and disbursements. These costs will be added to the outstanding principal and will become immediately due.

V. Transfer of the Promissory Note

Borrower hereby waives any notice of the transfer of this Note by Lender or by any subsequent holder of this Note, agrees to remain bound by the terms of this Note subsequent to any transfer, and agrees that the terms of this Note may be fully enforced by any subsequent holder of this Note.

VI. Amendment; Modification; Waiver

No amendment, modification or waiver of any provision of this Promissory Note or consent to departure therefrom shall be effective unless by written agreement signed by both Borrower and Lender.

VII. Successors

The terms and conditions of this Promissory Note shall inure to the benefit of and be binding jointly and severally upon the successors, assigns, heirs, survivors and personal representatives of Borrower and shall inure to the benefit of any holder, its legal representatives, successors and assigns.

VIll. Breach of Promissory Note

No breach of any provision of this Promissory Note shall be deemed waived unless it is waived in writing. No course of dealing and no delay on the part of Lender in exercising any right will operate as a waiver thereof or otherwise prejudice Lender's rights, powers, or remedies. No right, power, or remedy conferred by this Promissory Note upon Lender will be exclusive of any other rights, power, or remedy referred to in this Note, or now or hereafter available at law, in equity, by statute, or otherwise.

 

 

 

 

 

IX. Governing Law

The validity, construction and performance of this Promissory Note will be governed by the laws of Texas, excluding that body of law pertaining to conflicts of law. Borrower hereby waives presentment, notice of non-payment, notice of dishonor, protest, demand and diligence.

The parties hereby indicate by their signatures below that they have read and agree with the terms and conditions of this agreement in its entirety.

Borrower Signature:

Greenway Technologies, Inc.

Lender Signature:

Wildcat Consulting Group LLC Date: 11/13/17.

Certificate of Acknowledgment of Notary Public

State of

County of

known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he or she executed the same in his or her authorized capacity and that by his or her signature on the instrument, the person, or the entity upon behalf of which the person acted, executed the instrument.

 

 

 

WINSTON WILLIAMS

Notary State of Texas

Comm. Expires 01-20-2019 Notary 12849777-7

[NOTARY SEAL]

My commission expires

 

 

Exhibit 10.34

 

THIS NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACI"'), OR APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR RECEIPT BY THE COMPANY OF A WRITTEN OPINION OF COUNSEL IN THE FORM, SUBSTANCE AND SCOPE REASONABLY SATISFACTORY TO THE COMPANY THAT THIS NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION HEREOF MAY BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OF, UNDER AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND SUCH STATE SECURITIES LAWS.

 

GREENWAY TECHNOLOGIES, INC.

Subordinated Convertible Promissory Note

Dated: December 20, 2017 $166,667.00

 

For value received, Greenway Technologies, Inc., a Texas corporation (the "Company"), hereby promises to pay to the order of Tunstall Canyon Group, LLC, a Texas limited liability Company (together with its successors, representatives, and permitted assigns, the "Payee"), in accordance with the terms hereinafter provided, the principal amount of One Hundred Sixty-Six Thousand, Six Hundred Sixty-Seven and No/ 100 Dollars (S 166,667.00), together with interest from the date hereof (the "Issuance Date"), on the unpaid principal at the rate of4.50% per annum.

Interest shall be computed on the basis of a 360-day year of twelve 3D-day months and shall accrue commencing on the Issuance Date. Furthermore, upon the occurrence of an Event of Default (as defined below), then to the extent permitted by law, the Company will pay interest in cash to the Payee, payable on demand, on the outstanding principal balance of the Note from the date of the Event of Default until such Event of Default is cured at the maximum applicable legal rate per annum.

All payments under or pursuant to this Note shall be made in United States Dollars in immediately available funds by wire transfer to the Payee's bank account, pursuant to instructions to be provided by the Payee to the Company. The outstanding principal balance of this Note, plus all accrued interest, shall be due and payable as follows: On December 20, 2018, the sum of $86,667.00, plus accrued interest. On December 20, 2019, the sum of $80,000.00, plus accrued interest.

The Company reserves the right to prepay this Note (in whole or in part) prior to any maturity date with no prepayment penalty. Any such prepayment shall be applied against the principal due under this Note and shall be accompanied by the payment of accrued interest on the amount prepaid to the date of prepayment.

Provided, however, notwithstanding anything herein contained to the contrary, the Payee, in its sole discretion, in whole or in part and, in lieu of requiring that the Company make a cash payment of principal due on this Note on a due date as specified above, may elect instead to convert a portion of this Note and receive shares of the common stock of the Company, par value SO.OOOI per share (the "Common Stock") at the rate of $0.08 per share for each one dollar of cash payment which may be then due hereunder (the "Conversion Price"). All payments of accrued interest shall be in cash.

For example, if the Payee desires to receive the principal payment of $86,667.00 due on December 20, 2018, in shares of the Common Stock instead of cash, the Company shall issue to the Payee 1,083,333 shares of the Common Stock. If the Payee desires to receive the principal payment of $80,000.00 due on December 20, 2019, in shares of the Common Stock instead of cash, the Company shall issue to the Payee 1,000,000 shares of the Common Stock.

If any payment obligation under this Note is not paid when due, the Company promises to pay all costs of collection, including reasonable attorney fees, whether or not a lawsuit is commenced as part of the collection process.

If any of the following events of default (an "Event of Default") occurs, this Note and any other obligations of the Company to the Payee, shall become due immediately, without demand or notice:

 

 

* The failure of the Company to pay the principal and any accrued interest when due;
* The liquidation or dissolution of the Company;
* The filing of bankruptcy proceedings involving the Company as a debtor;
* The application for the appointment of a receiver for the Company;
* The making of a general assignment for the benefit of the Company's creditors;
* The insolvency of the Company;
* A misrepresentation by the Company to the Payee for the purpose of obtaining or extending credit; or
* The sale of a material portion of the business or assets of the Company.

All payments due under this Note shall be subordinated and made junior, in all respects to the payment in full of all principal, all interest accrued thereon and all other amounts due on any indebtedness outstanding prior to the Issuance Date.

Whenever any payment to be made shall be due on a Saturday, Sunday or a public holiday under the laws of the State of Texas, such payment may be due on the next succeeding business day and such next succeeding day shall be included in the calculation of the amount of accrued interest payable on such date.

This Note may be transferred, sold, pledged, hypothecated or otherwise granted as security by the Payee subject only to the express prior written consent of the Company which consent shall not be unreasonably withheld.

No delay in enforcing any right of the Payee under this Note, or assignment by the Payee of this Note, or failure to accelerate the debt evidenced hereby by reason of default in the payment of an installment or the acceptance of a past-due installment shall be construed as a waiver of the right of the Payee to thereafter insist upon strict compliance with the terms of this Note without notice being given to Company. All rights of the Payee under this Note are cumulative and may be exercised concurrently or consecutively at the Payee's option.

