UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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FORM 10-K/A
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[X]
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ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December
31, 2018.
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[
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TRANSITION REPORT PURSUANT
TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Commission File No. 000-55030
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GREENWAY TECHNOLOGIES, INC.
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(Exact name of issuer as specified in its charter)
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Texas
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90-0893594
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(
State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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1521 North Cooper Street, Suite 205
Arlington, Texas
(Address of principal executive offices)
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76011
(Zip Code)
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800-289-2515
(Registrant’s telephone number, including
area code)
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Securities registered under Section 12(b) of the Exchange Act:
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None
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Securities registered under Section 12(g) of the Exchange Act:
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Common stock, par value $0.0001 per share
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(Title of class)
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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:
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Large accelerated filer [ ]
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Accelerated filer [ ]
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Non-accelerated filer [ ]
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Smaller reporting company [X]
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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 December 31, 2018 reported on the OTCQB
operated by The OTC Markets Group, Inc. on that date was approximately $ $9,063,784. 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 April 15,
2019, the registrant had outstanding 287,471,582 shares of its Class A common stock and 0 shares of Class B common stock.
Table of Contents
CAUTIONARY NOTE REGARDING FORWARD LOOKING
STATEMENTS
This Annual Report on
Form 10-K contains “forward-looking statements,” all of which are subject to risks and uncertainties. Forward-looking
statements can be identified by the use of words such as “expects,” “plans,” “will,” “forecasts,”
“projects,” “intends,” “estimates,” and other words of similar meaning. One can identify them
by the fact that they do not relate strictly to historical or current facts. These statements are likely to address our growth
strategy and financial results. One must carefully consider any such statement and should understand that many factors could cause
actual results to differ from our forward-looking statements. These factors may include inaccurate assumptions and a broad variety
of other risks and uncertainties, including some that are known and some that are not. No forward-looking statement can be guaranteed,
and actual future results may vary materially.
Information regarding market and industry
statistics contained in this Report is included based on information available to us that we believe is accurate. It is generally
based on industry and other publications that are not produced for purposes of SEC filings or economic analysis. We have not reviewed
or included data from all sources and cannot assure investors of the accuracy or completeness of the data included in this Report.
Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and the additional
uncertainties accompanying any estimates of future market size, revenue and market acceptance of our services. We do not assume
any obligation to update any forward-looking statement. As a result, investors should not place undue reliance on these forward-looking
statements.
In this Form 10-K, “we,”
“our,” “us,” the “Company” and similar terms in this report, including references to “UMED”
and “Greenway” all refer to Greenway Technologies, Inc., and our wholly-owned subsidiary, Greenway Innovative Energy,
Inc., unless the context requires otherwise.
PART I
Greenway
Technologies, Inc., through its wholly-owned subsidiary, Greenway Innovative Energy, Inc., is primarily engaged in the research,
development and commercialization of a proprietary Gas-to-Liquids (GTL) syngas conversion system that can be economically scaled
to meet individual natural gas field/resource requirements. The Company's proprietary and patented technology has now been realized
in Greenway's recently completed first generation commercial-scale G-Reformer
TM
unit, a unique and critical component to the Company's overall GTL technology solution. Greenway's
objective is to become a material direct and licensed producer of renewable GTL synthesized diesel and jet fuels, with a near term
focus on U.S. market opportunities.
Greenway’s GTL Technology
In
August 2012, Greenway Technologies 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”), the Company believes that GIE’s G-Reformer, combined
with conventional Fischer-Tropsch (“FT”) processes, offers an economical and scalable method to converting natural
gas to liquid fuel. On February 15, 2013, GIE filed for its first patent on its GTL technology. U.S. Patent number 8,574,501 was
issued on November 5, 2013. On November 4, 2013, GIE filed for a second patent covering other unique aspects of the design. The
Company has identified several other areas in its technology to file for patent protection and such efforts are ongoing.
On June 26, 2017,
Greenway, in conjunction with the University of Texas at Arlington (“UTA”), announced that they had successfully demonstrated
Greenway’s GTL technology at the Company sponsored Conrad Greer Laboratory at UTA, proving the viability of the science behind
the technology.
On March 6, 2018,
the Company announced the completion of its first commercial scale G-Reformer. The G-Reformer is the critical component of the
Company’s innovative Greer-Wright Gas-to-Liquids system. A team consisting of individuals from the Company, UTA and the Company’s
contracted fabricator worked together to test and calibrate the newly-built G-Reformer unit. The testing substantiated the units’
synthesis gas generation capability and demonstrated additional proficiencies within certain prior prescribed testing metrics.
The Company believes
that its proprietary G-Reformer is a major innovation in gas reforming and GTL technology in general. Initial tests have demonstrated
that the Company’s solution is superior to legacy technologies which are costly, have a larger footprint and cannot be easily
deployed at field sites to process associated gas, stranded gas, coal-bed methane, vented gas, or flared gas, all markets the Company
seeks to service. The proprietary technology based around the G-Reformer is unique in that it also allows for transportable GTL
plants with a much smaller footprint when compared to legacy large-scale technologies. The Company believes its technologies and
processes will allow for GTL plants to be built with substantially lower up-front and ongoing costs resulting in more profitable
results for O&G operators. Greenway is now working to commercialize both its G-Reformer and its GTL solutions and is in discussions
with a number of oil and gas companies, smaller oil and gas operators and other interested parties to license and obtain joint
venture or other forms of capital funding to build its first complete gas-to-liquid plant.
GTL Industry –Market
GTL
converts natural gas – the cleanest-burning fossil fuel – into high-quality liquid products that would otherwise be
made from crude oil. These products include transport fuels, motor oils and the ingredients for everyday necessities like plastics,
detergents and cosmetics. GTL products are colorless and odorless. They contain almost none of the impurities, e.g., sulphur, aromatics
and nitrogen, that are found in crude oil.
According
to industry research, the market for GTL products accounted for $10.98 billion in 2017 and is expected to reach $22.89 billion
by 2026, growing at a CAGR of 8.5%. Products created by this process include GTL Diesel, GTL Naphtha, GTL Other (e.g., lubricants),
where GTL Diesel accounts for more than 68% of the market. Market share of these products has not changed significantly over the
last four years. Increasing population across the globe have led to the increase in the power consumption. There is a high demand
for clean natural gas liquids products (“NGL”) in the commercial sector, including as blend-stock for petrochemical
plants and refineries, as well as in the automobile and packaging industries, among others. Due to their clean nature, NGL products
have wide use as fuel in motor vehicles, furnaces for heating and cooking, and as a household energy source. Greenway’s focus
is in the production of high cetane diesel and Jet A fuels, a multi-billion-dollar market segment.
Development
of stringent environmental regulations by numerous governments to control pollution and promote cleaner fuel sources is expected
to complement industry growth. U.S. guidelines implemented such as the Petroleum and Natural Gas Regulatory Board Act, 2006, Oilfields
(Regulation and Development) Act of 1948, and Oil Industry (Development) Act, 1974 are likely to continue to encourage GTL applications
in diverse end-use industries to conserve natural gas and other resources.
Key
industry players include: Linc Energy; Gas Techno; Compact GTL; Primus Green Energy; Chevron Corporation; Velocys; Royal Dutch
Shell; Sasol Limited; NRG Energy; Ventech Engineers and Petrobras. In terms of production and consumption, Shell had the largest
market share in 2018, virtually all of which is located overseas.
Mining Interest
In December 2010,
UMED acquired the rights to approximately 1,440 acres of placer mining claims located on Bureau of Land Management (“BLM”)
land in Mohave County, Arizona for 5,066,000 shares of restricted Common A stock. Early indications, from samples taken and processed,
provided reason to believe that the potential recovery value of the metals located on the 1,440 acres is significant, but only
actual mining and processing will determine the ultimate value which may be realized from this property holding. The Company is
currently exploring strategic options to partner or sell its interest in this acreage, while it focuses on its emerging GTL technology
sales and marketing efforts.
Company History
Greenway
Technologies, Inc. was originally incorporated as Dynalyst Manufacturing Corporation (“Dynalyst”) under the laws of
the State of Texas on March 13, 2002. In connection with the merger with Universal Media Corporation (“UMC”),
a Nevada corporation, on August 17, 2009, the Company changed its 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 Dynalyst’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 its 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.in recognition of its primary operational activity, approved the amendment of its certificate
of formation and filed on June 23, 2017, with the Texas Secretary of State to change its name to: Greenway Technologies, Inc.
Employees
As
of April 15, 2019, we have 5 full-time employees. Four of these employees are located in, or near our corporate offices in Arlington,
Texas; one is located in North Carolina, but travels extensively on Company business. None of our employees are covered by collective
bargaining agreements. We consider our employee relations to be satisfactory.
Going Concern
The
accompanying condensed 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 of December 31, 2018, the Company has an accumulated
deficit of $26,818,584. During the twelve-months ended December 31, 2018, the Company used net cash of $1,289,436 for operating
activities. As a pre-revenue entity, these factors raise substantial doubt about the Company’s ability to continue as a going
concern. While the Company is attempting to commence revenue generating operations and thereby generate sustainable revenues, the
Company’s current cash position is not sufficient to support its daily operations.
The
ability of the Company to continue as a going concern is therefore 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 intends to raise
additional funds by way of public or private offerings, or both. Management believes that the actions presently being taken to
implement the Company’s business plan and generate revenues will provide the opportunity for the Company to continue as a
going concern. While Management believes in the viability of its strategy to generate revenues and in its ability to raise additional
funds, there can be no assurances to that effect. The Company’s ability to continue as a going concern is dependent upon
our ability to further implement our business plan and generate revenues.
We
may not be able to raise the additional capital necessary to execute our business strategy which includes the production, sale
and/or licensing of our proprietary GTL technology solutions to oil and gas operators in the United States and elsewhere.
Our
ability to successfully execute such transactions may depend on our ability to raise additional debt and/or equity capital. Our
ability to raise additional capital is uncertain and dependent upon numerous factors beyond our control, including but not limited
to economic conditions, regulatory factors, reduced retail sales, increased taxation, reductions in consumer confidence, changes
in levels of consumer spending, changes in preferences in how consumers pay for goods and services, weak housing markets and availability
or lack of availability of credit. If we are unable to obtain additional capital, or if the terms thereof are too costly, we may
be unable to successfully execute our business strategy.
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 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 have historically
incurred losses.
We are considered a pre-revenue
or development stage company. We have incurred significant operating losses since inception. Due to the inherent risk of commercializing
new technology, there can be no assurance that the Company will earn net income in the future and it may require additional capital
in order to fund its operations, which it may not be able to source on acceptable terms.
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 solution is greater than those available from competing technologies and providers. Even if the advantages derived from
our proprietary GTL technology is well 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 additional 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 the risks associated
with the commercialization of any GTL systems 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 may encounter substantial competition in our business
and failure to compete effectively may adversely affect our ability to generate revenue.
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 potentially develop a similar or more efficient GTL product or undertake more aggressive and costly marketing
campaigns than ours, which may adversely affect our sales and 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:
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current and future direct sales and marketing efforts by large competitors;
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rapid and effective development of new, unique GTL techniques; and
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new and aggressive pricing methodologies.
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If substantial competitors
enter our targeted markets, we may be unable to compete successfully against such existing or new competition. Most of our potential
competitors have far greater resources than the Company today. In addition, there is significant competition for experienced personnel
and financial capital in the oil and gas industry. Therefore, it can be difficult for smaller companies such as Greenway to attract
the personnel and related investment for its various business activities needed to succeed. We cannot give any assurances that
we will be able to successfully compete for such personnel and capital funds, and without adequate financial resources, Management
cannot assure that we will be able to compete in our business activities.
The longevity of patents
in the United Sates is limited in duration and may affect the Company’s long-term ability to successfully monetize the intellectual
property it owns.
As of December 31,
2018, the Company 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.
We are dependent on a limited number
of key executives, consultants and equipment fabricators, the loss of any of which could negatively impact our business.
Our
business is led by our President, John Olynick, and our Chief Financial Officer, Ransom Jones. Our engineering efforts are led
by Thomas Phillips. In addition, we plan to continue to use outside consultants to support and perform the engineering and production
work on our GTL technology. In that regard we have a Sponsored Research Agreement with UTA and have contracted manufacturing production
with a heavy equipment fabricator in Texas.
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 in our industry is
intense, the pool of qualified candidates is 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, and the loss of one or more of these executives, consultants or
current fabricators could negatively impact our business and operations.
Our quarterly results
may fluctuate substantially and if we fail to meet the expectations of our investors or analysts, our stock price could decline
substantially.
Our
quarterly operating results may fluctuate, and if we fail to meet or exceed the expectations of securities analysts or investors,
the trading price of our common stock could decline. Some of the important factors that could cause our revenue and operating results
to fluctuate from quarter to quarter include:
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we are a small company with limited operating history;
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the limited scope of our sales and marketing efforts;
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our ability to attract new customers and satisfy our customers’
requirements;
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general economic conditions;
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changes in our pricing capabilities;
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our ability to expand our business;
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the effectiveness of our personnel;
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new product introductions; and
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extraordinary expenses such as litigation or other dispute-related
settlement payments.
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We may have difficulty in attracting
and retaining outside independent directors to our board of directors as a result of their concerns relating to potentially 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 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 intellectual property 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 terms are offered at all.
Our ability to obtain field related operating hazards
insurance may be constrained by our limited operational history.
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 plan to carry comprehensive general
liability insurance will further provide workers’ compensation insurance coverage to employees in all states in which we
will operate.
While these policies
are customary in the industry, they do not provide complete coverage against all operating risks, and as a small operator, we may
not be able to obtain sufficient coverage. 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.
Our future revenues are unpredictable, and our quarterly
operating results may fluctuate significantly.
We only have a limited
operating history and cannot forecast with any degree of certainty whether our GTL technology will generate revenue, or that the
amount of revenue to be generated will be profitable. 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:
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ability to attract new and repeat customers;
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Our ability to protect our proprietary GTL Technology;
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The ability of our competitors to offer new or enhanced GTL services; and
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Unanticipated delays or cost increases with respect to research and development.
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Our GTL Technology is subject to the changing of applicable
U.S. laws and regulations.
Our business is
particularly subject to federal and state laws and regulations with respect to the oil and gas and mining industries. 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.
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 and customer relationships 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, joint ventures and similar production
relationships. We may not be able to enter into these strategic partnerships on commercially reasonable terms, or at all. Even
if we enter such relationships, our partners may not have sufficient production to provide profitable revenues or otherwise prove
advantageous to our business. Our inability to enter into such new relationships or strategic alliances could have a material and
adverse effect on our business.
Risks Relating to Our Mining Properties
As discussed above,
although we still own mining properties, we do not currently conduct any mining operations. However, there are still risks associated
with our mining properties, including those risks described below.
Our mining properties do not have quantified 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 and assay
activities on the leased 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 claims to 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 related
law, we are required to pay the BLM ten percent (10%) of any revenues derived from sales of minerals from the leased property.
Risks Relating to Our Stock
We may need to raise additional capital. If we are unable
to raise additional capital, our business may fail, or our operating results and our share price may be materially adversely affected.
Because we have
no record of profitable operations, we need to secure adequate funding on an ongoing basis. If we are unable to obtain adequate
funding, we may not be able to successfully develop and market our GTL Technology and our business will most likely fail. We have
limited commitments for financing. To secure 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.
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 rendered, without further approval by our shareholders based
upon such factors as our board of directors may deem relevant in their sole discretion. It is likely that that the Company will
issue additional securities to pay for services and reduce debt in the future.
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 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.
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.
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.
Volatility in our share price may subject the Company
to securities litigation.
There is a limited
market for our shares. The market for our shares is 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.
We do not intend
to pay dividends.
We have not paid
any cash dividends on our common stock since our inception and we do not anticipate paying any cash dividends in the foreseeable
future. Earnings, if any, that we may realize will be retained in the business for further development and expansion. Our ability
to pay dividends may be restricted under our Loan Agreement.
Our substantial level of indebtedness
could adversely affect our financial condition.
We
have a substantial amount of indebtedness, which requires significant interest payments. As of December 31, 2018, we had $3,625,214
of accrued liabilities and $1,139,536 of debt bearing average cash interest of 14.4% per year when current, and 18% default interest
if certain loans are not current. As of the date of this report, the Company is currently in default of certain loans and therefore
has $1,139,536 of current debt bearing an average cash interest of 18% per year.
Our substantial level of indebtedness could
have important consequences, including the following:
|
|
●
|
We must use a substantial portion of our cash flow from operations to pay interest, which reduces funds available to us for other purposes, such as working capital, capital expenditures and other general corporate purposes;
|
|
|
●
|
our ability to refinance such indebtedness or to obtain additional financing for working capital, capital expenditures, acquisitions or general corporate purposes may be impacted; and
|
|
|
●
|
our leverage may be greater than that of some of our competitors, which may put us at a competitive disadvantage and reduce our flexibility in responding to current and changing industry and financial market conditions.
|
Our
ability to meet expenses and to make future principal and interest payments in respect of our debt, depends on, among other things,
our future operating performance, competitive developments and financial market conditions, all of which are significantly affected
by financial, business, economic and other factors. We are not able to control many of these factors. If industry and economic
conditions deteriorate, our cash flow may not be sufficient to allow us to pay principal and interest on our debt and meet our
other obligations.
Future sales of large amounts of our
common stock could have a negative impact on our stock price.
Future sales of our common stock by existing
stockholders pursuant to an effective registration statement covering the resale of such shares or Rule 144 could adversely affect
the market price of our common stock and could materially impair our future ability to generate funds through sales of our equity
securities.
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 smaller reporting company that trades at less than $5.00 per share. Penny
stocks are generally 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.
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.
|
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, the Company’s management will strive 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.
Failure to maintain
effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our
business and stock price.
Section
404 of the Sarbanes-Oxley Act requires us to evaluate annually the effectiveness of our internal controls over financial reporting
as of the end of each fiscal year and to include a management report assessing the effectiveness of our internal controls over
financial reporting in our annual report. If we fail to maintain the adequacy of our internal controls, we may not be able to ensure
that we can conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section
404 of the Sarbanes-Oxley Act.
While we continue
to dedicate resources and management time to ensuring that we have effective controls over financial reporting, failure to achieve
and maintain an effective internal control environment could have a material adverse effect on the market’s perception of
our business and our stock price.
|
|
Item 1B.
|
Unresolved Staff Comments.
|
None.
Our principal office is 1521 North Cooper
St., Suite 205, Arlington, Texas 76011, leased at a rate of $957 per month. We believe these facilities are adequate for at least
the next 12 months. We expect that we could locate to other suitable facilities at comparable rates, should we need more space.
The Company 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 was 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 note. 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 the Company sold its shares
in Mamaki to HBI for $700,000 (along with the assumption of certain debt). The Company maintained its guaranty on the original
loan as a component of the sale transaction. 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, the parties executed a Settlement and Mutual Release Agreement (Agreement).
However, the Defendants again defaulted in their payment obligations under this new Agreement. Curtis Borman and Lee Jennison were
co-guarantors of the obligations of Mamaki and HBI. To secure their guaranties, each of Curtis Borman and Lee Jennsion posted 1,241,500
and 1,000,000 shares, respectively, of the Company. Under the Agreement, the shares were valued at $.20. Due to the default under
the Agreement, these shares were returned to the Company’s treasury shares. Curtis Borman subsequently filed for bankruptcy
and the property was liquidated for $600,000, applied against the prior loan amount, leaving a remaining guaranteed loan payment
balance of approximately $700,000, including accrued interest and legal fees. The Company is currently in negotiations with the
note holders and anticipates a positive resolution.
On April 9, 2018, the Company
and Tonaquint, Inc. agreed to settle on Tonaquint’s exercise of a warrant option with 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 was completed in connection with a legal opinion pursuant to Rule 144.
Wildcat Consulting
Group LLC (“Wildcat”) filed a civil lawsuit against Greenway Technologies, Inc. on September 27, 2018 for an alleged
breach of contract. The Company answered the lawsuit and asserted a number of affirmative defenses. The Company settled all claims
with Wildcat and its principal, Marshall Gleason in the first quarter of 2019. See Subsequent Events Note 14.
On March 26, 2019 the Company filed a verified
petition for Declaratory Judgement,
Ex Parte
Application for a Temporary Restraining Order and Application for Injunctive
Relief against the members of the Greenway Shareholders Committee in Dallas County. A Temporary Restraining Order was issued by
the court enjoining the Defendants (and their officers, agents, servants, employees and attorneys) and those persons in active
concert or participation from; holding the special shareholders meeting on April 4, 2019 or calling such meeting to order; attending
or participating in the Special Meeting; voting the shares of Plaintiff owned by any Defendant at the Special Meeting, either directly
or by granting a proxy to allow a non-defendant to vote said shares; voting any shares of Plaintiff owned by non-defendants with
or by proxy at the Special Meeting; and serving as chairman at the Special Meeting. On April 8, 2019, the court issued a Temporary
Injunction against the dissident shareholders who received notice. The Injunction will continue until the trial date of December
10, 2019.
The Company is aware that
there are claims that may be asserted against it by Richard Halden, a dissident shareholder, and Chisos Equity Consultants, LLC,
which is a company that may be controlled by Halden. These claims, if they are asserted will be vigorously defended by the Company.
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.
|
Reserved (by the SEC for future rulemaking).
|
Not applicable.
PART II
|
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
|
Market Information
Our shares of common
stock are quoted on the OTCQB under the symbol “GWTI.” The table following sets forth the high and low bid prices for
our common stock on the OTCQB as reported by various market makers. The quotations reflect inter-dealer prices, without retail
mark-up, mark-down or commission, and may not reflect actual transactions.
|
|
|
High
|
|
Low
|
Fiscal 2017
Quarter Ended:
|
|
|
|
|
|
|
March 31, 2017
|
|
|
$
|
0.1500
|
|
|
$
|
0.1100
|
|
|
|
June 30, 2017
|
|
|
$
|
0.3600
|
|
|
$
|
0.1200
|
|
|
|
September 30, 2017
|
|
|
$
|
0.2500
|
|
|
$
|
0.1000
|
|
|
|
December 31, 2017
|
|
|
$
|
0.1400
|
|
|
$
|
0.0799
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal 2018
Quarter Ended:
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2018
|
|
|
$
|
0.1600
|
|
|
$
|
0.1300
|
|
|
|
June 30, 2018
|
|
|
$
|
0.0600
|
|
|
$
|
0.0600
|
|
|
|
September 30, 2018
|
|
|
$
|
0.0700
|
|
|
$
|
0.0700
|
|
|
|
December 31, 2018
|
|
|
$
|
0.0800
|
|
|
$
|
0.0800
|
|
As of April 15, 2019, we
had outstanding 287,471,582 shares of Class A common stock and 0 shares of Class B common stock outstanding. Our shares of Class
A common stock are held by 513 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.
