UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

____________________________________________________

FORM 10-K/A

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

For the fiscal year ended December 31, 2018.

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

Commission File No. 000-55030

GREENWAY TECHNOLOGIES, INC.

(Exact name of issuer as specified in its charter)

  

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


1521 North Cooper Street, Suite 205

Arlington, Texas
(Address of principal executive offices)


76011
(Zip Code)

800-289-2515

(Registrant’s telephone number, including area code)

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

 

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

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

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

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

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

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

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

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

The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant on 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

PART I
Item 1.        Business 1
Item 1A.    Risk Factors 6
Item 1B.    Unresolved Staff Comments 13
Item 2.        Properties 13
Item 3.        Legal Proceedings 14
Item 4.        Reserved 15

 

PART II

15
Item 5.          Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases
        of Equity Securities
15
Item 6.          Selected Financial Data 16
Item 7.          Management’s Discussion and Analysis of Financial Condition and Results of Operations 17
Item 7A.       Quantitative and Qualitative Disclosures About Market Risk 25
Item 8.          Financial Statements and Supplementary Data 25
Item 9.          Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 25
Item 9A.       Controls and Procedures 25

Item 9B.    Other Information

 

26
PART III 27
Item 10.         Directors, Executive Officers and Corporate Governance 27
Item 11.         Executive Compensation 31
Item 12.         Security Ownership of Certain Beneficial Owners and Management and Related
                       Stockholder Matters
32
Item 13.         Certain Relationships and Related Transactions and Director Independence 33

Item 14.    Principal Accounting Fees and Services

 

33
PART IV 34
Item 15.    Exhibits and Financial Statement Schedules. 34

 

 
 

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

  Item 1. Business.
Overview

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.

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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,

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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.

Item 1A. Risk Factors.

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.

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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:

   • current and future direct sales and marketing efforts by large competitors;

 

  •  rapid and effective development of new, unique GTL techniques; and

 

   • new and aggressive pricing methodologies.

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.

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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:

· we are a small company with limited operating history;
· the limited scope of our sales and marketing efforts;
· our ability to attract new customers and satisfy our customers’ requirements;
· general economic conditions;
· changes in our pricing capabilities;
· our ability to expand our business;
· the effectiveness of our personnel;
· new product introductions; and
· extraordinary expenses such as litigation or other dispute-related settlement payments.

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

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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:

    ·          Our ability to attract new and repeat customers;

    ·          Our ability to keep current with the evolving requirements of our target market;

 

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    ·          Our ability to protect our proprietary GTL Technology;

    ·          The ability of our competitors to offer new or enhanced GTL services; and

    ·          Unanticipated delays or cost increases with respect to research and development.

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

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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

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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.

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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.

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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.

  Item 2. Properties.

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.

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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  

 

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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.

 

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    ·          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

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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:

15
 
  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

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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
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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.

· $349 of depreciation.

· $678,240 increase in accounts payable and accrued expenses.

 

Investing activities

There were no cash flows from investing activities for the years ended December 31, 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

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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.

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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

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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.

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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.

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  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.

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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.
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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

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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

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of the issuer’s board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The following persons shall not be considered independent:

    ·          A director who is, or at any time during the past three years was, employed by the company;

    ·          A director who accepted or who has a Family Member who accepted any compensation from the company in excess of $120,000 during any period of twelve consecutive months within the three years preceding the determination of independence, other than the following: (i) compensation for board or board committee service; (ii) compensation paid to a Family Member who is an employee (other than as an executive officer) of the company; or (iii) benefits under a tax-qualified retirement plan, or non-discretionary compensation. Provided, however, that in addition to the requirements contained in this paragraph, audit committee members are also subject to additional, more stringent requirements under Rule 4350(d).

    ·          A director who is a Family Member of an individual who is, or at any time during the past three years was, employed by the company as an executive officer;

    ·          A director who is, or has a Family Member who is, a partner in, or a controlling shareholder or an executive officer of, any organization to which the company made, or from which the company received, payments for property or services in the current or any of the past three fiscal years that exceed five percent of the recipient’s consolidated gross revenues for that year, or $200,000, whichever is more, other than the following: (i) payments arising solely from investments in the company’s securities; or (ii) payments under non-discretionary charitable contribution matching programs.

