NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2017
NOTE 1 – ORGANIZATION
Nature of Operations
Greenway Technologies, Inc. ("Greenway”
or the "Company") was organized on March 13, 2002 under the laws of the State of Texas as Dynalyst Manufacturing Corporation. On
August 18, 2009, in connection with a merger with Universal Media Corporation, a privately held Nevada company, the Company changed
its name to Universal Media Corporation ("UMC"). The company changed its name to Greenway Technologies, Inc.
on March 23, 2011.
The Company’s mission is to operate as a holding company
through the acquisition of businesses as wholly-owned subsidiaries that meet some key requirements: (1) solid management that
will not have to be replaced in the near future (2) the ability to grow with steady growth to follow and (3) an emphasis on emerging
core industry markets, such as energy and metals. It is the Company’s intention to add experienced personnel
and select strategic partners to manage and operate the acquired business units.
In September 2010, the Company acquired 1,440 acres of placer
mining claims on Bureau of Land Management land in Mohave County, Arizona. Due to the Company not producing any revenues from
its BLM mining leases since its acquisition of the leases, achieving a position of producing cash flow levels to fund the development
of its BLM mining leases in December 2010 and not having current resources for an appraisal, we recognized an impairment charge
of $100,000 during the year ended December 31, 2014.
In August 2012, the Company acquired 100% of Greenway Innovative
Energy, Inc. (sometimes, “GIE”) which owns patents and trade secrets for a proprietary process and related technology
to convert natural gas into synthesis gas (syngas). Syngas is an important intermediate gas used by industry in the production
of ammonia, methane, liquid fuels, and other downstream products. The Company’s unique process is called Fractional Thermal
Oxidation™ (FTO). When combined with Greenway Technologies’ Fischer-Tropsch (FT) system, we offer a new economical,
relatively small scale (125 to 2,475 bbls/day) method of converting gas-to-liquids (GTL) that can be located in field locations
where needed.
NOTE 2 - BASIS OF PRESENTATION AND GOING CONCERN UNCERTAINTIES
Principles of Consolidation
The accompanying consolidated financial statements
include the financial statements of Greenway and its wholly-owned subsidiaries. The Company entered into an agreement with Jet
Regulators at December to return its ownership interest for the return of 300,000 shares of the Company's common stock. All significant
inter-company accounts and transactions were eliminated in consolidation.
The accompanying consolidated financial statements
include the accounts of the following entities:
|
Name
of Entity
|
%
|
|
Entity
|
Incorporation
|
Relationship
|
|
Greenway Technologies, Inc.
|
|
|
Corporation
|
Texas
|
Parent
|
|
Universal Media Corporation
|
100
|
%
|
Corporation
|
Wyoming
|
Subsidiary
|
|
Greenway Innovative Energy, Inc.
|
100
|
%
|
Corporation
|
Nevada
|
Subsidiary
|
|
Logistix Technology Systems, Inc.
|
100
|
%
|
Corporation
|
Texas
|
Subsidiary
|
Going Concern Uncertainties
The accompanying consolidated financial
statements have been prepared on a going concern basis, which contemplates realization of assets and the satisfaction of liabilities
in the normal course of business. As shown in the accompanying consolidated financial statements, the Company sustained a loss
of approximately $9 million for the year ended December 31, 2017 and has a working capital deficiency of approximately $2.7 million
and liabilities in excess of assets of approximately $2.8 at December 31, 2017. The ability of the Company to continue as a going
concern is in doubt and dependent upon achieving a profitable level of operations or on the ability of the Company to obtain necessary
financing to fund ongoing operations. Management believes that its current and future plans enable it to continue as a going concern
for the next twelve months.
The Company is in discussions with
several oil and gas companies and other organizations regarding joint venture funding for its first gas-to-liquids (GTL) plant
using the Company’s unique GTL system. Should an agreement be made, the joint venture relationship will provide funding
at a level of $20M with an ongoing profit-sharing arrangement between the Company and the partner organizations and/or individuals
with an economic profile previously not achievable in the GTL industry segment. While there are no assurances that financing for
the first plant will be obtained on acceptable terms and in a timely manner, the failure to obtain the necessary working capital
may cause the Company to move in one or more alternate directions to shepherd this revolutionary GTL system into production. Several
alternate paths are under consideration in conjunction with the joint venture/profit sharing approach.
The accompanying consolidated financial
statements do not include any adjustment to the recorded assets or liabilities that might be necessary should the Company have
to curtail operations or be unable to continue in existence.
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of significant accounting policies applied in
the presentation of the consolidated financial statements are as follows.
Property and Equipment
Property and equipment is recorded
at cost. Major additions and improvements are capitalized. The cost and related accumulated depreciation of equipment retired
or sold, are removed from the accounts and any differences between the undepreciated amount and the proceeds from the sale or
salvage value are recorded as a gain or loss on sale of equipment. Depreciation is computed using the straight-line method over
the estimated useful life of the assets.
Impairment of Long-Lived Assets
The Company assesses the impairment
of long-lived assets whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, in
accordance with Accounting Standards Codification, ASC Topic 360,
Property, Plant and Equipment
. An asset or
asset group is considered impaired if its carrying amount exceeds the undiscounted future net cash flow the asset or asset group
is expected to generate. If an asset or asset group is considered impaired, the impairment to be recognized is measured
by the amount by which the carrying amount of the assets exceeds its fair value. If estimated fair value is less than
the book value, the asset is written down to the estimated fair value and an impairment loss is recognized.
Revenue Recognition
The FASB issued ASC 606 as
guidance on the recognition of revenue from contracts with customers in May 2014 with amendments in 2015 and 2016. Revenue recognition
will depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the
entity expects to be entitled in exchange for those goods or services. The guidance also requires disclosures regarding the nature,
amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The guidance permits two methods
of adoption: retrospectively to each prior reporting period presented, or retrospectively with the cumulative effect of initially
applying the guidance recognized at the date of initial application (the cumulative catch-up transition method). The company will
adopt the guidance on January 1, 2018 and apply the cumulative catch-up transition method. The transition adjustment to be recorded
to stockholders’ equity upon adoption of the new standard is not expected to be material.
The Company has not,
to date, generated any revenues.
Use of Estimates
The preparation of financial statements
in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amount of revenue and expenses during the reported period. Actual results
could differ materially from the estimates.
Cash and Cash Equivalents
The Company considers all highly liquid
investments purchased with an original maturity of three-months or less to be cash equivalents. There were no cash
equivalents at December 31, 2017, or December 31, 2016.
Income Taxes
The Company accounts for income taxes
in accordance with FASB ASC 740, “Income Taxes,” which requires that the Company recognize deferred tax liabilities
and assets based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities,
using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense)
results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when it is more
likely than not that some or all deferred tax assets will not be realized.
The Company has adopted the provisions
of FASB ASC 740-10-05
Accounting for Uncertainty in Income Taxes
. The ASC clarifies the accounting for uncertainty in income
taxes recognized in an enterprise’s financial statements. The ASC prescribes a recognition threshold and measurement
attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The
ASC provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and
transition. Open tax years, subject to IRS examination include 2014 – 2017.
Net Loss Per Share, basic and diluted
Basic loss per share has been computed
by dividing net loss available to common shareholders by the weighted average number of common shares outstanding for the period.
Shares issuable upon the exercise of warrants (12,810,625) have been excluded as a common stock equivalent in the diluted loss
per share because their effect would be anti-dilutive.
Derivative Instruments
The Company accounts for derivative
instruments in accordance with Accounting Standards Codification 815,
Derivatives and Hedging (“ASC 815”),
which establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded
in other contracts, and for hedging activities. They require that an entity recognize all derivatives as either assets
or liabilities in the balance sheet and measure those instruments at fair value.
If certain conditions are met, a derivative
may be specifically designated as a hedge, the objective of which is to match the timing of gain or loss recognition on the hedging
derivative with the recognition of (i) the changes in the fair value of the hedged asset or liability that are attributable to
the hedged risk or (ii) the earnings effect of the hedged forecasted transaction. For a derivative not designated as a hedging
instrument, the gain or loss is recognized in income in the period of change.
See Note 7 below for discussion regarding convertible notes
payable and warrants.
Fair Value of Financial Instruments
Effective January 1, 2008, fair value
measurements are determined by the Company’s adoption of authoritative guidance issued by the FASB, with the exception of
the application of the statement to non-recurring, non-financial assets and liabilities, as permitted. Fair value is defined in
the authoritative guidance as the price that would be received to sell an asset or paid to transfer a liability in the principal
or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement
date. A fair value hierarchy was established, which prioritizes the inputs used in measuring fair value into three levels as follows:
Level 1 – Valuation based on unadjusted
quoted market prices in active markets for identical assets or liabilities.
Level 2 – Valuation based on,
observable inputs (other than level one prices), quoted market prices for similar assets such as at the measurement date; quoted
prices in the market that are not active; or other inputs that are observable, either directly or indirectly.
Level 3 – Valuation based on unobservable inputs that
are supported by little or no market activity, therefore requiring management’s best estimate of what market participants
would use as fair value.
Original Issue Discount
For certain convertible debt issued,
the Company provides the debt holder with an original issue discount (“OID”). An OID is the difference
between the original cash proceeds and the amount of the note upon maturity. The Note is originally recorded for the total amount
payable. The OID is amortized into interest expense pro-rata over the term of the Note.
In instances where the determination
of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value
hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair
value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value
measurement in its entirety requires judgment and considers factors specific to the asset or liability. The valuation of the Company’s
notes recorded at fair value is determined using Level 3 inputs, which consider (i) time value, (ii) current market and (iii)
contractual prices.
The carrying amounts of financial assets
and liabilities, such as cash and cash equivalents, receivables, accounts payable, notes payable and other payables, approximate
their fair values because of the short maturity of these instruments.
The following table represents the Company’s assets
and liabilities by level measured at fair value on a recurring basis at December 31, 2017 and 2016:
|
Description
|
|
Level
1
|
|
|
Level
2
|
|
Level
3
|
|
|
2017 Derivative Liabilities
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
105,643
|
|
|
2016 Derivative Liabilities
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
56,057
|
|
The following assets and liabilities
are measured on the balance sheets at fair value on a recurring basis utilizing significant unobservable inputs or Level 3 assumptions
in their valuation. The following tables provide a reconciliation of the beginning and ending balances of the liabilities:
All gains and losses on assets and liabilities
measured at fair value on a recurring basis and classified as Level 3 within the fair value hierarchy are recognized in other
interest income and expense in the accompanying consolidated financial statements.
The change in the notes payable at fair value for the
year ended December 31, 2017, is as follows:
|
|
|
Fair
Value
|
|
Change in
|
|
New
|
|
|
|
Fair Value
|
|
|
|
January 1,
2017
|
|
Fair
Value
|
|
Convertible
Notes
|
|
Conversions
|
|
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative Liabilities
|
|
$
|
(56,057
|
)
|
|
$
|
(49,586
|
)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
(105,643
|
)
|
Stock Based Compensation
The Company follows Accounting Standards Codification subtopic
718-10,
Compensation
(“ASC 718-10”) which requires that all share-based payments to both employees and non-employees
be recognized in the income statement based on their fair values.
At December 31, 2017, the Company did not have any outstanding
stock options.
Concentration and Credit Risk
Financial instruments and related items, which potentially
subject the Company to concentrations of credit risk consist primarily of cash. The Company places its cash with high credit quality
institutions. At times, such deposits may be in excess of the FDIC insurance limit.
Research and Development
The Company accounts for research and
development costs in accordance with Accounting Standards Codification subtopic 730-10,
Research and Development
(“ASC
730-10”). Under ASC 730-10, all research and development costs must be charged to expense as incurred. Accordingly, internal
research and development costs are expensed as incurred. Third-party research and development costs are expensed when the contracted
work has been performed or as milestone results have been achieved as defined under the applicable agreement. Company-sponsored
research and development costs related to both present and future products are expensed in the period incurred. The Company incurred
research and development expenses of $867,052 and $967,348 during the years ended December 31, 2017 and 2016, respectively.
Issuance of Common Stock
The issuance of common stock for other than cash is recorded
by the Company at market values.
Impact of New Accounting Standards
The FASB issued ASC 606 as
guidance on the recognition of revenue from contracts with customers in May 2014 with amendments in 2015 and 2016. Revenue recognition
will depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the
entity expects to be entitled in exchange for those goods or services. The guidance also requires disclosures regarding the nature,
amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The guidance permits two methods
of adoption: retrospectively to each prior reporting period presented, or retrospectively with the cumulative effect of initially
applying the guidance recognized at the date of initial application (the cumulative catch-up transition method). The company will
adopt the guidance on January 1, 2019 and apply the cumulative catch-up transition method. The transition adjustment to be recorded
to stockholders’ equity upon adoption of the new standard is not expected to be material.
Management does not believe that any
other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying
consolidated financial statements.