Dividend Policy
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 twelve months ended December 31, 2018, the Company issued
5,655,253 shares of restricted Class A common stock to 22 individuals through private placement for cash of $602,500 at an average
of $0.107 per share.
|
|
|
·
|
During the twelve months ended December 31, 2018, the Company issued
500,000 shares of restricted Class A common stock as compensation for services at $0.10 per share.
|
|
|
·
|
During the twelve months ended December 31, 2018, the Company issued
1,600,000 shares of Class A common stock in settlement of a legal dispute at $0.13 per share.
|
|
|
·
|
During the twelve months ended December 31, 2018, the Company issued
3,000,000 shares of Class A common stock in settlement of shareholder obligations at $0.11 per share.
|
|
|
·
|
During the three months ended March 31, 2019, the Company issued
766,667 shares for the conversion of Warrants at an average of $0.06 per share.
|
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/her 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 accredited investors 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.
|
Our transfer agent is:
Transfer Online, Inc., whose address is 512 SE Salmon Street, Portland, Oregon 97214, 2nd Floor, telephone number (503) 227-2950.
|
|
Item 6.
|
Selected Financial Data.
|
We
are a smaller reporting company; as a result, we are not required to report selected financial data disclosures as required by
Item 301 of Regulation S-K.
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
The
following discussion and analysis of our results of operations and financial condition for the fiscal years ended December
31, 2018 and 2017 should be read in conjunction with our financial statements and the notes to those financial statements
that are included elsewhere in this annual report. Our discussion includes forward-looking statements based upon current expectations
that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing
of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors,
including those set forth under the “Risk Factors,” “Cautionary Notice Regarding Forward-Looking Statements”
and “Description of Business” sections and elsewhere in this report. We use words such as “anticipate,”
“estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,”
“believe,” “intend,” “may,” “will,” “should,” “could,”
“predict,” and similar expressions to identify forward-looking statements. Although we believe the expectations expressed
in these forward-looking statements are based on reasonable assumptions within the bounds of our knowledge of our business, our
actual results could differ materially from those discussed in these statements. We undertake no obligation to update publicly
any forward-looking statements for any reason even if new information becomes available or other events occur in the future.
In the below discussion,
“we,” “our,” “us,” the “Company” and similar terms in this report, as well as references
to “UMED” and “Greenway” all refer to Greenway Technologies, Inc., and our wholly-owned subsidiary, Greenway
Innovative Energy, Inc., unless the context requires otherwise.
GTL Technology
Greenway Technologies,
Inc., through its wholly-owned subsidiary, Greenway Innovative Energy, Inc., is primarily engaged in the research, development
and commercialization of a proprietary Gas-to-Liquids (GTL) syngas conversion system that can be economically scaled to meet individual
natural gas field/resource requirements. The Company's proprietary and patented technology has now been realized in Greenway's
recently completed first generation commercial-scale G-Reformer unit, a unique and critical component to the Company's overall
GTL technology solution. Greenway's objective is to become a material direct and licensed producer of renewable GTL synthesized
diesel and jet fuels, with a near term focus on U.S. market opportunities.
The Company believes
that its proprietary G-Reformer is a major innovation in gas reforming and GTL technology in general. Initial tests have demonstrated
that the Company’s solution is superior to legacy technologies which are costly, have a larger footprint and cannot be easily
deployed at field sites to process associated gas, stranded gas, coal-bed methane, vented gas, or flared gas, all markets the Company
seeks to service. The proprietary technology based around the G-Reformer is unique in that it also allows for transportable GTL
plants with a much smaller footprint when compared to legacy large-scale technologies. The Company believes its technologies and
processes will allow for GTL plants to be built with substantially lower up-front and ongoing costs resulting in more profitable
results for O&G operators. Greenway is now working to commercialize both its G-Reformer and its GTL solutions and is in discussions
with a number of oil and gas companies, smaller oil and gas operators and other interested parties to license and obtain joint
venture or other forms of capital funding to build its first complete gas-to-liquid plant.
Mining Interest
In December 2010,
UMED acquired the rights to approximately 1,440 acres of placer mining claims located on Bureau of Land Management (“BLM”)
land in Mohave County, Arizona for 5,066,000 shares of restricted Common A stock. Early indications, from samples taken and processed,
provided reason to believe that
the potential recovery value of the
metals located on the 1,440 acres is significant, but only actual mining and processing will determine the ultimate value which
may be realized from this property holding. The Company is currently exploring strategic options to partner or sell its interest
in this acreage, while it focuses on its emerging GTL technology sales and marketing efforts.
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 16, 2019, which raises substantial doubt about our ability to continue as a going
concern.
|
|
|
2018
|
|
|
2017
|
|
|
Net loss
|
|
$
|
(3,194,982
|
)
|
|
$
|
(9,147,397
|
)
|
|
Cash flow (negative) from operations
|
|
|
(1,289,436
|
)
|
|
|
(2,226,753
|
)
|
|
Negative working capital
|
|
|
(4,704,396
|
)
|
|
|
(2,748,201
|
)
|
|
Stockholders' deficit
|
|
|
(4,689,396
|
)
|
|
|
(2,812,201
|
)
|
As of December 31,
2018, Greenway Technologies has liabilities in excess of assets by $4,689,396. Also, during the year ended December 31, 2018, we
used net cash of $1,969,722 for operating activities. 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.
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 2019 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.
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, 2018, Compared
to Year Ended December 31, 2017.
We had no revenues for consolidated operations
for the years ended December 31, 2018 and 2017. We reported consolidated net losses during the years ended December 31, 2018 and
December 31, 2017, of $3,194,982 and $9,147,397, respectively.
The following table summarizes consolidated
operating expenses and other income and expenses for the years ended December 31, 2018, and December 31, 2017:
|
|
2018
|
2017
|
|
General and administrative
|
$2,255,503
|
$8,262,988
|
|
Research and development
|
$630,518
|
$867,052
|
|
Depreciation and amortization
|
$0
|
$349
|
|
|
|
|
|
Loss on derivative
|
$(34,500)
|
($15,933)
|
|
Net interest expense
|
$(126,461)
|
($14,676)
|
|
Loss on debt settlement
|
$(28,000)
|
0
|
|
Settlement expense – loan agreement
|
$(120,000)
|
0
|
Operating Expenses
.
During the year ended December 31, 2018, operating expenses decreased $2,886,021, as compared to $9,130,389 for the year ended
December 31, 2017. The decrease was due primarily to a decrease of stock-based compensation of $5,650,938 for the year ended December
31, 2017, compared to $50,000 for the year ended December 31, 2018. Major operating expense categories consisted of the following
from year to year;
Officer Compensation
.
During the year ended December 31, 2018, officer compensation (including Greenway Innovative Energy, Inc.’s chief executive)
decreased to $378,000 (inclusive of $50,000 of stock-based compensation), as compared to $3,645,000 (inclusive of $3,290,000 of
stock-based compensation) for the year ended December 31, 2017.
Consulting Fees
. During
the year ended December 31, 2018, consulting expense increased to $1,373,578, as compared to $234,950 for the year ended December
31, 2017. The increase was primarily the result of consultants used for the development and production of the Greenway GTL technologies
and for general management and governance support.
Professional Fees
. During
the year ended December 31, 2018, professional fees nominally increased to $24,358, as compared to $19,909for the year ended December
31, 2107. Professional fees were consistent with the prior year.
Travel Expenses
. During
the year ended December 31, 2018, travel expenses decreased to $30,113, as compared to $67,699 in the year ended December 31, 2017.
Legal Expenses
. During
the year ended December 31, 2018, legal expenses increased to $297,073, as compared to $225,229 in the year ended December 31,
2017. The increase in legal fees was due primarily to additional work related to the negotiation and settlement of various contract
matters and dissident shareholder actions.
Research and Development
Costs
. During the year ended December 31, 2018, research and development costs decreased to $630,518, as compared to $867,052in
the year ended December 31, 2017. The decrease was due to the Company reaching the completion of its initial GTL research activities
and migration to a commercial production environment.
Interest Expense.
During
the year ended December 31, 2018, interest expense increased to $126,461, as compared to $1,075 for the year ended December 31,
2017. The increase was primarily due to the increase of debt financing versus the sale of securities to support operating expenses.
Derivative Adjustment
.
During the year ended December 31, 2018, gain on derivative adjustment was $34,500, as compared to $15,933 for year ended December
31, 2017. The change was primarily 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 decreased to $3,194,982, as compared to $9,147,397 for the year ended December 31, 2017. The decrease
was due primarily to a decrease of 2017 stock-based compensation of $5,607,938. The consolidated net loss was $3,194,982 or $0.01
per basic and diluted earnings share, for the year ended December 31, 2018, as compared to $9,147,397 or $0.03 per basic and diluted
earnings per share for the year ended December 31, 2017. The weighted-average number of shares used in the
earnings per share for the basic
and dilutive computation was 285,638,699 for the year ended December 31, 2018, and 273,028,802 for the year ended December 31,
2017.
Liquidity and Capital Resources
We do not currently
have sufficient working capital to fund our expected future operations. We cannot assure investors that we will be able to continue
our operations without securing additional adequate funding. We had $73,211 in cash, total assets of $178,80 and total liabilities
of $4,868,226 as of December 31, 2018. Total stockholder's deficit at December 31, 2018, was $26,818,584.
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, 2018, and December 31, 2017:
|
|
|
|
|
|
|
$
|
|
%
|
|
|
|
2018
|
|
2017
|
|
Change
|
|
Change
|
|
Working Capital
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$ 73,211
|
|
$91,518
|
|
$ (18,307)
|
|
-20%
|
|
Total current assets
|
|
$ 73,211
|
|
$249,018
|
|
$(175,807)
|
|
-71%
|
|
Total assets
|
|
$ 88,211
|
|
$269,018
|
|
$(180,330)
|
|
-30%
|
|
Accounts payable and accrued liabilities
|
|
$3,506,880
|
|
$2,696,550
|
|
$810,330
|
|
30%
|
|
Notes payable and accrued interest
|
|
$1,048,917
|
|
$304,675
|
|
$794,840
|
|
261%
|
|
Derivative liability
|
|
$103,476
|
|
$105,643
|
|
$(2,167)
|
|
-2%
|
|
Total current liabilities
|
|
$4,777,607
|
|
$2,997,219
|
|
$1,780,388
|
|
59%
|
|
Total long-term debt
|
|
$0
|
|
$ 84,000
|
|
$(84,000)
|
|
|
|
Total liabilities
|
|
$4,777,607
|
|
$3,081,219
|
|
$1,696,388
|
|
55%
|
Operating Activities
Net cash used in
continuing operating activities during the year ended December 31, 2018, was $1,289,436, as compared to $2,226,753 for the year
ended December 31, 2017. Items totaling approximately $1,365,028 contributing to the net cash used in continuing operating activities
for the year ended December 31, 2018, include:
|
|
·
|
$3,194,982 net loss, reduced by:
|
|
|
·
|
$365,500 increase in accrued management fees.
|
|
|
·
|
$157,500 decrease in Prepaid Expenses
|
|
|
·
|
$50,000 stock-based compensation
|
|
|
·
|
$81,833 elimination of debt discount on defaulted notes
|
|
|
·
|
$778,806 increase in accrued accounts payable
|
|
|
·
|
$286,073 $778,806 increase in accrued expenses
|
|
|
·
|
44,982 loan default – derivative adjustments
|
Net cash used for continuing operating
activities for the year ended December 31, 2017, was $2,226,753. 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.
|
|
|
·
|
$1,412.286
increase in settlement of stockholder dispute.
|
|
|
·
|
$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, 2018 and 2017.
F
inancing Activities
Net cash provided
by financing activities was $1,271,129 for the year ended December 31, 2018, composed of $602,500 in sales of common stock, $728,869
proceeds from notes, $8,500 of payments on note payable and $51,740 repayment of shareholder advances.
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.
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 later research and
explore its existing mining leases properties. As shown in the accompanying consolidated financial statement, the Company has incurred
cumulative deficits of $26,818,584 and $23,623,602 as of December 31, 2018, and December 31, 2017, 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 the Company to obtain necessary financing to fund ongoing operations.
Commitments
Employment Agreements.
In August 2012,
The Company entered into an employment agreement with the president of Greenway Innovative Energy, Inc., and now chairman of the
board of Greenway Technologies, Inc. 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 such annual pay to $180,000. By its terms, the employment agreement automatically
renewed on August 12, 2018 for a successive one-year period. During the twelve-months ended December 31, 2018, the Company paid
and accrued a total of $180,000 for this fiscal year under the terms of the agreement.
Effective May 10,
2018, the Company entered into employment agreements with John Olynick, as President and Ransom Jones, as Chief Financial Officer,
respectively. The terms and conditions of their employment agreements are identical. John Olynick, as President earns a salary
of $120,000 per year. Ransom Jones, as Chief Financial Officer, earns a salary of $120,000 per year. Mr. Jones also serves as the
Company’s Secretary and Treasurer. During each year that their Agreements are in effect, they are each entitled to receive
a bonus (“Bonus”) equal to at least Thirty-Five Thousand Dollars ($35,000) per year. They are also entitled to certain
additional stock grants based on the performance of the Company during the term of their employment. They are each entitled to
and received a grant of common stock (the “Stock Grant”) on the Effective Date equal to 250,000 shares each (500,000
shares) of the Company’s Common
Stock, par value $.0001 per share (the “Common Stock”), such shares vesting immediately. They are also entitled to
participate in the Company’s benefit plans.
The foregoing summary
of the Employment Agreements is qualified in its entirety by reference to the actual true and correct Employment Agreements, copies
of which are attached hereto as Exhibit 10.39 and 10.40.
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 portable GTL unit is built and becomes operational and is capable of producing 2,000 barrels of diesel or
jet fuel per day and to pay Greenway Innovative Energy a 2% royalty on all gross production sales on each unit placed in production.
In connection with a settlement agreement with one of the prior owners of Greenway Innovative Energy, Inc., the Company replaced
3,750,000 of the shares with a different number of shares and other consideration. As a result, only 3,750,000 shares are committed
to be issued under this agreement.
Consulting Agreements
On April 13, 2018, the
Company entered into a consulting agreement with an individual, Gary L. Ragsdale, Ph.D., P.E., to provide research and development
support of the Company’s GTL technology development, including but not limited to chemical modeling and simulations, operational
validation, operating plant forecasts, ancillary product analysis and general technical advisory services. Terms include payment
of billable time at $40.00 per hour, plus approved expenses, retroactive to January 1, 2017. The term of the agreement is indefinite,
unless otherwise terminated with written notice by the parties. Dr. Ragsdale continues to provide services to the Company under
the current agreement.
On April 13, 2018, the
Company entered into a consulting agreement with an individual, John Olynick, to provide general advisory services, including but
not limited to advice and support for funding discussions, creation of presentations, document and contract preparation. Terms
include payment of billable time at $40.00 per hour, plus approved expenses, retroactive to January 1, 2017. The term of the agreement
is indefinite, unless otherwise terminated with written notice by the parties. This agreement was terminated on May 10, 2018 when
Mr. Olynick was engaged as President of Greenway.
On April 17, 2018, the
Company entered into a consulting agreement with an individual, Mark A. Zoellers, to provide general advisory services, including
but not limited to document and contract preparation, creation of presentations, photography and technical document review. Terms
include payment of billable time at $40.00 per hour, plus approved expenses, retroactive to January 1, 2017. The term of the agreement
is indefinite, unless otherwise terminated with written notice by the parties. Mr. Zoellers continues to provide services to the
Company under the current agreement.
On April 18, 2018, the
Company entered into a consulting agreement with an individual, Paul R. Alfano via Alfano Consulting Services, to provide board
and senior management advice, including but not limited to corporate strategy, SEC adherence, sales and marketing strategies, document
and presentation preparation and fund-raising support. Terms include payment of billable time at $40.00 per hour, plus approved
expenses, retroactive to January 1, 2017. The term of the agreement is indefinite, unless otherwise terminated with written notice
by the parties. Mr. Alfano continues to provide services to the Company under the current agreement.
On April 18, 2018, the
Company entered into a consulting agreement with an individual, Peter J. Hauser, to provide general advisory services, including
but not limited to public relations, press release preparation, photography, document preparation and editing. Terms include payment
of billable time at $40.00 per hour, plus approved expenses, retroactive to January 1, 2017. The term of the agreement is indefinite,
unless otherwise terminated with written notice by the parties. Mr. Hauser was a member of the Company’s board of directors
from May 10, 2018 until his resignation March 8, 2019 and continues to provide services to the Company under the current agreement.
On April 19, 2018, the
Company entered into a consulting agreement with an individual, William N. Campbell, to sales and marketing support for the Company’s
GTL technology, including but not limited to sales prospecting and presentation, document preparation, editing and making presentations,
along with general technical advisory services. Terms include payment of billable time at $40.00 per hour, plus approved expenses,
retroactive to January 1, 2017. The term of the agreement is indefinite, unless otherwise terminated with written notice by the
parties. Mr. Campbell continues to provide services to the Company under the current agreement.
On July 10, 2017,
the Company entered into a one-year consulting agreement with an individual, Ryan Turner, to provide business development services,
including but not limited to enhanced digital marketing, assistance with shareholder communications and help in establishing industry
relationships. Terms included monthly payments of $5,000 per month, plus approved expenses. After the first twelve-month initial
term, the agreement was automatically renewable for successive twelve-month terms, unless otherwise terminated with written notice
by the parties, and was subsequently renewed for an additional term. Mr. Turner continues to provide services to the Company under
the current agreement.
The foregoing summaries
of the Consulting Agreements described above are qualified in their entirety by reference to the actual true and correct Consulting
Agreements, copies of which are attached hereto as Exhibits 10.41 through 10.47.
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 its restricted common stock. Additional
payments upon our common stock reaching certain price points as follows:
|
|
|
·
500,000 shares at the time our common stock reaches $0.25 per share during the first year
|
|
|
|
|
·
500,000 shares at the time our common stock reaches $0.45 per share during the first year
|
|
|
|
|
·
1,000,000 shares at the time our common stock reaches $0.90 per share during the first or second year
|
|
|
|
·
2,000,000 shares at the time our common stock reaches $1.50 per share during the first or second year
|
|
|
|
·
3,000,000 shares at the time our common stock reaches $2.00 per share during the term of the agreement
|
|
|
|
·
1,000,000 shares at the time our common stock reaches $10.00 per share during the term of the agreement
|
Due to a breach under the
Agreement, the Board of Directors of the Company on June 22, 2018 voted to terminate the Agreement. Based on the termination, all
warrants to purchase the Company’s common stock were cancelled.
On December 8, 2017, the
Company entered into a six-month consulting agreement with MBK Consulting LLC (“MBK”) for the provision of general
corporate management and public company governance support, including assistance in and providing guidance for raising capital.
Terms included monthly payments of $10,000 per month, plus approved expenses. After the first six-months initial term, the agreement
was automatically renewable for successive six-month terms, unless otherwise terminated with written notice by the parties, and
was subsequently renewed for an additional term. The agreement on its then current terms was mutually ended as of December 2018.
MBK continues to provide services to the Company on a month-to-month and as-needed basis.
Mining Leases
We have a minimum
commitment for 2019 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, 2019. Once Greenway 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 files an annual maintenance fee form to hold the
claims.
Financing
Financing to date
has been provided by loans, advances from shareholders and by issuing shares of the Company’s common stock in various private
placements to accredited investors, related parties and individuals.
Seasonality
We do not anticipate that our business
will be affected by seasonal factors.
Impact of Inflation
While we are subject
to general inflationary trends, including for basic manufacturing production materials, Management believes that inflation in and
of itself 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 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 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”.
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 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 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 2015 – 2018.
Net Loss Per Share, Basic and Diluted
Greenway 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 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 to concentrations of credit risk, consist primarily of cash, cash equivalents
and trade receivables. Greenway 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.
Impact of New Accounting Standards
Greenway 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 believes that none of these pronouncements are expected
to have a significant effect on its consolidated financial statements.
Subsequent Events
See Notes accompanying the financial
statements.
|
|
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.
|
At no time have
there been any disagreements with our accountants regarding any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure.
|
|
Item 9A.
|
Controls and Procedures.
|
Evaluation of Disclosure Controls
and Procedures.
Under
the supervision and with the participation of our management, including our principal executive officer and principal financial
officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 15d-15(e) promulgated
under the Exchange Act, as of December 31, 2018. Based on this evaluation, our principal executive officer and principal financial
officer have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed
by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods
specified in the SEC’s rules.
Management's Annual Report on
Internal Control over Financial Reporting.
Our
management is responsible for establishing and maintaining effective internal control over financial reporting as defined in Rule
15d-15(f) under the Exchange Act. The Company’s internal control over financial reporting is designed to provide reasonable
assurance to the Company’s management and Board of Directors regarding the preparation and fair presentation of published
financial statements in accordance with United States’ generally accepted accounting principles (“US GAAP”),
including 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 the assets of the Company, (ii) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in accordance with US GAAP and that receipts
and expenditures are being made only in accordance with authorizations of management and directors of the Company, and (iii) provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s
assets that could have a material effect on the financial statements.
Management
conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control—Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Management’s assessment included
an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of our
internal control over financial reporting. Based on this evaluation, management has concluded that as of December 31, 2018, our
internal control over financial reporting was ineffective.
Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even
those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation
and presentation.
This
annual report does not include an attestation report of the Company’s 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 rules of the SEC that permit the Company to provide only management’s report in this annual report.
We have 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, 2018:
|
|
|
·
Greenway Technologies has inadequate segregation of duties within its cash disbursement control design.
|
|
|
|
·
During the year ended December 31, 2018, Greenway 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 does not have a sufficient number of independent or qualified directors for its board and audit committee. We currently have three independent directors on our board, which is comprised of six directors, and we do not yet have a functioning audit committee, as the only otherwise qualified director is not independent. As a publicly-traded company, we should strive to have a majority of our board of directors be independent.
|
Greenway 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 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
There were no changes (including
corrective actions with regard to significant deficiencies or material weaknesses) in our internal control over financial reporting
that occurred during the year ended December 31, 2018, that have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.
|
|
Item 9B.
|
Other Information.
|
None.
PART III
|
|
Item 10.
|
Directors, Executive Officers and Corporate Governance.
|
The following table
sets forth the names, ages, and positions of our executive officers, directors and key employees as of the date of this report.
Executive officers are elected annually by our Board of Directors. Each executive officer holds his office until he resigns, is
removed by the Board, or his successor is elected and qualified. Directors are elected annually by our stockholders at the annual
meeting. Each director holds his office until his successor is elected and qualified or his earlier resignation or removal.
|
Name
|
Age
|
Position
|
Director
|
|
Raymond Wright
|
82
|
Chairman of the Board, President of GIE, Director
|
2016
|
|
Ransom Jones
|
70
|
Chief Financial Officer, Secretary, Director
|
2016
|
|
Kevin Jones
|
54
|
Director
|
2016
|
|
Craig Takacs
|
53
|
Director (Independent)
|
2002
|
|
Kent J. Harer
|
61
|
Director (Independent)
|
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 five directors, who have expertise in the business of Greenway. No date for
the next annual meeting of stockholders is specified in our bylaws or has been fixed by the Board of Directors. The term of office
of each officer ends at the next annual meeting of our Board of Directors, expected to take place immediately after the next annual
meeting of stockholders, or when such officer's successor is elected and qualifies.
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 and/or appointed in the interim to fill vacancies and newly created directorships, will hold office for the
term for which elected and/or appointed 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 brothers. 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 has not identified or reached an agreement or understanding
with any other individuals to serve in management positions.