Covenants of the Company . The Company covenants that, while this Note is convertible (a) it will reserve from its authorized and unissued shares of the Common Stock a sufficient number of shares of the Common Stock to provide for the delivery of the shares of the Common Stock pursuant to any conversion of this Note, and (b) that all shares of the Common Stock which may be issued upon any such conversion of this Note will be fully paid and non-assessable.

2.                  Protection Against Dilution. Etc . In any of the following events, occurring after the Issuance Date, appropriate adjustment shall be made in the number of shares of the Common Stock to be deliverable upon any conversion of this Note and the purchase price per share of the Common Stock to be paid, so as to maintain the proportionate interest of the Payee as of the Issuance Date: (a) recapitalization of the Company through a split-up or reverse split of the outstanding shares of the Common Stock into a greater or lesser number, as the case may be, or (b) declaration of a dividend on the shares of the Common Stock, payable in shares of the Common Stock or other securities of the Company convertible into shares of the Common Stock, or (c) any of the events described in Paragraph 4 hereof.

3.                  Merger. Etc . In case the Company, or any successor, shall be consolidated or merged with another Company, or substantially all of its assets shall be sold to another company in exchange for stock, cash or other property with the view to distributing such stock, cash or other property to its shareholders, each of the shares of the

 

 

Common Stock purchasable by this Note shall be replaced tor the purposes hereof by the securities of the Company or cash or property issuable or distributable in respect of one share of the Common Stock of the Company, or its successors, upon such consolidation, merger, or sale, and adequate provision to that effect shall be made at the time thereof. Provided, however, notwithstanding anything herein contained to the contrary, in the event that the terms of any such consolidation, merger or sale call for the distribution of any cash or property to the shareholders of the Company, no such cash or property shall be distributable to the Payee in connection with any unconverted portion of this Note, unless the Payee shall have converted this Note pursuant to the terms of Paragraph 6 hereof and all other terms of this Note.

4.                  Notice of Certain Events . Upon the happening of any event requiring an adjustment of the Conversion Price, the Company shall forthwith give written notice thereof to the Payee stating the adjusted Conversion Price and the adjusted number of shares of the Common Stock purchasable upon the conversion hereof resulting from such event and setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. The Board of Directors of the Company shall determine the computation made hereunder. In the case of (a) any consolidation, merger, or sale affecting the Company and calling for the payment of cash or the delivery of property to shareholders of the Company, or (b) any voluntary or involuntary dissolution, liquidation, or winding up of the Company shall at any time be proposed, the Company shall give at least 20 days' prior written notice thereof to the Payee stating the date on which such event is to take place and the date (which shall be at least 20 days after the giving of such notice) as of which the holders of record of shares of the Common Stock shall be entitled to participate in any such event. If the Payee does not elect to convert any part of this Note as a result of any such notice, the Payee shall have no right with respect to any portion of this Note which shall remain unconverted to participate in (x) any such cash or other property resulting from any such consolidation, merger or sale, or (y) any voluntary or involuntary dissolution, liquidation, or winding up of the Company.

 

5.                  Shareholders' Rights . Until a valid conversion of this Note, the Payee shall not be entitled to any rights of a shareholder with respect to the shares of the Common Stock covered by this Note and not so converted; but immediately upon a conversion of this Note as provided herein, the Payee shall be deemed a record holder of the shares of the Common Stock received as a result of any such conversion.

6.                  Manner of Conversion . In order to convert this Note, the Payee shall surrender this Note, duly endorsed or assigned to the Company or, in blank, at the office of the Company, accompanied by a written Form of Conversion attached hereto (the "Conversion Notice") that the Payee elects to convert this Note or, if less than the entire amount thereof is to be converted, the portion thereof to be converted.

This Note shall be deemed to have been converted immediately prior to the close of business on the day of surrender of this Note for conversion in accordance with the foregoing provisions, and at such time the person or persons entitled to receive the shares of the Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of the shares of the Common Stock at such time. As promptly as practicable on or after a conversion date, but in no event later than five business days, the Company shall issue and shall deliver to the Payee a certificate or certificates for the number of full shares of the Common Stock issuable upon such conversion.

In case this Note is converted in part only, upon such conversion the Company shall execute and deliver to the Payee thereof, at the expense of the Company, a new Note, in the aggregate, in the number of shares of the Common Stock covered by the unconverted portion of this Note.

7.                  Limitation on Conversion . The Payee (including any successor, transferee or assignee) shall not have the right to convert any portion of this Note to the extent that after giving effect to such conversion, the Payee

 

 

(together with the Payee's affiliates) would beneficially own in excess of 9.99% (the "Maximum Percentage") of the number of shares of the Common Stock of the Company outstanding immediately after giving effect to such conversion. For purposes of the foregoing sentence, the number of shares of the Common Stock beneficially owned by the Payee and its affiliates shall include the number of shares of the Common Stock issuable upon conversion of this Note with respect to which the determination of such sentence is being made, but shall exclude the number of shares Of the Common Stock which would be issuable upon (i) conversion of the remaining, non-converted portion of this Note beneficially owned by the Payee or any of its affiliates, and (ii) conversion of the unconverted or nonconverted portion of any other securities of the Company (including, without limitation, any other notes of the Company) subject to a limitation on conversion analogous to the limitation contained herein beneficially owned by the Payee or any of its affiliates. Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended. For purposes of this paragraph, in determining the number of outstanding shares of the Common Stock, the Payee may rely on the number of outstanding shares of the Common Stock as reflected in (x) the Company's most recent Form 10-K, Form 10-Q or Form 8-K, as the case may be, (y) a more recent public announcement by the Company, or (z) any other notice by the Company or the Transfer Agent setting forth the number of shares of the Common Stock outstanding. For any reason at any time, during regular business hours of the Company and upon the written request of the Payee, the Company shall within two business days confirm in writing to the Payee the number of shares of the Common Stock then outstanding. In any case, the number of outstanding shares of the Common Stock shall be determined after giving effect to the conversion of securities of the Company, including this Note, by the Payee or its affiliates since the date as of which such number of outstanding shares of the Common Stock was reported. By written notice to the Company, the Payee may increase or decrease the Maximum Percentage to any other percentage specified in such notice; provided that (A) any such increase will not be effective until the 61st day after such notice is delivered to the Company, and (B) any such increase or decrease will apply only to the Payee and not to any other party.        