NOTE 4 – PROPERTY, PLANT
AND EQUIPMENT
Property, plant and equipment, their estimated useful lives, and
related accumulated depreciation at December 31, 2017 and 2016, respectively, are summarized as follows:
|
|
|
Range of
|
|
|
|
|
|
|
|
|
|
|
Lives in
|
|
|
|
|
|
|
|
Years
|
|
|
2017
|
|
|
2016
|
|
|
Equipment
|
|
|
5
|
|
|
|
2,032
|
|
|
|
2,032
|
|
|
Furniture and fixtures
|
|
|
5
|
|
|
|
1,983
|
|
|
|
1,983
|
|
|
|
|
|
|
|
|
|
4,015
|
|
|
|
4,015
|
|
|
Less accumulate depreciation
|
|
|
|
|
|
|
(4,015
|
)
|
|
|
(3,666
|
)
|
|
|
|
|
|
|
|
$
|
0
|
|
|
|
349
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation expense for the year ended December 31, 2017 and
2016.
|
|
|
|
|
|
$
|
349
|
|
|
$
|
396
|
|
NOTE 5 – TERM NOTES PAYABLE
Term notes payable consisted of the following at December 31, 2017
and 2016;
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
Unsecured note payable dated March 8, 2016 to
an individual at 5% interest, payable upon
the Company’s availability of cash (1)
|
|
$
|
2,500
|
|
|
$
|
13,500
|
|
|
Unsecured note payable dated November 13, 2017
to a corporation at $10,000 lump
sum interest at maturity on February 28, 2018
|
|
|
100,000
|
|
|
|
0
|
|
|
Unsecured note payable dated December 28, 2017 to a corporation,
payable on January 8, 2018
|
|
|
51,342
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
Total term notes
|
|
$
|
153,842
|
|
|
$
|
229,763
|
|
|
|
(1)
|
The
Company negotiated a $15,500 reduction of the note in November 2016 for 200,000 shares
of common stock valued at $0.12 per share of $24,000. The Company recognized a $8,500
loss on the settlement.
|
NOTE 6 – 2017 CONVERTIBLE PROMISSORY NOTES
The Company issued a $166,667 convertible
promissory note bearing interest at 4.50% per annum to an accredited investor, payable in equal installments of $6,000 commencing
February 1, 2018 plus interest at rate of 4% per annum on December 20, 2018 and $80,000 plus accrued interest on December 20,
2019. The holder has the right to convert the note into common stock of the Company at a conversion price of
$0.08 per share for each one dollar of cash payment which may be due (which would be 1,083,333 shares for the $86,667 payment
and 1,000,000 shares for the $80,000 payment.
The Company evaluated the terms of
the convertible note in accordance with ASC 815-40, Contracts in Entity’s Own Equity, and concluded that the Convertible
Note did not resulted in a derivative. The Company evaluated the terms of the convertible note and concluded that there was a
beneficial conversion feature since the convertible note was convertible
into shares of common stock at a discount
to the market value of the common stock. The discount related to the beneficial conversion feature on the note was valued at $27,083
based on the $0.013 difference between the market price of $0.093 and the conversion price of $0.08 times the 2,083,325 conversion
shares. The discount related to the beneficial conversion feature will amortized over the term of the debt beginning in 2018.
The Company issued a $150,000 convertible
promissory note bearing interest at 4.50% per annum to an accredited investor, payable in equal installments of $6,000 plus accrued
interest until the principal and accrued interest are paid in full. The holder has the right to convert the note
into common stock of the Company at a conversion price of equal to 70% of the prior twenty (20) days average closing market price
of the Company’s common stock.
The Company evaluated the terms of
the convertible note in accordance with ASC 815-40, Contracts in Entity’s Own Equity, and concluded that the Convertible
Note resulted in a derivative. The Company evaluated the terms of the convertible note and concluded that there was a beneficial
conversion feature since the convertible note was convertible into shares of common stock at a discount to the market value of
the common stock. The discount related to the beneficial conversion feature on the note was valued at $58,494 based on the difference
between the fair value of the 1,578,947 convertible shares at the valuation date and the $150,000 note value. The discount related
to the beneficial conversion feature will amortized over the term of the debt beginning in 2018. The discount related to the beneficial
conversion feature on the note was valued at $150,000 based on the
Black-Scholes Model
. The derivative ($58,494) was will
be amortized over the term of the debt (25 months) beginning in 2018 and was computed as follows;
|
|
|
Commitment Date
|
|
|
Expected dividends
|
|
|
0%
|
|
|
Expected volatility
|
|
|
115.58%
|
|
|
Expected term: conversion feature
|
|
2 years
|
|
|
Risk free interest rate
|
|
|
1.89%
|
|
NOTE 7 – MAY 4, 2016 CONVERTIBLE PROMISSORY NOTE
May 2016 Convertible Note
On May 4, 2016, the Company issued
a $224,000 convertible promissory note bearing interest at 10.0% per annum to an accredited investor, payable beginning November
10, 2016, in monthly installments of $44,800 plus accrued interest and a cash premium equal to 10.0% of the installment amount. The
convertible promissory note was paid in full on March 4, 2017. The holder had the right under certain circumstances to convert
the note into common stock of the Company at a conversion price equal to 70% of the average of the 3 lowest volume weighted average
trading prices during the 20-day period ending on the latest complete trading day prior to the conversion date.
The Company evaluated the terms of
the convertible note in accordance with ASC 815-40, Contracts in Entity’s Own Equity, and concluded that the Convertible
Note resulted in a derivative. The Company evaluated the terms of the convertible note and concluded that there was a beneficial
conversion feature since the convertible note was convertible into shares of common stock at a discount to the market value of
the common stock. The discount related to the beneficial conversion feature on the note was valued at $224,000 based on the
Black-Scholes
Model
. The discount related to the beneficial conversion feature ($51,829) was amortized over the term of the debt (10 months). For
the year ended December 31, 2017, the Company recognized interest expense of $9,327 related to the amortization of the discount.
In connection with the issuance of the $224,000 note, the
Company recorded debt issue cost and discount as follows:
|
|
·
|
$20,000 original issue discount and $4,000 debt
issue cost, which was amortized over 10 months, with amortization
of $4,000 for twelve-months ended December 31,
2017.
|
|
|
·
|
The convertible promissory note was paid in full
on March 10, 2017, reducing the embedded derivative for the
2016 beneficial conversion right to zero at December
31, 2017.
|
September 2014 Convertible Note
In connection with the issuance of a $158,000 convertible
promissory note in 2014 (repaid in July 2015), the Company issued warrants to purchase shares of common stock.
|
|
·
|
Warrants – recorded at fair value ($79,537)
upon issuance, and marked -to-market on the balance sheet at $47,149
as of December 31, 2017, and $20,820 as of December
31, 2016, which was computed as follows:
|
|
|
|
Commitment Date
|
|
|
Expected dividends
|
|
|
0%
|
|
|
Expected volatility
|
|
|
115.58%
|
|
|
Expected term: conversion feature
|
|
2 years
|
|
|
Risk free interest rate
|
|
|
1.89%
|
|
NOTE 8 – ACCRUED EXPENSES
Accrued expenses consisted of the following at December 31, 2017
and 2016;
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
Accrued consulting fees
|
|
$
|
249,500
|
|
|
$
|
249,500
|
|
|
Accrued expense related to shareholder dispute
|
|
|
330,000
|
|
|
|
0
|
|
|
Accrued expense related to warrant exercise
|
|
|
180,000
|
|
|
|
0
|
|
|
Accrued consulting expense
|
|
|
12,000
|
|
|
|
0
|
|
|
Accrued interest expense
|
|
|
7,260
|
|
|
|
1,022
|
|
|
Total accrued expenses
|
|
$
|
778,760
|
|
|
$
|
250,522
|
|
NOTE 9– CAPITAL STRUCTURE
The Company is authorized to issue 300,000,000
shares of class A common stock with a par value of $.0001 per share and 20,000,000 shares of class B stock with a par value of
$.0001 per share. Each common stock share has one voting right and the right to dividends, if and when declared by
the Board of Directors.
Class A Common Stock
At December 31, 2017, there were 287,681,826
shares of class A common stock issued and outstanding.
During the year ended December 31, 2017, the
Company: issued 21,004,716 shares of restricted class A common stock to sixty-five individuals through private placements for
cash of $2,191,750 at average of $0.104 per share.
-
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 recorded at $69,507.
-
issued 693,932 shares of class A stock in exchange for 126,938 class
B shares.
During the year ended December 31, 2016, the
Company: issued 31,055,955 shares of restricted class A common stock to forty-two individuals through private placements for cash
of $1,755,000 at average of $0.057 per share.
-
issued 410,000 shares of restricted common stock for consulting services
of $32,800 at average of $.082 per share.
-
issued 106,000 shares of restricted common stock to a creditor for
rent expense of $8,480 at average of $.08 per share.
-
issued 664,285 shares of restricted common stock for conversion of
$51,500 in advances by shareholder at average of $.0775 per share.
-
issued 200,000 shares of restricted common stock in partial settlement
of a note payable valued at $24,000.
-
the Company issued 15,000,000 shares of class A stock in exchange
for 15,000,000 class B shares.
Class B Stock
At December 31, 2017 and 2016, there were
0 and 126,938 shares of class B stock issued and outstanding, respectively.
During the year ended December 31, 2017, the Company; exchanged
630,000 shares of class A common stock for 62,986 class B shares with a shareholder who held class B shares from the 2009 merger
agreement between the Company and Dynalyst Manufacturing Corporation which set a conversion rate of 15 to 1. The Company negotiated
the 630,000 shares when the class B shareholder elected to convert.
-
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, 2017, the Company has not adopted any employee
stock option plans.
On February 3, 2017, the Company issued
6,000,000 warrants (4,000,000 at $0.35 for two years and 2,000,000 at $0.45 for three years) as part of a separation agreement
with a co-founder and former president. The Company valued the warrants as of March 31, 2017, at $639,284 using the
Black-Scholes
Model
with expected dividend rate of 0%, expected volatility rate of 455%, expected conversion term of two and three years
and risk-free interest rate of 1.75%.
On November 30, 2017, the Company issued
1,000,000 warrants at $0.30 for three years as part of a settlement of a shareholder dispute with MTG Holdings, Inc. he Company
valued the warrants as of December 31, 2017, at $95,846 using the
Black-Scholes Model
with expected dividend rate of 0%,
expected volatility rate of 116%, expected conversion term of two and three years and risk-free interest rate of 1.37%.
NOTE 10 - RELATED PARTY TRANSACTIONS
Shareholders made loans and advances to the Company in the amounts
of $219,509 (Tunstall Canyon Group $166,667, Kevin Jones $51,342 and Pat Six $1,500) and $141,040 (Kevin Jones $121,040 and Tunstall
Canyon Group $20,000) during the years ended December 31, 2017 and 2016, respectively. During the year ended December 31,
2107, a shareholder Richard Halden purchased 2,250,000 shares of class A common stock for $225,000 ($0.010 per shares and Kevin
Jones received repayment of $59,690 loan. During the year ended December 31, 2016, Tunstall Canyon elected to convert advances
of $51,500 to shares of class A common stock at an average value of $0.0775 per share and Kevin Jones received repayment of $151,000
loan. A shareholder forgave $30,077 of advances during the year ended December 31, 2016.
NOTE 11 – INCOME TAXES
At December 31, 2017 and 2016, the Company
had approximately $9.5 million and $5.6 million, respectively, of net operating losses ("NOL") carry forwards for federal
and state income tax purposes. These losses are available for future years and expire through 2034. Utilization
of these losses may be severely or completely limited if the Company undergoes an ownership change pursuant to Internal Revenue
Code Section 382.
The provision for income taxes for continuing operations consists
of the following components for the years ended December 31, 2017 and 2016:
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
Current
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Deferred
|
|
|
-
|
|
|
|
-
|
|
|
Total tax provision for (benefit from) income
taxes
|
|
$
|
-
|
|
|
$
|
-
|
|
A comparison of the provision for income tax expense at the federal
statutory rate of 34% for the years ended December 31, 2017 and 2016 the Company's effective rate is as follows:
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
Federal statutory rate
|
|
|
(21.0
|
) %
|
|
|
(34.0
|
) %
|
|
State tax, net of federal benefit
|
|
|
(0.0
|
)
|
|
|
(0.0
|
)
|
|
Permanent differences and other including surtax exemption
|
|
|
0.0
|
|
|
|
0.0
|
|
|
Temporary difference
|
|
|
(15.9
|
)
|
|
|
(3.7
|
)
|
|
Valuation allowance
|
|
|
36.9
|
|
|
|
37.7
|
|
|
Effective tax rate
|
|
|
0.0
|
%
|
|
|
0.0
|
%
|
The net deferred tax assets and liabilities included in the
financial statements consist of the following amounts at December 31, 2017 and December 31, 2016:
|
|
|
2017
|
|
|
2016
|
|
|
Deferred tax assets
|
|
|
|
|
|
|
|
Net operating loss carry forwards
|
|
$
|
16,403,873
|
|
|
$
|
4,921,910
|
|
|
Deferred compensation
|
|
|
821,572
|
|
|
|
860,947
|
|
|
Stock based compensation
|
|
|
2,900,734
|
|
|
|
1,756,142
|
|
|
Other
|
|
|
581,639
|
|
|
|
383,964
|
|
|
Total
|
|
|
20,707,818
|
|
|
|
7,922,963
|
|
|
Less valuation allowance
|
|
|
(20,707,818
|
)
|
|
|
(7,922,963
|
)
|
|
Deferred tax asset
|
|
|
-
|
|
|
|
-
|
|
|
Deferred tax liabilities
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Net long-term deferred tax asset
|
|
$
|
-
|
|
|
$
|
-
|
|
The change in the valuation allowance
was $12,784,855 and $2,018,074 for the years ended December 31, 2017 and 2016, respectively. The Company has recorded a
100% valuation allowance related to the deferred tax asset for the loss from operations, interest expense, interest income and
other income subsequent to the change in ownership, which amounted to $23,623,602 and $14,476,205 at December 31, 2017 and 2016,
respectively.