Directors and Officers Biographies
Raymond Wright is the Chairman
of the Board of Greenway Technologies. Ray 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 natural gas to liquid (GTL) process and worked through
2012, when he and the late Conrad Greer formed Greenway Innovative Energy, Inc. to continue working on the GTL process. Previously,
Ray worked with Dallas-based Texas Instruments (TI) managing operations and opening 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.
Ransom B. Jones is Chief
Financial Officer of Greenway Technologies, Inc. and 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. Mr. Jones served as President and Interim Chief Executive Officer of
UMED through April 2017. He graduated from the University of Texas at El Paso in 1971 with a BBA, Accounting. Ransom Jones and
Kevin Jones are brothers.
Kevin Jones is the
founder and president of All Commercial Floors 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 commercial flooring companies in the country, with
multiple offices in the United States, serving customers from Alaska to Florida, Maine to California and beyond. ACF has managed
and installed landmark projects at
venues such as the Gaylord Texan, American
Airlines Center, the University of Alabama and Cowboys Stadium. ACF believes that no other flooring contractor in the country has
the ability to reach any corner of North American continent with the skill and success of ACF. Mr. Jones attended Texas Tech University
in Lubbock, Texas. Kevin Jones and Ransom B. Jones are brothers.
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.
Kenton
J. Harer began his career working for the oilfield division of LTV Corporation in 1981. In 1984, he began working in the industrial
gas industry where he developed an extensive knowledge of the industrial gas business and the various technologies of the diverse
industries it serves. He has been and remains an instrumental part of the operation of world-renowned French company Air Liquide
in the United States. In his capacity at Air Liquide, Mr. Harer was involved in the initial development of the G-Reformer®
utilizing existing technologies and was instrumental in negotiating agreements between Air Liquide and Greenway that allowed Greenway
to develop and begin to commercialize the G-Reformer technology. He graduated from the University of South Dakota with a Bachelor
of Science in Business Administration in 1980.
Mr.
Olynick has been president of Greenway since May 2018 and brings over 40 years of experience in senior management positions at
industry leading technology corporations including Digital Equipment Corp (DEC), CISCO Systems, Inc. and Philips Electronics. Over
his career, John has helped build businesses and has led turnarounds including serving as CEO and Chairman of the Board of an Arizona-based
public company that grew both organically and through acquisition under his leadership. Since July 2017, he has been assisting
the Company as a business development consultant with a focus on securing operational funding and developing joint venture partnerships.
He is a graduate of the New York University School of Engineering and the Harvard Business School Professional Development program.
Other Key Personnel
Thomas Phillips,
age 51, was elected as Vice President of Operations for Greenway Innovative Energy, Inc. Mr. Phillips is a highly experienced and
accomplished deal making executive with a very successful acquisition and divestiture track record. 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). After the FCS group was purchased, Mr. Phillips was asked to join
the senior management team at BCR Environmental/NuTerra Management LLC, a municipal wastewater treatment technology company and
related solutions provider. Early in 2017, Mr. Phillips was brought aboard to guide the Company’s GTL engineering operations.
Mr. Phillips holds a Bachelor of Science in Industrial Engineering from and is designated as a Distinguished Alumnus of Texas A&M
University.
Committees of the Board
On June 22, 2018,
pursuant to the authority granted to the Board in Section 2.10 of Article Two of the Company’s Bylaws, the Board created
an Executive Committee. As of the date of this report, the designated board members comprising said committee include Ray Wright,
Kent Harer and Ransom Jones. The Executive Committee may consider and review any and all such matters or issues it deems necessary
coming before the Company and take such further lawful actions as it determines to be consistent with its responsibilities.
The responsibilities
of other committees now or to be adopted in the future are currently are fulfilled by our board of directors and all of our directors
participate in such responsibilities, two of whom are “independent” as defined under Rule 4200(a)(15) of the NASD’s
listing standards described below. Given the small size of the Company, with the exception of the Executive Committee, 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:
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·
A director who is, or at any time during the past three years was, employed by the company;
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·
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).
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·
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;
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·
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.
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·
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
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·
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 additional
qualified independent members to 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,
Ransom Jones, the Chief Financial Officer and one of our directors, is considered to be our expert in financial and accounting
matters.
Nomination Committee
Our size and the
size of our board, at this time, does not require a separate nominating committee. When evaluating director nominees, our directors
consider the following factors:
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·
The appropriate size of our board of directors;
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·
Our needs with respect to the particular talents and experience of our directors;
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·
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;
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·
Experience in political affairs;
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·
Experience with accounting rules and practices; and
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·
The desire to balance the benefit of continuity with the periodic injection of the fresh perspective provided by new board members.
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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, 2018, 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, 2018.
Communication with Directors
Shareholders
and other interested parties may contact any of our directors by writing to them at Greenway Technologies, Inc. at 1521 N. Cooper
Street, Suite 205, Arlington, TX 76011. 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.
Conflicts of Interest
With respect to transactions involving
real or apparent conflicts of interest, we have adopted written policies and procedures which require that:
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·
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;
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·
The
transaction be approved by a majority of our disinterested outside directors; and
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·
The
transaction be fair and reasonable to us at the time it is authorized or approved by our directors.
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Code of Ethics for Senior Executive Officers and Senior
Financial Officers
We have adopted a written
code of business conduct and ethics, to be known as our code of ethics, which applies to our principal executive officer, principal
financial officer, principal accounting officer and all persons providing similar functions.
A code of ethics is a
written standard designed to deter wrongdoing and to promote:
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●
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honest and ethical conduct;
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●
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full, fair, accurate, timely and understandable disclosure in regulatory filings and public statements;
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●
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compliance with applicable laws, rules and regulations;
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●
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the prompt reporting violation of the code; and
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●
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Ongoing accountability for adherence to the code.
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We will provide a copy
of the Code of Ethics free of charge upon request to any person submitting a written request to our corporate Secretary.
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Item 11.
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Executive Compensation.
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Summary of Cash and Certain Other Compensation
At present, Greenway Technologies has
three executive officers, Messrs. Wright, Olynick and Jones.
Greenway Technologies Summary
Compensation Table
The following table sets forth, for our
named executive officers for the two completed fiscal years ended December 31, 2018, and December 31, 2017:
Name and
Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock Awards
($)
|
Option
Awards
($)
|
Non-Equiy Incentive Plan Compensation
($)
|
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
|
|
|
2018
|
5,000
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
5,000
|
|
R. Jones (2)
|
2017
|
40,000
|
-0-
|
490,000
|
-0-
|
-0-
|
-0-
|
-0-
|
530,000
|
|
|
2018
|
120,000
|
35,000
|
25,000
|
-0-
|
-0-
|
-0-
|
-0-
|
180.000
|
|
Ray Wright (3)
|
2017
|
150,000
|
-0-
|
1,400,000
|
-0-
|
-0-
|
-0-
|
-0-
|
1,550,000
|
|
|
2018
|
180,000
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
180,000
|
|
John Olynick (4)
|
2018
|
120,000
|
35,000
|
25,000
|
-0-
|
-0-
|
-0-
|
-0-
|
180,000
|
________
|
|
(1)
|
Mr. Six was hired as president 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. Mr. Six resigned as President on May 10, 2018, and as a director on February 19, 2019.
|
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(2)
|
Mr. Jones was 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. Mr. Jones was hired as Chief Financial Officer and Secretary on May 10, 2018 and received 250,000 shares of Class A common stock valued at $0.10 per share as a component of his employment agreement.
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|
(3)
|
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 Class A common stock valued at $0.14 per share. Mr. Wright resigned as corporate secretary on June 22, 2018, after being elected Chairman of the Board.
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|
(4)
|
Mr. Olynick was hired as president on May 10, 2018 and received 250,000 shares of Class A common stock valued at $0.10 per share as a component of his employment agreement
|
Outstanding Equity Awards at Fiscal
Year-End
The following table provides
information for each of our named executive officers as of the end of our last completed fiscal year, December 31, 2018:
|
|
Option Awards (1)
|
Stock Awards
|
|
Name
|
Number of Securities Underlying Unexercised Options (#)
Exercisable
|
Number of Securities Underlying Unexercised Options (#)
Unexercisable
|
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned
Options (#)
|
Option
Exercise
Price ($)
|
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-
|
|
John Olynick
(4)
|
-0-
|
-0-
|
-0-
|
N/A
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
|
|
|
|
|
|
|
|
|
|
|
__________
|
|
(1)
|
Mr. Six was elected as our chief executive officer on April 24, 2017. Mr. Six resigned as President on May 10, 2018, and as a director on February 19, 2019.
|
|
|
(2)
|
Mr. Jones was our interim chief executive officer, effective January 14, 2016, and president from August 4, 2016, through April 24, 2017. Mr. Jones was hired as Chief Financial Officer and Secretary on May 10, 2018
|
|
|
(3)
(4)
|
Mr. Wright was elected as our corporate secretary on January 4, 2017. Mr. Wright resigned as corporate secretary on June 22, 2018, after being elected Chairman of the Board.
Mr. Olynick was hired as president on May 10, 2018 and received 250,000 shares of Class A common stock valued at $0.10 per share as a component of his employment agreement
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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, 2018, by:
|
|
·
|
Each person who owns beneficially more than five percent of the outstanding shares of our common stock;
|
|
|
·
|
Each named executive officer; and
|
|
|
·
|
All directors and officers as a group.
|
|
|
Shares of Common Stock
Beneficially Owned (2)
|
|
Name of Beneficial Owner (1)
|
Number
|
Percent
|
|
D. Patrick Six (3)
|
16,333,272
|
5.7%
|
|
Raymond Wright (4)
|
17,750,000
|
6.2%
|
|
Craig Takacs (5)
|
3,666,963
|
1.3%
|
|
Ransom Jones (6)
|
4,125,000
|
1.4%
|
|
Kevin Jones (7)
|
19,613,029
|
6.8%
|
|
Kent Harer (8)
|
0
|
0%
|
|
Peter Hauser (9)
|
3,240,000
|
1.1%
|
|
John Olynick (10)
|
550,000
|
0.2%
|
|
All directors and officers as a group (six persons)
|
65,278,264
|
22.8%
|
|
Randy Moseley (11)
|
22,178,302
|
7.71%
|
|
Richard Halden (12)
|
15,543,239
|
5.4%
|
|
Paul Alfano
|
21,250,000
|
7.4%
|
________
|
|
(1)
|
Unless otherwise indicated, the address for each of these shareholders is c/o Greenway Technologies,
Inc., at 1521 N. Cooper Street, Suite 205, Arlington, TX 76011. 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, 2018, there were outstanding 286,488,677 shares of our Class A common stock.
|
|
|
(3)
|
Mr. Six was elected chief executive officer on April 24, 2017. Mr. Six resigned as President on May 10, 2018, and as a director
on February 19, 2019.
|
|
|
(4)
|
Mr. Wright is Chairman of the Board of Directors, 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. Mr. Jones was hired as Chief Financial Officer and Secretary on May 10, 2018. 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. Hauser was elected as a director on May 10, 2018 and resigned on March 8, 2019.
|
|
|
(10)
|
Mr. Olynick was hired as president on May 10, 2018.
|
|
|
(11)
|
Mr. Moseley was our former chief financial officer and a former director. He resigned from both positions on November 21, 2016.
|
|
|
(12)
|
Mr. Halden was a 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 than as stated herein, there
are no other agreements with any of our officers and directors.
Through December 31, 2018,
Shareholders made loans and advances to the Company in the amounts of $878,869 (including the Greer Family Trust $144.000 net of
a $6,000 repayment, $51,342 repayment to Kevin Jones), and various shareholders through Mabert, LLC of $728,869, as more fully
described below), as compared to $219,509 (Tunstall Canyon Group $166,667, Kevin Jones $51,342 and Pat Six $1,500) through December
31, 2017. During the year ended December 31, 2107, shareholders made loans and advances to the Company in the amounts of $219,509
(Tunstall Canyon Group, Kevin Jones $51,342 and Pat Six $1,500), and a shareholder Richard Halden purchased 2,250,000 shares of
class A common stock for $225,000 ($0.010 per share) and Kevin Jones received repayment of $59,690 loan.
On September 14, 2018 Mabert,
LLC a Texas Limited Liability Company owned by a Director and shareholder, Kevin Jones and his wife Christine Early, entered into
a loan agreement for the purpose of funding working capital and general corporate expenses up to $1,500,000 for the Company. Mabert
is an agent for the lenders of the Company. Since the inception of the Loan Agreement a total of $$728,869 has been loaned to the
Company by four shareholder individuals through the agent Mabert, LLC.
Mr. Jones along with his
wife and his company have loaned the sum of $528,869 and two other shareholders have loaned the balance. These loans are secured
by the assets of the Company. A financing statement and UCC-1 have been filed according to Texas statutes. Should a default under
the loan agreement occur, there could be a foreclosure or a bankruptcy proceeding filed by the Agent for these Shareholders. The
actions of the Company in case of default can only be determined by the Shareholders. A foreclosure sale or distribution through
bankruptcy could only result in the creditors receiving a pro rata payment based upon the terms of the loan agreement. Mabert did
not nor will it receive compensation for its efforts.
|
|
Item 14.
|
Principal Accounting Fees and Services.
|
The following table presents fees for
professional services rendered by Soles, Heyn & Company LLP, our independent auditors for the audit of our financial statements
for the years ended December 31, 2018, and December 31, 2017:
|
|
|
2018
|
|
2017
|
|
Audit Fees
|
|
$
|
38,021
|
|
|
$
|
28,700
|
|
|
Audit Related Fees
|
|
|
-0-
|
|
|
|
-0-
|
|
|
Tax Fees
|
|
|
-0-
|
|
|
|
-0-
|
|
|
Total
|
|
$
|
38,021
|
|
|
$
|
28,700
|
|
Audit Fees
billed by Soles, Heyn were for professional services rendered for the audit of our annual financial statements and review of our
interim financial statements for the years ended December 31, 2018 and 2017, as well as for their 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 described in Item 8 of this report and are included as indexed in the appendix on page F-1, et seq..
|
|
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.
|
|
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.
|
|
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. filed at Exhibit 10.34 to the registrant’s Form 10K on April 5, 2018, Commission File Number 000-55030.
|
|
10.37**
|
Warrant dated January 8, 2018 for 4,000,000 shares issued to Kent Harer.
|
|
10.38**
|
Settlement agreement by and between Greenway Technologies, Inc. and Tonaquint, Inc. dated April 9, 2018.
|
|
10.39**
|
Employment agreement with John Olynick, as President, dated May 10, 2018.
|
|
10.40**
|
Employment agreement with Ransom Jones, as Chief Financial Officer, Secretary and Treasurer, dated May 10, 2018.
|
|
10.41*
|
Consulting Agreement with Gary L. Ragsdale, Ph.D., P.E.
|
|
10.42*
|
Consulting Agreement with John Olynick
|
|
10.43*
|
Consulting Agreement with Marl Zoellers
|
|
10.44*
|
Consulting Agreement with Paul Alfano dba Alfano Consulting Services
|
|
10.45*
|
Consulting Agreement with Peter Hauser
|
|
10.46*
|
Consulting Agreement with William Campbell
|
|
10.47*
|
Consulting Agreement with Ryan Turner
|
|
10.48*
|
Amendment on July 30, 2014 to that certain Employment Agreement with Raymond Wright dated August 29, 2012
|
|
10.49*
|
Mabert LLC as Agent Loan Agreement dated September 14, 2018
|
|
10.50*
|
Mabert LLC as Agent Security Agreement dated September 14, 2018
|
|
10.51*
|
Texas UCC-1 filed by Mabert LLC as Agent on October 11, 2018, ending October 10, 2023
|
|
10.52*
|
Rule 11 Agreement, dated March 6, 2019, pursuant to a mutual settlement of all claims by Wildcat Consulting, LLC for the matters in Cause No. 2018-005801 and Cause No. 2018-006416-2, filed in the County Courts at Law in Tarrant County, TX on Sept 7, and September 27, 2018 respectively.
|
|
31.1*
|
Certification of John Olynick, President of Greenway Technologies, Inc., pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.
|
|
31.2*
|
Certification of Ransom Jones, 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.
|
|
32.1*
|
Certification of John Olynick, President and Ransom Jones, 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.
|
|
32.2*
|
Certification of Ransom Jones, 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 16, 2019.
By
/s/ John Olynick
John Olynick, President
By
/s/ Ransom Jones
Ransom Jones, 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/ John Olynick
JOHN OLYNICK
|
|
President
|
|
April 16, 2019
|
/s/ Craig Takacs
CRAIG TAKACS
|
|
Director
|
|
April 16, 2019
|
/s/ Ransom Jones
RANSOM JONES
|
|
Director
|
|
April 16, 2019
|
/s/ Kevin Jones
KEVIN JONES
|
|
Director
|
|
April 16, 2019
|
/s/ Kent Harer
KENT HARER
|
|
Director
|
|
April 16, 2019
|
|
/s/ Raymond Wright
RAYMOND WRIGHT
|
|
Chairman, President of Greenway Innovative Energy, Inc.
|
|
April 16, 2019
|
INDEX TO FINANCIAL
STATEMENTS
Greenway Technologies, Inc. and Subsidiaries
December 31, 2018
Contents
Report of Independent Registered Public Accounting Firm
F-1
Consolidated Financial Statements
Consolidated Balance Sheets, December 31, 2018 and December 31, 2017
F-2
Consolidated Statements of Operations for the Years Ended December 31, 2018 and December 31, 2017
F-3
Consolidated Statements of Stockholders' Deficit For the Years Ended December 31, 2018 and December 31, 2017
F-4
Consolidated Statements of Cash Flows for the Years Ended December 31, 2018 and December 31, 21017
F-5
Notes to Consolidated Financial Statements
F-6 - F-21
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
To the Board of Directors and Stockholders of
Greenway Technologies, Inc.
Fort Worth, Texas
We have audited the accompanying consolidated
balance sheets of Greenway Technologies, Inc., including its subsidiaries (the Company) as of December 31, 2018 and 2017 and the
related consolidated statements of operations, changes in stockholders’ equity (deficit), and cash flows for each of the
years in the two-year period ended December 31, 2018, and the related notes (collectively referred to as the consolidated financial
statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial
position of the Company as of December 31, 2018 and 2017, and the consolidated results of its operations and its cash flows for
each of the years in the two-year period ended December 31, 2018, in conformity with accounting principles generally accepted in
the United States of America.
Going Concern
The accompanying consolidated financials
have been prepared assuming the Company will continue as a going concern. As of December 31, 2018, the Company had accumulated
losses of approximately $26.8 million, a working capital deficit of approximately $4.7 million and may continue to 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 consolidated financial statements do not include any adjustments that might result from the outcome of
this uncertainty.
Basis for Opinion
These consolidated financial statements
are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated
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 consolidated 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 consolidated 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 consolidated 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 consolidated financial statements. We believe
that our audits provide a reasonable basis for our opinion.
|
/s/
Soles,
Heyn & Company LLP
|
|
|
|
|
We have served as the Company’s auditor since 2015.
|
|
|
|
Soles, Heyn & Company
West Palm Beach, Florida
|
|
|
|
April 18, 2019
GREENWAY TECHNOLOGIES, INC.
Condensed Consolidated Balance Sheet
As of December 31, 2018 and 2017
|
|
|
December 31,
|
|
December 31,
|
|
|
|
2018
|
|
2017
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
73,211
|
|
|
$
|
91,518
|
|
|
Prepaid expense
|
|
|
—
|
|
|
|
157,500
|
|
|
Total Current Assets
|
|
|
73,211
|
|
|
|
249,018
|
|
|
Fixed assets
|
|
|
|
|
|
|
|
|
|
Property & equipment
|
|
|
4,015
|
|
|
|
4,015
|
|
|
Less depreciation
|
|
|
4,015
|
|
|
|
4,015
|
|
|
|
|
|
—
|
|
|
|
—
|
|
|
Other Assets
|
|
|
15,000
|
|
|
|
20,000
|
|
|
Total Assets
|
|
$
|
88,211
|
|
|
$
|
269,018
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities & Stockholders’ Deficit
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
738,845
|
|
|
$
|
140,039
|
|
|
Stockholder advances
|
|
|
1,100
|
|
|
|
1,500
|
|
|
Accrued management fees
|
|
|
2,032,102
|
|
|
|
1,666,602
|
|
|
Notes payable (Net of debt discount of $0 and $81,833, respectively)
|
|
|
410,667
|
|
|
|
153,841
|
|
|
Notes payable - Related parties (Net of debt discount of $90,619 and $0 respectively)
|
|
|
638,250
|
|
|
|
—
|
|
|
Accrued expenses
|
|
|
734,833
|
|
|
|
778,760
|
|
|
Accrued expenses - Related parties
|
|
|
118,334
|
|
|
|
—
|
|
|
Current portion of convertible note payable
|
|
|
—
|
|
|
|
150,834
|
|
|
Derivative liability – warrants
|
|
|
103,476
|
|
|
|
105,643
|
|
|
Total Current Liabilities
|
|
|
4,777,607
|
|
|
|
2,997,219
|
|
|
Long term convertible note payable, less current portion
|
|
|
—
|
|
|
|
84,000
|
|
|
Total Liabilities
|
|
$
|
4,777,607
|
|
|
$
|
3,081,219
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
Stockholders’ Deficit
|
|
|
|
|
|
|
|
|
|
Common Class B stock, 20,000,000 shares authorized, par value $0.0001, 0 shares issued and outstanding at December 31, 2018 and 2017, respectively
|
|
|
—
|
|
|
|
—
|
|
|
Common Class A stock 300,000,000 shares authorized, par value $0.0001, 286,703,915 and 287,681,826 issued and outstanding at December 31, 2018 and 2017, respectively
|
|
|
29,101
|
|
|
|
28,771
|
|
|
Additional paid-in capital
|
|
|
22,100,087
|
|
|
|
20,782,630
|
|
|
Accumulated deficit
|
|
|
(26,818,584
|
)
|
|
|
(23,623,602
|
)
|
|
Total Stockholders’ Deficit
|
|
|
(4,689,396
|
)
|
|
|
(2,812,201
|
)
|
|
Total Liabilities & Stockholders’ Deficit
|
|
$
|
88,211
|
|
|
$
|
269,018
|
|
The accompanying Notes are an integral
part of the consolidated financial statements.
GREENWAY TECHNOLOGIES, INC.
Consolidated Statements of Operations
For the years ended December 31, 2018 and
2017
|
|
|
|
|
|
|
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
$
|
2,255,503
|
|
|
$
|
8,262,988
|
|
|
Research and development
|
|
|
630,518
|
|
|
|
867,052
|
|
|
Depreciation
|
|
|
—
|
|
|
|
349
|
|
|
Total Expense
|
|
|
2,886,021
|
|
|
|
9,130,389
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
|
|
(2,886,021
|
)
|
|
|
(9,130,389
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expenses)
|
|
|
|
|
|
|
|
|
|
Gain (loss) on change in fair value of derivative
|
|
|
(34,500
|
)
|
|
|
(15,933
|
)
|
|
Loss on settlement of debt
|
|
|
(28,000
|
)
|
|
|
—
|
|
|
Settlement expense - loan agreement
|
|
|
(120,000
|
)
|
|
|
—
|
|
|
Interest (expense) income
|
|
|
(126,461
|
)
|
|
|
(1,075
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Total other income (expense)
|
|
|
(308,961
|
)
|
|
|
(17,008
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes
|
|
|
(3,194,982
|
)
|
|
|
(9,147,397
|
)
|
|
Provision for income taxes
|
|
|
—
|
|
|
|
—
|
|
|
Net loss
|
|
$
|
(3,194,982
|
)
|
|
$
|
(9,147,397
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per share
|
|
$
|
(0.01
|
)
|
|
$
|
(0.03
|
)
|
|
Weighted average shares
|
|
|
|
|
|
|
|
|
|
Outstanding:
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
285,638,699
|
|
|
|
273,028,802
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying Notes are an integral part of the financial statement.
|
|
|
|
|
|
|
|
|
GREENWAY TECHNOLOGIES, INC.