8. Representations and Covenants Of the Payee . The Payee represents and covenants that this Note has not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any other applicable securities law. This Note has been purchased for investment only and not with a view to distribution or resale, and may not be sold, pledged, hypothecated or otherwise transferred unless this Note or the shares of the Common Stock represented hereby are registered under the Securities Act, and any other applicable securities law, or the Company has received an opinion of counsel satisfactory to it that registration is not required. A legend in substantially the following form will be placed on any certificates or other documents evidencing the shares of the Common Stock to be issued upon any conversion of this Note:

 

THE SECURITIES REPRESENTED BY THIS INSTRUMENT OR DOCUMENT HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAW OF ANY STATE. WITHOUT SUCH REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT UPON DELIVERY TO THE COMPANY OF AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER OR THE SUBMISSION TO THE COMPANY OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO THE COMPANY TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE SECURITIES ACT OF 1933, AS AMENDED, THE SECURITIES LAW OF ANY STATE, OR ANY RULE OR REGULATION PROMULGATED THEREUNDER.

 

Further, stop transfer instructions to the transfer agent of the shares of the Common Stock have been or will be placed with respect to the shares of the Common Stock so as to restrict the resale, pledge, hypothecation or other transfer thereof, subject to the further items hereof, including the provisions of the legend set forth in this paragraph.

 

 

 

9.                  Fractional Shares . Upon the conversion of this Note, no fractions of shares of the Common Stock shall be issued. If any such fraction might exist, the number of shares of the Common Stock shall be rounded down to the nearest whole number of shares.

10.              Registration Obligation . The Company has not agreed to file and the Company does not anticipate the filing of a registration statement under the Securities Act to allow a public resale of this Note or the resale of any shares of the Common Stock issued upon the conversion of this Note.

11.               Loss. Theft. Destruction of Note . Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction, or mutilation of this Note and, in the case of any such loss, theft, or destruction, upon receipt of indemnity reasonably satisfactory to the Company, or, in the case of any such mutilation, upon surrender and cancellation of this Note, the Company will make and deliver, in lieu of such lost, stolen, destroyed or mutilated Note, a new Note of like tenor.

12.               Arbitration . Any controversy or claim arising out of or relating to this Note, or the breach, termination, or validity thereof, shall be settled by final and binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association ("AAA Rules") in effect as of the effective Issuance Date. The American Arbitration Association shall be responsible for (a) appointing a sole arbitrator, and (b) administering the case in accordance with the AAA Rules. The situs of the arbitration shall be Fort Worth, Texas. Upon the application of either party to this Note, and whether or not an arbitration proceeding has yet been initiated, all courts having jurisdiction hereby are authorized to (x) issue and enforce in any lawful manner, such temporary restraining orders, preliminary injunctions and other interim measures of relief as may be necessary to prevent harm to a party's interest or as otherwise may be appropriate pending the conclusion of arbitration proceedings pursuant to this Note, and (y) enter and enforce in any lawful manner such judgments for permanent equitable relief as may be necessary to prevent harm to a party's interest or as otherwise may be appropriate following the issuance of arbitral awards pursuant to this Note. Any order or judgment rendered by the arbitrator may be entered and enforced by any court having competent jurisdiction.

13.               Benefit . All the terms and provisions of this Note shall be binding upon and inure to the benefit of and be enforceable by the parties hereto, and their respective successors and permitted assigns.

14 Notices . All notices and other communications hereunder shall be in writing and shall be deemed to have been given (a) on the date they are delivered if delivered in person; (b) on the date initially received if delivered by facsimile transmission or email followed by registered or certified mail confirmation; (c) on the date delivered by an overnight courier service; or (d) on the third business day after it is mailed by registered or certified mail, return receipt requested with postage and Other fees prepaid, if to the Company addressed to Mr. D. Patrick Six at 8851 Camp Bowie West Boulevard, Suite 240, Fort Worth, Texas 761 16, telephone (817) 709-8567, and email patrick.six@gwtechinc.com; and if to the Payee addressed to Tunstall Canyon Group, LLC at 300 County Road 438, Eastland, Texas 76448, and email stanwoods219@gmail.com. Any party hereto may change its address upon 10 days' written notice to any other party hereto.

 

15.               Construction . Words of any gender used in this Note shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, and vice versa, unless the context requires otherwise. In addition, the pronouns used in this Note shall be understood and construed to apply whether the party referred to is an individual, partnership, joint venture, corporation or an individual or individuals doing business under a firm or trade name, and the masculine, feminine and neuter pronouns shall each include the other and may be used interchangeably with the same meaning.

 

 

 

16.               Headings . The headings used in this Note are for convenience and reference only and in no way define, limit, simplify or describe the scope or intent of this Note, and in no way effect or constitute a part of this Note.

17.               Invalidity . In the event any one or more of the provisions contained in this Note shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect the other provisions of this Note.

18.               Law Governing . This Note shall be construed and governed by the laws of the State of Texas, and all obligations hereunder shall be deemed performable in Tarrant County, Texas.

 

IN WITNESS WHEREOF, this Note has been issued on December 20, 2017.

 

GREENWAY TECHNOLOGIES, [NC.

 

Exhibit 10.35

 

Greenway Technologies, Inc.

Stock Purchase Warrant

Expiring: November 30, 2020.

THIS IS TO CERTIFY for value received, MTG Holdings LTD (the "Holder") is entitled at any time from the date hereof, but prior to 5:00pm, Fort Worth, Texas time on November 30, 2020, subject to and upon the terms and conditions herein, to purchase up to 1,000,000 (one million) fully paid and nonassessable shares of the common stock, par value $0.0001 per share (the "Common Stock") of GREENWAY TECHNOLOGIES, INC., a Texas corporation (the "Company") at a purchase price of $0.30 (thirty cents) per share (the "Exercise Price") of the Common Stock, after taking into account the restrictive nature of the shares of the Common Stock as described below (such number of shares of the Common Stock and the purchase price being subject to adjustment as provided herein). This Warrant shall be void and of no effect and all rights hereunder shall cease at 5:00pm, Fort Worth, Texas time on November 30, 2020, except to the extent therefore exercised, provided that in the case of the earlier dissolution of the Company, this Warrant shall become void on the date fixed for such dissolution.

 

I. Covenants of the Company . The Company covenants that, while this Warrant is exercisable (a) it will reserve from its authorized and issued shares of the Common Stock a sufficient number of shares of the Common Stock to provide for the delivery of the shares of the Common Stock pursuant to the exercise of this Warrant, and (b) that all shares of the Common Stock which may be issued upon the exercise of this Warrant will be fully paid and non-assessable.

2. Protection Against Dilution. Etc . In any of the following events, occurring after the date of the issuance of this Warrant, appropriate adjustment shall be made in the number of shares of the Common Stock to be deliverable upon the exercise of the Warrant and the purchase price per share of the Common Stock to be paid, so as to maintain the proportionate interest of the Holder as of the date hereof (a) recapitalization of the Company through a split-up or reverse split of the outstanding shares of the Common Stock into a greater or lesser number, as the case may be, or (b) declaration of a dividend on the shares of the Common Stock, payable in shares of the Common Stock or other securities of the Company convertible into shares of the Common Stock, or (c) any of the events described in Paragraph 4 hereof.