Utilization of the
Company’s net operating losses may be subject to substantial annual limitation if the Company experiences a 50% change in
ownership, as provided by the Internal Revenue Code and similar state provisions. Such an ownership change would substantially
increase the possibility of net operating losses expiring before complete utilization.
The ultimate realization of deferred tax assets
is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.
Management considers the scheduled reversal of deferred tax liabilities, historical taxable income including available net operating
loss carry forwards to offset taxable income, and projected future taxable income in making this assessment.
NOTE 13 – COMMITMENTS
Employment Agreements
In May 2011, the Company entered into employment
agreements with its chief executive officer, president and chief financial officer. The Agreements were for a term
of 5 years, ending on May 31, 2016. The employment agreements also provide for the officers to receive 1,250,000 shares
of restricted common stock annually for each year of the employment agreement. The agreements were not renewed. During
the year ended December 31, 2016, the Company accrued $150,000, respectively, as management fees for the president and chief financial
officer.
In August 2012, the Company entered into employment
agreements with the president and chairman of the board of Greenway Innovative Energy, Inc. for a term of 5 years with compensation
of $90,000 per year. In June of 2014, the president's employment agreement was amended to increase his annual pay to $180,000.
During the years ended December 31, 2017 and 2016, respectively, the Company paid and accrued a total of $180,000 and $191,250,
respectively, towards the employment agreement.
In the August 2012 acquisition agreement with Greenway Innovative
Energy, Inc., the Company agreed to issue an additional 7,500,000 shares of restricted common stock when the first GTL unit is
built and becomes operational and is capable of producing 2,000 barrels of diesel or jet fuel per day and pay Greenway Innovative
Energy a 2% royalty on all gross production sales on each unit placed in production.
Consulting Agreement
On November 28, 2017, the Company entered into a three-year consulting
agreement with Chisos Equity Consultants, LLC for public relations, consulting and corporate communications services. The initial
payment was 1,800,000 shares of the Company’s restricted common stock. Additional payments upon the Company’s common
stock reaching certain price points as follows;
-
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
Leases
In October 2015, the Company signed a new
two-year lease for new office space of approximately 1,800 square feet at the rate of $2,417 for the first twelve months and $2,495
for the second twelve months. During the years ended December 31, 2017 and 2016, the Company expensed $35,000 and $33,512,
respectively, in rent expense.
Greenway Innovative Energy, Inc. rents approximately
600 square feet of office space at 1511 North Cooper St., Suite 207, Arlington, Texas 76011, at a rate of $1,369 per month.
The Company pays approximately $11,600
in annual maintenance fees on its Arizona BLM mining leases, in addition to 10% royalties based on production.
Legal
The Company has been named as
a co-defendant in an action brought against the Company and Mamaki Tea, Inc., alleging, among other things, that the Company was
named as a co-guarantor on an $850,000 foreclosed loan. Management does not believe the ultimate resolution will have an adverse
impact on the Company’s financial condition or results of operations.
On April 22, 2016, Greenway Technologies filed
suit under Cause No. DC-16-004718, in the 193rd District Court, Dallas County, Texas against Mamaki of Hawaii, Inc. (“Mamaki”),
Hawaiian Beverages, Inc.(“HBI”), Curtis Borman and Lee Jenison for breach of a Stock Purchase Agreement dated October
29, 2015, wherein we sold our shares in Mamaki to HBI for $700,000 (along with the assumption of certain debt). The Defendants
failed to make payments of $150,000 each on November 30, 2015, December 28, 2015 and January 27, 2016. On January 13, 2017, we
executed a Settlement and Mutual Release Agreement with the Defendants. However, the Defendants defaulted in their payment obligations
under Settlement and Mutual Release Agreement. Due to the bankruptcy proceedings involving Curtis Borman, all action in this matter
has been stayed.
On September 14, 2017, in The Third
Judicial District Court of Salt Lake City, Utah, Tonaquint, Inc., a Utah corporation, filed suit against Greenway Technologies,
Inc. (F.K.A. UMED Holdings, Inc.) under Case No. 170905756. Pursuant to a Securities Purchase Agreement (the “Purchase Agreement”)
between Tonaquint and the Company, as buyer, and UMED, as seller, Tonaquint acquired a Convertible Promissory Note (the "Note"),
issued by UMED, and a Warrant to Purchase Shares of Common Stock (the “Warrant”). The suit asserts that the Warrant
allegedly provided Tonaquint with the right to purchase at any time on or after September 18, 2014, a number of fully paid and
non-assessable shares of UMED's common stock equal to $47,400 divided by the Market Price (as defined in the Note, as of September
18, 2014), as such number may be adjusted from time to time pursuant to the terms and conditions of the Warrant. As of the date
of this report, the parties have agreed to settle the dispute by a dismissal of this action with prejudice in return for a mutual
release of claims and a one-time issuance from Greenway Technologies of 1,600,000 shares of our common stock subject to a weekly
leak out restriction equal to the greater of $10,000.00 and 8% of the weekly trading volume. Further, the issuance of stock will
be done in connection with a legal opinion pursuant to Rule 144.
NOTE 14- SUBSEQUENT EVENTS
During the period from January 1, 2018 through
March 31, 2018, the Company issued 5,065,000 shares of restricted class A common stock to 11 individuals for $751,500 at
average price of $0.1484 per share.
On February 16, 2018, a former executive returned
8,633,164 to the Company to be cancelled.
On February 21, 2018, the Company issued 3,000,000
shares of restricted class A common stock and a $150,000 promissory note (payable over 25 months) to the Greer Family Trust as
part of a settlement agreement.
On January 8, 2018, the Company issued 4,000,000
warrants (exercisable on or before January 8, 2021 at a price of $.10 per shares) to Kent Harer, a member of the Company’s
Board of Directors.
During the week of February 28 and March 2,
2018, operational activation of the first 125 BPD G-reformer was completed at the manufacturer in Fort Worth, Texas. The results
of the activation confirmed our expectation for syn-gas production in the field.
Exhibit 10.33-FORM 10K/A-December 31, 2017
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=====================================================================================
Exhibit 10.34-FORM 10K/A-December 31, 2017
THIS NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACI"'), OR APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR RECEIPT BY THE COMPANY OF A WRITTEN OPINION OF COUNSEL IN THE FORM, SUBSTANCE AND SCOPE REASONABLY SATISFACTORY TO THE COMPANY THAT THIS NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION HEREOF MAY BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OF, UNDER AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND SUCH STATE SECURITIES LAWS.
GREENWAY TECHNOLOGIES, INC.
Subordinated Convertible Promissory Note
Dated: December 20, 2017 $166,667.00
For value received, Greenway Technologies, Inc., a Texas corporation (the "Company"), hereby promises to pay to the order of Tunstall Canyon Group, LLC, a Texas limited liability Company (together with its successors, representatives, and permitted assigns, the "Payee"), in accordance with the terms hereinafter provided, the principal amount of One Hundred Sixty-Six Thousand, Six Hundred Sixty-Seven and No/ 100 Dollars (S 166,667.00), together with interest from the date hereof (the "Issuance Date"), on the unpaid principal at the rate of4.50% per annum.
Interest shall be computed on the basis of a 360-day year of twelve 3D-day months and shall accrue commencing on the Issuance Date. Furthermore, upon the occurrence of an Event of Default (as defined below), then to the extent permitted by law, the Company will pay interest in cash to the Payee, payable on demand, on the outstanding principal balance of the Note from the date of the Event of Default until such Event of Default is cured at the maximum applicable legal rate per annum.
All payments under or pursuant to this Note shall be made in United States Dollars in immediately available funds by wire transfer to the Payee's bank account, pursuant to instructions to be provided by the Payee to the Company. The outstanding principal balance of this Note, plus all accrued interest, shall be due and payable as follows: On December 20, 2018, the sum of $86,667.00, plus accrued interest. On December 20, 2019, the sum of $80,000.00, plus accrued interest.
The Company reserves the right to prepay this Note (in whole or in part) prior to any maturity date with no prepayment penalty. Any such prepayment shall be applied against the principal due under this Note and shall be accompanied by the payment of accrued interest on the amount prepaid to the date of prepayment.
Provided, however, notwithstanding anything herein contained to the contrary, the Payee, in its sole discretion, in whole or in part and, in lieu of requiring that the Company make a cash payment of principal due on this Note on a due date as specified above, may elect instead to convert a portion of this Note and receive shares of the common stock of the Company, par value SO.OOOI per share (the "Common Stock") at the rate of $0.08 per share for each one dollar of cash payment which may be then due hereunder (the "Conversion Price"). All payments of accrued interest shall be in cash.
For example, if the Payee desires to receive the principal payment of $86,667.00 due on December 20, 2018, in shares of the Common Stock instead of cash, the Company shall issue to the Payee 1,083,333 shares of the Common Stock. If the Payee desires to receive the principal payment of $80,000.00 due on December 20, 2019, in shares of the Common Stock instead of cash, the Company shall issue to the Payee 1,000,000 shares of the Common Stock.
PAGE K-61
If any payment obligation under this Note is not paid when due, the Company promises to pay all costs of collection, including reasonable attorney fees, whether or not a lawsuit is commenced as part of the collection process.
If any of the following events of default (an "Event of Default") occurs, this Note and any other obligations of the Company to the Payee, shall become due immediately, without demand or notice:
|
|
|
|
|
|
-
|
The failure of the Company to pay the principal and any accrued interest when due;
|
|
|
|
|
|
|
-
|
The liquidation or dissolution of the Company;
|
|
|
|
|
|
|
-
|
The filing of bankruptcy proceedings involving the Company as a debtor;
|
|
|
|
|
|
|
-
|
The application for the appointment of a receiver for the Company;
|
|
|
|
|
|
|
-
|
The making of a general assignment for the benefit of the Company's creditors;
|
|
|
|
|
|
|
-
|
The insolvency of the Company;
|
|
|
|
|
|
|
-
|
A misrepresentation by the Company to the Payee for the purpose of obtaining or extending credit; or
|
|
|
|
|
|
|
-
|
The sale of a material portion of the business or assets of the Company.
|
All payments due under this Note shall be subordinated and made junior, in all respects to the payment in full of all principal, all interest accrued thereon and all other amounts due on any indebtedness outstanding prior to the Issuance Date.
Whenever any payment to be made shall be due on a Saturday, Sunday or a public holiday under the laws of the State of Texas, such payment may be due on the next succeeding business day and such next succeeding day shall be included in the calculation of the amount of accrued interest payable on such date.
PAGE K-62
This Note may be transferred, sold, pledged, hypothecated or otherwise granted as security by the Payee subject only to the express prior written consent of the Company which consent shall not be unreasonably withheld.
No delay in enforcing any right of the Payee under this Note, or assignment by the Payee of this Note, or failure to accelerate the debt evidenced hereby by reason of default in the payment of an installment or the acceptance of a past-due installment shall be construed as a waiver of the right of the Payee to thereafter insist upon strict compliance with the terms of this Note without notice being given to Company. All rights of the Payee under this Note are cumulative and may be exercised concurrently or consecutively at the Payee's option.
1.
Covenants of the Company
. The Company covenants that, while this Note is convertible (a) it will reserve from its authorized and unissued shares of the Common Stock a sufficient number of shares of the Common Stock to provide for the delivery of the shares of the Common Stock pursuant to any conversion of this Note, and (b) that all shares of the Common Stock which may be issued upon any such conversion of this Note will be fully paid and non-assessable.
2.
Protection Against Dilution. Etc
. In any of the following events, occurring after the Issuance Date, appropriate adjustment shall be made in the number of shares of the Common Stock to be deliverable upon any conversion of this Note and the purchase price per share of the Common Stock to be paid, so as to maintain the proportionate interest of the Payee as of the Issuance Date: (a) recapitalization of the Company through a split-up or reverse split of the outstanding shares of the Common Stock into a greater or lesser number, as the case may be, or (b) declaration of a dividend on the shares of the Common Stock, payable in shares of the Common Stock or other securities of the Company convertible into shares of the Common Stock, or (c) any of the events described in Paragraph 4 hereof.