Consolidated Statement of Stockholders' Deficit
For the years ended December 31, 2018 and
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
|
|
|
|
|
|
|
|
|
Class B
|
|
Par Value
|
|
Class A
|
|
Par Value
|
|
Additional
|
|
|
|
|
|
Number of
|
|
$0.00
|
|
Number of
|
|
$0.00
|
|
Paid-In-
|
|
Accumulated
|
|
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Deficit
|
|
Total
|
|
Balance
|
|
126938
|
|
13
|
|
231,118,372
|
|
$ 23,114
|
$
|
12,036,225
|
|
$ (14,476,205)
|
|
$ (2,416,853)
|
|
31-Dec-16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
735,133
|
|
|
|
735,133
|
|
Warrants issued for services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(9,147,397)
|
|
(9,147,397)
|
|
Balance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31-Dec-17
|
|
0
|
|
0
|
|
287,681,826
|
$
|
28,771
|
$
|
20,782,630
|
|
$ (23,623,602)
|
$
|
(2,812,201)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of common stock
|
|
—
|
|
—
|
|
5,655,253
|
|
983
|
|
601,517
|
|
—
|
|
602,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued to settle shareholder disputes
|
|
—
|
|
—
|
|
1,600,000
|
|
160
|
|
207,840
|
|
—
|
|
208,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for services
|
|
—
|
|
—
|
|
500,000
|
|
50
|
|
49,950
|
|
—
|
|
50,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares returned to be cancelled
|
|
|
|
|
|
(11,733,164)
|
|
(1,163)
|
|
1,163
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued to settle shareholder obligations
|
|
|
|
|
|
3,000,000
|
|
300
|
|
329,700
|
|
|
|
330,000
|
|
|
|
|
|
|
|
|
|
|
|
127,287
|
|
|
|
187,287
|
|
Equity features embedded in debt issued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
|
|
|
—
|
|
—
|
|
—
|
|
(3,194,982)
|
|
(3,194,982)
|
|
Balance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31-Dec-18
|
|
0
|
$
|
0
|
|
286,703,915
|
$
|
29,101
|
$
|
22,100,087
|
|
(26,818,584)
|
|
$ (4,689,396)
|
The accompanying Notes are an integral part
of the consolidated financial statements.
GREENWAY TECHNOLOGIES, INC.
Consolidated Statements of Cash Flows
For the years ended December 31, 2018 and
2017
|
|
|
2018
|
|
2017
|
|
Cash Flows from Operating Activities
|
|
|
|
|
|
|
|
|
|
Net Loss from Operations
|
|
$
|
(3,194,982
|
)
|
|
$
|
(9,147,397
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net loss to net cash used in
|
|
|
|
|
|
|
|
|
|
operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
—
|
|
|
|
349
|
|
|
Stock based compensation
|
|
|
50,000
|
|
|
|
5,650,938
|
|
|
Loss on shareholder disputes and debt settlement
|
|
|
—
|
|
|
|
1,412,286
|
|
|
Change in fair value of derivatives
|
|
|
34,500
|
|
|
|
3,744
|
|
|
Debt discount - Elimination of discount
|
|
|
81,833
|
|
|
|
—
|
|
|
Loss (gain) change in fair value of derivatives
|
|
|
—
|
|
|
|
8,908
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Prepaid Expenses
|
|
|
157,500
|
|
|
|
(144,024
|
)
|
|
Other assets
|
|
|
5,000
|
|
|
|
(15,000
|
)
|
|
Accrued Accounts payable - Related parties
|
|
|
778,806
|
|
|
|
212,765
|
|
|
Accrued expenses
|
|
|
286,073
|
|
|
|
—
|
|
|
Accrued expenses - Related parties
|
|
|
118,334
|
|
|
|
—
|
|
|
Accrued management fees
|
|
|
365,500
|
|
|
|
(250,000
|
)
|
|
Derivative liability - Warrants
|
|
|
—
|
|
|
|
40,678
|
|
|
Stock Issuance to settle loan dispute
|
|
|
28,000
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash Used in Operating Activities
|
|
$
|
(1,289,436
|
)
|
|
$
|
(2,226,753
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities
|
|
|
|
|
|
|
|
|
|
Repayment of advances from shareholders - Net
|
|
|
(51,740
|
)
|
|
|
(58,190
|
)
|
|
Increase in notes payable - Related Parties
|
|
|
728,869
|
|
|
|
151,342
|
|
|
Payments on note payable
|
|
|
(8,500
|
)
|
|
|
(11,000
|
)
|
|
Proceeds from convertible note payable
|
|
|
—
|
|
|
|
166,667
|
|
|
Payments on convertible note payable
|
|
|
—
|
|
|
|
(120,754
|
)
|
|
Purchase of treasury shares
|
|
|
—
|
|
|
|
(69,508
|
)
|
|
Proceeds from sale of common stock
|
|
|
602,500
|
|
|
|
2,191,750
|
|
|
Net Cash Provided by Financing Activities
|
|
|
1,271,129
|
|
|
|
2,250,307
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Increase in cash for the year
|
|
|
(18,308
|
)
|
|
|
23,554
|
|
|
Cash Beginning of Year
|
|
|
91,519
|
|
|
|
67,964
|
|
|
Cash End of Year
|
|
$
|
73,211
|
|
|
$
|
91,518
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosure of Cash Flow Information:
|
|
|
|
|
|
|
|
|
|
Cash Paid during the period for interest
|
|
|
789
|
|
|
|
—
|
|
|
Cash Paid during the period for taxes
|
|
|
—
|
|
|
|
—
|
|
|
Conversion of class B common stock to class A common stock
|
|
|
—
|
|
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash operating activities:
|
|
|
|
|
|
|
|
|
|
Shares issued to settle loan dispute
|
|
|
208,000
|
|
|
|
—
|
|
|
Shares issued to settle shareholder obligation
|
|
|
300,000
|
|
|
|
—
|
|
|
Warrants issued for debt discount
|
|
|
90,620
|
|
|
|
—
|
|
The accompanying Notes are an integral
part of the consolidated financial statements.
GREENWAY TECHNOLOGIES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2018
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 a conventional Fischer-Tropsch (FT) system, we will be
able to 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
|
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 $3.2 million for the year ended December 31, 2018 and has a working capital deficiency of approximately $4.7 million
and liabilities in excess of assets of approximately $2.7 million 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 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 adopted the guidance
on January 1, 2018 and applied the cumulative catch-up transition method. The transition adjustment to be recorded to stockholders’
equity upon adoption of the new standard did not have a material effect upon the financial statements.
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, 2018, or December 31, 2017.
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 (17,265,893) 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.
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, 2018 and 2017:
|
Description
|
|
Level 1
|
|
|
Level 2
|
|
Level 3
|
|
|
2018 Derivative Liabilities
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
103,476
|
|
|
2017 Derivative Liabilities
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
105,643
|
|
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.
The change in the notes payable at fair value for the year
ended December 31, 2018, is as follows:
|
|
|
Fair
Value
|
|
Change in
|
|
New
|
|
|
|
Fair Value
|
|
|
|
January 1,
2018
|
|
Fair
Value
|
|
Convertible
Notes
|
|
Conversions/Settlement
|
|
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative Liabilities
|
|
$
|
(105,643
|
)
|
|
$
|
(2,167
|
)
|
|
$
|
0
|
|
|
$
|
|
|
|
$
|
(103,476
|
)
|
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, 2018, 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 $630,518 and $867,052 during the years ended December 31, 2018 and 2017, 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 adopted the guidance
on January 1, 2018 and applied the cumulative catch-up transition method. The transition adjustment to be recorded to stockholders’
equity upon adoption of the new standard was not 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.
NOTE 4 – PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment, their estimated useful lives, and
related accumulated depreciation at December 31, 2018 and 2017, respectively, are summarized as follows:
|
|
|
Range of
|
|
|
|
|
|
|
|
|
|
|
Lives in
|
|
|
|
|
|
|
|
Years
|
|
|
2018
|
|
|
2017
|
|
|
Equipment
|
|
|
5
|
|
|
|
2,032
|
|
|
|
2,032
|
|
|
Furniture and fixtures
|
|
|
5
|
|
|
|
1,983
|
|
|
|
1,983
|
|
|
|
|
|
|
|
|
|
4,015
|
|
|
|
4,015
|
|
|
Less accumulate depreciation
|
|
|
|
|
|
|
(4,015
|
)
|
|
|
(4,015
|
)
|
|
|
|
|
|
|
|
$
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation expense for the year ended December 31, 2018 and 2017.
|
|
|
|
|
|
$
|
0
|
|
|
$
|
349
|
|
NOTE 5 – TERM NOTES PAYABLE
Term notes payable consisted of the following at December 31, 2018
and 2017;
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
Secured notes payable at 18% per annum related to the Mabert LLC as Agent Loan Agreement dated September 14, 2018 for up to $1,500,000 (1)
|
|
$
|
728,869
|
|
|
$
|
0
|
|
|
Unsecured note payable at 10% per annum dated November 13, 2017 to a corporation at $10,000 lump sum interest at maturity on February 28, 2018, with an amended due date of March 1, 2020
|
|
|
100,000
|
|
|
|
100,000
|
|
|
Unsecured note payable at 4.5% per annum dated December 28, 2017 to a corporation, payable on January 8, 2018 and 2019 (2)
|
|
|
166,667
|
|
|
|
51,342
|
|
|
Unsecured note payable at 4.0% per annum dated January 16, 2018 to a trust, payable January 16, 2020 (3)
|
|
|
144,000
|
|
|
|
0
|
|
|
Total term notes
|
|
$
|
1,139,536
|
|
|
$
|
253,842
|
|
(1) On
September 14, 2018, the Company entered into a loan agreement with Mabert LLC, an entity owned by a director and stockholder, Kevin
Jones, for the purpose of funding working capital and general corporate expenses up to $1,500,000 for the Company. Mabert is acting
as the agent for various private lenders to the Company and has loaned $728,869 through December 31, 2018. The loan is secured
and Mabert filed a UCC-1 with the State of Texas. The Loan Agreement, Security Agreement and UCC-1filing are attached hereto as
Exhibits 10.48–10.50. The Company agreed to issue warrants for Class A common stock valued at $0.01 per share on a 3.67:1
and/or 2:1 basis for each dollar borrowed. For the year ended December 31, 2018, the Company issued 1,624,404 warrants. Of this
number, 766,667 warrants were converted to common stock in January 2019.
(2) This
loan is in default. By its terms, the cash interest payable increased to 18% per annum on December 20, 2018 and continues at such
rate until the default is cured or is paid at term.
(3) This
loan is in default. By its terms, the cash interest payable increased to 18% per annum on April 1, 2018 and continues at such rate
until the default is cured or is paid at term.
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. As of December 20, 2018, a material event of default has occurred. The holder has the right but has not noticed the Company
of its intent to convert.
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 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. As a result
of the event of default, the discount related to the beneficial conversion feature has been extinguished for the balance of 2018,
and until the event of default is cured or the note is converted to common shares.
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. As of April 1, 2018, a material event of default has occurred. The holder has the right but has not noticed
the Company of its intent to convert.
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 of $58,595 related to the beneficial
conversion feature is being amortized over the term of the debt. The discount related to the beneficial conversion feature on the
note was valued at $150,000 based on the
Black-Scholes Model
. During the year ended December 31, 2018, the remaining
discount was fully amortized.
The derivative liability for this note at December 2018 was
$103,476, computed as follows. This note is in default and the terms are being renegotiated between the parties.
|
|
|
Commitment Date
|
|
|
Expected dividends
|
|
|
0%
|
|
|
Expected volatility
|
|
|
261.71%
|
|
|
Expected term: conversion feature
|
|
|
1 year
|
|
|
|
Risk free interest rate
|
|
|
1.76%
|
|
|
|
|
|
|
|
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.
|
NOTE 8 – ACCRUED EXPENSES
Accrued expenses consisted of the following at December 31, 2018
and 2017;
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
Accrued consulting fees
|
|
$
|
328,157
|
|
|
$
|
249,500
|
|
|
Accrued expense related to shareholder dispute
|
|
|
0
|
|
|
|
330,000
|
|
|
Accrued expense related to warrant exercise
|
|
|
0
|
|
|
|
180,000
|
|
|
Accrued consulting expense
|
|
|
356,078
|
|
|
|
12,000
|
|
|
Accrued officers’ salaries
|
|
|
118,334
|
|
|
|
0
|
|
|
Accrued interest expense
|
|
|
50,598
|
|
|
|
7,260
|
|
|
Total accrued expenses
|
|
$
|
853,167
|
|
|
$
|
778,760
|
|
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 Class A common stock share has one voting right; the Class B common shares do not have voting
rights, but retain a preferential right to dividends, if and when declared by the Board of Directors.
Class A Common Stock
At December 31, 2018, there were 286,703,915
shares of Class A common stock issued and outstanding.
During the year ended December 31, 2018, the
Company: issued 5,655,253 shares of restricted Class A common stock to 22 individuals through private placements for cash of $$601,517
at average of $0.106 per share.
|
|
·
|
issued 500,000 shares of restricted common stock for consulting services
of $838,650 at average of $.0129 per share.
|
|
|
·
|
issued 3,000,000 of restricted common stock to one shareholder in settlement
of a shareholder obligation for a total value of $330,000 at an average of $0.11 per share.
|
|
|
·
|
Issued 1,600,000 of restricted common stock to one shareholder in settlement
of a debt that had warrants attached. The total was a value of $208,000 at an average of $0.13 per share.
|
|
|
·
|
canceled 11,733,164 of treasury shares.
|
At December 31, 20187, there were 287,681,826
shares of Class A common stock issued and outstanding.
During the year ended December 31, 201, the
Company: issued 21,004,716shares 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.
|
|
·
|
issued 6,356,666 shares of restricted common stock for consulting services
of $838,650 at average of $.0129 per share.
|
|
|
·
|
issued 7,346,000 of restricted common stock to eight shares in settlement
of Shareholder disputes for a total value of $898,940 at an average of $0.122 per share.
|
|
|
·
|
issued 29,500,000 shares of restricted class A common stock to five
directors and valued the shares at $0.14 per share for a total value of $4,130,000.
|
|
|
·
|
canceled 8,337,860 of treasury shares.
|
|
|
·
|
issued 693,932 shares of class A stock in exchange for 126,938 class
B shares.
|
Class B Stock
At December 31, 2018 and 2017, there were 0
and 0 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.
|
|
·
|
exchanged (on a one for one basis) 63,932 shares of Class A common stock for 63,932
Class B shares with shareholders who acquired the class B shares after the 2009 merger agreement between the Company and Dynalyst
Manufacturing Corporation.
|
|
|
·
|
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, 2018, 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. The 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%. These warrants
were extinguished in the comprehensive settlement agreement reached in March 2019. See Subsequent Events Note 14.
On January 8, 2018, the Company issued
4,000,000 warrants at a purchase price of $0.15 per share to a director, Kent Harer, in exchange for his return of 3,000,000 shares
of Class A common stock he had been prior granted. The 3,000,000 shares issued were valued and recorded for $490,000 during 2017.
The value of $490,000 remained on the books as it reflects the event that occurred in 2017. The warrants shall be void and of
no effect and all rights thereunder shall cease at 5:00 pm, Fort Worth, Texas time on January 8, 202
In conjunction with the Mabert LLC Loan
Agreement described herein above, the Company issued a combined total of 1,624,404 warrants at a purchase price of $0.01 per share
for fifteen (15) years in the two quarters ending December 31, 2018. In the third quarter ending September 30, 2018, the Company
issued 366,667 warrants. In the fourth quarter, the Company issued 1,257,737 warrants, including 1,057,737 warrants to Kevin Jones,
a director, and his spouse for loans they each separately made totaling $428,868 and $100,000 respectively, and 200,000 warrants
to a third-party lender. All such warrants, excluding Mr. Jones’, were converted to common stock in January 2019.
NOTE 10 - RELATED PARTY TRANSACTIONS
Through December 31, 2018, Shareholders, including Kevin
Jones, a director and greater than 5% shareholder, made loans and advances to the Company in the amount of $878,869, of which
$728,869 was made through Mabert, LLC a company that Mr. Jones controls, as compared to $219,509 (Tunstall Canyon Group $166,667,
Kevin Jones $51,342 and Pat Six $1,500) through December 31, 2017. During the year ended December 31, 2107, a shareholder and
former president and director, 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 a prior $59,690 loan.
After approval during
a properly called special meeting of the board of directors, on September 14, 2018 Mabert, LLC, a Texas Limited Liability Company
owned by a director and stockholder, Kevin Jones and his wife Christine Early, entered into a loan agreement for the purpose of
funding working capital and general corporate expenses up to $1,500,000 for the Company. Mabert is acting as the agent for the
lenders to the Company. The Company bylaws provide no bar from transactions with Interested Directors, so long as the interested
party does not vote on such transaction. Mr. Jones did not vote on this transaction. Since the inception of the Loan Agreement,
a total of $$728,869 has been loaned to the Company by four shareholder individuals, including Mr. Jones through Mabert, LLC.
Through Mabert, Mr. Jones along with his wife and his company
have loaned $528,869, and two other shareholders have loaned the balance. These loans are secured by the assets of the Company.
A financing statement and UCC-1 have been filed according to Texas statutes. Should a default under the loan agreement occur,
there could be a foreclosure or a bankruptcy proceeding filed by the Agent for these Shareholders. The actions of the Company
in case of default can only be determined by the Shareholders. A foreclosure sale or distribution through bankruptcy could only
result in the creditors receiving a pro rata payment based upon the terms of the loan agreement. Mabert did not nor will it receive
compensation for its efforts.
Through December 31, 2017, affiliate
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) during the year ended December 31, 2017. Also during the year ended December 31, 2107, a former director,
president and greater than 5% shareholder Richard Halden purchased 2,250,000 shares of class A common stock for $225,000 ($0.010
per share) and Kevin Jones received repayment of a prior $59,690 loan.
NOTE 11 – INCOME TAXES
At December 31, 2018 and 2017, the Company
had approximately $3.2 million and approximately $9.5 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 2035. 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, 2018 and 2017:
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
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 21% for the years ended December 31, 2018 and 2017 the Company's effective rate is as
follows:
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
Federal statutory rate
|
|
|
(21.0
|
) %
|
|
|
(21.0
|
) %
|
|
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
|
)
|
|
|
(15.9
|
)
|
|
Valuation allowance
|
|
|
36.9
|
|
|
|
36.9
|
|
|
Effective tax rate
|
|
|
0.0
|
%
|
|
|
0.0
|
%
|
The net deferred tax assets and liabilities included in the financial
statements consist of the following amounts at December 31, 2018 and December 31, 2017:
|
|
|
2018
|
|
|
2017
|
|
|
Deferred tax assets
|
|
|
|
|
|
|
|
Net operating loss carry forwards
|
|
$
|
19,598,855
|
|
|
$
|
16,403,873
|
|
|
Deferred management fees
|
|
|
438,834
|
|
|
|
821,572
|
|
|
Stock based compensation
|
|
|
50,000
|
|
|
|
2,900,734
|
|
|
Other
|
|
|
826,166
|
|
|
|
581,639
|
|
|
Total
|
|
|
20,949,855
|
|
|
|
20,707,818
|
|
|
Less valuation allowance
|
|
|
(20,949,855
|
)
|
|
|
(20,707,818
|
)
|
|
Deferred tax asset
|
|
|
-
|
|
|
|
-
|
|
|
Deferred tax liabilities
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Net long-term deferred tax asset
|
|
$
|
-
|
|
|
$
|
-
|
|
The change in the valuation allowance was $242,037
and $12,784,855 for the years ended December 31, 2018 and 2017, 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 $26,818,584 and $23,623,602 at December 31, 2018 and 2017 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 August 2012, the Company entered into employment
agreements with Ray Wright, president of Greenway Innovative Energy, Inc., now chairman of the board for a term of 5 years with
compensation of $90,000 per year. In July 2014, the president's employment agreement was amended to increase his annual pay to
$180,000. By its terms, the employment agreement automatically renewed on August 12, 2018 for a successive one-year period.
During the years ended December 31, 2018 and 2017, the Company paid and accrued a total of $180,000 and $180,000, respectively,
for the annual compensation payments, as well as accrued an additional $435,000 as an adjustment for prior periods not correctly
accounted for.
Effective May 10, 2018,
the Company entered into employment agreements with John Olynick, as President and Ransom Jones, as Chief Financial Officer, respectively.
The terms and conditions of their employment agreements are identical. John Olynick, as President earns a salary of $120,000 per
year. Ransom Jones, as Chief Financial Officer, earns a salary of $120,000 per year. Mr. Jones also serves as the Company’s
Secretary and Treasurer. During each year that their Agreements are in effect, they are each entitled to receive a bonus (“Bonus”)
equal to at least Thirty-Five Thousand Dollars ($35,000) per year. They are also entitled to certain additional stock grants based
on the performance of the Company during the term of their employment. They are each entitled to a grant of common stock (the “Stock
Grant”) on the Effective Date equal to 250,000 shares each of the Company’s Common Stock, par value $.0001 per share
(the “Common Stock”), such shares vesting immediately. They are also entitled to participate in the Company’s
benefit plans.
The foregoing summary
of the Employment Agreements is qualified in its entirety by reference to the actual true and correct Employment Agreements, copies
of which are attached hereto as Exhibit 10.39 and 10.40.
In the August 2012 acquisition agreement with
Greenway Innovative Energy, Inc. (“GIE”), the Company agreed to: (i) issue an additional 7,500,000 shares of restricted
common stock when the first portable GTL unit is built and becomes operational, and, is capable of producing 2,000 barrels of diesel
or jet fuel per day, and (ii) pay a 2% royalty on all gross production sales on each unit placed in production. In connection with
a settlement agreement with the Greer Family Trust (‘Trust”), the successor owner of one of the two founders and prior
owners of GIE on February 6, 2018, the Company exchanged Greer’s half of the 7,500,000 shares (3,750,000 shares) to be issued
in the future, Greer’s half of the 2% royalty, a termination of Greer’s then current Employment Agreement and the Trust's
waiver of any future claims against the Company for any reason, for the issuance and delivery to the Trust of three million (3,000,000)
restricted shares of the Company’s common stock, and a Promissory Note for $150,000. As a result, only 3,750,000 shares are
committed to be later issued under the original 2012 acquisition agreement. A copy of the Settlement Agreement and Promissory Note
is attached hereto as Exhibit 10.36.