 

3. Merger, Etc . In case the Company, or any successor, shall be consolidated or merged with another company, or substantially all of its assets shall be sold to another company in exchange for stock, cash or other property with the view to distributing such stock, cash or other property to its shareholders, each of the shares of the Common Stock purchasable by this Warrant shall be replaced for the

1

purposes hereof by the securities of the Company or cash or property issuable or distributable in respect of one share of the Common Stock of the Company, or its successors, upon such consolidation, merger, or sale, and adequate provision to that effect shall be made at the time thereof. Provided, however, notwithstanding anything herein contained to the contrary, in the event that the terms of any such consolidation, merger or sale call for the distribution of any cash or property to the shareholders of the Company, no cash or property shall be distributable to the Holder in connection with any unexercised portion of this Warrant, unless the Holder shall have exercised this Warrant pursuant to the terms of Paragraph 6 hereof and all other terms of this Warrant.

4.       Notice of Certain Events. Upon the happening of any event requiring an adjustment of the Warrant

 

 

 

purchase price hereunder, the Company shall forthwith give written notice thereof to the Holder stating the adjusted Warrant purchase price and the adjusted number of shares of the Common Stock purchasable upon the exercise hereof resulting from such event and setting forth in reasonable detail the method of calculation is based. The Board of Directors of the Company shall determine the compensation made hereunder. In the case of (a) any consolidation, merger, or sale affecting the Company and calling for the payment of cash or the delivery of property to shareholders of the Company, or (b) any voluntary or involuntary dissolution, liquidation, or winding up of the Company shall at any time be proposed, the Company shall give at least 20 days' prior written notice thereof to the Holder stating the date on which such an event is to take place and the date (which shall be at least 20 days after the giving of such notice) as of which the holders of record of shares of the Common Stock shall be entitled to participate in ay such event. If the Holder does not elect to exercise any part of this Warrant as a result of any such notice, the Holder shall have no right with respect to any portion of this Warrant which shall remain unexercised to participate in (x) any such cash or other property resulting from any such consolidation, merger, or sale, or (y) any voluntary or involuntary dissolution, liquidation, or winding up of the Company,

5.       Shareholders' Rights . Until the valid exercise of this Warrant, the Holder shall not be entitled to any rights od a shareholder with respect to the shares of the Common Stock covered by this Warrant; but immediately upon the exercise of this Warrant and upon payment as provided herein, the Holder shall be deemed a record holder of the shares of the Common Stock.

6.       Manner of Exercise . In order to exercise this Warrant, the Holder should surrender this Warrant, duly endorsed or assigned to the Company or, in blank, at the office of the Company, accompanied by (a) written Form of Election to Purchase attached hereto (the "Exercise Notice") that the Holder elects to exercise this Warrant or, if less than the entire amount thereof is to be exercised, the portion thereof to be exercised, and (b) payment of the purchase price of the shares of the Common Stock to be purchased on each exercise, in cash or by cashier's or certified check.

This Warrant shall be deemed to have been exercised immediately prior to the close of business on the day of surrender of this Warrant for exercise in accordance with the foregoing provisions, and at such time the person or persons entitled to receive the shares of the Common Stock issuable upon exercise shall be treated for all purposes as the record holder or holders of the shares of the Common Stock at such time. As promptly as practicable on or after the exercise date, but in no event later than three business days, the Company shall issue and shall deliver to the Holder a certificate or certificates for the number of full shares of the Common Stock issuable upon exercise.

In case this Warrant is exercised in part only, upon such exercise the Company shall execute and deliver to the Holder thereof, at the expense of the Company, a new Warrant to purchase, in the aggregate, in the number of shares of the Common Stock covered by the unexercised portion of this Warrant.

7.             Limitation on Exercise . The Holder (including any successor, transferee or assignee) shall not have the right to convert any portion of this Warrant to the extent that giving effect to such exercise, the Holder (together with the Holders affiliates) would beneficially own in excess of 9.999% (the Maximum Percentage") of the number of shares of the Common Stock of the Company outstanding immediately after giving effect to such exercise. For the purposes of the foregoing sentence, the number of shares of the Common Stock beneficially owned by the Holder and its affiliates shall include the number of shares of the Common Stock issuable upon conversion of this Warrant with respect to which the determination of such sentence is being made, but shall exclude the number of shares of the Common Stock which shall be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its affiliates and (ii) exercise of the unexercised or non-converted portion of any other securities of the Company (including, without limitation, any other notes or warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its affiliates. Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended. For purposes of this paragraph, in determining the number of outstanding shares of the Common Stock, the Holder may rely on the number of outstanding shares of the Common Stock as reflected in (x) the Company’s most recent Form 10-K, Form 10-Q or Form 8-K, as the case may be, (y) a more recent public announcement by the Company, or (z) any other notice by the

 

 

 

 

Company or the Transfer Agent setting forth the number of shares of the Common Stock outstanding. For any reason at any time, during regular business hours of the Company and upon the written request of the Holder, the Company shall within two business days confirm in writing to the Holder the number of shares of the Common Stock then outstanding. In any case, the number of outstanding shares of the Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its affiliates since the date as of which such number of outstanding

shares of the Common Stock was reported. By written notice to the Company, the Holder may increase or decrease the Maximum Percentage to any other percentage specified in such notice; provided that (A) any such increase will not be effective until the 61st day after such notice is delivered to the Company, (B) any such increase or decrease will apply to the Holder and not to any Other holder of warrants, and (C) and In no case shall the Holder or its affiliates acquire in excess of 9.999% of the outstanding shares of the Common Stock or the voting power of the Company.

 

8. The Holder represents and covenants that this Warrant has not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any other applicable securities law. This Warrant has been purchased for investment only and not a view to distribute or resale, and may not be sold, pledged, hypothecated or otherwise transferred unless this Warrant or the shares of the Common Stock represented hereby are registered under the Securities Act, any other applicable securities law, or the Company has received an opinion of counsel satisfactory to it that registration is not required. A legend in substantially the following form will be placed on ay certificates or other documents evidencing the shares of the Common Stock to be issued upon any exercise of this Warrant

THE SECURITIES REPRESENTED BY THIS INSTRUMENT OR DOCUMENT HAVE BEEN ACQIURED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMANDED, OR THE SECURITIES LAW OF ANY STATE. WITHOUT SUCH REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT UPON DELIVERY TO THE COMPANY OF AN OPINION OR COUNSEL SATISFACTORY To THE COMPANY THAT REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER OR THE SUBMISSION TO THE COMPAN OR SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO THE COMPANY TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE SECURITIES ACT OF 1933, AS AMANDED, THE SECURITIES LAW OF ANY STATE, OR ANY RULE OR REGULATION PROMULGATED THEREUNDER.