3.
Merger. Etc
. In case the Company, or any successor, shall be consolidated or merged with another Company, or substantially all of its assets shall be sold to another company in exchange for stock, cash or other property with the view to distributing such stock, cash or other property to its shareholders, each of the shares of the Common Stock purchasable by this Note shall be replaced tor the purposes hereof by the securities of the Company or cash or property issuable or distributable in respect of one share of the Common Stock of the Company, or its successors, upon such consolidation, merger, or sale, and adequate provision to that effect shall be made at the time thereof. Provided, however, notwithstanding anything herein contained to the contrary, in the event that the terms of any such consolidation, merger or sale call for the distribution of any cash or property to the shareholders of the Company, no such cash or property shall be distributable to the Payee in connection with any unconverted portion of this Note, unless the Payee shall have converted this Note pursuant to the terms of Paragraph 6 hereof and all other terms of this Note.
4.
Notice of Certain Events
. Upon the happening of any event requiring an adjustment of the Conversion Price, the Company shall forthwith give written notice thereof to the Payee stating the adjusted Conversion Price and the adjusted number of shares of the Common Stock purchasable upon the conversion hereof resulting from such event and setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. The Board of Directors of the Company shall determine the computation made hereunder. In the case of (a) any consolidation, merger, or sale affecting the Company and calling for the payment of cash or the delivery of property to shareholders of the Company, or (b) any voluntary or involuntary dissolution, liquidation, or winding up of the Company shall at any time be proposed, the Company shall give at least 20 days' prior written notice thereof to the Payee stating the date on which such event is to take place and the date (which shall be at least 20 days after the giving of such notice) as of which the holders of record of shares of the Common Stock shall be entitled to participate in any such event. If the Payee does not elect to convert any part of this Note as a result of any such notice, the Payee shall have no right with respect to any portion of this Note which shall remain unconverted to participate in (x) any such cash or other property resulting from any such consolidation, merger or sale, or (y) any voluntary or involuntary dissolution, liquidation, or winding up of the Company.
5.
Shareholders' Rights
. Until a valid conversion of this Note, the Payee shall not be entitled to any rights of a shareholder with respect to the shares of the Common Stock covered by this Note and not so converted; but immediately upon a conversion of this Note as provided herein, the Payee shall be deemed a record holder of the shares of the Common Stock received as a result of any such conversion.
6.
Manner of Conversion
. In order to convert this Note, the Payee shall surrender this Note, duly endorsed or assigned to the Company or, in blank, at the office of the Company, accompanied by a written Form of Conversion attached hereto (the "Conversion Notice") that the Payee elects to convert this Note or, if less than the entire amount thereof is to be converted, the portion thereof to be converted.
This Note shall be deemed to have been converted immediately prior to the close of business on the day of surrender of this Note for conversion in accordance with the foregoing provisions, and at such time the person or persons entitled to receive the shares of the Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of the shares of the Common Stock at such time. As promptly as practicable on or after a conversion date, but in no event later than five business days, the Company shall issue and shall deliver to the Payee a certificate or certificates for the number of full shares of the Common Stock issuable upon such conversion.
In case this Note is converted in part only, upon such conversion the Company shall execute and deliver to the Payee thereof, at the expense of the Company, a new Note, in the aggregate, in the number of shares of the Common Stock covered by the unconverted portion of this Note.
PAGE K-63
7.
Limitation on Conversion
. The Payee (including any successor, transferee or assignee) shall not have the right to convert any portion of this Note to the extent that after giving effect to such conversion, the Payee (together with the Payee's affiliates) would beneficially own in excess of 9.99% (the "Maximum Percentage") of the number of shares of the Common Stock of the Company outstanding immediately after giving effect to such conversion. For purposes of the foregoing sentence, the number of shares of the Common Stock beneficially owned by the Payee and its affiliates shall include the number of shares of the Common Stock issuable upon conversion of this Note with respect to which the determination of such sentence is being made, but shall exclude the number of shares Of the Common Stock which would be issuable upon (i) conversion of the remaining, non-converted portion of this Note beneficially owned by the Payee or any of its affiliates, and (ii) conversion of the unconverted or nonconverted portion of any other securities of the Company (including, without limitation, any other notes of the Company) subject to a limitation on conversion analogous to the limitation contained herein beneficially owned by the Payee or any of its affiliates. Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended. For purposes of this paragraph, in determining the number of outstanding shares of the Common Stock, the Payee may rely on the number of outstanding shares of the Common Stock as reflected in (x) the Company's most recent Form 10-K, Form 10-Q or Form 8-K, as the case may be, (y) a more recent public announcement by the Company, or (z) any other notice by the Company or the Transfer Agent setting forth the number of shares of the Common Stock outstanding. For any reason at any time, during regular business hours of the Company and upon the written request of the Payee, the Company shall within two business days confirm in writing to the Payee the number of shares of the Common Stock then outstanding. In any case, the number of outstanding shares of the Common Stock shall be determined after giving effect to the conversion of securities of the Company, including this Note, by the Payee or its affiliates since the date as of which such number of outstanding shares of the Common Stock was reported. By written notice to the Company, the Payee may increase or decrease the Maximum Percentage to any other percentage specified in such notice; provided that (A) any such increase will not be effective until the 61st day after such notice is delivered to the Company, and (B) any such increase or decrease will apply only to the Payee and not to any other party.
8. Representations and Covenants Of the Payee
. The Payee represents and covenants that this Note has not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any other applicable securities law. This Note has been purchased for investment only and not with a view to distribution or resale, and may not be sold, pledged, hypothecated or otherwise transferred unless this Note or the shares of the Common Stock represented hereby are registered under the Securities Act, and any other applicable securities law, or the Company has received an opinion of counsel satisfactory to it that registration is not required. A legend in substantially the following form will be placed on any certificates or other documents evidencing the shares of the Common Stock to be issued upon any conversion of this Note:
THE SECURITIES REPRESENTED BY THIS INSTRUMENT OR DOCUMENT HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAW OF ANY STATE. WITHOUT SUCH REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT UPON DELIVERY TO THE COMPANY OF AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER OR THE SUBMISSION TO THE COMPANY OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO THE COMPANY TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE SECURITIES ACT OF 1933, AS AMENDED, THE SECURITIES LAW OF ANY STATE, OR ANY RULE OR REGULATION PROMULGATED THEREUNDER.
Further, stop transfer instructions to the transfer agent of the shares of the Common Stock have been or will be placed with respect to the shares of the Common Stock so as to restrict the resale, pledge, hypothecation or other transfer thereof, subject to the further items hereof, including the provisions of the legend set forth in this paragraph.
K-64
9.
Fractional Shares
. Upon the conversion of this Note, no fractions of shares of the Common Stock shall be issued. If any such fraction might exist, the number of shares of the Common Stock shall be rounded down to the nearest whole number of shares.
10.
Registration Obligation
. The Company has not agreed to file and the Company does not anticipate the filing of a registration statement under the Securities Act to allow a public resale of this Note or the resale of any shares of the Common Stock issued upon the conversion of this Note.
11.
Loss. Theft. Destruction of Note
. Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction, or mutilation of this Note and, in the case of any such loss, theft, or destruction, upon receipt of indemnity reasonably satisfactory to the Company, or, in the case of any such mutilation, upon surrender and cancellation of this Note, the Company will make and deliver, in lieu of such lost, stolen, destroyed or mutilated Note, a new Note of like tenor.
12.
Arbitration
. Any controversy or claim arising out of or relating to this Note, or the breach, termination, or validity thereof, shall be settled by final and binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association ("AAA Rules") in effect as of the effective Issuance Date. The American Arbitration Association shall be responsible for (a) appointing a sole arbitrator, and (b) administering the case in accordance with the AAA Rules. The situs of the arbitration shall be Fort Worth, Texas. Upon the application of either party to this Note, and whether or not an arbitration proceeding has yet been initiated, all courts having jurisdiction hereby are authorized to (x) issue and enforce in any lawful manner, such temporary restraining orders, preliminary injunctions and other interim measures of relief as may be necessary to prevent harm to a party's interest or as otherwise may be appropriate pending the conclusion of arbitration proceedings pursuant to this Note, and (y) enter and enforce in any lawful manner such judgments for permanent equitable relief as may be necessary to prevent harm to a party's interest or as otherwise may be appropriate following the issuance of arbitral awards pursuant to this Note. Any order or judgment rendered by the arbitrator may be entered and enforced by any court having competent jurisdiction.
PAGE K-65
13.
Benefit
. All the terms and provisions of this Note shall be binding upon and inure to the benefit of and be enforceable by the parties hereto, and their respective successors and permitted assigns.
14
Notices
. All notices and other communications hereunder shall be in writing and shall be deemed to have been given (a) on the date they are delivered if delivered in person; (b) on the date initially received if delivered by facsimile transmission or email followed by registered or certified mail confirmation; (c) on the date delivered by an overnight courier service; or (d) on the third business day after it is mailed by registered or certified mail, return receipt requested with postage and Other fees prepaid, if to the Company addressed to Mr. D. Patrick Six at 8851 Camp Bowie West Boulevard, Suite 240, Fort Worth, Texas 761 16, telephone (817) 709-8567, and email patrick.six@gwtechinc.com; and if to the Payee addressed to Tunstall Canyon Group, LLC at 300 County Road 438, Eastland, Texas 76448, and email stanwoods219@gmail.com. Any party hereto may change its address upon 10 days' written notice to any other party hereto.
15.
Construction
. Words of any gender used in this Note shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, and vice versa, unless the context requires otherwise. In addition, the pronouns used in this Note shall be understood and construed to apply whether the party referred to is an individual, partnership, joint venture, corporation or an individual or individuals doing business under a firm or trade name, and the masculine, feminine and neuter pronouns shall each include the other and may be used interchangeably with the same meaning.
16.
Headings
. The headings used in this Note are for convenience and reference only and in no way define, limit, simplify or describe the scope or intent of this Note, and in no way effect or constitute a part of this Note.
17.
Invalidity
. In the event any one or more of the provisions contained in this Note shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect the other provisions of this Note.
18.
Law Governing
. This Note shall be construed and governed by the laws of the State of Texas, and all obligations hereunder shall be deemed performable in Tarrant County, Texas.
IN WITNESS WHEREOF, this Note has been issued on December 20, 2017.
/s/ GREENWAY TECHNOLOGIES, INC.
PAGE K-66
=========================================================================================================
Exhibit 10.35-FORM 10K/A-December 31, 2017
Exhibit 10.35
Greenway Technologies, Inc.
Stock Purchase Warrant
Expiring: November 30, 2020.
THIS IS TO CERTIFY for value received, MTG Holdings LTD (the "Holder") is entitled at any time from the date hereof, but prior to 5:00pm, Fort Worth, Texas time on November 30, 2020, subject to and upon the terms and conditions herein, to purchase up to 1,000,000 (one million) fully paid and nonassessable shares of the common stock, par value $0.0001 per share (the "Common Stock") of GREENWAY TECHNOLOGIES, INC., a Texas corporation (the "Company") at a purchase price of $0.30 (thirty cents) per share (the "Exercise Price") of the Common Stock, after taking into account the restrictive nature of the shares of the Common Stock as described below (such number of shares of the Common Stock and the purchase price being subject to adjustment as provided herein). This Warrant shall be void and of no effect and all rights hereunder shall cease at 5:00pm, Fort Worth, Texas time on November 30, 2020, except to the extent therefore exercised, provided that in the case of the earlier dissolution of the Company, this Warrant shall become void on the date fixed for such dissolution.
1.
Covenants of the Company
. The Company covenants that, while this Warrant is exercisable (a) it will reserve from its authorized and issued shares of the Common Stock a sufficient number of shares of the Common Stock to provide for the delivery of the shares of the Common Stock pursuant to the exercise of this Warrant, and (b) that all shares of the Common Stock which may be issued upon the exercise of this Warrant will be fully paid and non-assessable.
2.
Protection Against Dilution. Etc
. In any of the following events, occurring after the date of the issuance of this Warrant, appropriate adjustment shall be made in the number of shares of the Common Stock to be deliverable upon the exercise of the Warrant and the purchase price per share of the Common Stock to be paid, so as to maintain the proportionate interest of the Holder as of the date hereof (a) recapitalization of the Company through a split-up or reverse split of the outstanding shares of the Common Stock into a greater or lesser number, as the case may be, or (b) declaration of a dividend on the shares of the Common Stock, payable in shares of the Common Stock or other securities of the Company convertible into shares of the Common Stock, or (c) any of the events described in Paragraph 4 hereof.
PAGE K-67
3.