Consulting Agreements
On April 13, 2018, the Company entered into
a consulting agreement with an individual, Gary L. Ragsdale, Ph.D., P.E., to provide research and development support of the Company’s
GTL technology development, including but not limited to chemical modeling and simulations, operational validation, operating plant
forecasts, ancillary product analysis and general technical advisory services. Terms include payment of billable time at $40.00
per hour, plus approved expenses, retroactive to January 1, 2017. The term of the agreement is indefinite, unless otherwise terminated
with written notice by the parties. Dr. Ragsdale continues to provide services to the Company under the current agreement.
On April 13, 2018, the Company entered into
a consulting agreement with an individual, John Olynick, to provide general advisory services, including but not limited to advice
and support for funding discussions, creation of presentations, document and contract preparation. Terms include payment of billable
time at $40.00 per hour, plus approved expenses, retroactive to January 1, 2017. The term of the agreement is indefinite, unless
otherwise terminated with written notice by the parties. This agreement was terminated on May 10, 2018 when Mr. Olynick was engaged
as President of Greenway.
On April 17, 2018, the Company entered into
a consulting agreement with an individual, Mark A. Zoellers, to provide general advisory services, including but not limited to
document and contract preparation, creation of presentations, photography and technical document review. Terms include payment
of billable time at $40.00 per hour, plus approved expenses, retroactive to January 1, 2017. The term of the agreement is indefinite,
unless otherwise terminated with written notice by the parties. Mr. Zoellers continues to provide services to the Company under
the current agreement.
On April 18, 2018, the Company entered into
a consulting agreement with an individual, Paul R. Alfano via Alfano Consulting Services, to provide board and senior management
advice, including but not limited to corporate strategy, SEC adherence, sales and marketing strategies, document and presentation
preparation and fund-raising support. Terms include payment of billable time at $40.00 per hour, plus approved expenses, retroactive
to January 1, 2017. The term of the agreement is indefinite, unless otherwise terminated with written notice by the parties. Mr.
Alfano continues to provide services to the Company under the current agreement.
On April 18, 2018, the Company entered into
a consulting agreement with an individual, Peter J. Hauser, to provide general advisory services, including but not limited to
public relations, press release preparation, photography, document preparation and editing. Terms include payment of billable time
at $40.00 per hour, plus approved expenses, retroactive to January 1, 2017. The term of the agreement is indefinite, unless otherwise
terminated with written notice by the parties. Mr. Hauser was a member of the Company’s board of directors from May 10, 2018
until his resignation March 8, 2019 and continues to provide services to the Company under the current agreement.
On April 19, 2018, the Company entered into
a consulting agreement with an individual, William N. Campbell, to sales and marketing support for the Company’s GTL technology,
including but not limited to sales prospecting and presentation, document preparation, editing and making presentations, along
with general technical advisory services. Terms include payment of billable time at $40.00 per hour, plus approved expenses, retroactive
to January 1, 2017. The term of the agreement is indefinite, unless otherwise terminated with written notice by the parties. Mr.
Campbell continues to provide services to the Company under the current agreement.
On July 10, 2017, the Company entered
into a one-year consulting agreement with an individual, Ryan Turner, to provide business development services, including but not
limited to enhanced digital marketing, assistance with shareholder communications and help in establishing industry relationships.
Terms included monthly payments of $5,000 per month, plus approved expenses. After the first twelve-month initial term, the agreement
was automatically renewable for successive twelve-month terms, unless otherwise terminated with written notice by the parties,
and was subsequently renewed for an additional term. Mr. Turner continues to provide services to the Company under the current
agreement.
The foregoing summaries of the Consulting Agreements
described above are qualified in their entirety by reference to the actual true and correct Consulting Agreements, copies of which
are attached hereto as Exhibits 10.41 through 10.47.
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
|
Due to a breach under the Agreement,
the Board of Directors of the Company on June 22, 2018 voted to terminate the Agreement. Based on the termination, all warrants
to purchase the Company’s common stock were cancelled.
On December 8, 2017, the Company entered into
a six-month consulting agreement with MBK Consulting LLC (“MBK”) for the provision of general corporate management
and public company governance support, including assistance in and providing guidance for raising capital. Terms included monthly
payments of $10,000 per month, plus approved expenses. After the first six-months initial term, the agreement was automatically
renewable for successive six-moth terms, unless otherwise terminated with written notice by the parties, and was subsequently renewed
for an additional term. The agreement on its current terms was mutually ended as of December 2018. MBK continues to provide services
to the Company on a month-to-month and as-needed basis.
Leases
In October 2015, the
Company entered into a two-year lease for approximately 1,800 square feet a base rate of $2,417 per month. For the years ended
December 31, 2018, and 2017, the Company expensed $17,995 and $26,992 respectively. The Company terminated the lease effective
August 31, 2018 and has no further financial obligations under the lease.
Greenway rents approximately
600 square feet of office space at 1521 North Cooper St., Suite 205, Arlington, Texas 76011, at a rate of $957 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 was 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 note. 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 the Company sold its shares
in Mamaki to HBI for $700,000 (along with the assumption of certain debt). The Company maintained its guaranty on the original
loan as a component of the sale transaction. 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, the parties executed a Settlement and Mutual Release Agreement (Agreement).
However, the Defendants again defaulted in their payment obligations under this new Agreement. Curtis Borman and Lee Jennison were
co-guarantors of the obligations of Mamaki and HBI. To secure their guaranties, each of Curtis Borman and Lee Jennsion posted 1,241,500
and 1,000,000 shares, respectively, of the Company. Under the Agreement, the shares were valued at $.20. Due to the default under
the Agreement, these shares were returned to the Company’s treasury
shares. Curtis Borman subsequently
filed for bankruptcy and the property was liquidated for $600,000, applied against the prior loan amount, leaving a remaining guaranteed
loan payment balance of approximately $700,000, including accrued interest and legal fees. The Company is currently in negotiations
with the note holders and anticipates a positive resolution.
On April 9, 2108, the Company
and Tonaquint, Inc. agreed to settle on Tonaquint’s exercise of a warrant option with 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 was completed in connection with a legal opinion pursuant to Rule 144.
Wildcat Consulting Group
LLC (“Wildcat”) filed a civil lawsuit against Greenway Technologies, Inc. on September 27, 2018 for an alleged breach
of contract. The Company answered the lawsuit and asserted a number of affirmative defenses. The Company settled all claims with
Wildcat and its principal, Marshall Gleason in the first quarter of 2019. See Subsequent Events Note 14.
The
Company is aware that there are claims that may be asserted against it by Richard Halden, a dissident shareholder, and Chisos
Equity Consultants, LLC, which is a company that may be controlled by Halden. These claims, if they are asserted will be vigorously
defended by the Company.
NOTE 14- SUBSEQUENT EVENTS
On September 7, 2018,
Wildcat Consulting Group, LLC (“Wildcat”), a company controlled by a shareholder, filed suit against the Company alleging
claims arising from a Consulting Agreement between the Parties, seeking to recover monetary damages, interest, court costs, and
attorney's fees. On September 27, 2018, Wildcat filed a second suit against the Company alleging claims arising from a Promissory
Note between the Parties, seeking to recover monetary damages, interest, court costs, and attorney's fees. On February 13, 2019,
the Parties attended mediation which resulted in settlement discussions which resulted in a Rule 11 Agreement settling both disputes.
Pursuant to the Rule 11 Agreement, the Parties have agreed to abate this case until the earlier of a default of the performance
of the Rule 11 Agreement or October 30, 2019. The Rule 11 Agreement causes and allows the Parties time to draft and sign a Compromise
Settlement and Mutual Release Agreement (“Settlement Agreement”), to make payments due on or before October 15, 2019,
and to allow for the transfer of stock to effectuate the terms of the Rule 11 Agreement. As of the date of this report, the Company
is in compliance with the Rule 11 Agreement, and the Parties have exchanged drafts of the Settlement Agreement to be completed
before the abatement period ends. The material terms of the Rule 11 Agreement are as follows:
|
|
·
|
The Company will execute a new Promissory Note to replace the original
Promissory Note, effective November 13, 2017, the effective date of the original note. The new Promissory Note has a maturity date
of March 1, 2020 and provides for four equal payments of principal through such date, and accrued interest at 10% upon maturity.
|
|
|
·
|
The Company shall pay $300,000 in settlement of the prior Consulting
Agreement in 60 installments of $5,000 each month, until paid in full.
|
|
|
·
|
The Parties agreed to amend the existing Overriding Royalty Agreement
(“ORRI”) between the Company’s wholly-owned subsidiary, Greenway Innovative Energy, Inc. (“GIE”),
increasing Wildcat’s royalties from .25% (1/4 of 1%) to .375% (3/8 of 1%).
|
|
|
·
|
The Company shall pay Wildcat’s legal fees related to these
matters, capped at $60,000, in three installments of $20,000 on June 1, August 1, and October 1, 2019.
|
|
|
·
|
The Company shall issue 1,500,000 restricted shares of its Class
A common stock on or before October 15, 2019, in consideration of the Promissory Note, in exchange for extinguishment of all prior
granted warrants and to complete the grant of 1,000,000 shares not received from a prior transaction. Such shares were valued at
$120,000 and accrued for the year ended December 31, 2018.
|
Provided the Company
timely performs through October 15, 2019, the Parties will file a Joint Motion for Dismissal and present Agreed Orders of Dismissal
with prejudice for both lawsuits. A copy of the Rule 11 Agreement is attached hereto as Exhibit 10.52.
During the three months ended March 31, 2019,
the Company issued 766,667 shares of restricted Class A common stock for the conversion of the warrants granted under the terms
of the Mabert Loan Agreement.
On March 26, 2019 the Company filed a verified
petition for Declaratory Judgement, Ex Parte Application for a Temporary Restraining Order and Application for Injunctive Relief
against the members of the Greenway Shareholders Committee in Dallas County. A Temporary Restraining Order was issued by the court
enjoining the Defendants (and their officers, agents, servants, employees and attorneys) and those persons in active concert or
participation from; holding the special shareholders meeting on April 4, 2019 or calling such meeting to order; attending or participating
in the Special Meeting; voting the shares of Plaintiff owned by any Defendant at the Special Meeting, either directly or by granting
a proxy to allow a non-defendant to vote said shares; voting any shares of Plaintiff owned by non-defendants with or by proxy at
the Special Meeting; and serving as chairman at the Special Meeting. On April 8, 2019, the court issued a Temporary Injunction
against the dissident shareholders who received notice. The Injunction will continue until the trial date of December 10, 2019.
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, 2018, I, John Olynick, President
and chief executive 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 16, 2019.
/s/ John Olynick
John Olynick, President
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, 2018, I, Ransom
Jones, 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 16, 2019.
/s/ Ransom Jones
Ransom Jones
Chief Financial Officer and Principal
Accounting
Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, John Olynick, 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 16, 2019.
/s/ John Olynick
John Olynick, President
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Ransom Jones, 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 16, 2019
/s/ Ransom Jones
Ransom Jones, Chief Financial Officer
and Principal Accounting Officer
Exhibit 10.43
CONSULTING AGREEMENT
This agreement (the “Agreement”) dated this 17th day
of April, 2018 retroactively applicable to the beginning of the work period which started January 1, 2017.
BETWEEN
Greenway Innovative Energy
1521 N. Cooper St. Suite #207
Arlington, TX 76011
(the “Client”)
AND
Mark A. Zoellers
8737 Sherwood Drive
Frisco, TX 75035
(the “Consultant”)
This Agreement states the terms and conditions that govern
the contractual agreement between Client and the Consultant who agrees to be bound by this Agreement.
WHEREAS
, the Consultant offers consulting services in the
fields of:
Document Preparation
Document Editing and Updating
Presentations: Preparation and Delivery to Customers
Photography
Consultant Coordination with Greenway and with each other
General Advisory Services
Operations: General Assistance and Specific Task Assignments
Technical Document Review and Assistance to Technical staff
NOW,
THEREFORE
, in consideration of the
mutual covenants and promises made by the parties hereto, the Consultant and the Client (individually, each a
“Party” and collectively, the “Parties”) covenant and agree as follows:
TERMS OF THE AGREEMENT
TERM
The term of this agreement will begin on the date of this
agreement and will remain in force indefinitely until “Termination” as provided in this Agreement.
TERMINATION
In the event that either party wishes to terminate this
Agreement, that Party will be required to provide ten days written notice to the other Party.
INDEMNIFICATION
The Client agrees to indemnify, defend, and protect the
Consultant from and against all lawsuits and costs of every kind pertaining to the Client’s business including
reasonable legal fees due to any act or failure to act by the Client based upon the Consulting Services.
LAW OF THE STATE OF TEXAS
This Consulting Agreement and the interpretation of its
terms shall be governed by and construed in accordance with the laws of the State of Texas and subject to the exclusive
jurisdiction of the federal and state courts located in Tarrant County, Texas.
INTELLECTUAL PROPERTY
The Parties acknowledge and agree that the Client will hold
all intellectual property right in any work product resulting from the Consulting Services including, but not limited to,
copyright and trademark rights. The Consultant agrees not to claim any such ownership in such work product’s
intellectual property at any time prior to or after the completion and delivery of such work product to the Client.
EXPENSES
The Consultant will be reimbursed from time to time
for reasonable and necessary expenses incurred by the Consultant in connection with providing these services includes
reasonable travel and living expenses.
Late payments will be subject to 2% interest per month.
COMPENSATION
The Consultant will be compensated at a reduced rate of
$40.00 per hour (the “Compensation”). All monetary amounts in the contract shall be in US Dollars.
CHANGES
All Changes to this contract shall be in writing.
INDEPENDENT CONTRACTOR
In providing the Services under this contract, it
is expressly agreed that the Consultant is acting as an independent contractor and not as an employee. The Client and
Consultant agree that this Agreement does not create a partnership or joint venture between them and is exclusively a
contract for service. The client is not required to pay, or make any contribution to, any social security, local, state, or
federal taxes, unemployment compensation, worker’s compensation, insurance premium, profit-sharing, pension, or any
other employee benefit for the consultant during the Term. The Consultant is responsible for paying, and complying with
reporting requirements for, all local, state, and federal taxes relating to payments made to the Consultant under this Agreement.
IN WITNESS WHEREOF
, each of the Parties has executed this
Consulting Agreement, both Parties by its duly authorized officer, as of the day and year set forth below
|
CONSULTANT
|
|
|
/s/ Mark A. Zoellers
|
|
|
Mark A. Zoellers
|
|
|
|
|
|
Date
|
|
|
4/18/2018
|
|
|
CLIENT
|
|
|
/s/ Raymond Wright
|
|
|
Raymond Wright
|
|
|
|
|
|
Date
|
|
|
4/19/2018
|
|
Exhibit 10.42
CONSULTING AGREEMENT
This agreement (the “Agreement”) dated this 17th day
of April, 2018 retroactively applicable to the beginning of the work period which started January 1, 2017.
BETWEEN
Greenway Innovative Energy
1521 N. Cooper St. Suite #207
Arlington, TX 76011
(the “Client”)
AND
John Olynick
35 Louvain Street
Fairfield, CT 06825
(the “Consultant”)
This Agreement states the terms and conditions that govern
the contractual agreement between Client and the Consultant who agrees to be bound by this Agreement.
WHEREAS
, the Consultant offers consulting services in the
fields of:
Document and Contact Preparation
Advice and Support for NY, NJ, CT based funding discussions
Advice and Consultation as a former CEO and BOD Chairman
Public Company
Presentation Creation and Delivery Support
General Advisory Services
NOW,
THEREFORE
, in consideration of the
mutual covenants and promises made by the parties hereto, the Consultant and the Client (individually, each a
“Party” and collectively, the “Parties”) covenant and agree as follows:
TERMS OF THE AGREEMENT
TERM
The term of this agreement will begin on the date of this
agreement and will remain in force indefinitely until “Termination” as provided in this Agreement.
TERMINATION
In the event that either party wishes to terminate this
Agreement, that Party will be required to provide ten days written notice to the other Party.
INDEMNIFICATION
The Client agrees to indemnify, defend, and protect the
Consultant from and against all lawsuits and costs of every kind pertaining to the Client’s business including
reasonable legal fees due to any act or failure to act by the Client based upon the Consulting Services.
LAW OF THE STATE OF TEXAS
This Consulting Agreement and the interpretation of its
terms shall be governed by and construed in accordance with the laws of the State of Texas and subject to the exclusive
jurisdiction of the federal and state courts located in Tarrant County, Texas.
INTELLECTUAL PROPERTY
The Parties acknowledge and agree that the Client will hold
all intellectual property right in any work product resulting from the Consulting Services including, but not limited to,
copyright and trademark rights. The Consultant agrees not to claim any such ownership in such work product’s
intellectual property at any time prior to or after the completion and delivery of such work product to the Client.
EXPENSES
The Consultant will be reimbursed from time to time
for reasonable and necessary expenses incurred by the Consultant in connection with providing these services includes
reasonable travel and living expenses.
Late payments will be subject to 2% interest per month.
COMPENSATION
The Consultant will be compensated at a reduced rate of
$40.00 per hour (the “Compensation”). All monetary amounts in the contract shall be in US Dollars.
CHANGES
All Changes to this contract shall be in writing.
INDEPENDENT CONTRACTOR
In providing the Services under this contract, it
is expressly agreed that the Consultant is acting as an independent contractor and not as an employee. The Client and
Consultant agree that this Agreement does not create a partnership or joint venture between them and is exclusively a
contract for service. The client is not required to pay, or make any contribution to, any social security, local, state, or
federal taxes, unemployment compensation, worker’s compensation, insurance premium, profit-sharing, pension, or any
other employee benefit for the consultant during the Term. The Consultant is responsible for paying, and complying with
reporting requirements for, all local, state, and federal taxes relating to payments made to the Consultant under this Agreement.
IN WITNESS WHEREOF
, each of the Parties has executed this
Consulting Agreement, both Parties by its duly authorized officer, as of the day and year set forth below
|
CONSULTANT
|
|
|
/s/ John Olynick
|
|
|
John Olynick
|
|
|
|
|
|
Date
|
|
|
4/18/2018
|
|
|
CLIENT
|
|
|
/s/ Raymond Wright
|
|
|
Raymond Wright
|
|
|
Greenway Innovative Energy
|
|
|
|
|
|
Date
|
|
|
4/19/2018
|
|
Exhibit 10.44
CONSULTING AGREEMENT
This agreement (the “Agreement”) dated this 17th day
of April, 2018 retroactively applicable to the beginning of the work period which started January 1, 2017.
BETWEEN
Greenway Innovative Energy
1521 N. Cooper St. Suite #207
Arlington, TX 76011
(the “Client”)
AND
Paul R. Alfano
via
Alfano Consulting Services
(NYS-DBA)
21 Barchan Dune Rise
Victor, New York 14564
(the “Consultant”)
This Agreement states the terms and conditions that govern
the contractual agreement between GIE-GWTI and the Consultant who agrees to be bound by this Agreement.
WHEREAS
, the Consultant offers consulting services in the
fields of:
GIE-GWTI Board, Senior Management &
Advisory Team advice:
• Corporate Strategy
• SEC Adherence
• Shareholder Value
• Client, Partner & Competitive
Analysis
• Sales Campaigns
• Marketing Strategy
• Document Editing
• Presentation Editing
• Fund Raising (via Treasury
Shares)
NOW,
THEREFORE
, in consideration of the
mutual covenants and promises made by the parties hereto, the Consultant and the Client (individually, each a
“Party” and collectively, the “Parties”) covenant and agree as follows:
TERMS OF THE AGREEMENT
TERM
The term of this agreement will begin on the date of this
agreement and will remain in force indefinitely until “Termination” as provided in this Agreement.
TERMINATION
In the event that either party wishes to terminate this
Agreement, that Party will be required to provide ten days written notice to the other Party.
INDEMNIFICATION
The Client agrees to indemnify, defend, and protect the
Consultant from and against all lawsuits and costs of every kind pertaining to the Client’s business including
reasonable legal fees due to any act or failure to act by the Client based upon the Consulting Services.
LAW OF THE STATE OF TEXAS
This Consulting Agreement and the interpretation of its
terms shall be governed by and construed in accordance with the laws of the State of Texas and subject to the exclusive
jurisdiction of the federal and state courts located in Tarrant County, Texas.
INTELLECTUAL PROPERTY
The Parties acknowledge and agree that the Client will hold
all intellectual property right in any work product resulting from the Consulting Services including, but not limited to,
copyright and trademark rights. The Consultant agrees not to claim any such ownership in such work product’s
intellectual property at any time prior to or after the completion and delivery of such work product to the Client.
EXPENSES
The Consultant will be reimbursed from time to time
for reasonable and necessary expenses incurred by the Consultant in connection with providing these services includes
reasonable travel and living expenses.
Late payments will be subject to 2% interest per month.
COMPENSATION
The Consultant will be compensated at a reduced rate of
$40.00 per hour (the “Compensation”). All monetary amounts in the contract shall be in US Dollars.
CHANGES
All Changes to this contract shall be in writing.
INDEPENDENT CONTRACTOR
In providing the Services under this contract, it
is expressly agreed that the Consultant is acting as an independent contractor and not as an employee. The Client and
Consultant agree that this Agreement does not create a partnership or joint venture between them and is exclusively a
contract for service. The client is not required to pay, or make any contribution to, any social security, local, state, or
federal taxes, unemployment compensation, worker’s compensation, insurance premium, profit-sharing, pension, or any
other employee benefit for the consultant during the Term. The Consultant is responsible for paying, and complying with
reporting requirements for, all local, state, and federal taxes relating to payments made to the Consultant under this Agreement.
IN WITNESS WHEREOF
, each of the Parties has executed this
Consulting Agreement, both Parties by its duly authorized officer, as of the day and year set forth below
|
CONSULTANT
|
|
|
/s/ Paul R. Alfano
|
|
|
Paul R. Alfano
|
|
|
Owner - Alfano Consulting Services
|
|
|
|
|
|
Date
|
|
|
4/18/2018
|
|
|
CLIENT
|
|
|
/s/ Raymond Wright
|
|
|
Raymond B. Wright
|
|
|
President - Greenway Innovative Energy
|
|
|
|
|
|
Date
|
|
|
4/19/2018
|
|
Exhibit 10.46
CONSULTING AGREEMENT
This agreement (the “Agreement”) dated this 17th day
of April, 2018 retroactively applicable to the beginning of the work period which started January 1, 2017.
BETWEEN
Greenway Innovative Energy
1521 N. Cooper St. Suite #207
Arlington, TX 76011
(the “Client”)
AND
William N. Campbell
1839 Chris Craft Dr
Grapevine, TX 76051
(the “Consultant”)
This Agreement states the terms and conditions that govern
the contractual agreement between Client and the Consultant who agrees to be bound by this Agreement.
WHEREAS
, the Consultant offers consulting services in the
fields of:
Sales Prospecting
Sales Presentations
Sales Tracking and Development
Document Preparation
Document Editing
Presentations
General Advisory Services
NOW,
THEREFORE
, in consideration of the
mutual covenants and promises made by the parties hereto, the Consultant and the Client (individually, each a
“Party” and collectively, the “Parties”) covenant and agree as follows:
TERMS OF THE AGREEMENT
TERM
The term of this agreement will begin on the date of this
agreement and will remain in force indefinitely until “Termination” as provided in this Agreement.
TERMINATION
In the event that either party wishes to terminate this
Agreement, that Party will be required to provide ten days written notice to the other Party.