Further, stop transfer instructions to the transfer agent of the shares of the Common Stock have been or will be placed with respect to the shares of the Common Stock so as to restrict the resale, pledge, hypothecation or other transfer thereof, subject to the further items hereof, including the provision of the legend set forth in this paragraph.

9.         Fractional Warrants . Upon the exercise of this Warrant, no fractions of shares of the Common Stock shall be issued; but fractional Warrants shall be delivered, entitling the Holder, upon surrender with other fractional Warrants aggregating one or more full shares of the Common Stock, to purchase such full shares of the Common Stock.

10.    The Company has not agreed to file and the Company does not anticipate the filing of the registration statement under the Securities Act to allow the public resale of any shares of the Common Stock issued upon the exercise of this Warrant

11.    Loss, Theft, Destruction of a Warrant . Upon the receipt of evidence satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant and, in the case of any such loss, theft, or destruction, upon receipt of indemnity reasonably satisfactory to the Company, or, in the case of any such mutilation, upon surrender and cancellation of this Warrant, the Company will make and deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor.

 

 

 

12.    Arbitration . Any controversy or claim arising out of or relating to this Warrant, or the breach, termination, or validity thereof, shall be settled by final and binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association ("AAA Rules") in effect as of the effective date of this Warrant The American Arbitration Association shall be responsible for (a) appointing a sole arbitrator, and (b) administering the case in accordance with the AAA Rules. The situs of the arbitration shall be Houston, Texas. Upon the application of either party to this Warrant, and whether or not an arbitration proceeding has yet been initiated, all courts having jurisdiction hereby are authorized to (x) issue and enforce in any lawful manner, such temporary restraining orders, preliminary injunctions and other interim measures of relief as may be necessary to prevent harm to a party s interest or as otherwise may be appropriate pending the conclusion of arbitration proceedings pursuant to this Warrant, and (y) enter and enforce in any lawful manner such judgments for permanent equitable relief as may be necessary to prevent harm to a party s interest or as otherwise may be appropriate following the issuance of arbitral awards pursuant to the Warrant. Any order or judgment rendered by the arbitrator may be entered and enforced by any court having competent jurisdiction.

13.    Benefit . All the terms and provisions of this Warrant shall be binding upon and inure to the benefit of and be enforceable by the parties herein, and their respective successors and permitted assigns.

14.                   Notices . All notices and communications hereunder shall be in writing and shall be deemed to have been given (a) on the date they are delivered in person: (b) on the date initially received if delivered by facsimile transmission or email followed by registered or certifies mail confirmation; (c) on the date delivered by an overnight courier service; or (d) on the third business day after it is mailed by registered or certified mail, return receipt requested with postage and other fees prepaid, if to the Company addressed to Mr. D. Patrick Six at 8851 Camp Bowie West, Suite 240, Fort Worth, Texas 76116, telephone 817-346-6900, and email and if to the Holder, addressed to PO Box 81175, Las Vegas, NV 189180-1175, telephone 503-793-9300 and email

marshall.gleason@gmail.com . Any party hereto may change its address upon 10 days' written notice to any other party hereto.

15.    Construction . Words of any gender used in this Warrant shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, and vice versa, unless the context requires otherwise. In addition, the pronouns used in this Warrant shall be understood and construed to apply whether the party referred to is an individual, partnership, joint venture, corporation, or an individual or individuals doing business under a firm or trade name, and the masculine, feminine and neuter pronouns shall each include the other and may be used interchangeably with the same meaning.

16.    Headings . The headings used in this Warrant are for convenience and reference only and in no way define, limit, simplify or describe the scope or intent of this Warrant, and in no way effect or constitute a part of this Warrant.

17.    Invalidity_ . In the event any one or more of the provisions contained in this Warrant shall, for any reason, be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceable shall not effect the other provisions of this Warrant.

18.    Law Governing . This Warrant shall be construed and governed by the laws of the State of Texas, and all obligations hereunder shall be deemed performable in Tarrant County, Texas.

 

 

 

IN WITNESS WHEREOF, this Warrant has been issued on November 30, 2017.

 

 

 

 

 

 

Exhibit 10.36

 

THIS NOTE. AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOI. HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933AS AMENDED, OR ANY STAIE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT AND LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.

 

THE GREER FAMILY TRUST PROMISSORY NOTE

$ 150.000

In connection With the Agreed Settlement. Mutual Releases and Indemnity Agreement (the “Settlement), Greeway Technologies. Inc., fka UMED Holdings. Inc. (the "Company") promises to pay to the (the "Trust"), or its assigns in lawful money Of the United States of America the principal sum of one hundred fifty thousand dollars (S 150.000). or such greater amount as Shall equal to the outstanding principal amount hereof, together with interest from the date of this Promissory Note ("Note") on the unpaid principal balance at the rate to four percent (4%) per annum computed on the of the actual number of days elapsed and a year of 365 days. The Note is payable: (i) in equal Installments of six thousand dollars per month, commencing February 1, 2018 until the principal. together with any then unpaid and accrued interest and other amounts payable hereunder shall and payable are paid in full or (ii) when. upon or after the occurrence of an Event of Default (as defined below) such amounts arc declared due and payable by the Trust or made automatically due and payable in accordance with the terms hereof.

 

The following is a statement of the rights of The Trust and the conditions to which this Note is subject and to which The Trust, by the acceptance of this Note agrees:

Definitions, as used in this Note. the following capitalized terms have the following meanings:

the "Company•• includes the corporation initially executing this Note and any person which shall succeed to or assume the obligations Of the Company under this Now,

   "Trust" shall mean the Greer Family Trust or any Person or Persons who shall at the time be the registered holder of this Note, he the

"Material Adverse Effect" shall mean a material adverse effect on operations. prospects or financial or other condition of the Company; (b) the ability Of the Company pay Of the Obligations in accordance with the terms of this Note and the other Settlement Documents and to avoid an Event Of Default. or an event which, with the giving of notice or passage of time or both, would constitute an Event of Default under any Settlement Document' or (c) the rights and remedies of 'he Trust under this Note, the other Settlement Documents or any related document. instrument or agreement through no fault of the Trust.