Merger, Etc
. In case the Company, or any successor, shall be consolidated or merged with another company, or substantially all of its assets shall be sold to another company in exchange for stock, cash or other property with the view to distributing such stock, cash or other property to its shareholders, each of the shares of the Common Stock purchasable by this Warrant shall be replaced for the purposes hereof by the securities of the Company or cash or property issuable or distributable in respect of one share of the Common Stock of the Company, or its successors, upon such consolidation, merger, or sale, and adequate provision to that effect shall be made at the time thereof. Provided, however, notwithstanding anything herein contained to the contrary, in the event that the terms of any such consolidation, merger or sale call for the distribution of any cash or property to the shareholders of the Company, no cash or property shall be distributable to the Holder in connection with any unexercised portion of this Warrant, unless the Holder shall have exercised this Warrant pursuant to the terms of Paragraph 6 hereof and all other terms of this Warrant.
4. Notice of Certain Events. Upon the happening of any event requiring an adjustment of the Warrant purchase price hereunder, the Company shall forthwith give written notice thereof to the Holder stating the adjusted Warrant purchase price and the adjusted number of shares of the Common Stock purchasable upon the exercise hereof resulting from such event and setting forth in reasonable detail the method of calculation is based. The Board of Directors of the Company shall determine the compensation made hereunder. In the case of (a) any consolidation, merger, or sale affecting the Company and calling for the payment of cash or the delivery of property to shareholders of the Company, or (b) any voluntary or involuntary dissolution, liquidation, or winding up of the Company shall at any time be proposed, the Company shall give at least 20 days' prior written notice thereof to the Holder stating the date on which such an event is to take place and the date (which shall be at least 20 days after the giving of such notice) as of which the holders of record of shares of the Common Stock shall be entitled to participate in ay such event. If the Holder does not elect to exercise any part of this Warrant as a result of any such notice, the Holder shall have no right with respect to any portion of this Warrant which shall remain unexercised to participate in (x) any such cash or other property resulting from any such consolidation, merger, or sale, or (y) any voluntary or involuntary dissolution, liquidation, or winding up of the Company,
5.
Shareholders' Rights
. Until the valid exercise of this Warrant, the Holder shall not be entitled to any rights a shareholder with respect to the shares of the Common Stock covered by this Warrant; but immediately upon the exercise of this Warrant and upon payment as provided herein, the Holder shall be deemed a record holder of the shares of the Common Stock.
6.
Manner of Exercise
. In order to exercise this Warrant, the Holder should surrender this Warrant, duly endorsed or assigned to the Company or, in blank, at the office of the Company, accompanied by (a) written Form of Election to Purchase attached hereto (the "Exercise Notice") that the Holder elects to exercise this Warrant or, if less than the entire amount thereof is to be exercised, the portion thereof to be exercised, and (b) payment of the purchase price of the shares of the Common Stock to be purchased on each exercise, in cash or by cashier's or certified check.
This Warrant shall be deemed to have been exercised immediately prior to the close of business on the day of surrender of this Warrant for exercise in accordance with the foregoing provisions, and at such time the person or persons entitled to receive the shares of the Common Stock issuable upon exercise shall be treated for all purposes as the record holder or holders of the shares of the Common Stock at such time. As promptly as practicable on or after the exercise date, but in no event later than three business days, the Company shall issue and shall deliver to the Holder a certificate or certificates for the number of full shares of the Common Stock issuable upon exercise.
In case this Warrant is exercised in part only, upon such exercise the Company shall execute and deliver to the Holder thereof, at the expense of the Company, a new Warrant to purchase, in the aggregate, in the number of shares of the Common Stock covered by the unexercised portion of this Warrant.
PAGE K-68
7.
Limitation on Exercise
. The Holder (including any successor, transferee or assignee) shall not have the right to convert any portion of this Warrant to the extent that giving effect to such exercise, the Holder (together with the Holders affiliates) would beneficially own in excess of 9.999% (the Maximum Percentage") of the number of shares of the Common Stock of the Company outstanding immediately after giving effect to such exercise. For the purposes of the foregoing sentence, the number of shares of the Common Stock beneficially owned by the Holder and its affiliates shall include the number of shares of the Common Stock issuable upon conversion of this Warrant with respect to which the determination of such sentence is being made, but shall exclude the number of shares of the Common Stock which shall be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its affiliates and (ii) exercise of the unexercised or non-converted portion of any other securities of the Company (including, without limitation, any other notes or warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its affiliates. Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended. For purposes of this paragraph, in determining the number of outstanding shares of the Common Stock, the Holder may rely on the number of outstanding shares of the Common Stock as reflected in (x) the Company’s most recent Form 10-K, Form 10-Q or Form 8-K, as the case may be, (y) a more recent public announcement by the Company, or (z) any other notice by the Company or the Transfer Agent setting forth the number of shares of the Common Stock outstanding. For any reason at any time, during regular business hours of the Company and upon the written request of the Holder, the Company shall within two business days confirm in writing to the Holder the number of shares of the Common Stock then outstanding. In any case, the number of outstanding shares of the Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its affiliates since the date as of which such number of outstanding,shares of the Common Stock was reported. By written notice to the Company, the Holder may increase or decrease the Maximum Percentage to any other percentage specified in such notice; provided that (A) any such increase will not be effective until the 61st day after such notice is delivered to the Company, (B) any such increase or decrease will apply to the Holder and not to any Other holder of warrants, and (C) and In no case shall the Holder or its affiliates acquire in excess of 9.999% of the outstanding shares of the Common Stock or the voting power of the Company.
8. The Holder represents and covenants that this Warrant has not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any other applicable securities law. This Warrant has been purchased for investment only and not a view to distribute or resale, and may not be sold, pledged, hypothecated or otherwise transferred unless this Warrant or the shares of the Common Stock represented hereby are registered under the Securities Act, any other applicable securities law, or the Company has received an opinion of counsel satisfactory to it that registration is not required. A legend in substantially the following form will be placed on ay certificates or other documents evidencing the shares of the Common Stock to be issued upon any exercise of this Warrant
THE SECURITIES REPRESENTED BY THIS INSTRUMENT OR DOCUMENT HAVE BEEN ACQIURED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMANDED, OR THE SECURITIES LAW OF ANY STATE. WITHOUT SUCH REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT UPON DELIVERY TO THE COMPANY OF AN OPINION OR COUNSEL SATISFACTORY To THE COMPANY THAT REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER OR THE SUBMISSION TO THE COMPAN OR SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO THE COMPANY TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE SECURITIES ACT OF 1933, AS AMANDED, THE SECURITIES LAW OF ANY STATE, OR ANY RULE OR REGULATION PROMULGATED THEREUNDER.
Further, stop transfer instructions to the transfer agent of the shares of the Common Stock have been or will be placed with respect to the shares of the Common Stock so as to restrict the resale, pledge, hypothecation or other transfer thereof, subject to the further items hereof, including the provision of the legend set forth in this paragraph.
9.
Fractional Warrants
. Upon the exercise of this Warrant, no fractions of shares of the Common Stock shall be issued; but fractional Warrants shall be delivered, entitling the Holder, upon surrender with other fractional Warrants aggregating one or more full shares of the Common Stock, to purchase such full shares of the Common Stock.
PAGE K-69
10. The Company has not agreed to file and the Company does not anticipate the filing of the registration statement under the Securities Act to allow the public resale of any shares of the Common Stock issued upon the exercise of this Warrant
11.
Loss, Theft, Destruction of a Warrant
. Upon the receipt of evidence satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant and, in the case of any such loss, theft, or destruction, upon receipt of indemnity reasonably satisfactory to the Company, or, in the case of any such mutilation, upon surrender and cancellation of this Warrant, the Company will make and deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor.
12.
Arbitration
. Any controversy or claim arising out of or relating to this Warrant, or the breach, termination, or validity thereof, shall be settled by final and binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association ("AAA Rules") in effect as of the effective date of this Warrant The American Arbitration Association shall be responsible for (a) appointing a sole arbitrator, and (b) administering the case in accordance with the AAA Rules. The situs of the arbitration shall be Houston, Texas. Upon the application of either party to this Warrant, and whether or not an arbitration proceeding has yet been initiated, all courts having jurisdiction hereby are authorized to (x) issue and enforce in any lawful manner, such temporary restraining orders, preliminary injunctions and other interim measures of relief as may be necessary to prevent harm to a party s interest or as otherwise may be appropriate pending the conclusion of arbitration proceedings pursuant to this Warrant, and (y) enter and enforce in any lawful manner such judgments for permanent equitable relief as may be necessary to prevent harm to a party s interest or as otherwise may be appropriate following the issuance of arbitral awards pursuant to the Warrant. Any order or judgment rendered by the arbitrator may be entered and enforced by any court having competent jurisdiction.
13.
Benefit
. All the terms and provisions of this Warrant shall be binding upon and inure to the benefit of and be enforceable by the parties herein, and their respective successors and permitted assigns.
14.
Notices
. All notices and communications hereunder shall be in writing and shall be deemed to have been given (a) on the date they are delivered in person: (b) on the date initially received if delivered by facsimile transmission or email followed by registered or certifies mail confirmation; (c) on the date delivered by an overnight courier service; or (d) on the third business day after it is mailed by registered or certified mail, return receipt requested with postage and other fees prepaid, if to the Company addressed to Mr. D. Patrick Six at 8851 Camp Bowie West, Suite 240, Fort Worth, Texas 76116, telephone 817-346-6900, and email and if to the Holder, addressed to PO Box 81175, Las Vegas, NV 189180-1175, telephone 503-793-9300 and email
marshall.gleason@gmail.com
. Any party hereto may change its address upon 10 days' written notice to any other party hereto.
PAGE K-70
15.
Construction
. Words of any gender used in this Warrant shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, and vice versa, unless the context requires otherwise. In addition, the pronouns used in this Warrant shall be understood and construed to apply whether the party referred to is an individual, partnership, joint venture, corporation, or an individual or individuals doing business under a firm or trade name, and the masculine, feminine and neuter pronouns shall each include the other and may be used interchangeably with the same meaning.
16.
Headings
. The headings used in this Warrant are for convenience and reference only and in no way define, limit, simplify or describe the scope or intent of this Warrant, and in no way effect or constitute a part of this Warrant
17.
Invalidity_
. In the event any one or more of the provisions contained in this Warrant shall, for any reason, be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceable shall not effect the other provisions of this Warrant.
18.
Law Governing
. This Warrant shall be construed and governed by the laws of the State of Texas, and all obligations hereunder shall be deemed performable in Tarrant County, Texas.
IN WITNESS WHEREOF, this Warrant has been issued on November 30, 2017.
GREENWAY TECHNOLOGIES, INC.
/s/ D. Patrick Six, President
PAGE K-71
=========================================================================
Exhibit 10.36-FORM 10K/A-December 31, 2017
Exhibit 10.36
THIS NOTE. AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOI. HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933AS AMENDED, OR ANY STAIE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT AND LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.
THE GREER FAMILY TRUST PROMISSORY NOTE $ 150,000
In connection With the Agreed Settlement. Mutual Releases and Indemnity Agreement (the “Settlement), Greeway Technologies. Inc., fka UMED Holdings. Inc. (the "Company") promises to pay to the (the "Trust"), or its assigns in lawful money Of the United States of America the principal sum of one hundred fifty thousand dollars (S 150.000). or such greater amount as Shall equal to the outstanding principal amount hereof, together with interest from the date of this Promissory Note ("Note") on the unpaid principal balance at the rate to four percent (4%) per annum computed on the of the actual number of days elapsed and a year of 365 days. The Note is payable: (i) in equal Installments of six thousand dollars per month, commencing February 1, 2018 until the principal. together with any then unpaid and accrued interest and other amounts payable hereunder shall and payable are paid in full or (ii) when. upon or after the occurrence of an Event of Default (as defined below) such amounts arc declared due and payable by the Trust or made automatically due and payable in accordance with the terms hereof.
The following is a statement of the rights of The Trust and the conditions to which this Note is subject and to which The Trust, by the acceptance of this Note agrees:
Definitions, as used in this Note. the following capitalized terms have the following meanings:
the "Company•• includes the corporation initially executing this Note and any person which shall succeed to or assume the obligations Of the Company under this Now,
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"Trust" shall mean the Greer Family Trust or any Person or Persons who shall at the time be the registered holder of this Note,
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(c)
"Material Adverse Effect" shall mean a material adverse effect on operations. prospects or financial or other condition of the Company; (b) the ability Of the Company pay Of the Obligations in accordance with the terms of this Note and the other Settlement Documents and to avoid an Event Of Default. or an event which, with the giving of notice or passage of time or both, would constitute an Event of Default under any Settlement Document' or (c) the rights and remedies of 'he Trust under this Note, the other Settlement Documents or any related document. instrument or agreement through no fault of the Trust.