    ·          A director of the issuer who is, or has a Family Member who is, employed as an executive officer of another entity where at any time during the past three years any of the executive officers of the issuer serve on the compensation committee of such other entity; or

    ·          A director who is, or has a Family Member who is, a current partner of the company’s outside auditor, or was a partner or employee of the registrant’s outside auditor who worked on the company’s audit at any time during any of the past three years.

We hope to add 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:

    ·          The appropriate size of our board of directors;

    ·          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;

    ·          Experience in political affairs;

    ·          Experience with accounting rules and practices; and

    ·          The desire to balance the benefit of continuity with the periodic injection of the fresh perspective provided by new board members.

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

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

Section 16(a) Beneficial Ownership Reporting Compliance

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

    ·          The fact of the relationship or interest giving rise to the potential conflict be disclosed or known to the directors who authorize or approve the transaction prior to such authorization or approval;
    ·          The transaction be approved by a majority of our disinterested outside directors; and

28
 
    ·          The transaction be fair and reasonable to us at the time it is authorized or approved by our directors.

Code of Ethics for Senior Executive Officers and Senior Financial Officers

We have adopted 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: 

  honest and ethical conduct;
  full, fair, accurate, timely and understandable disclosure in regulatory filings and public                statements;
  compliance with applicable laws, rules and regulations;
  the prompt reporting violation of the code; and
  Ongoing accountability for adherence to the code.

 

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.

  Item 11. Executive Compensation.

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.

  (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.

  (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.

  (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

 

29
 

 

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

 

  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 director;

  · 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%
30
 

 

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.
31
 

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.
32
 
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.
33
 

 

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.
34
 

 

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.

35
 

 

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

 

 

36
 

 

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

 

37
 

 

 

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

F- 1
 

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.

 

F- 2
 

 

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.                

 

 

F- 3
 

 

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.

 

F- 4
 

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. 

 

F- 5
 

 

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

 

 

 

F- 6
 

 

  Going Concern Uncertainties

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying consolidated financial statements, the Company sustained a loss of approximately $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.

 

F- 7
 

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.

 

F- 8
 

 

  Fair Value of Financial Instruments

 

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

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

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

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

Original Issue Discount

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

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

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

The following table represents the Company’s assets and liabilities by level measured at fair value on a recurring basis at December 31, 2018 and 2017:

 

Description   Level 1     Level 2   Level 3  
2018 Derivative Liabilities   $                       $     $ 103,476  
2017 Derivative Liabilities   $                       $     $ 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.

 

F- 9
 

 

 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.

 

F- 10
 

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.

 

 

 

 

 

 

F- 11
 

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.

F- 12
 

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.

 

F- 13
 

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

 

F- 14
 

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   $ -     $ -  

 

 

F- 15
 

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.

 

F- 16
 

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.

 

 

F- 17
 

 

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.

 

F- 18
 

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

F- 19
 

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.

 

 

 

 

F- 20
 

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

 

 

F- 21
 

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

 

 

F- 22
 

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

 

 

 

F- 23
 

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

 

F- 24
 

 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
Greenway Innovative Energy, Inc.  
/s/ Ric Halden /s/ Raymond Wright
By: Ric Halden President of UMED Holdings, Inc., Raymond Wright
owner of Greenway Innovative Energy, Inc.  
Date: 4/18/2018  


 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:

Ryan Turner  
1704 Marion Drive  
Garland, Texas 75042  
940-367-4596  
ryanbruceturner@gmail.com  

 

As to the Company:

Greenway innovative Energy, Inc.  
Ray Wright, President  
1521 Tulip Drive  
Arlington, TX 76013  
972-342-4051  
raymondwright@yahoo.com

 

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:

 

Greenway Innovative Energy, Inc.  
/s/ Ray Wright  
Ray Wright, President  
 

 

Consultant:

 

Ryan Turner  
/s/ Ryan Turner  
Ryan Turner  
   

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:

 

(a) All assets;

 

(b) 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

 

 

1  
 

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;

 

(k) All investment property;

 

(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.

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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.]

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IN WITNESS WHEREOF, the undersigned has executed this Agreement to be effective as of the date first written above.