 

 

 

 

(d) “Obligations" shall mean and Include all loans advances, debts, liabilities and obligations,

howsoever arising, owed by the Company to The Trust of every kind and description (whether evidenced by any note or instrument and whether or not for the payment of money). existing or hereafter arising under or pursuant to the terms of this Note. the Agreement and the other Settlement Documents. including, all fees, charges. expenses. attorneys' fees and costs and accountants • fees and costs chargeable to and payable by the Company hereunder and thereunder. each case. whether direct or indirect. absolute or contingent. due or become due, and whether or not arising after the commencement of a proceeding under Title 11 of the United States Code (11 U.S.C Section 101 et seq.). as amended from time to time (including post-petition Interest) and whether or allowed allowable as a claim in any such proceeding.

(e) "Person' • shall mean and include an individual. a partnership. corporation trust). a joint stock company, a limited liability company. an unincorporated association

Z2pJ

or a governmental authority

f f) "Securities Act" shall mean the Securities Act of 1933 as amended,

Interest. Accrued interest on this Note shall be payable at maturity

3 Prepayment. Upon the prior written consent of the Trust, Company may prepav this Note in whole or in part: provided that any such prepayment be applied first to the payment of under Note, to Interest accrued on this Note and third. If the amount of prepayment exceeds the amount of all such expenses and accrued interest to the payment of this Note,

Events of Default The occurrence of any of the following shall consummate an "Event of Default under this Note and the Other Settlement Documents.

(a) Failure to Pay. The Company shall fall to pay (1) when due any principal or Interest payment on the due date hereunder or (ii) any other payment required under the terms of this Note or any other Settlement Document on the date due: or

Voluntary Bankruptcy or Insolvency Proceedings, The Company shall i) apply or the appointment of a receiver. trustee. liquidator or custodian of Itself or of all or substantial part of its property (ii) or be unable. or admit in writing its inability to pay its debts generally as they mature. (iii) make a general assignment for the benefit of its or any of Its creditors. (iv) be dissolved or liquidated. (v)' become insolvent (as such term may be defined or interpreted under any applicable statute). (VI) commence a voluntary case or other liquidation. reorganization other relief with respect to Itself or its debts under any bankruptcy similar law now or hereafter in effect or consent to any such relief or to the appointment of or taking Of property by any official in an involuntary case or Other proceeding commenced against lt. or take the purpose of effecting any of the foregoing; or

Involuntary Bankruptcy or Insolvency Proceedings in for the appointment of a receiver trustee liquidator or custodian Of the Company or of all or a substantial part of the property thereof, or an involuntary ease or other proceedings seeking liquidation. reorganization ocher relief with respect: to Company or the debts thereof under any bankruptcy. Insolvency or other law now or hereafter in be commenced and an order for relief entered or such proceeding shall not he or

 

 

 

commencement: or    
(d) Material Adverse Effect. One or more conditions exist reasonably indicate, or reasonably result a Material Adverse Effect. or event' have occurred  

From and after the occurrence of any Event of and so ion! as such Event of the unpaid Principal Amount of this Note shall bear Interest at rate per annum equal to the Highest Lawful Rate. payable on demand

Rights of The Trust upon Default. Upon the occurrence of existence of any Event of Default and at any time thereafter during the continuance of such Event of Default. The Trust may by written notice to the Company declare all outstanding Obligations payable by the Company hereunder (o be immediately due and presentment. demand. protest or any other notice of any kind. all of which are hereby expressly contained herein or in the other Settlement Documents to the contrary notwithstanding. Upon the occurrence or existence of any Event of Default described In Section 4. immediately and without notice, all Obligations payable by the Company hereunder shall automatically become immediately due and payable. without demand. protest or any Other notice of any kind. all of which are hereby expressly waived and Indemnity herein or in the other Settlement Documents shall be void.

6.       Conversion.

(a) Conversion. This Note shall be convertible at the option of the Trust into that number of shares of the Company's Common Stock as is determined by dividing such principal amount and accrued by seventy percent (70%) of the prior twenty (20) day average closing market price for the Company common stuck adjusted to reflect subsequent stock dividends. stock splits. combinations or recapitalizations. Before the Trust shall be entitled convert this Note into shares of Common Stock under this Section 6(a), the Trust shall execute Company common stock purchase agreement reasonably acceptable to the Company representations and warranties and transfer restrictions. The Company Shall. as soon as practicable issue instructions to its transfer agent to issue and deliver via DWAC and FAST (the number of shares of Common Stock which the Trust shall he entitled upon conversion. together with a replacement Note (if any converted) and any other securities and property to which The Trust IS upon such conversion of this Note. The conversion shall be deemed to have been made Immediately prior to the close date of the surrender of this Note. and the Person or Persons the such conversion shall he treated for all purposes as the record holders of such shares of Common Stock as of such date.

Fractional Shares: Interest; Effect of Conversion. No fractional Share* 'shall be issued upon conversion of this Note. In lieu of the Company issuing any fractional shares to the Trust upon the conversion Note. the Company shall pay to the Trust an amount to the product obtained by multiplying the by the fraction of a share not Issued pursuant to the previous sentence in addition. the Company 'hall pay to any Interest accrued on the amount to be paid to the Company pursuant the previous sentence; Upon this Note in full and the payment of any amounts specified in tins Section the Company be from all its obligations and liabilities under this Note-

Successors and Assigns Subject to the restrictions on transfer described in Sections and rights and obligations of the Company and The Trust Shall be binding upon and benefit administrators and transferees of the parties.

 

 

 

Waiver and Amendment. Any provision of this Note may be amended. waived or modified upon the written mutual consent oi the Company and the Trust.

Transfer of this Note or Securities issuable on Conversion Hereof. With respect to disposition of this Note. the Trust will give written notice to the Company prior thereto, describing briefly the manner thereof, together with a written opinion of the Trust's counsel. or other evidence if reasonably the Company, to the effect that such offer. sale or Other distribution may be effected without registration under any federal or state law then in effect), Upon receiving and reasonably opinion, it-so requested, or other evidence. the Company. as promptly as practical Shall notify the Trust thro sell or otherwise dispose of this Note. all in accordance with the terms of the notice delivered to the Company. If a determination has been made pursuant to this Section 9 that the opinion of• counsel for the or not reasonably satisfactory to the Company. the Company shall so notify the Trust promptly after such determination has been made, Each Note thus transferred shall bear a legend as to the applicable on order to ensure compliance with the Securities Act, unless in the opinion of counsel for the Company such a legend is not required in order to ensure compliance With the Securities Act. Prior to presentation of this Note for registration of transfer, the Company shall treat the registered holder hereof JVS the holder of tm of receiving all payments of principal and Interest hereon and for all other purposes whatsoever, whether or not this Note shall be overdue and the Company shall not be affected by notice contrary.

10. Assignment by the Company. Neither this Note nor any of its rights, interest or obligations hereunder may be assigned. by operation of law or otherwise jn whole or in part. by Company Without consent of the Trust. which consent not be unreasonably withheld.