INDEMNIFICATION
The Client agrees to indemnify, defend, and protect the
Consultant from and against all lawsuits and costs of every kind pertaining to the Client’s business including
reasonable legal fees due to any act or failure to act by the Client based upon the Consulting Services.
LAW OF THE STATE OF TEXAS
This Consulting Agreement and the interpretation of its
terms shall be governed by and construed in accordance with the laws of the State of Texas and subject to the exclusive
jurisdiction of the federal and state courts located in Tarrant County, Texas.
INTELLECTUAL PROPERTY
The Parties acknowledge and agree that the Client will hold
all intellectual property right in any work product resulting from the Consulting Services including, but not limited to,
copyright and trademark rights. The Consultant agrees not to claim any such ownership in such work product’s
intellectual property at any time prior to or after the completion and delivery of such work product to the Client.
EXPENSES
The Consultant will be reimbursed from time to time
for reasonable and necessary expenses incurred by the Consultant in connection with providing these services includes
reasonable travel and living expenses.
Late payments will be subject to 2% interest per month.
COMPENSATION
The Consultant will be compensated at a reduced rate of
$40.00 per hour (the “Compensation”). All monetary amounts in the contract shall be in US Dollars.
CHANGES
All Changes to this contract shall be in writing.
INDEPENDENT CONTRACTOR
In providing the Services under this contract, it
is expressly agreed that the Consultant is acting as an independent contractor and not as an employee. The Client and
Consultant agree that this Agreement does not create a partnership or joint venture between them and is exclusively a
contract for service. The client is not required to pay, or make any contribution to, any social security, local, state, or
federal taxes, unemployment compensation, worker’s compensation, insurance premium, profit-sharing, pension, or any
other employee benefit for the consultant during the Term. The Consultant is responsible for paying, and complying with
reporting requirements for, all local, state, and federal taxes relating to payments made to the Consultant under this Agreement.
IN WITNESS WHEREOF
, each of the Parties has executed this
Consulting Agreement, both Parties by its duly authorized officer, as of the day and year set forth below
|
CONSULTANT
|
|
|
/s/ William N. Campbell
|
|
|
William N. Campell
|
|
|
|
|
|
Date
|
|
|
4/18/2018
|
|
|
CLIENT
|
|
|
/s/ Raymond Wright
|
|
|
Raymond Wright
|
|
|
|
|
|
Date
|
|
|
4/19/2018
|
|
Exhibit 10.41
CONSULTING AGREEMENT
This agreement (the “Agreement”) dated this 17th day
of April, 2018 retroactively applicable to the beginning of the work period which started January 1, 2017.
BETWEEN
Greenway Innovative Energy
1521 N. Cooper St. Suite #207
Arlington, TX 76011
(the “Client”)
AND
Gary L. Ragsdale, Ph.D.,P.E.
13 Weyfield
San Antonio, TX 78248
(the “Consultant”)
This Agreement states the terms and conditions that govern
the contractual agreement between Client and the Consultant who agrees to be bound by this Agreement.
WHEREAS
, the Consultant offers consulting services in the
fields of:
Research and Development of Gas-To-Liquid (GTL) Technology
GTL Chemistry Modeling and Simulation
GTL Plant Mass and Energy Balance Forecasts
GTL Plant Operationg Expense (OPEX) Forecasts
G-Reformer Burner Operational Validation Project Scheduling,
Logistics, and Project Management
GTL Plant Ancillary Products Analysis and Documentation
Supplier Qualification, Informmation, and Proposal Coordination
General Technical Advisory Services
NOW,
THEREFORE
, in consideration of the
mutual covenants and promises made by the parties hereto, the Consultant and the Client (individually, each a
“Party” and collectively, the “Parties”) covenant and agree as follows:
TERMS OF THE AGREEMENT
TERM
The term of this agreement will begin on the date of this
agreement and will remain in force indefinitely until “Termination” as provided in this Agreement.
TERMINATION
In the event that either party wishes to terminate this
Agreement, that Party will be required to provide ten days written notice to the other Party.
INDEMNIFICATION
The Client agrees to indemnify, defend, and protect the
Consultant from and against all lawsuits and costs of every kind pertaining to the Client’s business including
reasonable legal fees due to any act or failure to act by the Client based upon the Consulting Services.
LAW OF THE STATE OF TEXAS
This Consulting Agreement and the interpretation of its
terms shall be governed by and construed in accordance with the laws of the State of Texas and subject to the exclusive
jurisdiction of the federal and state courts located in Tarrant County, Texas.
INTELLECTUAL PROPERTY
The Parties acknowledge and agree that the Client will hold
all intellectual property right in any work product resulting from the Consulting Services including, but not limited to,
copyright and trademark rights. The Consultant agrees not to claim any such ownership in such work product’s
intellectual property at any time prior to or after the completion and delivery of such work product to the Client.
EXPENSES
The Consultant will be reimbursed from time to time
for reasonable and necessary expenses incurred by the Consultant in connection with providing these services includes
reasonable travel and living expenses.
Late payments will be subject to 2% interest per month.
COMPENSATION
The Consultant will be compensated at a reduced rate of
$40.00 per hour (the “Compensation”). All monetary amounts in the contract shall be in US Dollars.
CHANGES
All Changes to this contract shall be in writing.
INDEPENDENT CONTRACTOR
In providing the Services under this contract, it
is expressly agreed that the Consultant is acting as an independent contractor and not as an employee. The Client and
Consultant agree that this Agreement does not create a partnership or joint venture between them and is exclusively a
contract for service. The client is not required to pay, or make any contribution to, any social security, local, state, or
federal taxes, unemployment compensation, worker’s compensation, insurance premium, profit-sharing, pension, or any
other employee benefit for the consultant during the Term. The Consultant is responsible for paying, and complying with
reporting requirements for, all local, state, and federal taxes relating to payments made to the Consultant under this Agreement.
IN WITNESS WHEREOF
, each of the Parties has executed this
Consulting Agreement, both Parties by its duly authorized officer, as of the day and year set forth below
|
CONSULTANT
|
|
|
/s/ Gary L. Ragsdale
|
|
|
Gary L. Ragsdale
|
|
|
|
|
|
Date
|
|
|
4/18/2018
|
|
|
CLIENT
|
|
|
/s/ Raymond Wright
|
|
|
Raymond Wright
|
|
|
|
|
|
Date
|
|
|
4/19/2018
|
|
Exhibit 10.45
CONSULTING AGREEMENT
This agreement (the “Agreement”) dated this 17th day
of April, 2018 retroactively applicable to the beginning of the work period which started January 1, 2017.
BETWEEN
Greenway Innovative Energy
1521 N. Cooper St. Suite #207
Arlington, TX 76011
(the “Client”)
AND
Peter J. Hauser
1208 Shady Creek Road
Marriotsville, MD 21104
(the “Consultant”)
This Agreement states the terms and conditions that
govern the contractual agreement between Greenway Innovative Energy and the Consultant who agrees to be bound by this
Agreement.
WHEREAS
, the Consultant offers consulting services in the
fields of:
Public Relations
Document Preparation
Document Editing and Updating
Presentations: Preparation and Delivery to Customers
Photography
Consultant Coordination with Greenway and with each other
General Advisory Services
Operations: General Assistance and Specific Task Assignments
Technical Document Review and Assistance to Technical staff
NOW,
THEREFORE
, in consideration of the
mutual covenants and promises made by the parties hereto, the Consultant and the Client (individually, each a
“Party” and collectively, the “Parties”) covenant and agree as follows:
TERMS OF THE AGREEMENT
TERM
The term of this agreement will begin on the date of this
agreement and will remain in force indefinitely until “Termination” as provided in this Agreement.
TERMINATION
In the event that either party wishes to terminate this
Agreement, that Party will be required to provide ten days written notice to the other Party.
INDEMNIFICATION
The Client agrees to indemnify, defend, and protect the
Consultant from and against all lawsuits and costs of every kind pertaining to the Client’s business including
reasonable legal fees due to any act or failure to act by the Client based upon the Consulting Services.
LAW OF THE STATE OF TEXAS
This Consulting Agreement and the interpretation of its
terms shall be governed by and construed in accordance with the laws of the State of Texas and subject to the exclusive
jurisdiction of the federal and state courts located in Tarrant County, Texas.
INTELLECTUAL PROPERTY
The Parties acknowledge and agree that the Client will hold
all intellectual property right in any work product resulting from the Consulting Services including, but not limited to,
copyright and trademark rights. The Consultant agrees not to claim any such ownership in such work product’s
intellectual property at any time prior to or after the completion and delivery of such work product to the Client.
EXPENSES
The Consultant will be reimbursed from time to time
for reasonable and necessary expenses incurred by the Consultant in connection with providing these services includes
reasonable travel and living expenses.
Late payments will be subject to 2% interest per month.
COMPENSATION
The Consultant will be compensated at a reduced rate of
$40.00 per hour (the “Compensation”). All monetary amounts in the contract shall be in US Dollars.
CHANGES
All Changes to this contract shall be in writing.
INDEPENDENT CONTRACTOR
In providing the Services under this contract, it
is expressly agreed that the Consultant is acting as an independent contractor and not as an employee. The Client and
Consultant agree that this Agreement does not create a partnership or joint venture between them and is exclusively a
contract for service. The client is not required to pay, or make any contribution to, any social security, local, state, or
federal taxes, unemployment compensation, worker’s compensation, insurance premium, profit-sharing, pension, or any
other employee benefit for the consultant during the Term. The Consultant is responsible for paying, and complying with
reporting requirements for, all local, state, and federal taxes relating to payments made to the Consultant under this Agreement.
IN WITNESS WHEREOF
, each of the Parties has executed this
Consulting Agreement, both Parties by its duly authorized officer, as of the day and year set forth below
|
CONSULTANT
|
|
|
/s/ Peter J. Hauser
|
|
|
Peter J. Hauser
|
|
|
|
|
|
Date
|
|
|
4/18/2018
|
|
|
CLIENT
|
|
|
/s/ Raymond Wright
|
|
|
Raymond Wright
|
|
|
|
|
|
Date
|
|
|
4/19/2018
|
|
Exhibit
10.48
ADDENDUM
TO EMPLOYMENT AGREEMENT
This
Addendum to Employment Agreement shall amend, where conflicting, and supplement, as needed, the Employment Agreement by and between
UMED Holdings, Inc., Greenway Innovative Energy, Inc., a wholly owned subsidiary of UMED Holdings, Inc., and Raymond Wright, dated
August 29, 2012. Such Addendum shall be attached to and incorporated _into the original Employment Agreement for all purposes
and only add or change the Employment Agreement as specifically set forth herein.
Contracting
Parties
UMED
Holdings, Inc., as owner of Greenway Innovative Energy, Inc., hereinafter referred to as "the Company," have employed
Raymond Wright, hereinafter referred to as "Wright," as President of Greenway Innovative Energy, Inc., as set forth
in such Employment Agreement for which this Addendum attaches and is incorporated therewith.
Trade
Secrets/Intellectual Property
During
the term of employment, Wright will have access to and become familiar with various trade secrets and intellectual property of
the Company, consisting of but not limited to, patents and information which developed such patents and which could be derived
from such patents, formulas, catalysts, drawings, specifications, equipment, business models, pricing, devices, secret inventions,
processes, and compilations of information, financial and business records, and specifications, owned by the Company and regularly
used in the operation of the business of the Company. This and all other information generally deemed to be trade secrets or confidential
shall bedefined as the "Confidential Information." Wright must not disclose the Confidential Information, directly or
indirectly, nor use them in any way, either during the term of this Agreement or at any time thereafter, except as may be reasonably
necessary to carry out his obligations hereunder. The Confidential Information and all other files, records, documents, drawings,
specifications, equipment, and similar items relating to the business of the Employer, whether or not prepared by Wright, remain
the exclusive property of the Company. Furthermore, all Confidential Information, as defined above, of Greenway Innovative Energy,
lnc. which was developed prior to UMED Holdings, Inc.'s purchase of Greenway Innovative Energy, Inc., are now wholly owned by
UMED Holdings, Inc., through such acquisition, in whole, of Greenway Innovative Energy, Inc., and such may not be removed from
the premises of the Company unless in the normal course of business without the prior written consent of the Company.
Wright
hereby assigns to the Company, or its designee, all his right, title and interest in and to any and all inventions, original works
of authorship, development, concepts, improvements, designs, discoveries, ideas, trademarks, or trade secrets, whether or not
patentable or registrable under copyright or similar laws, which may be solely or jointly conceived or developed to, reduced to
practice, or cause to be conceived or developed or reduced to practice, during the period of time Wright is
in
the employ of the Company. Wright agrees to make full disclosure to the Company of all such Inventions. Wright further
acknowledges that all
original
works of authorship which are made by Wright (solely or jointly with others) within the scope of and during the period of his
employment with the Company and which are protectible by copyright are "works made for hire,'' as that tennis defined
in
the United States Copyright Act are the property of the Compnay. Wright understands and agrees that the decision to commercialize
or market any invention developed by Wright, solely or jointly with others, is within the Company's sole discretion and for the
Company's sole benefit, and that no royalty will be due to Wright as a result of the Company's efforts to commercialize or market
any such Invention.
Wright
understands that the provisions of this Agreement requiring assignment of Inventions to the Company do not apply to any invention
for which no equipment, supplies, facilities, or Confidential Information of the Company was used and which was developed entirely
on his own time ("Exempted Inventions"), unless
(i)
the invention relates (A)
directly to the Company's business, or (B) to the Company's actual or demonstrably anticipated research or development, or
(ii)
the invention results from any work performed by Wright for the Company. Wright will advise the Company promptly in writing
of any Exempted Inventions that Wright believes meet the criteria as set forth in the preceding sentence. Wright hereby warrants
that he does not currently claim or possess any information that would lead to Exempted Inventions.
Wright
agrees to keep and maintain adequate and current written records of all Inventions made by Wright and/or Greenway Innovative Energy,
Inc., solely or jointly with others, during the term of his employment
with
the Company.
The records will be in the form of notes, sketches, drawings and any other format that may be specified by the Company. The records
will be available to and remain the sole property of the Company at all times.
For
a period of twelve (12) months after termination of his employment with the Company for any reason, Wright will promptly disclose
to the Company fully and in writing all patent applications filed by Wright or on his behalf. At the time of each such disclosure,
Wright will advise the Company in writing of any inventions that Wright believes qualify as Exempted Inventions, as defined above;
and Wright will, at that time, provide to the Company, in writing, all evidence necessary to substantiate that belief. Wright
understands that the Company will keep in confidence and will not disclose to third parties without his consent any proprietary
information disclosed in writing to the Company pursuant to this Agreement relating to any such Exempted Inventions. Wright will
preserve the confidentiality of any invention that does not qualify fully as an Exempted Invention.
Wright
agrees to assist the Company, or its designee, at the Company's expense,
in
every proper
way to secure the Company's rights in the Inventions and any copyrights, patents, mask work rights or other intellectual property
rights relating thereto in any and all countries, including the disclosure to the Company of all pertinent information and data
with respect thereto, the execution of all applications, specifications, oaths, assignments and all other instruments which the
Company shall deem necessary
in
order to apply for and obtain such rights and in order
to assign and convey to the Company,
its
successors, assigns, and nominees the sole and
exclusive rights, title and interest in and to such Inventions, and any copyrights, patents, mask work rights or other intellectual
property
rights
relating thereto. Wright further agrees that his obligation to execute or cause to be executed, when it is in his/her power to
do so, any such instrument or papers shall continue after the termination of this Agreement.
If
Wright is unable because of his mental or physical incapacity or for any other reason to secure his/her signature to apply
for or to pursue any application for any United States or foreign patents or copyright registrations covering Inventions or original
works of authorship assigned to the Company as above, then Wright hereby irrevocably designates and appoints the Company and its
duly authorized officers and agents as his agent and attorney in fact, to act for and in his behalf and stead to execute and file
any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent or
copyright registrations thereon with the same legal force and effect as if executed by Wright. Wright agrees that this obligation
to assist the Company shall continue beyond the termination of his employment with the Company, but that the Company
will
compensate Wright at a reasonable rate following the termination of his employment for time actually spent by Wright at
the Company's request on such assistance.
On
the termination of employment or whenever requested by the Employer, Wright must immediately deliver to the Employer all property,
including but not limited to Confidential Information as defined above, in the Wright's possession or under the Wright's control
belonging to the Employer.
Non-competition
Wright
hereby agrees, whether while working under the terms of this Agreement, or upon termination of this Agreement for any reason,
not to engage or participate, directly or indirectly, in any competitive business with the business of the Company, specifically
including the natural gas to liquid fuel industry, for a period of three (3) years. Wright fully understands that the business
of the Company is global,
in
that Wright and the Company have conducted business in many
different countries, all over the world, and continue to seek business worldwide, and therefore, the Company and Wright agree
that the only reasonable, geographical limitation to this clause is worldwide, but the Parties fully understand and agree that
a court of competent jurisdiction can and may limit such geographical limitation to something other than worldwide. The Company
and Wright agree that the clause shall survive any such court-ordered change to the geographical limitation.
Compensation
and Benefits
As
compensation for employment by the Company, Wright shall receive a base salary of $180,000.00 per annum to begin upon the signing
of this Addendum. Such salary will increase to $250,000.00 per annum when the first operational, portable GTL unit is funded (funding
to include a year of working capital for UMED Holdings, Inc.) Such compensation shall stay consistent through the term of this
Agreement, but can be modified as the discretion of the Companys' Board of Directors, including but not limited to deferral of
same, but at no time shall such compensation be lessened unless agreed by both Wright and the Company.
If
Wright dies during the term of this Agreement, Wright's estate shall receive his then existing salacy for three years following
his death, as well as, any and all deferred compensation then owed to him or owing the future.
Wright
shall receive 3,500,000 shares of UMED Holdings, Inc. stock in consideration of an assignment of all right, title and interest
in and to any and all patents, inventions, intellectual property, drawings, ideas or the like developed before and/or during the
term of this Agreement concerning Gas-to-Liquid Technology, either individually and/or in conjunction with others, to be held
in perpetuity by the Company. This Agreement shall constitute the full and final assignment of same for all purposes.
Wright
shall be eligible for a stock allocation of a minimum of 3,750,000 shares of UMED Holdings, Inc. stock when the first operational,
portable GTL unit is built and becomes operational and is capable of producing 2,000 barrels of diesel or jet fuel per day.
Wright
shall be offered a position on the UMED Holdings, Inc. Board of Directors upon the signing of this Addendum.
Miscellaneous
Any
and all conflicts between this Addendum and the initial Employment Agreement shall be resolved in favor of the language contained
in this Addendum.
Any
dispute concerning any questions of law and fact arising out of the circumstances of employment under this Agreement shall be
determined by a court of competent jurisdiction, in Tarrant County, Texas, under the laws of the State of Texas.
This
Agreement may be amended only in writing by the mutual consent of all of the parties, evidenced by all necessary and proper corporate
authority. No waiver of any provision of this Agreement shall arise from any action or inaction of any party, except an instrument
in writing expressly waiving the provision executed by the party entitled to the benefit of the provision.
This
Agreement, together with any documents and exhibits given or delivered pursuant to this Agreement, constitutes the entire agreement
between the parties to this Agreement. No Party shall be bound by any communications between them on the subject matter of this
Agreement unless the communication is (a) in writing, (b) bears a date contemporaneous with or subsequent to the date of this
Agreement, and (c) is agreed to by all parties to this Agreement. On execution of this Agreement, all prior agreements or understandings
between the parties shall be null and void.
The
Parties to this Agreement jointly participated in the negotiation and preparation of same, and hence, ambiguities should not be
construed against and/or contributed to either Party.
Executed
on this 30 day of July, 2014.
|
EMPLOYER
|
EMPLOYEE
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Greenway Innovative Energy, Inc.
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/s/ Ric
Halden
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/s/ Raymond
Wright
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By: Ric Halden President of UMED Holdings, Inc.,
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Raymond Wright
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owner of Greenway Innovative Energy,
Inc.
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|
|
Date: 4/18/2018
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Exhibit 10.47
CONSULTING AGREEMENT
This Consulting Agreement (this “Agreement”) is
entered into by Greenway Innovative Energy, Inc. (The ''Company''), and Ryan Turner, 1704 Marion Dr., Garland, Texas 75042
(the ''Consultant''). The Company and the Consultant, collectively (''the Parties''), agree to terms with respect to the
following:
1.
Work to be Performed.
the Consultant offers consulting
services in the fields of:
1.1 The Company hereby retains Consultant on a
“non-Exclusive” basis to:
a. Work closely with the Greenway mai1engagement team
assisting in business development through relationship building and introductions to qualified industry individuals from
financial institutions, officers, investors, and leading market vendors in the oil and gas industry.
b. Creating awareness about Greenway Innovative Energy, Inc. and the gas to liquids technology through digital efforts such as: updating the Greenway website, providing weekly/monthly informational conference calls, producing explainer videos about Greenway's technology and distributing informational campaigns through the Greenway email database.
c. Assisting the management team in critical follow up
contact meetings with engineers, vendors and UTA personnel including phone and written correspondence. Attending meetings
when called upon to assist in assembling information for distribution.
d. Assist the management team of Greenway Technologies, Inc.
in regard to shareholder lists; follow up communication with shareholders and potential shareholder and investor calls and
meetings.
1.2 Consultant and the Company agrees that the Consultant is an independent contractor, and is solely responsible for the performance of all Consulting Services required hereunder, and will report to, and be directly responsible to, the Company's President or designated agent, for all matters pertaining to the Consultant's activities and communications relative to this Consulting Agreement.
1.3 Consultant will devote adequate time, as provided above in
paragraph 1.2, and resources at his own expense, as necessary in performing the Consulting Services for The Company as stated
herein. Consultant shall have discretion in selecting the dates and times it performs such Consulting Services throughout the
month giving due regard to the o needs of the Company's business. It is understood that Consultant will not, and is not expected
to provide, or be o compensated for, full time commitment to this individual project. In rendering Consulting Services hereunder,
Consultant shall conform to the highest professional standards of work and business ethics.
2. Term of Engagement.
2.1 The Consultant will be engaged immediately upon execution of the Agreement. engaged for one (1) year commencing with the execution of this Agreement.
2.2 The Engagement Period shall automatically extend for a
period of one (1) year from the date of each annual anniversary and will continue to be engaged until either party elects
to terminate this Agreement.
2.4 Upon termination of this Agreement by either party, the Company shall pay the Consultant any and all compensation earned through the date of termination. The Company will irrevocably pay all compensation earned resulting from any additional business conducted between The Company, its officers, associates, partners, affiliates, and heirs and the Investors/Financiers as per the compensation agreed upon in Paragraph 3 below.
2.5 This agreement covers the initial agreement and shall include any renewals, extensions, rollover , additions or any new project that may originate because of the above Consult ant introduction of the Company to acquisitions and/or Investors/Financiers.
3. Compensation
3.1 The Company, hereby irrevocably confirms and accepts to pay the Consultant $5,000.00 monthly. Payments shall be made on the 1st of each month. Consultant may earn additional compensation upon delivery of timely information that would enhance the profitability of the Company.