PAGE K-72
(d) “Obligations" shall mean and Include all loans advances, debts, liabilities and obligations, how soever arising, owed by the Company to The Trust of every kind and description (whether evidenced by any note or instrument and whether or not for the payment of money). existing or hereafter arising under or pursuant to the terms of this Note. the Agreement and the other Settlement Documents. including, all fees, charges. expenses. attorneys' fees and costs and accountants • fees and costs chargeable to and payable by the Company hereunder and thereunder. each case. whether direct or indirect. absolute or contingent. due or become due, and whether or not arising after the commencement of a proceeding under Title 11 of the United States Code (11 U.S.C Section 101 et seq.). as amended from time to time (including post-petition Interest) and whether or allowed allowable as a claim in any such proceeding.
(e) "Person' • shall mean and include an individual. a partnership. corporation trust). a joint stock company, a limited liability company. an unincorporated association or a governmental authority
f) "Securities Act" shall mean the Securities Act of 1933 as amended,
2.Interest. Accrued interest on this Note shall be payable at maturity
3. Prepayment. Upon the prior written consent of the Trust, Company may prepav this Note in whole or in part: provided that any such prepayment be applied first to the payment of under Note, to Interest accrued on this Note and third. If the amount of prepayment exceeds the amount of all such expenses and accrued interest to the payment of this Note,
4 .Events of Default The occurrence of any of the following shall consummate an "Event of Default under this Note and the Other Settlement Documents.
(a) Failure to Pay. The Company shall fall to pay (1) when due any principal or Interest payment on the due date hereunder or (ii) any other payment required under the terms of this Note or any other Settlement Document on the date due: or b)Voluntary Bankruptcy or Insolvency Proceedings, The Company shall i) apply or the appointment of a receiver. trustee. liquidator or custodian of Itself or of all or substantial part of its property (ii) or be unable. or admit in writing its inability to pay its debts generally as they mature. (iii) make a general assignment for the benefit of its or any of Its creditors. (iv) be dissolved or liquidated. (v)' become insolvent (as such term may be defined or interpreted under any applicable statute). (VI) commence a voluntary case or other liquidation. reorganization other relief with respect to Itself or its debts under any bankruptcy similar law now or hereafter in effect or consent to any such relief or to the appointment of or taking Of property by any official in an involuntary case or Other proceeding commenced against lt. or take the purpose of effecting any of the foregoing; or
(c)Involuntary Bankruptcy or Insolvency Proceedings in for the appointment of a receiver trustee liquidator or custodian Of the Company or of all or a substantial part of the property thereof, or an involuntary ease or other proceedings seeking liquidation. reorganization ocher relief with respect: to Company or the debts thereof under any bankruptcy. Insolvency or other law now or hereafter in be commenced and an order for relief entered or such proceeding shall not he or commencement: or
PAGE K-73
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(d) Material Adverse Effect. One or more conditions exist or event' have occurred reasonably indicate, or reasonably result a Material Adverse Effect.
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From and after the occurrence of any Event of and so ion! as such Event of the unpaid Principal Amount of this Note shall bear Interest at rate per annum equal to the Highest Lawful Rate. payable on demand
5. Rights of The Trust upon Default. Upon the occurrence of existence of any Event of Default and at any time thereafter during the continuance of such Event of Default. The Trust may by written notice to the Company declare all outstanding Obligations payable by the Company hereunder (o be immediately due and presentment. demand. protest or any other notice of any kind. all of which are hereby expressly contained herein or in the other Settlement Documents to the contrary notwithstanding. Upon the occurrence or existence of any Event of Default described In Section 4. immediately and without notice, all Obligations payable by the Company hereunder shall automatically become immediately due and payable. without demand. protest or any Other notice of any kind. all of which are hereby expressly waived and Indemnity herein or in the other Settlement Documents shall be void.
6. Conversion.
(a) Conversion. This Note shall be convertible at the option of the Trust into that number of shares of the Company's Common Stock as is determined by dividing such principal amount and accrued by seventy percent (70%) of the prior twenty (20) day average closing market price for the Company common stuck adjusted to reflect subsequent stock dividends. stock splits. combinations or recapitalizations. Before the Trust shall be entitled convert this Note into shares of Common Stock under this Section 6(a), the Trust shall execute Company common stock purchase agreement reasonably acceptable to the Company representations and warranties and transfer restrictions. The Company Shall. as soon as practicable issue instructions to its transfer agent to issue and deliver via DWAC and FAST (the number of shares of Common Stock which the Trust shall he entitled upon conversion. together with a replacement Note (if any converted) and any other securities and property to which The Trust IS upon such conversion of this Note. The conversion shall be deemed to have been made Immediately prior to the close date of the surrender of this Note. and the Person or Persons the such conversion shall he treated for all purposes as the record holders of such shares of Common Stock as of such date.
(b)Fractional Shares: Interest; Effect of Conversion. No fractional Share* 'shall be issued upon conversion of this Note. In lieu of the Company issuing any fractional shares to the Trust upon the conversion Note. the Company shall pay to the Trust an amount to the product obtained by multiplying the by the fraction of a share not Issued pursuant to the previous sentence in addition. the Company 'hall pay to any Interest accrued on the amount to be paid to the Company pursuant the previous sentence; Upon this Note in full and the payment of any amounts specified in tins Section the Company be from all its obligations and liabilities under this Note-Successors and Assigns Subject to the restrictions on transfer described in
7.Sections and rights and obligations of the Company and The Trust Shall be binding upon and benefit administrators and transferees of the parties.
8.Waiver and Amendment. Any provision of this Note may be amended. waived or modified upon the written mutual consent oi the Company and the Trust.
Transfer of this Note or Securities issuable on Conversion Hereof. With respect to disposition of this Note. the Trust will give written notice to the Company prior thereto, describing briefly the manner thereof, together with a written opinion of the Trust's counsel. or other evidence if reasonably the Company, to the effect that such offer. sale or Other distribution may be effected without registration under any federal or state law then in effect), Upon receiving and reasonably opinion, it-so requested, or other evidence. the Company. as promptly as practical Shall notify the Trust thro sell or otherwise dispose of this Note. all in accordance with the terms of the notice delivered to the Company. If a determination has been made pursuant to this Section 9 that the opinion of• counsel for the or not reasonably satisfactory to the Company. the Company shall so notify the Trust promptly after such determination has been made, Each Note thus transferred shall bear a legend as to the applicable on order to ensure compliance with the Securities Act, unless in the opinion of counsel for the Company such a legend is not required in order to ensure compliance With the Securities Act. Prior to presentation of this Note for registration of transfer, the Company shall treat the registered holder hereof JVS the holder of tm of receiving all payments of principal and Interest hereon and for all other purposes whatsoever, whether or not this Note shall be overdue and the Company shall not be affected by notice contrary.
PAGE K-74
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10.
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Assignment by the Company. Neither this Note nor any of its rights, interest or obligations hereunder may be assigned. by operation of law or otherwise jn whole or in part. by Company Without consent of the Trust. which consent not be unreasonably withheld.
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11.
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Notices. All notices, requests, demands, consents, instructions or other permitted hereunder Shall be in writing and faxed. mailed or delivered each party at the respective parties as set forth in the Agreement. or at such other address or facsimile number the Company to the Trust in writing. All such notices and communications Will be deemed effectively given of (i) when received. (ii) when delivered personally. (iii' one business day after being delivered by appropriate confirmation). one business day after being deposited With an standing or (v) tour days after being deposited in the U.S. mail. first class with postage prepaid.
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12. Payment. Payment shall be made in lawful tender Of the United States.
13. Governing Law and Venue. This Notice and all actions arising out of or jn connection with ths Notice shall be governed by and construed accordance with the laws Of the State Of regard to the provisions of the State of Texas. or of any other state. Venue shall In Tarrant County. TexasIN WITNESS WHEREOF the undersigned has executed this Convertible Promissory Note Of the date first set forth above.
Greenway Technologies, Inc. fna UMED Holdings. Inc.
By/s/ D. Parick Six, President & COO
AG
RE
ED
SETTLEMENT, MUTUAL R
ELE
ASES, and
INDEMNIIY
WHEREAS, Greenway Technologies, Inc., fka UMED Holdings, Inc. ("Company"). acting b' and through its President and COO, D. Patrick Six ("Six is desirous of settling any and all claims that the Greer Family Trust. the Trust heretofore succeeded to the rights of the Estate of Conrad Greer, deceased, may have currently or in the future against the Company: and
WHEREAS. the Trustee for the Greer Family Trust by execution of this Agreed Settlement
Mutual Release. and Indemnity represents to the Company that she has the authority to get as Trustee and also represents the Estate of Conrad Greer, deceased; and
WHEREAS. the Greer Family Trust, (the "Trust") is desirous of settling any and all outstanding claims the Trust and/or any of its Beneficiaries may have against the Company for any and all matters; and
WHEREAS, the Company will agree to issue and delivery to the Trust, Three (3,000,000) shares of Greenway Technologies. Inc. (fka UMED Holdings. Inc,) common stock in exchange for the Trust's waiver of any future claims against the Company for any reason
PAGE K-75
WHEREAS. Company will agree to issue such shares of the Company to the Trust the written instructions of the Trust's Trustee, Ms. Wendy Braff; and
WHEREAS. Company will agree to pay to the Trust the sum of One Hundred Fifty Thousand Dollars (S150,000.00 in the form of a Convertible Promissory Note ag set forth below: and
WHEREAS, the parties hereto wish to Settle any and all disputes regarding the and this Agreed Settlement and Mutual Release, one to the other, and settle all outstanding claims, past, present. and future that might arise from any action or inaction connected with the Company and the Trust and its rights to any stock in the Company he may have had or today: and
WHEREAS. all entities and individuals stated herein may be collectively referred to as “Parties”.
NOW, THEREFORE. in consideration of the foregoing recitals and of the conditions, covenants and agreements set forth below, the amount and sufficiency of' which are hereby acknowledged. the Parties agree as follows:
I.
(a) Effective upon timely transfer of the said UMED stock. now known
officially as Greenway Technologies. Inc. common shares as provided Section 2 below. the Parties, on behalf of themselves, and all persons or entities claiming by. through or under them. and their respective heirs, successors and assigns, hereby fully, completely and finally waive. release, remise, acquit, and forever discharge and covenant not to sue the Other well the other Parties' respective officers. directors, shareholders, trustees, parent companies. Sister companies, affiliates, subsidiaries. employers. attorneys. accountants, insurers. representatives, and agents with respect to any kind all claims, demands, obligation, debt, liability, tort, covenant, contract, or causes of action of any kind law or in equity, including without limitation, all claims and causes of action arising out of or in any way relating to the claims or demands of the Trust and/or the Beneficiaries of said Trust against the Company, its officers, directors. shareholders. trustees, parent companies, sister companies, affiliates, subsidiaries, employers, attorneys, accountants. predecessors.representatives, and agents or its successor company. The Parties warrant and that y have not assigned or otherwise transferred any claim or cause of action released by Agreement to any third party.
(b) The Parties acknowledge and agree that these releases are General
RELEASES. The Parties expressly waive and assume the risk of any and all claims for damages which exist as of this date. but which they do not know or suspect to exist. whether through ignorance, oversight, error, negligence, or otherwise. and which. if known. would materially his or her or its decision to enter into this Agreement. The Parties expressly acknowledge waiver of claims includes any claims for any alleged fraud. deception, concealment, misrepresentation or any other misconduct of any kind in procuring this Agreement. The Parties specifically do not, however. waive or release any claim that may arise breach of this Agreement.
PAGE K-76
(c) In exchange for the following stock delivery and cash payments as are set forth below in paragraphs 2 & 3, the Trust (including all named Beneficiaries are set forth below , and it is hereby represented that such Beneficiaries are the only Beneficiaries of the Trust or the Estate of Conrad Greer (deceased) hereby releases any and all claims for any and all other consideration of any kind or nature whatsoever it/they may have against [he Company or its predecessor.
(d) Upon payment of the Note in section 3. below. the Employment Agreement by and between Conrad Greer, deceased, and the Company will be acknowledged to be void and of no further force or effect,
before February l, 2018, Company will issue and deliver Three Million (3,000,.000 shares of the Company's common stock to the Trust, If the shares are DWAC eligible, shares shall be transferred electronically using the Fast Automated Securities Transfer service (FAST) transfer service to an account to be provided. If the company not DWAC and FAST eligible. certificate representing Three Million (3,000,000) unrestricted shares of 'he Company" common stock shall be delivered to the Trust, c/o Ms. Wendy Braff, 198 Green Hills Road. Cincinnati. OH45208.
3.
Promissory Note
. As additional consideration from Company to Greer. the Company Will Convertible Promissory Note in the principal amount of One
Hundred Fifty Thousand
Dollars ($150,000.00) (the "Note"), a form of the Note IS attached hereto as Exhibit A. payable in the monthly sum of Six Thousand Dollars for twenty-five (25) consecutive months until a total of One Hundred Fifty Thousand Dollars ($150,000.00) has been paid to the Trust commencing on the 1st Day of February 2018. The Company will make the monthly cash payments to the Trust, c/o Ms. Wendy Braff, 198 Green Hills Road, Cincinnati. HO 45208.