 

11. Notices. All notices, requests, demands, consents, instructions or other permitted hereunder Shall be in writing and faxed. mailed or delivered each party at the respective parties as set forth in the Agreement. or at such other address or facsimile number the Company to the Trust in writing. All such notices and communications Will be deemed effectively given of (i) when received. (ii) when delivered personally. (iii' one business day after being delivered by appropriate confirmation). one business day after being deposited With an

standing or (v) tour days after being deposited in the U.S. mail. first class with postage prepaid.

Payment. Payment shall be made in lawful tender Of the United States.

13. Governing Law and Venue. This Notice and all actions arising out of or jn connection with ths Notice shall be governed by and construed accordance with the laws Of the State Of regard to the provisions of the State of Texas. or of any other state. Venue shall In Tarrant County. Texas

 

 

 

IN WITNESS WHEREOF the undersigned has executed this Convertible Promissory Note Of the date first set forth above.

Greenway Technologies, Inc. fna UMED Holdings. Inc.

By.

of 4. Promissory

 

 

AG RE ED SETTLEMENT, MUTUAL R ELE ASES, and INDEMNIIY

WHEREAS, Greenway Technologies, Inc., fka UMED Holdings, Inc. ("Company"). acting b' and through its President and COO, D. Patrick Six ("Six is desirous of settling any and all claims that the Greer Family Trust. the Trust heretofore succeeded to the rights of the Estate of Conrad Greer, deceased, may have currently or in the future against the Company: and

WHEREAS. the Trustee for the Greer Family Trust by execution of this Agreed Settlement

Mutual Release. and Indemnity represents to the Company that she has the authority to get as Trustee and also represents the Estate of Conrad Greer, deceased; and

WHEREAS. the Greer Family Trust, (the "Trust") is desirous of settling any and all outstanding claims the Trust and/or any of its Beneficiaries may have against the Company for any and all matters; and

WHEREAS, the Company will agree to issue and delivery to the Trust, Three (3,000,000) shares of Greenway Technologies. Inc. (fka UMED Holdings. Inc,) common stock in exchange for the Trust's waiver of any future claims against the Company for any reason

WHEREAS. Company will agree to issue such shares of the Company to the Trust the written instructions of the Trust's Trustee, Ms. Wendy Braff; and

WHEREAS. Company will agree to pay to the Trust the sum of One Hundred Fifty Thousand

Dollars (S150,000.00 in the form of a Convertible Promissory Note ag set forth below: and

WHEREAS, the parties hereto wish to Settle any and all disputes regarding the and this Agreed Settlement and Mutual Release, one to the other, and settle all outstanding claims, past, present. and future that might arise from any action or inaction connected with the Company and the Trust and its rights to any stock in the Company he may have had or today: and

WHEREAS. all entities and individuals stated herein may be collectively referred to as “Parties”.

NOW, THEREFORE. in consideration of the foregoing recitals and of the conditions, covenants and agreements set forth below, the amount and sufficiency of' which are hereby acknowledged. the Parties agree as follows:

Mutual    

I.

(a)                  Effective upon timely transfer of the said UMED stock. now known

 

 

 

officially as Greenway Technologies. Inc. common shares as provided Section 2 below. the Parties, on behalf of themselves, and all persons or entities claiming by. through or under them. and their respective heirs, successors and assigns, hereby fully, completely and finally waive. release, remise, acquit, and forever discharge and covenant not to sue the Other well the other Parties' respective officers. directors, shareholders, trustees, parent companies. Sister companies, affiliates, subsidiaries. employers. attorneys. accountants, insurers. representatives, and agents with respect to any kind all claims, demands, obligation, debt, liability, tort, covenant, contract, or causes of action of any kind law or in equity, including without limitation, all claims and causes of action arising out of or in any way relating to the claims or demands of the Trust and/or the Beneficiaries of said Trust against

 

the Company, its officers, directors. shareholders. trustees, parent companies, sister companies, affiliates, subsidiaries, employers, attorneys, accountants. predecessors.

representatives, and agents or its successor company. The Parties warrant and that y have not assigned or otherwise transferred any claim or cause of action released by Agreement to any third party.

(b)                  The Parties acknowledge and agree that these releases are General

RELEASES. The Parties expressly waive and assume the risk of any and all claims for damages which exist as of this date. but which they do not know or suspect to exist. whether through ignorance, oversight, error, negligence, or otherwise. and which. if known. would materially his or her or its decision to enter into this Agreement. The Parties expressly acknowledge waiver of claims includes any claims for any alleged fraud. deception, concealment, misrepresentation or any other misconduct of any kind in procuring this Agreement. The Parties specifically do not, however. waive or release any claim that may arise breach of this Agreement.

(c)                  In exchange for the following stock delivery and cash payments as are set forth below in paragraphs 2 & 3, the Trust (including all named Beneficiaries are set forth below , and it is hereby represented that such Beneficiaries are the only Beneficiaries of the Trust or the Estate of Conrad Greer (deceased) hereby releases any and all claims for any and all other consideration of any kind or nature whatsoever it/they may have against [he Company or its predecessor.

(d)                  Upon payment of the Note in section 3. below. the Employment Agreement by and between Conrad Greer, deceased, and the Company will be acknowledged to be void and of no further force or effect,

2.

before February l, 2018, Company will issue and deliver Three Million (3,000,.000 shares of the Company's common stock to the Trust, If the shares are DWAC eligible, shares shall be transferred electronically using the Fast Automated Securities Transfer service (FAST) transfer service to an account to be provided. If the company not DWAC and FAST eligible. certificate representing Three Million (3,000,000) unrestricted shares of 'he Company" common stock shall be delivered to the Trust, c/o Ms. Wendy Braff, 198 Green Hills Road. Cincinnati. 45208.

 

 

 

3.

Promissory Note . As additional consideration from Company to Greer. the Company Will

Convertible Promissory Note in the principal amount of One Hundred Fifty Thousand Dollars ($150,000.00) (the "Note"), a form of the Note IS attached hereto as Exhibit A. payable in the monthly sum of Six Thousand Dollars for twenty-five (25) consecutive months until a total of One Hundred Fifty Thousand Dollars ($150,000.00) has been paid to the Trust commencing on the 1st Day of February 2018. The Company will make the monthly cash payments to the Trust, c/o Ms. Wendy Braff, 198 Green Hills Road, Cincinnati. HO 45208.

4.                      No Admission of Liability . Neither the issuance and delivery of Greenway

Technologies, Inc. common shares and/or the payment of the cash sum stated above, nor the 

execution of the aforesaid Agreements shall be construed as an admission of liability or fault by any Party. Any and all liability is expressly denied by al! Parties.