3.2 The Company is not bound by this Agreement to accept any
offers, approve any client/contacts or accept any financial arrangement from an interested party, and the Consultant
understands and agrees that any and all agreements are subject to final negotiations between the Company and such source
introduced by Consultant. The term of this agreement will begin on the date of this agreement and will remain in force
indefinitely until “Termination” as provided in this Agreement.
4.
Independent Contractor, Non-Circumvention and Non-Disclosure,
Confidentiality.
4.1
Independent Contractor.
This Agreement is not a contract
of employment. Consultant is an independent contractor of the Company and shall have no power or authority to bind or obligate
The Company. Consultant shall have the exclusive right to determine the method, manner and means by which it will perform and
provide the Consulting Services hereunder.
4.2
Supplies and Expenses.
Unless otherwise agreed to by
Company in advance, Consultant shall be solely responsible for procuring and paying for and maintaining any computer equipment,
software, paper, tools or supplies necessary or appropriate for the performance of Consult ant's services hereunder. Company,
at its discretion, may reimburse reasonable business expenses.
4.3
Non-Circumvention and Non-Disclosure
The Parties
agree that they shall not directly or indirectly interfere with, circumvent or attempt to circumvent, avoid, by-pass or obviate
each other's interest or relationships. Each Party agrees that, without the expressed written consent of the other Party, it will
not initiate, respond or otherwise abide any contact with any person, company, institution, professional association, or other
entity to which it has been introduced or with whom it has become first acquainted in the course of doing business with the other
Party. Each Party agrees that the provisions of this Agreement and the confidentiality agreement referred to in 4.3 below protecting
each other's sources and prohibiting contacts with the same shall apply to all employees, professional consultants, advisors,
contractors, and agents whose responsibilities require knowledge of such information. Each time an entity or party is introduced
by Consultant to Company, the Parties shall confirm by email or in writing the respective proprietary source. Regardless of whether
or not the transaction closes, the duty of non-disclosure and non-circumvention shall apply. This agreement applies to transactions,
which involve successors, assigns, affiliates or subsidiary companies or entities. The duration of the Agreement shall perpetuate
for two (2) years from last date of signing.
4.4
Confidentiality.
The Parties that during the term of
this Agreement, and thereafter for a period of two (2) years, Consultant shall not, without the prior written consent of Company,
disclose to anyone any
''Confidential Information''
of the Company.
Confidential Information
for the purpose of
this Agreement shall include Company's proprietary and confidential information such as, but not limited to, customer lists, business
plans, marketing plans, financial information, designs, drawings, specifications, models, software, source codes or any non-public
Company data or information. Confidential Information shall not include any information that: a. Is disclosed by Company without
restriction and is intended to be made public. b. Becomes publicly available through no act of Consultant. c. Is rightfully received
by Consultant from a third party.
a. Is disclosed by Company without restriction and is intended to be made public.
b. Becomes publicly available through no act of Consultant.
c. Is rightfully received by Consultant
from a third party.
5.
Termination.
5.1
Termination by Company.
This Agreement may be terminated
by Company as follows:
a. If Consultant is unable to provide the
sales and marketing services contemplated by
this agreement by reason of permanent illness.
b. Breach or Default of any obligations of
Consultant pursuant to Section 104.
c. Breach or default of Consultant of any
other material obligation in this Agreement, which
breach or default is not cured within (10) days of written notice of company
5.2
Termination by Consultant.
Consultant may terminate
this Agreement as follows:
a. Breach or default of any material
obligation of Company, which breach or default is not cured within
ten (10) days of written notice from Consultant.
b. If Company files protection under the federal bankruptcy laws, or any bankruptcy petition or petition for receiver is
commenced by a third party against Company.
6
. Federal, State and Local Payroll Taxes.
6.1 The Company shall not make any withholding for income taxes, FICA, unemployment insurance or worker's compensation premiums or any other employer withholdings, deductions or contributions on its payments to Consultant. Consultant shall be solely responsible for all such withholdings, deductions and contributions.
7.
Benefits; Worker’s Compensation; Insurance.
7.1 Consultant and Consultant' employees will not be eligible for, and shall not participate in, any employee pension, health, welfare, or other fringe benefit plan, of The Company. No workers' compensation or other insurance shall be obtained by The Company covering Consultant or Consultant' employees.
8.
Notice.
8.1 All notices required here must be in writing and must be served on the Parties at addresses following their signatures at the address below.
As to the Consultant:
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Ryan Turner
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1704 Marion Drive
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Garland, Texas 75042
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940-367-4596
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ryanbruceturner@gmail.com
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As to the Company:
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Greenway innovative Energy, Inc.
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Ray Wright, President
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1521 Tulip Drive
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Arlington, TX 76013
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972-342-4051
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raymondwright@yahoo.com
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Notices must be served either personally. by certified mail
return receipt requested, or by overnight courier. A party’s address may be changed by written notice to the other
party; provided, however, that notice of change of address shall be effective until actual receipt of such notice.
9.
Miscellaneous
9.1
Assignment.
This Agreement may not be assigned by either
Party without the prior written consent of the other Party. The benefit and obligations of this Agreement shall be binding upon
and inure to the Parties here to, their successors and assign .
9.2
Entire Agreement.
This Agreement constitutes and expresses
the entire agreement of the Parties with respect to the subject matter here of, and may be modified only by written agreement
signed by the Parties. if any provision of this Agreement is held by unenforceable by a court of competent jurisdiction, that
provision shall be served and shall not affect the validity or enforceability of the remaining provisions.
9.3
Choice of Law.
This Agreement shall be governed by
and construed in accordance with the internal laws (and not the laws of conflicts) of the State of Texas.
9.4
Counterparts.
This Agreement may be executed
in any number of counterparts, each of which will be deemed to be an original and all of which constitute one agreement that
is binding upon each of the Parties, notwithstanding that all Parties are not signatories to the same counterpart.
9.5
Construction of Terms
. If any provision of this
Agreement is held unenforceable by a court of competent jurisdiction, that provision shall be severed and shall not affect
the validity or enforceability of the remaining provisions.
9.6
Modification.
No modification or attempted waiver(s)
of this Agreement, or any provision thereof, shall be valid unless they are signed by both Parties.
9.7
Headings.
The headings in this Agreement are inserted for convenience only and shall not be used to define, limit or describe the scope of this Agreement or any of the obligations herein.
9.8
Waiver of Breach.
The waiver by a party of a breach
of any provision of this Agreement by the other Party shall not operate or be construed as a waiver of any other or subsequent
breach by the Party in breach.
The Parties have executed this Agreement
as of the date set forth in the introductory clause.
The Company:
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Greenway Innovative Energy, Inc.
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/s/ Ray Wright
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Ray Wright, President
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Consultant:
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Ryan Turner
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/s/ Ryan Turner
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Ryan Turner
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Exhibit 10.50
SECURITY AGREEMENT
This SECURITY
AGREEMENT (this “
Agreement
”) is executed as of September
[
14
], 2018, by GREENWAY TECHNOLOGIES, INC., a Texas corporation (the “
Debtor
”), in favor of MABERT, LLC, a Texas
limited liability company (the “
Secured Party
”), as agent for the lenders under that certain Loan Agreement
of even date herewith, by and among the Debtor, the lenders party thereto (the “
Lenders
”) and the Secured Party
(the “
Loan Agreement
”). Capitalized terms used but not defined herein shall have the meanings set forth in the
Loan Agreement.
1.
Grant
. The Debtor, for valuable consideration, receipt whereof is hereby acknowledged,
hereby grants to the Secured Party, as agent for the Lenders, a security interest in the following described property and interests
in property of the Debtor (the “
Collateral
”) whether now owned or hereafter acquired:
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(b)
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All
personal
property;
|
(c)
All
“accounts”,
“general intangibles”, “chattel paper”, “contract rights”, “documents”, “goods”,
“instruments”, “deposit accounts”, “inventory”,
“farm
products”, “fixtures”
and
“equipment”,
as
such
terms are
defined
in
Article
9 of the Texas
Uniform Commercial Code
(the
“
UCC
”)
in
effect
on the date
hereof;
(d)
All
general
intangibles
of every
kind, including without limitation,
federal,
state and local tax
refunds
and claims of all
kinds;
all rights as a
licensee
or any kind; all
customer
lists, telephone numbers, and purchase orders,
and
all rights
to
purchase,
lease
sell,
or
otherwise acquire
or deal with
real
or
personal property and
all rights relating
thereto;
(e)
All
returned
and
repossessed goods
and all
rights
as a seller of
goods
of the
Debtor;
all
collateral securing
any of the
foregoing;
all
deposit accounts, special
and
general, whether
on
deposit
with the
Secured
Party
or others;
(f)
All
life
and other
insurance policies,
claims in
contract,
tort or
otherwise,
and all
judgments
now
or
hereafter arising therefrom;
(g)
All
right,
title, and
interest
of the
Debtor,
and all of the
Debtor’s rights, remedies, security,
and
liens,
in, to and in
respect
of all
accounts
and other
collateral, including, without limitation, rights
of
stoppage
in
transit, replevin, repossession,
and
reclamation
and other
rights
and remedies of an
unpaid
vendor, lienor,
or
secured party,
and all
guarantees
and other
contracts
of
suretyship
with
respect
to any
accounts
and other
collateral,
and all
deposits
and other security
for
any
accounts
and other
collateral,
and all
credit and
other
insurance;
(h)
All
notes,
drafts,
letters of credit,
contract rights,
and
things
in action; all
drawings, specifications,
blueprints
and
catalogs;
and all raw
materials,
work in
process, materials used
or
consumed
in the
Debtor’s business, goods, finished goods,
returned
goods
and all other
goods
and inventory of
whatsoever
kind or
nature,
any and all
wrapping,
packaging, advertising
and
shipping materials,
and all
documents
relating
thereto,
and
all
labels
and
other devices,
names and marks
affixed
or
to be
affixed
thereto
for purposes
of
selling or
identifying
the same or the seller or manufacturer thereof;
(i)
All
inventory,
raw
materials
and
work
in
progress wherever
located; all
present
and
future
claims
against
any
supplier
of any of the
foregoing, including
claims
for defective goods
or
overpayments
to or
undershipments
by
suppliers;
all
proceeds arising
from the
lease
or rental
of any of the
foregoing;
inventory
returned
by the
Debtor
to its
suppliers shall
remain
subject
to the
Secured Party’s
security
interest;
(j)
All
equipment
and
fixtures, including without
limitation all
machinery,
machine
tools, motors, controls, parts, vehicles, workstations,
tools,
dies, jigs, furniture, furnishings,
and
fixtures;
and all
attachments, accessories, accessions
and
property
now or
hereafter affixed
to or
used
in
connection
with
any
of the
foregoing,
and all
substitutions
and
replacements
for
any of the
foregoing;
all
warranty
and other
claims against
any
vendor
or
lessor
of any of the
foregoing;
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(k)
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All
investment
property;
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(l)
All
books,
records,
ledger
cards, computer data,
and
programs
and other
property
and
general intangibles
at any time
evidencing
or relating to any or all of the
foregoing;
and
(m)
All
cash and
non-cash
products
and
proceeds
of any of the
foregoing,
in
whatever form, including proceeds
in the
form
of
inventory,
equipment, or any other form of
personal
property,
including proceeds of
proceeds
and
proceeds
of
insurance,
and all
claims
by the
Debtor
against
third parties
for
loss or
damage
to, or
destruction of,
or
otherwise
relating
to, any or all of the
foregoing;
to secure payment of the obligations
of the Debtor to the Secured Party and the Lenders under the Loan Agreement and the Notes (as defined in the Loan Agreement) (the
“
Obligations
”):
2.
Remedies
. UPON AN EVENT OF DEFAULT AND AT ANY TIME THEREAFTER, THE SECURED PARTY
MAY DECLARE ALL OBLIGATIONS SECURED HEREBY IMMEDIATELY DUE AND PAYABLE AND SHALL HAVE THE REMEDIES OF A SECURED PARTY UNDER THE
UCC. The requirements of reasonable notice shall be
met
if delivered in accordance with
Section 3
at least ten (10) days before the time of the sale or disposition. The Secured Party may buy the Collateral at
any public sale.
The
remedies of the Secured Party hereunder are cumulative and the exercise of any one or more of the remedies provided for herein
or under the UCC shall not be construed as a waiver of any of the other remedies of the Secured Party so long as any part of the
Debtor’s Obligation remains unsatisfied.
3.
Notice
. All notices and other communications under this Agreement shall be in accordance
with
Section 8.4
of the Loan Agreement.
4.
General
. No waiver by the Secured Party of any default shall operate as a waiver
of any other default or of the same default on a future occasion. All rights of the Secured Party hereunder shall inure to the
benefit of its successors and assigns; and all obligations of the Debtor shall bind its successors or assigns. This Agreement shall
become effective when it is signed by the Debtor.
The
Debtor irrevocably authorizes the Secured Party at any time and from time to time to file in any jurisdiction any financing statements
and amendments that: (a) name Collateral as collateral thereunder (including a collateral description of “all assets”),
regardless of whether any particular Collateral falls within the scope of the UCC; and (b) contain any other information required
by the UCC for sufficiency or filing office acceptance. The Debtor ratifies any such filings made prior to the date hereof.
If
any of the provisions of this Agreement, or the application thereof to any person, party or circumstances, shall, to any extent,
be invalid or unenforceable, the remainder of this Agreement, or the application of such provision or provisions to persons, parties
or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected thereby, and every
provision of this Agreement shall be valid and enforceable to the fullest extent permitted by Law.
IRRESPECTIVE
OF THE PLACE OF EXECUTION AND/OR DELIVERY, THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF TEXAS.
[Signature page follows.]
IN WITNESS WHEREOF, the
undersigned has executed this Agreement to be effective as of the date first written above.
DEBTOR:
GREENWAY TECHNOLOGIES, INC.
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By:
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/s/ Ransom Jones
|
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Name:
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Ransom Jones
|
|
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Title:
|
Chief Financial Officer
|
[Security Agreement]
Exhibit 10.49
LOAN AGREEMENT
for a loan in the
amount of up to
$1,500,000.00
MADE
BY AND BETWEEN GREENWAY TECHNOLOGIES, INC.
a Texas corporation,
as Borrower the Lenders party hereto
AND
MABERT, LLC
,
a Texas limited liability
company, as Agent
Dated as of September
[
14
], 2018
LOAN AGREEMENT
PREAMBLE
THIS
LOAN AGREEMENT (“
Agreement
”) is made as of September [
14
], 2018, by and among each of GREENWAY TECHNOLOGIES,
INC., a Texas corporation (the “
Borrower
”), the lenders party hereto (the “
Lenders
”) and
MABERT, LLC, a Texas limited liability company, its successors and assigns, as agent for the Lenders (“
Agent
”).
W I T N E S S E
T H
:
RECITALS
A.
Borrower has applied to Lenders for a loan in the amount of up to ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($1,500,000.00)
(the “
Loan
”) for the purpose of funding working capital and general corporate expenses, and Lender is willing
to make the Loan on the terms and conditions hereinafter set forth.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties hereto agree as follows:
1.1
Defined
Terms.
ARTICLE I DEFINITIONS
The following terms as used herein shall
have the following meanings:
Agreement
: As such term is defined in the Preamble.
Applicable
Rate
: At any time, the lower of (a) the interest rate specified in each Note, or (b) the Maximum Lawful Rate.
Bankruptcy
Code
: Title 11 of the United States Code entitled “Bankruptcy” as now or hereafter in effect, or any successor
thereto or any other present or future bankruptcy or insolvency statute.
Borrower
: As such term is defined
in the Preamble.
Collateral
: As such term is defined in the Security Agreement.
Default or default
: Any
event, circumstance or condition, which, if it were to continue uncured, would, with notice or lapse of time or both, constitute
an Event of Default hereunder.
Default Rate
:
A rate per annum equal to three percentage points (300 basis points) in excess of the Applicable Rate, but which shall not at any
time exceed the Maximum Lawful Rate.
Event of Default
: As such term is defined in
Article
6
.
Governmental
Authority
: Any federal, state, county or municipal government, or political subdivision thereof, any governmental or quasi-governmental
agency, authority, board, bureau, commission, department, instrumentality, or public body, or any court, administrative tribunal,
or public utility.
Laws
: Collectively,
all federal, state and local laws, statutes, codes, ordinances, orders, rules and regulations, including judicial opinions or precedential
authority in the applicable jurisdiction.
Lender
: As defined
in the opening paragraph of this Agreement, and including any successor holder of the Loan from time to time.
Loan
: As defined in
Recital A
.
Loan Documents
: Collectively,
this Agreement, the Security Agreement and the Notes.
Material Adverse Change
: If, in Agent’s reasonable discretion,
the business prospects,
operations or financial condition of a person,
entity or property has changed in a manner which could
impair the value of Lenders’
security for the Loan, prevent timely repayment of the Loan or otherwise prevent the applicable person or entity from timely performing
any of its material obligations hereunder or under the Note.
Maturity Date
: As set forth in each Note.
Maximum Lawful Rate
: As such term is defined
in the Notes.
Note
: Each promissory
note, executed by Borrower and payable to the order of Lenders, evidencing the Loan.
Open the Loan, Opening
of the Loan or Loan Opening
: The first disbursement of Loan proceeds.
Payment Date
: With
respect to each Note, the last day of each calendar quarter, beginning on the last day of the calendar quarter during which such
Lender initially loans funds under said Note.
Security Agreement
: That
certain Security Agreement, dated as of the date hereof, by Borrower in favor of Agent, as agent for the Lenders.
Warrant
: Each warrant,
executed by Borrower for the benefit of each Lender, evidencing a right to purchase shares of the Borrower as set forth therein.
ARTICLE II
BORROWER’S REPRESENTATIONS
AND WARRANTIES
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2.1
|
Representations and Warranties.
|
To induce
Lender to execute this Agreement and perform its obligations hereunder, the Borrower hereby represents and warrants to Lender as
follows:
(a)
The Borrower is a duly organized and validly existing limited corporation and has full power
and authority to execute, deliver and perform the Loan Documents, and such execution, delivery and performance have been duly authorized
by all requisite action on the part of the Borrower.
(b)
No consent, approval or authorization of or declaration, registration or filing with any
Governmental Authority or nongovernmental person or entity, including any creditor, partner, or shareholder of the Borrower, is
required in connection with the execution, delivery and performance of the Loan Documents. The execution, delivery and performance
of the Loan Documents have not constituted and will not constitute, upon the giving of notice or lapse of time or both, a breach
or default under any other agreement to which the Borrower is a party or may be bound or affected, or a violation of any Law or
court order which may affect the Borrower or the Collateral, any part thereof, any interest therein, or the use thereof.
(c)
Borrower has been advised by the Lenders to seek the advice of an attorney
and
an accountant in connection with the Loan. The Borrower has had the opportunity to seek the advice of an attorney and accountant
of the Borrower's choice in connection with the Loan.
|
|
(d)
|
There is no Default or Event of Default under the Loan Documents.
|
|
|
2.2
|
Survival of Representations and Warranties.
|
Borrower
agrees that all of the representations and warranties set forth in this Agreement are true as of the date hereof, will be true
at the Loan Opening and, except for matters which have been disclosed by Borrower and approved by Lender in writing, at all times
thereafter. Each request for a disbursement hereunder shall constitute a reaffirmation of such representations and warranties,
as deemed modified in accordance with the disclosures made and approved as aforesaid, as of the date of such request.
ARTICLE
III LOAN
|
|
3.1
|
Agreement to Borrow and Lend; Lender’s Obligation to Disburse.
|
Subject
to the terms, provisions and conditions of this Agreement and the other Loan Documents, Borrower agrees to borrow from Lenders
and Lenders agree to lend to Borrower the Loan, for the purposes and subject to all of the terms, provisions and conditions contained
in this Agreement.
(a)
The maximum aggregate amount of the Loan shall not exceed One Million Five Hundred Thousand
Dollars ($1,500,000.00).
(b)
Each Lender agrees, upon Borrower’s compliance with and satisfaction of all conditions
precedent to the Loan Opening, no Material Adverse Change has occurred with respect to
Borrower and no Default or Event of Default
has occurred and is continuing hereunder, to loan the Borrower the amount set forth opposite such Lender on
Schedule A
hereto.
(c)
Additional Lenders may become party to this Loan Agreement, by delivery by such Lenders
and acceptance by Borrower of a signature page hereto. Schedule A hereto shall be updated to reflect the amount of the Loan made
by any such additional Lender.
All principal,
interest and other sums due hereunder and under the Note shall be due and payable in full on the Maturity Date.
ARTICLE IV INTEREST
(a)
The Loan will bear interest at the Applicable Rate, unless the Default Rate is applicable.
The Loan shall bear interest at the Default Rate at any time at which an Event of Default shall exist. Interest at the Applicable
Rate (or Default Rate) shall be calculated for the actual number of days elapsed on the basis of a 365-day year, including the
first date of the applicable period to, but not including, the date of repayment.
Borrower
shall make payments of all accrued but unpaid interest quarterly in arrears on each Payment Date.
|
|
4.3
|
Prepayment; Extension.
|
Borrower shall not be allowed to
prepay the Loan prior to the Maturity Date. Each Lender, at its discretion, may offer to extend the Maturity Date of its Note by
one year. Such offer shall be made in writing, not less than thirty (30) days prior, nor more than sixty (60) days prior, to the
Maturity Date. Upon receipt of such offer, Borrower shall have twenty (20) days to accept or reject such extension. An extension
of one Lender’s Note shall not affect the Borrower’s obligation to pay the other Lenders’ Notes on the Maturity
Date.
Borrower
shall make all payments hereunder to the Agent. Agent shall distribute all such payments, to the Lenders, pro rata based on the
Lenders’ Loan Commitments and Amounts as shown on
Schedule A
hereto; provided that regular payments of interest shall
be distributed to the Lenders, pro rata based on the amount of interest owing to such Lender on the relevant Payment Date.
Borrower
shall reimburse Agent and the Lenders for all costs and expenses incurred in connection with the negotiation, structuring and documentation
of the Loan, and for all costs and
expenses incurred in connection with the administration
or collection of the Loan, including in connection with any amendments or modifications thereto.
|
|
5.1
|
Conditions
Precedent.
|
ARTICLE V REQUIREMENTS
PRECEDENT
TO DISBURSEMENTS
Borrower
agrees that the Lenders’ obligation to Open the Loan is conditioned upon Borrower’s delivery, performance and satisfaction
of the following conditions precedent in form and substance satisfactory to Lender in its reasonable discretion:
|
|
(a)
|
No Default
: There shall exist no Default or Event of Default hereunder;
|
(b)
Additional Documents
: Borrower shall have executed and delivered the Loan Documents
and furnished to Agent and the Lenders such other documents or information as Agent and the Lenders shall reasonably request.
ARTICLE VI EVENTS
OF DEFAULT
The occurrence of any
one or more of the following shall constitute an “Event of Default” as said term is used herein:
(a)
Failure of Borrower (i) (A) to make any payment of principal on the Maturity Date, or interest
when due on a Payment Date, or (B) to observe or perform any of the other covenants or conditions by Borrower to be performed under
the terms of this Agreement or the other Loan Documents concerning the payment of money, for a period of ten (10) days after written
notice from Lender that the same is due and payable; or (ii) for a period of ten (10) days after written notice from Lender, to
observe or perform any non-monetary covenant or condition contained in this Agreement or the Note; provided that if any such failure
concerning a non-monetary covenant or condition is susceptible to cure and cannot reasonably be cured within said ten (10) day
period, then Borrower shall have an additional thirty (30) day period to cure such failure and no Event of Default shall be deemed
to exist hereunder so long as Borrower commences such cure within the initial ten (10) day period and diligently and in good faith
pursue such cure to completion within such resulting forty
(40) day period from the date
of Lender’s notice; and provided further that if another subsection of this
Section 6.1
applies to a particular breach
and does not expressly provide for a notice or grace period the specific provision shall control.