4.
No Admission of Liability
. Neither the issuance and delivery of Greenway
Technologies, Inc. common shares and/or the payment of the cash sum stated above, nor the
execution of the aforesaid Agreements shall be construed as an admission of liability or fault by any Party. Any and all liability is expressly denied by al! Parties.
5.
Confidentiality
. The Parties and their respective counsel represent and agree that, except for matters of public record as of the date of this Agreement. they will keep the terms and contents of this Agreement confidential. and that they Will not hereinafter disclose the terms of this Agreement to other persons except as compelled by applicable law or to individuals who have a need to know about this Agreement and its contents. such as Parties legal counsel, tax advisors. or other retained professional representatives. all of whom shall be informed and bound by this confidentiality clause. In no event will any party make or cause to be made any comment. written statement or press release to any member of the media concerning the fact of this settlement or the substance or terms of this settlement.
6.
Authority
. The Parties represent and warrant that they possess full authority to enter into this Agreement and to lawfully and effectively release the opposing Party ax set forth herein, free of any rights of settlement, approval, subrogation. or other condition or impediment This undertaking includes specifically, without limitation, the representation and warranty that no third party has now acquired or will acquire rights to present or pursue any claims from of based upon the claims that have been released herein.
PAGE K-77
7.
Agreement
. The Parties represent and agree that no promise. inducement. or agreement other than as expressed herein has been made to them and that this Agreement is fully integrated, supersedes all prior agreements and understandings. including Without limitation. any promissory notes, and any other agreement between the Parties. and contains the entire Settlement and Agreement between the Parties.
8. Voluntary and Informed Consent. The Parties represent and agree that they each have read and fully understand this Agreement, that they are fully competent to enter into Mid sign this Agreement, and that they are executing this Agreement voluntarily, free of any duress or coercion and this Agreement is made of their own free will and choice.
9.Each of the parties will bear its own costs. expenses, and attorneys' fees incurred in connection with this Settlement Agreement.
10. The laws of the State of Texas shall apply to and control any interpretation. construction, performance or enforcement of this Agreement, Che Parties agree that the exclusive jurisdiction for any legal proceeding arising out of or feinting [o this Agreement shall be the Court of appropriate Court having jurisdiction in 'I'arrant County. Texas, and all Parties hereby waive any challenge to personal jurisdiction or venue in that court.
11.
Attorneys’ Fees and Costs for Breach.
The prevailing Party in any action to enforce or interpret this Agreement is entitled to recover from the other Party its reasonable attorneys' fees.
12.
Construction
. This Agreement shall be construed as if the Parties jointly prepared it, and any uncertainty or ambiguity shall not be interpreted against any one Party.
13. No oral agreement. statement. promise, undertaking. understanding. arrangement, act or omission of any Party, occurring subsequent to the date hereof may be deemed an amendment or modification of this Agreement unless reduced to writing and signed by the Parties hereto or their respective successors or assigns.
14 Severability. The Parties agree that if. for any reason. a provision of this Agreement is held unenforceable by any court of competent jurisdiction, this Agreement shall be automatically conformed to the law, and otherwise this Agreement shall continue in full force and effect.
15 Whenever applicable within this Agreement, the singular shall include the plural and the plural shall include the singular.
PAGE K-78
16.
Headings
. The headings of paragraphs herein are included solely for convenience of reference and shall not control the meaning or interpretation of any of the provisions of this Agreement.
17. This Agreement may be executed in several counterparts and counterparts so executed shall constitute one agreement binding on all Parties hereto. notwithstanding that all the Parties are not signatories to the original or the same counterpart Facsimile signatures shall be accepted the same as an original signature. A photocopy of' the. Agreement may be used in any action brought to enforce or construe this Agreement
18 .No Waiver. No failure to exercise and no delay in exercising any right, power or remedy under this Agreement shall impair any right, power or remedy which any Party may have. nor shall any such delay be construed to be a waiver of any such rights, powers or remedies or an acquiescence in any breach or default under this Agreement. nor shall any waiver of any breach or default of any Party be deemed a waiver of any default or breach subsequently arising.
19 Greer agrees to indemnify Company, its officers, directors. agents, representative, and employees against and for any damages to Company that his heretofore actions may cause to the Company.
20. By the execution of this document, Wendy Braff, Trustee of the Greer Family Trust, hereby warrants and represents that she has the authority and direction of the following Greer Family Trust Beneficiaries to execute this Settlement Agreement, Mutual Release and Indemnity on their behalf as Beneficiaries of the Greer Family Trust and on behalf of the said Trust
List of Beneficiaries:
Wendy Kay Braff
198 Green Hills Road
Cincinnati, OH 45208
###-##-####
Cynthia Ann McKinnon 2104 Ridge Plaza Drive
Castle Rock. CO 80208
###-##-####
Cathy Joanne Pederson
2009 Bosbury Drive
Flower Mound. TX 75028
###-##-####
PAGE K-79
Scott Patrick Greer
1210 Steinhart Ave.
Redondo Beach, CA 90278
###-##-####
Kathryn Ellen Shipman
S47A Londonderry Tpke.
Auburn. NH 03032
Constance .Jeanne Greer
7151 Gaston Avenue #1109
Dallas. TX 75214
###-##-####
Dated 30th day of January 2018.
/s/ The Greer Family Trust
Witness:/s/
PAGE K-80
==================================================================================
Exhibit 31.1-FORM 10K/A-December 31, 2017
Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, D. Patrick Six, certify that:
1. I
have reviewed this Form 10-K of Greenway Technologies, Inc.;
2. Based
on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
the period covered by this report;
3. Based
on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in
this report;
4. The
registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange
Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
(b) Designed
such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated
the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
and
(d) Disclosed
in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The
registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or
persons performing the equivalent functions):
(a) All
significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
and
(b) Any
fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
Date: April 16, 2018.
/s/ D. Patrick Six
D. Patrick Six, Chief Executive Officer
PAGE K-81
==================================================================================
Exhibit 31.2-FORM 10K/A-December 31, 2017
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, D. Patrick Six, certify that:
1. I
have reviewed this Form 10-K of Greenway Technologies, Inc.;
2. Based
on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
the period covered by this report;
3. Based
on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in
this report;
4. The
registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange
Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
(b) Designed
such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated
the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
and
(d) Disclosed
in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The
registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or
persons performing the equivalent functions):
(a) All
significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
and
(b) Any
fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
Date: April 16, 2018.
/s/ D. Patrick Six
D. Patrick Six, Chief Financial Officer
and Principal Accounting Officer
PAGE K-82
==================================================================================
Exhibit 32.1-FORM 10K/A-December 31, 2017
Exhibit 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY
ACT OF 2002
In connection with the accompanying
Annual Report on Form 10-K of Greenway Technologies, Inc. for the fiscal year ending December 31, 2017, I, D. Patrick Six, Chief
Executive Officer of Greenway Technologies, Inc., hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge and belief, that:
1. Such
Annual Report on Form 10-K for the fiscal year ending December 31, 2018, fully complies with the requirements of section 13(a)
or 15(d) of the Securities Exchange Act of 1934; and
2. The
information contained in such Annual Report on Form 10-K for the fiscal year ending December 31, 2018, fairly presents, in all
material respects, the financial condition and results of operations of Greenway Technologies, Inc.
Date April 16, 2018.
/s/ D. Patrick Six
D. Patrick Six, Chief Executive
Officer
PAGE K-83
==================================================================================
Exhibit 32.2-FORM 10K/A-December 31, 2017
Exhibit 32.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY
ACT OF 2002
In connection with the accompanying
Annual Report on Form 10-K of Greenway Technologies, Inc. for the fiscal year ending December 31, 2017, I, D. Patrick Six, Chief
Financial Officer of Greenway Technologies, Inc., hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge and belief, that:
1. Such
Annual Report on Form 10-K for the fiscal year ending December 31, 2018, fully complies with the requirements of section 13(a)
or 15(d) of the Securities Exchange Act of 1934; and
2. The
information contained in such Annual Report on Form 10-K for the fiscal year ending December 31, 2018, fairly presents, in all
material respects, the financial condition and results of operations of Greenway Technologies, Inc.
Date: April 16, 2018.
/s/ D. Patrick Six
D. Patrick Six, Chief Financial
Officer
and Principal Accounting Officer
PAGE K-84
==================================================================================
EXHIBIT- FORM 10Q- Three Months Ended March 31, 2018
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________________________________________
FORM 10-Q
[X] Quarterly report under Section 13 or 15(d)
of the Securities Exchange Act of 1934 For the quarterly period ended March 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 registrant as specified
in its charter)
|
|
|
|
Texas
(State or other jurisdiction
of
incorporation or organization)
|
90-0893594
(I.R.S. Employer Identification Number)
|
|
8851 Camp Bowie
West Boulevard, Suite 240
Fort Worth, Texas
(Address of principal
executive offices)
|
76116
(Zip Code)
|
|
(817)
346-6900
(Registrant’s
telephone number, including area code)
|
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 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 (Check One):
|
|
|
|
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 ]
Indicate the number of shares
outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. At May 5, 2018, the
registrant had outstanding 283,828,915 shares of our Class A common stock and 126,938 shares of Class B common stock.
Table of Contents
Part I – Financial Information.
|
Item
1. Financial Statements
|
1
|
|
Item
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
15
|
|
Item
3. Quantitative and Qualitative Disclosures about Market Risk
|
20
|
|
Item
4. Controls and Procedures
|
20
|
|
|
|
|
Part
II- Other Information
|
|
|
|
|
|
Item
1. Legal Proceedings
|
22
|
|
Item
1A. Risk Factors
|
22
|
|
Item
2. Unregistered Sales of Equity Securities and Use of Proceeds
|
22
|
|
Item
3. Defaults Upon Senior Securities
|
23
|
|
Item
4. Mine Safety Disclosures
|
23
|
|
Item
5. Other Information
|
23
|
|
Item
6. Exhibits
|
24
|
|
Signatures
|
26
|
PART I – FINANCIAL INFORMATION
|
|
Item
1.
|
Financial
Statements.
|
GREENWAY TECHNOLOGIES,
INC.
Condensed Consolidated Balance Sheet
(Unaudited)
|
|
|
March 31,
|
|
December 31,
|
|
|
|
2018
|
|
2017
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
22,475
|
|
|
$
|
91,518
|
|
|
Prepaid expense
|
|
|
144,000
|
|
|
|
157,500
|
|
|
Total
Current Assets
|
|
|
166,475
|
|
|
|
249,018
|
|
|
Fixed assets
|
|
|
|
|
|
|
|
|
|
Property & equipment
|
|
|
4,015
|
|
|
|
4,015
|
|
|
Less depreciation
|
|
|
4,015
|
|
|
|
4,015
|
|
|
|
|
|
0
|
|
|
|
0
|
|
|
Other Assets
|
|
|
20,000
|
|
|
|
20,000
|
|
|
Total
Assets
|
|
$
|
186,475
|
|
|
$
|
269,018
|
|
|
Liabilities & Stockholders’
Deficit
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
101,794
|
|
|
$
|
140,039
|
|
|
Stockholder advances
|
|
|
1,000
|
|
|
|
1,500
|
|
|
Accrued management fees
|
|
|
1,736,602
|
|
|
|
1,666,602
|
|
|
Notes payable
|
|
|
100,000
|
|
|
|
153,841
|
|
|
Accrued expenses
|
|
|
441,909
|
|
|
|
778,760
|
|
|
Current portion of convertible note payable, net of
|
|
|
|
|
|
|
|
|
|
discount of $71,428 and $81,833
|
|
|
155,239
|
|
|
|
150,834
|
|
|
Derivative liability – warrants
|
|
|
86,255
|
|
|
|
105,643
|
|
|
Total
Current Liabilities
|
|
|
2,622,799
|
|
|
|
2,997,219
|
|
|
Long term convertible note payable,
less current portion
|
|
|
84,000
|
|
|
|
84,000
|
|
|
Total Liabilities
|
|
|
2,706,799
|
|
|
|
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 March 31, 2018
|
|
|
|
|
|
|
|
|
|
and December 31, 2107
|
|
|
0
|
|
|
|
0
|
|
|
Common Class A stock 300,000,000
shares authorized, par value $0.0001, 283,828,915 and 287,681,826 issued and outstanding at
|
|
|
|
|
|
|
|
|
|
March 31, 2018 and December 31, 2017, respectively
|
|
|
28,386
|
|
|
|
28,771
|
|
|
Additional paid-in capital
|
|
|
21,649,515
|
|
|
|
20,782,630
|
|
|
Accumulated
deficit
|
|
|
(24,198,225
|
)
|
|
|
(23,623,602
|
)
|
|
Total
Stockholders’ Deficit
|
|
|
(2,520,324
|
)
|
|
|
(2,812,201
|
)
|
|
Total
Liabilities & Stockholders’ Deficit
|
|
$
|
186,475
|
|
|
$
|
269,018
|
|
See the accompanying notes to unaudited
condensed consolidated financial statements.