5.                      Confidentiality . The Parties and their respective counsel represent and agree that, except for matters of public record as of the date of this Agreement. they will keep the terms and contents of this Agreement confidential. and that they Will not hereinafter disclose the terms of this Agreement to other persons except as compelled by applicable law or to individuals who have a need to know about this Agreement and its contents. such as Parties legal counsel, tax advisors. or other retained professional representatives. all of whom shall be informed and bound by this confidentiality clause. In no event will any party make or cause to be made any comment. written statement or press release to any member of the media concerning the fact of this settlement or the substance or terms of this settlement.

6.                      Authority . The Parties represent and warrant that they possess full authority to enter into this Agreement and to lawfully and effectively release the opposing Party ax set forth herein, free of any rights of settlement, approval, subrogation. or other condition or impediment This undertaking includes specifically, without limitation, the representation and warranty that no third party has now acquired or will acquire rights to present or pursue any claims from of based upon the claims that have been released herein.

7.                      Agreement . The Parties represent and agree that no promise. inducement. or agreement other than as expressed herein has been made to them and that this Agreement is fully integrated, supersedes all prior agreements and understandings. including Without limitation. any promissory notes, and any other agreement between the Parties. and contains the entire Settlement and Agreement between the Parties.

8. Voluntary and Informed Consent. The Parties represent and agree that they each have read and fully understand this Agreement, that they are fully competent to enter into Mid sign this Agreement, and that they are executing this Agreement voluntarily, free of any duress or coercion and this Agreement is made of their own free will and choice.

9.Each of the parties will bear its own costs. expenses, and attorneys' fees incurred in connection with this Settlement Agreement.

10. The laws of the State of Texas shall apply to and control any interpretation. construction, performance or enforcement of this Agreement, Che Parties agree that the exclusive jurisdiction for any legal proceeding arising out of or feinting [o this Agreement shall be the Court of appropriate Court having jurisdiction in 'I'arrant County. Texas, and all Parties hereby waive any challenge to personal jurisdiction or venue in that court.

 

 

  11. Attorneys’ Fees and Costs for Breach. The prevailing Party in any action to enforce or interpret this Agreement is entitled to recover from the other Party its reasonable attorneys' fees.

12.         Construction . This Agreement shall be construed as if the Parties jointly prepared it, and any uncertainty or ambiguity shall not be interpreted against any one Party.

13. No oral agreement. statement. promise, undertaking. understanding. arrangement, act or omission of any Party, occurring subsequent to the date hereof may be deemed an amendment or modification of this Agreement unless reduced to writing and signed by the Parties hereto or their respective successors or assigns.

Severability. The Parties agree that if. for any reason. a provision of this Agreement is held unenforceable by any court of competent jurisdiction, this Agreement shall be automatically conformed to the law, and otherwise this Agreement shall continue in full force and effect.

1 5 • Whenever applicable within this Agreement, the singular shall include the plural and the plural shall include the singular.

16.                  Headings . The headings of paragraphs herein are included solely for convenience of reference and shall not control the meaning or interpretation of any of the provisions of this Agreement.

17.                  This Agreement may be executed in several counterparts and counterparts so executed shall constitute one agreement binding on all Parties hereto. notwithstanding that all the Parties are not signatories to the original or the same counterpart Facsimile signatures shall be accepted the same as an original signature. A photocopy of' the. Agreement may be used in any action brought to enforce or construe this Agreement

18.                 

No Waiver . No failure to exercise and no delay in exercising any right, power or remedy under this Agreement shall impair any right, power or remedy which any Party may have. nor shall any such delay be construed to be a waiver of any such rights, powers or remedies or an acquiescence in any breach or default under this Agreement. nor shall any waiver of any breach or default of any Party be deemed a waiver of any default or breach subsequently arising.

19• Greer agrees to indemnify Company, its officers, directors. agents, representative, and employees against and for any damages to Company that his heretofore actions may cause to the Company.

20. By the execution of this document, Wendy Braff, Trustee of the Greer Family Trust, hereby warrants and represents that she has the authority and direction of the following Greer Family Trust Beneficiaries to execute this Settlement Agreement, Mutual Release and Indemnity on their behalf as Beneficiaries of the Greer Family Trust and on behalf of the said Trust

List of Beneficiaries:

Wendy Kay Braff

198 Green Hills Road

Cincinnati, OH 45208

469-13-5321

Cynthia Ann McKinnon 2104 Ridge Plaza Drive

Castle Rock. CO 80208

459-13-5308

Cathy Joanne Pederson

2009 Bosbury Drive

Flower Mound. TX 75028

463-08-8034

 

 

 

Scott Patrick Greer

1210 Steinhart Ave.

Redondo Beach, CA 90278

548-94-8150

Kathryn Ellen Shipman

S47A Londonderry Tpke.

Auburn. NH 03032

 

562-17-1402

Constance .Jeanne Greer

7151 Gaston Avenue #1109

Dallas. TX 75214

555-96-9356

Dated of January 2018.

The Greer Family Trust

By:

Witness: Printed

 

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the accompanying Annual Report on Form 10-K of Greenway Technologies, Inc. for the fiscal year ending December 31, 2017, I, D. Patrick Six, Chief Executive Officer of Greenway Technologies, Inc., hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge and belief, that:

1.       Such Annual Report on Form 10-K for the fiscal year ending December 31, 2018, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.       The information contained in such Annual Report on Form 10-K for the fiscal year ending December 31, 2018, fairly presents, in all material respects, the financial condition and results of operations of Greenway Technologies, Inc.

Date April 5, 2018.

/s/ D. Patrick Six

D. Patrick Six, Chief Executive Officer

 

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, D. Patrick Six, certify that:

1.       I have reviewed this Form 10-K of Greenway Technologies, Inc.;

2.       Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.       Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this report;

4.       The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:

(a)       Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)       Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)       Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)       Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.       The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)       All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)       Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 5, 2018.

/s/ D. Patrick Six

D. Patrick Six, Chief Executive Officer

 

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, D. Patrick Six, certify that:

1.       I have reviewed this Form 10-K of Greenway Technologies, Inc.;

2.       Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.       Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this report;

4.       The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:

(a)       Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)       Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)       Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)       Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.       The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)       All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)       Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 5, 2018.

/s/ D. Patrick Six

D. Patrick Six, Chief Financial Officer

and Principal Accounting Officer

 

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the accompanying Annual Report on Form 10-K of Greenway Technologies, Inc. for the fiscal year ending December 31, 2017, I, D. Patrick Six, Chief Financial Officer of Greenway Technologies, Inc., hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge and belief, that:

1.       Such Annual Report on Form 10-K for the fiscal year ending December 31, 2018, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.       The information contained in such Annual Report on Form 10-K for the fiscal year ending December 31, 2018, fairly presents, in all material respects, the financial condition and results of operations of Greenway Technologies, Inc.

Date: April 5, 2018.

/s/ D. Patrick Six

D. Patrick Six, Chief Financial Officer

and Principal Accounting Officer