(b)
If any representation or warranty made now or hereafter by Borrower is untrue or incorrect
at the time made or delivered, provided that if such breach is reasonably susceptible of cure,
then no Event of Default shall exist so long
as Borrower cures said breach (i) within the notice and cure period provided in
(a)(i)
above for a breach that can be cured
by the payment of money or
(ii) within the notice and cure period provided
in
(a)(ii)
above for any other breach.
(c)
Borrower shall commence a voluntary case under the Bankruptcy Code; or an involuntary proceeding
is commenced against Borrower under the Bankruptcy Code and relief is ordered against Borrower, or the petition is controverted
but not dismissed or stayed within sixty (60) days after the commencement of the case, or a custodian (as defined in the Bankruptcy
Code) is appointed for or takes charge of all or substantially all of the property of Borrower; or Borrower commences any other
proceedings under any reorganization, insolvency or liquidation or similar Law of any jurisdiction relating to Borrower; or there
is commenced against Borrower any such proceeding which remains undismissed or unstayed for a period of sixty (60) days; or Borrower
fails to controvert in a timely manner any such case under the Bankruptcy Code or any such proceeding, or any order of relief or
other order approving any such case or proceeding is entered; or Borrower by any act or failure to act indicates its consent to,
approval of, or acquiescence in any such case or proceeding or the appointment of any custodian or the like of or for it for any
substantial part of its property or suffers any such appointment to continue undischarged or unstayed for a period of sixty
(60) days.
(d)
Borrower shall make an assignment for the benefit of creditors, or shall admit in writing
its inability to pay its debts generally as they become due, or shall consent to the appointment of a receiver or trustee or liquidator
of all of its property or the major part thereof or if all or a substantial part of the assets of Borrower are attached, seized,
subjected
to
a writ or distress warrant, or are levied upon, or come into the possession
of any receiver, trustee, custodian or assignee for the benefit of creditors.
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|
(e)
|
If a Material Adverse Change occurs with respect to a Borrower or the Collateral.
|
ARTICLE VII
LENDER’S REMEDIES IN
EVENT OF DEFAULT
|
|
7.1
|
Remedies Conferred Upon Lender.
|
Upon
the occurrence of any Event of Default, Agent may pursue any one or more of the following remedies concurrently or successively,
it being the intent hereof that none of such remedies shall be to the exclusion of any other:
(a)
Withhold further disbursement of the proceeds of the Loan and/or terminate the Lenders’
obligations to make further disbursements hereunder;
|
|
(b)
|
Declare the Notes to be immediately due and payable;
|
(c)
Exercise or pursue any other remedy or cause of action permitted under this Agreement or
the other Loan Documents, or conferred upon Agent or the Lenders by operation of Law.
Notwithstanding the
foregoing, upon the occurrence of any Event of Default under
Section 6.1(d)
or
(e)
with respect to Borrower, all
amounts evidenced by the Notes shall automatically
become due and payable, without any presentment,
demand, protest or notice of any kind to Borrower.
|
|
8.1
|
Modification; Waiver.
|
ARTICLE VIII GENERAL
PROVISIONS
No
modification, waiver, amendment or discharge of this Agreement or the other Loan Documents shall be valid unless the same is in
writing and signed by the party against which the enforcement of such modification, waiver, amendment or discharge is sought.
Irrespective
of the place of execution and/or delivery, this Agreement shall be governed by, and shall be construed in accordance with, the
laws of the State of Texas.
|
|
8.3
|
Disclaimer by Lender.
|
This
Agreement is made for the sole benefit of Borrower, Agent and Lenders, and no other person or persons shall have any benefits,
rights or remedies under or by reason of this Agreement, or by reason of any actions taken by Agent or Lenders pursuant to this
Agreement.
Any
notice, demand, request or other communication which any party hereto may be required or may desire to give hereunder shall be
in writing and shall be deemed to have been properly given
(a) if hand delivered,
when delivered; (b) if mailed by United States Certified Mail (postage prepaid, return receipt requested), three (3) business days
after mailing; (c) if by Federal Express or other reliable overnight courier service, on the next business day after delivered
to such courier service or
(d) if by telecopier on the
day of transmission so long as a copy is sent on the same day by overnight courier to such party’s address as set forth on
the signature page hereto, or at such other address as the party to be served with notice may have furnished in writing to the
party seeking or desiring to serve notice as a place for the service of notice.
|
|
8.5
|
Authorized Representative
.
|
The
Borrower hereby appoints Ransom Jones, or his successor as chief financial officer, as its authorized representative for purposes
of dealing with the Agent and the Lenders on behalf of Borrower in respect of any and all matters in connection with this Agreement,
the other Loan Documents, and the Loan.
|
|
8.6
|
Assignments and Transfers
.
|
Borrower
shall not assign or attempt to assign its rights under this Agreement and any purported assignment shall be void. Subject to the
foregoing restrictions on transfer and assignment, this Agreement shall inure to the benefit of and shall be binding on the parties
hereto and their respective successors and permitted assigns.
|
|
8.7
|
Waiver of Jury Trial.
|
BORROWER, AGENT
AND LENDERS EACH WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT
AND THE NOTE OR RELATING THERETO OR ARISING FROM THE LENDING RELATIONSHIP WHICH IS THE SUBJECT OF THIS AGREEMENT AND AGREE THAT
ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
THIS
WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[Signature page follows.]
EXECUTED as of the date first set forth above.
|
|
|
BORROWER:
|
|
|
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|
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|
|
|
GREENWAY TECHNOLOGIES, INC.,
|
|
|
|
|
a Texas Corporation
|
|
|
|
|
|
|
|
|
By:
|
/s/ Ransom Jones
|
|
|
|
|
Name:
|
Ransom Jones
|
|
|
|
Title:
|
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
Address for Notices:
|
|
|
|
|
1521 N. Cooper Street, Suite 205
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|
|
Arlington, TX 76011
|
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|
Facsimile:
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AGENT:
|
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MABERT, LLC,
|
|
|
|
|
a Texas Limited Liability Company
|
|
|
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|
|
By:
|
/s/ Kevin Jones
|
|
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|
|
Name:
|
Kevin Jones
|
|
|
|
Title:
|
Managing Member
|
|
|
|
|
|
|
|
|
|
Address for Notices:
|
|
|
|
|
|
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|
Facsimile:
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ADDITIONAL LENDERS – AS FOLLOWS BELOW:
|
|
|
LENDERS:
|
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|
ALL COMMERCIAL FLOORS, INC.,
|
|
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a Texas Corporation
|
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|
By:
|
/s/ Kevin Jones
|
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|
Name:
|
Kevin Jones
|
|
|
|
Title:
|
President
|
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|
|
|
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|
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|
|
Address for Notices:
|
|
|
|
|
|
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|
|
Facsimile:
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CHRISTINE EARLY
|
|
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|
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an Individual
|
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|
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|
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/s/ Christine Earley
|
|
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|
|
Christine Earley
|
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|
|
|
|
Address for Notices:
|
|
|
|
|
|
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|
|
Facsimile:
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|
|
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|
|
RANDY PATTERSON
|
|
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|
|
an Individual
|
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|
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|
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|
/s/ Randy Patterson
|
|
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|
|
Randy Patterson
|
|
|
|
|
|
|
|
|
|
Address for Notices:
|
|
|
|
|
|
|
|
|
Facsimile:
|
|
|
|
|
|
|
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|
|
MICHAEL WYRENT
|
|
|
|
|
an Individual
|
|
|
|
|
|
|
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|
|
/s/ Michael Wyrent
|
|
|
|
|
|
Michael Wyrent
|
|
|
|
|
|
|
|
|
|
Address for Notices:
|
|
|
|
|
|
|
|
|
Facsimile:
|
|
|
|
|
|
|
|
|
|
|
R. Kevin Jones
|
|
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|
|
an Individual
|
|
|
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|
|
/s/ R. Kevin Jones
|
|
|
|
|
|
R. Kevin Jones
|
|
|
|
|
|
|
|
|
|
Address for Notices:
|
|
|
|
|
|
|
|
|
Facsimile:
|
|
|
|
|
|
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|
|
ADDITIONAL LENDER(S):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a ____________________
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
Name:
|
|
|
|
|
Title:
|
|
|
|
|
|
|
|
|
|
|
Address for Notices:
|
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|
|
|
|
|
|
|
Facsimile:
|
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|
|
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|
|
Schedule A
Loan Commitments and Amounts
|
Lender
|
Loan Amount
|
Date
|
|
Randy Patterson
|
$100,000
|
9/14/2018
|
|
Christine Earley
|
$100,000
|
10/23/2018
|
|
Michael Wykrent
|
$100,000
|
11/6/2018
|
|
R. Kevin Jones
|
$428,868.55
|
12/31/2018
|
|
|
|
|
|
|
|
|
Exhibit
10.52
GRIFFITH
,
JA
Y
M
I
C
H
EL
LLP
ATTORNEYS
AT
LAW
|
Ross
P. Griffith
|
2200
Forest Park Boulevard
|
|
|
James
V. Jay IV
|
Fort
Worth, Texas 76110-1732
|
Of
Counsel
|
|
Thomas
M. Michel
|
Phone
(817) 926-2500
|
Franklin
Moore
|
|
Kelly
E. DeBerry
|
Fax
(817) 926-2505
|
William
M. Murphy
|
|
Mark
J. Petrocchi
|
Website
www.lawjm.com
|
Richard
L. Bourland, P.C.
|
|
Lauren
M. Lockett
|
|
Elizabeth
Bourland
|
|
William
V. Haslam
|
|
|
March
6, 2019
Via
E-mail (zacha,:y.farrar@wickphillips.com)
Zachary
C. Farrar
Wick
Phillips Gould & Martin LLP
100
Throckmorton St., Suite 1500 Fort Worth, TX 76102
RE:
Cause No. 2018-005801-1; In County Court at Law No. 1 of Tarrant County, TX;
Wildcat Consulting Group LLC vs. Greenway Technologies,
Inc. (Consulting Agreement)
Our
File No. 7538
Cause No. 2018-006416-2; In County Court at Law No. 2 of Tarrant County, TX;
Wildcat Consulting Group
LLC vs. Greenway Technologies, Inc. (Promissory Note)
Our
File No. 7539
Dear Mr. Farrar:
The
purpose of this Rule 11 Agreement ("Agreement") is to memorialize the agreement reached between the parties in the above-referenced
lawsuits as a result of the mediation and settlement discussions conducted between Wildcat Consulting Group LLC ("Wildcat")
and Greenway Technologies, Inc. ("Greenway"). The terms of this Agreement are to be incorporated into settlement documents
including a Promissory Note and Compromise Settlement Agreement ("CSA"), which will incorporate the terms of this Agreement
as set forth below. If the parties fully and timely perform the obligations as set forth herein, it is intended that the settlement
of these lawsuits should result in a dismissal with prejudice of the claims pending in the above-referenced lawsuits. Upon full
execution, this Agreement will be filed with the Court in each of the above-referenced lawsuits.
Wildcat
and Greenway hereby agree to the following:
1.
With regard to the claims pending
in Cause No. 2018-006416-2, referred to as the "Promissory Note Lawsuit":
a.
The parties agree that Greenway shall execute a
new Promissory Note payable to Wildcat in the original principal amount of $100,000. This new Promissory Note shall be effective
as of November 13, 2017 and shall provide for interest accruing since the effective date at the rate of 10% per annum, which shall
be compounded annually. The new Promissory Note will have a maturity date of March 1, 2020 and shall provide for the payments
of principal only to be paid in four installments of $25,000 each to be paid to Wildcat on or before 5:00 p.m. on June 1, 2019,
September 1, 2019, December 1, 2019 and March 1, 2020. All unpaid principal and interest shall become due and payable on maturity
or in the event of default. The new Promissory Note shall provide for a default interest rate of 18% per annum, compounded annually,
and shall provide that Wildcat shall be entitled to recover reasonable and necessary attorney's fees and costs of court in the
event of a default. The new Promissory Note shall provide that "time is of the essence" with regard to all payments
to be made pursuant to that note.
b.
As additional consideration, Greenway shall issue
500,000 shares of Restricted 144a Common A stock to Wildcat as soon as practical after Greenway has taken actions necessary to
provide for the issuance of such shares. In no event shall such shares be issued after October 15, 2019.
c.
Wildcat hereby agrees that upon issuance of the
above-referenced shares, all warrants issued to Wildcat prior to this Agreement shall be terminated. Wildcat, Mr. Marshall Gleason
and all affiliated entities hereby represent that they currently have no claim for any additional warrants, or claims for any
warrant for Greenway stock which are not terminated by this Agreement. Nothing herein shall prevent the issuance of additional
warrants after this date, under separate agreement to Wildcat, Mr. Gleason or affiliated entities. Wildcat, Mr. Gleason and all
affiliated entities hereby agree not to exercise any previously issued warrants so long as Greenway is not in default of this
Agreement.
d.
Wildcat and Greenway hereby agree that Wildcat
currently has 1,700,000 unrestricted shares and 3,000,000 Rule 144a shares of stock in Greenway.
e.
Wildcat and Greenway agree that the Promissory
Note Lawsuit shall be abated until October 15, 2019 to allow for the preparation and execution of settlement documents and for
the timely payment of amounts due and stock issuance prior to that date. In the event all payments and/or obligations imposed
in this Agreement are not timely performed, Wildcat shall be entitled to proceed with the all claims pending in the Promissory
Note Lawsuit on the original Promissory Note, subject to any credits provided as described herein. The New Promissory Note shall
not
be construed as a wavier or novation of the claims pursuant to the original Promissory Note. To the extent Wildcat pursues claims
on the original Promissory Note, Wildcat shall have no claims under the New Promissory Note.
2.
With regard to the claims pending in Cause No.
2018-005801-1, referred to as the "Consulting Agreement Lawsuit":
a.
The parties agree to execute a CSA which will provide
that Greenway shall pay Wildcat a total settlement of amount of $300,000 to be paid by 60 monthly payments of $5,000 each with
the first payment being due to Wildcat on or before 5:00 p.m. on or before March 15, 2019 and by 5:00 p.m. on the 1st day of each
month thereafter until paid in full.
b.
The
CSA shall provide that Greenway stipulates that the Overriding Royalty Agreement ("ORRI") between Greenway
Innovative Energy, Inc. (a wholly- owned subsidiary of Greenway) and Wildcat executed on or about October 30, 2017 is valid
and enforceable for all purposes and that Greenway shall not contest Wildcat's right to receive payments pursuant to such
agreement. The parties agree to amend the ORRI, to increase Wildcat's royalties from 1/4 of 1 % or .25% to 3/8 of 1 % or
.375%. Greenway agrees that it will not contest Wildcat's right to receive payments pursuant to the amended ORRI. The amended
ORRI shall be executed on or before April 1, 2019.
c.
The CSA shall provide that Greenway stipulates
that the Royalty Agreement between Greenway and Wildcat executed on or about October 30, 2017 is valid and enforceable for all
purposes and that Greenway shall not contest Wildcat's right to receive payments pursuant to such agreement.
d.
The CSA shall provide that the parties agree that
in the event Wildcat receives any payments pursuant to the amended ORRI and/or the Royalty Agreement referenced above, prior to
the full timely payment of the settlement amount referenced above, Greenway shall be entitled to a dollar-for-dollar credit against
the settlement amount. In the event Greenway fails to timely make any monthly payment of the settlement amount, it shall only
have a right to a credit for any ORRI or Royalty Agreement payment(s) made to Wildcat prior to such default.
e.
The CSA shall provide that Greenway shall issue
1,000,000 shares of Restricted 144a Common A stock to Wildcat as soon as practical after Greenway has taken actions necessary
to provide for the issuance of such shares. In no event shall such shares be issued after October 15, 2019.
f.
The CSA shall provide that Greenway, effective
immediately, releases Wildcat from any and all claims arising out of the past transactions between the parties. The CSA shall
further provide that Wildcat shall release Greenway of any and all claims arising from past transactions effective as of October
15, 2019, subject to Greenway's timely performance of its obligations under this Agreement, prior to that date. In the event of
a default prior to October 15, 2019, the parties agree that Greenway shall be entitled to a credit against Wildcat's claims for
any amounts paid or stock issued by Greenway to Wildcat prior the date of default, and Wildcat shall be entitled to pursue claims
under the Consulting Agreement or the CSA at its election. Wildcat's election of pursuing claims under either the Consulting Agreement
or the CSA in no way limits any defenses available to Greenway.
g.
The CSA shall provide that the Consulting Agreement
Lawsuit shall be abated until October 15, 2019 to allow for the preparation and execution of settlement documents and for the
timely payment of amounts due and stock issuance prior to that date. In the event all payments and/or obligations imposed in this
Agreement are not timely performed, Wildcat shall be entitled to proceed with all claims pending in the Consulting Agreement Lawsuit,
subject to any credits provided as described herein above.
3.
Each party stipulates and agrees that they have
been cautioned to read this entire document word-for-word and to ask questions they may have about this Agreement of their respective
attorneys.
4.
By signing this Agreement, each party to it represents
that they reviewed this written Agreement with their respective counsel of record in this case before signing it. Each party represents
that they have they have the authority to sign this Agreement in the capacity represented. Each party stipulates and represents
to the other and to their attorneys that:
|
|
a.
|
each
is signing this Agreement only after having read this entire document carefully, word-for-word;
|
|
|
b.
|
each
has been afforded an opportunity to ask any questions they may have about this Agreement
of their lawyer outside the presence of the other party, and each is completely satisfied
with the legal representation they have received today;
|
|
|
c.
|
each
party, in signing this Agreement, is acting voluntarily and not under any duress or compulsion
by the attorneys or any other person and each party is
|
|
|
|
physically,
mentally and emotionally able to understand the terms of this Agreement and execute this Agreement and is of sound mind and is
able to give knowing and voluntary assent to it, and that they are without mental illness that would preclude the ability to understand
and assent to the Agreement;
|
|
|
d.
|
neither
party has been promised anything that is not contained in this Agreement, in order to
induce or encourage either party to assent to it;
|
|
|
e.
|
this
stipulation and the Agreement is signed voluntarily and with the advice and consent of
counsel on the date set out below, and its provisions are intended to be incorporated
into a Promissory Note and CSA as provided herein above; and
|
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f.
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each
party has been advised NOT to sign this Agreement unless each has read it fully, understands
it completely, and is willing to be bound by all of its terms, provisions and conditions.
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5.
The CSA shall provide that Greenway
shall pay to Wildcat's attorney, Griffith, Jay
&
Michel, LLP, the total sum of$60,000 to be paid by three payments of$20,000 each to be paid on
or before 5:00 p.m. on June 1, 2019, August 1, 2019, and October 1, 2019.
6.
Greenway agrees to provide Wildcat a copy of the
Corporate Resolution approving this Agreement, the New Promissory Note, CSA, the issuance of stock, the abatement of all litigation
and the anticipated dismissal of such litigation, as provided herein.
7.
The parties agree to file a joint motion for abatement
and to present an Agreed Order of Abatement abating the lawsuits described above, until the earlier of any default of this Agreement,
or October 30, 2019.
8.
The parties agree that if all terms of this Agreement
have been timely performed through October 15, 2019, the parties will file a Joint Motion for Dismissal and present Agreed Orders
of Dismissal with prejudice of the lawsuits described above.
9.
The
parties agree that venue for enforcement of the Agreement and all documents referenced
therein shall be in the State Courts located in Tarrant County, Texas.
10.
The
parties agree that counsel for Greenway shall prepare the original draft(s) of the CSA,
Amendment to the ORRI and the Motion and Order of Dismissal. Counsel for Wildcat shall
prepare the original draft of the New Promissory Note, and Motion and Order of
Abatement.
The first drafts of these documents shall be exchanged by and between counsels on or before March 25, 2019.
This
Agreement shall be executed by Marshall Gleason, Member of Wildcat, and shall be further executed by John Olynick, President of
Greenway. Greenway has represented that it shall conduct a Special Meeting of its Board of Directors on or before 12:00pmCST on
March 11, 2019, and at such Special Meeting, Mr. Olynick shall present and recommend the acceptance of the terms and conditions
of this Agreement. Counsels shall be notified by no later than 1:00pmCST of the Board's vote and final determination of the acceptance
or rejection of this Agreement.
If
this Agreement is approved by Greenway's Board of Directors,
this Agreement along with the notification of such approval shall be filed with the courts in which the lawsuits are pending and
shall be enforceable and non-revocable by Rule 11 of the Texas Rules of Civil Procedure.
If
not
approved at such Special Board meeting, Greenway agrees to provide by March 15, 2019, dates and times available for depositions
of its corporate representatives in the lawsuits, such depositions to occur no later than within 60 days of March 6, 2019.
[The
remainder of this page is left intentionally blank. Signature page following.]
The undersigned hereby certify that
this Rule 11 Agreement clearly reflects the terms of a full and final settlement of all claims pending between Wildcat Consulting
Group LLC and Greenway Technologies, Inc..
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/s/ Marshall Gleason
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Marshall Gleason
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Member
and Authorized Representative
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For
Plaintiff, Wildcat Consulting Group LLC
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Date:
03/06/19
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/s/ James V. Jay
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James V. Jay
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Attorney for Plaintiff
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Date:
03/06/19
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/s/ John Olynick
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John Olynick
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Member
and Authorized Representative
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For Defendant, Greenway Technologies, Inc.
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Date: 03/06/19
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/s/ Zachary C. Farrar
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Zachary C. Farrar
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Attorney for Defendant
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Date:
03/06/19
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Exhibit
10.51
Capitol Services Inc
PO
Box 1831
Austin, TX 78767 -
Office of the Secretary of State
100-131
October 11, 2018
Page 1 of 1
Filing Fee: $30.00
Total Filing Fee: $30.00
Re:
Texas
UCC Initial Filing Acknowledgment
The Texas Secretary
of State's Office has received and filed your document. The information below reflects the data that was indexed into our system.
Initial
Filing Type:
Financing Statement
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Initial Filing Number:
18-0035922050
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Filing Date: 10/10/2018
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Filing Time: 4:37 p.m.
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Lapse Date: 10/10/2023
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Document Number:
842043100025
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Party Type
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Party Name and Address
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Debtor
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GREENWAY TECHNOLOGIES, INC.
8850 CAMP BOWIE WEST BLVD., SUITE 240, FORT WORTH,
TX, USA, 76116
MABERT,
LLC, AS AGENT
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Secured Party
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878 MEADOW HILL ROAD, SUITE 104, FORT WORTH, TX, USA, 76108
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Please feel free to contact
us at 512-475-2703 if you have any questions regarding the above information. User ID: MCENTENO
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Phone: 512-475-2703
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Come visit us on the Intemet@http://www.sos.state.tx.us!
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Fax: 512-463-1423 Dial 7-1-1 for Relay Services
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