 

DEBTOR:

 

GREENWAY TECHNOLOGIES, INC.

 

 

By: /s/ Ransom Jones  
Name: Ransom Jones
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.

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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

2  
 
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

3  
 

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.

 

3.2 Term of the Loan.

 

All principal, interest and other sums due hereunder and under the Note shall be due and payable in full on the Maturity Date.

 

 

 

 

4.1 Interest Rate.

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.

 

4.2 Payment Dates.

 

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.

 

4.4 Pro Rata Payments.

 

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.

 

4.5 Costs and Expenses.

 

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

4  
 

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.

 

 

 

 

6.1 Events of Default.

 

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,

5  
 

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.

 

(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

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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.

 

8.2 Governing 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.

 

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.

 

8.4 Notices.

 

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.

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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.

 

8.8 No Oral Agreements.

 

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.]

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EXECUTED as of the date first set forth above.

 

    BORROWER:  
       
    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  
    Arlington, TX 76011  
       
  Facsimile:    
       
    AGENT:  
       
    MABERT, LLC,  
       a Texas Limited Liability Company  
       
  By: /s/ Kevin Jones    
  Name: Kevin Jones  
  Title: Managing Member  
       
    Address for Notices:  
       
  Facsimile:    

 ADDITIONAL LENDERS – AS FOLLOWS BELOW:

 

 

 

 

 

 

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    LENDERS:  
       
    ALL COMMERCIAL FLOORS, INC.,  
      a Texas Corporation  
       
  By: /s/ Kevin Jones    
  Name: Kevin Jones  
  Title: President  
       
    Address for Notices:  
       
  Facsimile:    
       
    CHRISTINE EARLY  
       an Individual  
       
    /s/ Christine Earley    
    Christine Earley  
       
    Address for Notices:  
       
  Facsimile:    
       
    RANDY PATTERSON  
        an Individual  
       
    /s/ Randy Patterson    
    Randy Patterson  
       
    Address for Notices:  
       
  Facsimile:    
       

 

10  
 
    MICHAEL WYRENT  
       an Individual  
       
    /s/ Michael Wyrent    
    Michael Wyrent  
       
    Address for Notices:  
       
  Facsimile:    
       
    R. Kevin Jones  
        an Individual  
       
    /s/ R. Kevin Jones    
    R. Kevin Jones  
       
    Address for Notices:  
       
  Facsimile:    
       
    ADDITIONAL LENDER(S):  
       
       
       a ____________________   
       
  By:    
  Name:    
  Title:    
       
    Address for Notices:  
       
  Facsimile:    
       

 

11  
 

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":

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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

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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.

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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
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  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

 

f. 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.

 

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

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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.]

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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..

 

 

/s/ Marshall Gleason      
Marshall Gleason    
Member and Authorized Representative    
For Plaintiff, Wildcat Consulting Group LLC    
     
Date: 03/06/19    
     
/s/ James V. Jay      
James V. Jay    
Attorney for Plaintiff    
     
Date: 03/06/19    
     
/s/ John Olynick      
John Olynick    
Member and Authorized Representative    
For Defendant, Greenway Technologies, Inc.    
     
Date: 03/06/19    
     
/s/ Zachary C. Farrar      
Zachary C. Farrar    
Attorney for Defendant    
     
Date: 03/06/19    
     

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

Initial Filing Number: 18-0035922050 Filing Date: 10/10/2018 Filing Time: 4:37 p.m.
Lapse Date: 10/10/2023

Document Number: 842043100025

 

   

 

 

 

 

Party Type Party Name and Address
Debtor

GREENWAY TECHNOLOGIES, INC.

8850 CAMP BOWIE WEST BLVD., SUITE 240, FORT WORTH, TX, USA, 76116

 

MABERT, LLC, AS AGENT

Secured Party  
878 MEADOW HILL ROAD, SUITE 104, FORT WORTH, TX, USA, 76108

 

 

 

 

Please feel free to contact us at 512-475-2703 if you have any questions regarding the above information. User ID: MCENTENO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Phone: 512-475-2703 Come visit us on the Intemet@http://www.sos.state.tx.us! Fax: 512-463-1423 Dial 7-1-1 for Relay Services