GREENWAY TECHNOLOGIES, INC.
Condensed Consolidated Statements
of Operations – Unaudited
For the three months ended March
31, 2018 and 2017
|
|
|
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
|
$
|
|
0
|
|
|
$
|
0
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
|
|
268,741
|
|
|
|
5,048,380
|
|
|
Research and development
|
|
|
|
|
309,215
|
|
|
|
177,658
|
|
|
Depreciation
|
|
|
|
|
0
|
|
|
|
99
|
|
|
Total Expense
|
|
|
|
|
577,956
|
|
|
|
5,226,137
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
|
|
|
|
(577,956
|
)
|
|
|
(5,226,137
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expenses)
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) on change in fair value of derivative
|
|
|
|
|
19,388
|
|
|
|
(53,385
|
)
|
|
Interest (expense)
income
|
|
|
|
|
(16,055
|
)
|
|
|
9,529
|
|
|
Total other income (expense)
|
|
|
|
|
3,333
|
|
|
|
(43,856
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes
|
|
|
|
|
(574,623
|
)
|
|
|
(5,269,993
|
)
|
|
Provision for income taxes
|
|
|
|
|
0
|
|
|
|
0
|
|
|
Net loss
|
|
|
|
$
|
(574,623
|
)
|
|
$
|
(5,269,993
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share;
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted net loss per shares
|
|
|
|
$
|
(0.00
|
)
|
|
$
|
(0.03
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding;
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
|
|
282,508,746
|
|
|
|
273,028,802
|
|
See the accompanying notes to unaudited
condensed consolidated financial statements.
GREENWAY TECHNOLOGIES, INC.
Condensed Consolidated Statements
of Cash Flows - Unaudited
For the three months ended March
31, 2018 and 2017
|
|
|
2018
|
|
2017
|
|
Cash Flows from Operating Activities
|
|
|
|
|
|
|
|
|
|
Net Loss from operations
|
|
$
|
(574,623
|
)
|
|
$
|
(5,269,993
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net loss to net cash
used in
|
|
|
|
|
|
|
|
|
|
Operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
0
|
|
|
|
99
|
|
|
Stock based compensation
|
|
|
0
|
|
|
|
4,779,370
|
|
|
(Gain) loss on derivative
|
|
|
(19,388
|
)
|
|
|
28,544
|
|
|
Debt issue costs amortized
|
|
|
10,405
|
|
|
|
0
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Prepaid expense
|
|
|
13,500
|
|
|
|
7,214
|
|
|
Accounts payable
|
|
|
(38,245
|
)
|
|
|
(58,874
|
)
|
|
Accrued management fees
|
|
|
70,000
|
|
|
|
15,000
|
|
|
Stockholder advances
|
|
|
(500
|
)
|
|
|
0
|
|
|
Accrued expenses
|
|
|
(6,851
|
)
|
|
|
(622
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash Used in Operating
Activities
|
|
|
(545,702
|
)
|
|
|
(499,262
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Flows from Investing Activities
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities
|
|
|
|
|
|
|
|
|
|
Repayments on note payable
|
|
|
(53,841
|
)
|
|
|
(3,000
|
)
|
|
Repayments on convertible note payable
|
|
|
(6,000
|
)
|
|
|
(120,753
|
)
|
|
Proceeds from
sale of common stock
|
|
|
536,500
|
|
|
|
833,250
|
|
|
Net Cash Provided by Financing
Activities
|
|
|
476,659
|
|
|
|
709,497
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Decrease) Increase in Cash
|
|
|
(69,043
|
)
|
|
|
210,235
|
|
|
Cash Beginning of Period
|
|
|
91,518
|
|
|
|
67,964
|
|
|
Cash End of Period
|
|
$
|
22,475
|
|
|
$
|
278,199
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosure of Cash Flow Information:
|
|
|
|
|
|
|
|
|
|
Cash Paid during the period for interest
|
|
$
|
500
|
|
|
$
|
2,287
|
|
|
Cash Paid during the period for taxes
|
|
$
|
0
|
|
|
$
|
0
|
|
|
Shares returned and cancelled
|
|
$
|
745
|
|
|
$
|
0
|
|
The accompanying notes are an integral
part of these unaudited condensed consolidated financial statements.
GREENWAY
TECHNOLOGIES, INC.
NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March
31, 2018
(Unaudited)
NOTE 1 – ORGANIZATION
Nature of Operations
Greenway Technologies, Inc. (“Greenway Technologies,”
“GTI,” 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 (“Universal Media”). The
Company changed its name to UMED Holdings, Inc. on March 23, 2011, and to Greenway Technologies, Inc. on June 23, 2017.
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
(2) the ability to grow with steady growth to follow and (3) an emphasis on emerging core industry markets, such as energy and metals.
In September 2010, the Company acquired 1,440 acres
of placer mining claims on Bureau of Land Management land in Mohave County, Arizona. See discussion in Note 3. Due to the
Company not producing any revenues from its BLM mining leases since its acquisition of the leases, nor achieving cash flow levels
to independently fund the development of its BLM mining leases in December 2010 and not having current resources for an appraisal
or assay, the Company 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. (“GIE”) which owns patents and trade secrets for a proprietary process and related technology
to convert natural gas into synthesis gas (syngas), also known as Gas-to-liquids or “GTL” processing. Syngas is an
important intermediate gas used by industry in the production of ammonia, methane, liquid fuels, and other downstream products.
The Company’s unique process is called Fractional Thermal Oxidation™ (FTO). When combined with Greenway Technologies’
Fischer-Tropsch (FT) system, the Company believes it will be able to offer a new economical, relatively small scale (125 to 2,475
bbls/day) method of converting gas-to-liquids that can be located in field locations where applicable to smaller scale GTL processing
requirements.
NOTE 2 - BASIS OF
PRESENTATION AND GOING CONCERN UNCERTAINTIES
Principles of Consolidation
The accompanying condensed consolidated financial
statements include the financial statements of the Company and its wholly-owned subsidiaries. All significant inter-company accounts
and transactions are eliminated in consolidation.
Basis of Presentation
The accompanying unaudited interim condensed consolidated
financial statements of the Company have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”)
for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulations S-X. Accordingly,
they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the periods presented are not necessarily indicative of the results that may be
expected for the year ending December 31, 2018. For further information, refer to the consolidated financial statements
and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2017.
The accompanying condensed
consolidated financial statements include the accounts of the following entities.
|
Name
of Entity
|
%
|
|
Entity
|
Incorporation
|
Relationship
|
|
Greenway
Technologies, Inc.
|
|
|
Corporation
|
Texas
|
Parent
|
|
Universal
Media Corporation
|
100
|
%
|
Corporation
|
Wyoming
|
Subsidiary
|
|
Greenway
Innovative Energy, Inc.
|
100
|
%
|
Corporation
|
Nevada
|
Subsidiary
|
|
Logistix
Technology Systems, Inc.
|
100
|
%
|
Corporation
|
Texas
|
Subsidiary
|
Going Concern Uncertainties
The accompanying 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 shown in the accompanying condensed consolidated financial statements, the Company sustained
a loss of approximately $575,000 for the three-month period ended March 31, 2018 and has a working capital deficiency of approximately
$2.5 million and an accumulated deficit of approximately $24.2 million at March 31, 2018. The ability of the Company to continue
as a going concern is in doubt and dependent upon achieving a profitable level of operations or on the ability of the Company
to obtain necessary financing to fund ongoing operations. Management believes that its current and future plans enable it to continue
as a going concern for the next twelve months.
The Company is in discussions with a number of oil
and gas companies, smaller oil and gas operators, and investors regarding joint venture funding for a commercial scale gas-to-liquids
(GTL) plant using the Company’s unique GTL system which includes its proprietary G-Reformer®, a Fischer-Tropsch unit,
and all necessary components to develop a fully functional GTL plant with a minimum output of ~125 barrels/day of high-cetane
blendstock (diesel fuel). Should an agreement be made, the joint venture relationship is expected to provide funding for a plant
as well as operating capital for the Company. While there are no assurances that financing for the initial plant will be obtained
on acceptable terms and in a timely manner, the failure to obtain the necessary working capital may cause the Company to move
in one or more alternate directions to transition this revolutionary GTL system into production.
In parallel, Company is also seeking agreements and/or
partnerships with other GTL system providers to use the Company’s proprietary synthesis gas production unit, the G-Reformer®,
as part of existing, planned, or new GTL systems in partnership with the Company. While there are no assurances that such agreements
and partnerships will be obtained on acceptable terms and in a timely manner, the failure to obtain the necessary working capital
may cause the Company to move in one or more alternate directions to commercialize its proprietary G-Reformer® technology.
Several alternate paths are under consideration.
The accompanying condensed 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 condensed 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 useful life of the assets.
The Company continues to use its fully depreciated property and equipment/
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 Company has not, to date, generated
any revenues.
Use of Estimates
The preparation of financial statements in conformity
with accounting principles generally accepted in the United States requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amount of revenue and expenses during the reported period. Actual results could differ
materially from the estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments
purchased with an original maturity of three-months or less to be cash equivalents. There were no cash equivalents
at March 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 2013 – 2016.
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 and beneficial conversion features (16,600,000) 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 Notes 6 and 7 below for disclosures associated
with the Company’s convertible notes payable and warrants.
Fair Value of Financial Instruments
Effective January 1, 2008, fair value measurements
are determined by the Company’s adoption of authoritative guidance issued by the FASB, with the exception of the application
of the statement to non-recurring, non-financial assets and liabilities, as permitted. Fair value is defined in the authoritative
guidance as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous
market for the asset or liability in an orderly transaction between market participants at the measurement date. A fair value
hierarchy was established, which prioritizes the inputs used in measuring fair value into three levels as follows:
Level 1 – Valuation based on unadjusted quoted market
prices in active markets for identical assets or liabilities.
Level 2 – Valuation based
on, observable inputs (other than level one prices), quoted market prices for similar assets such as at the measurement date;
quoted prices in the market that are not active; or other inputs that are observable, either directly or indirectly.
Level 3 – Valuation based on unobservable inputs
that are supported by little or no market activity, therefore requiring management’s best estimate of what market participants
would use as fair value.
Original Issue Discount
For certain convertible debt issued, the Company provides
the debt holder with an original issue discount (“OID”). An OID is the difference between the original
cash proceeds and the amount of the note upon maturity. The Note is originally recorded for the total amount payable. The OID
is amortized into interest expense pro-rata over the term of the Note.
In instances where the determination of the fair value
measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within
which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement
in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its
entirety requires judgment and considers factors specific to the asset or liability. The valuation of the Company’s notes
recorded at fair value is determined using Level 3 inputs, which consider (i) time value, (ii) current market and (iii) contractual
prices.
The carrying amounts of financial assets and liabilities,
such as cash and cash equivalents, receivables, accounts payable, notes payable and other payables, approximate their fair values
because of the short maturity of these instruments.
The following table
represents the Company’s assets and liabilities by level measured at fair value on a recurring basis at March 31, 2018 and
December 31, 2017:
|
Description
|
|
Level
1
|
|
|
Level
2
|
|
Level
3
|
|
|
March
31, 2018 Derivative Liabilities
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
86,255
|
|
|
December
31, 2017Derivative Liabilities
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
105,643
|
|
The following assets and liabilities
are measured on the balance sheets at fair value on a recurring basis utilizing significant unobservable inputs or Level 3 assumptions
in their valuation. The following tables provide a reconciliation of the beginning and ending balances of the liabilities:
The change in the notes payable at fair value for
the nine-month period ended March 31, 2018, is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair
Value
|
|
Change
in
|
|
New
|
|
|
|
Fair
Value
|
|
|
|
January
1,
2018
|
|
Fair
Value
|
|
Convertible
Notes
|
|
Conversions
|
|
March
31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative
Liabilities
|
|
$
|
(105,643)
|
|
|
$
|
19,388
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
(86,255)
|
|
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 condensed consolidated financial statements.
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 March 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 $309,215 and $177,658 during the three-months ended March 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
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 condensed
consolidated financial statements.
NOTE 4 – PROPERTY,
PLANT, AND EQUIPMENT
|
|
|
Range
of Lives
in
Years
|
|
March
31, 2018
|
|
December
31, 2017
|
|
Equipment
|
|
|
5
|
|
|
$
|
2,032
|
|
|
$
|
2,032
|
|
|
Furniture
and fixtures
|
|
|
5
|
|
|
|
1,983
|
|
|
|
1,983
|
|
|
|
|
|
|
|
|
|
4,015
|
|
|
|
4,015
|
|
|
Less
accumulated depreciation
|
|
|
|
|
|
|
(4,015
|
)
|
|
|
(4,015
|
)
|
|
|
|
|
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Depreciation expense
was $0 and $99 for the three-months ended March 31, 2018 and 2017, respectively.
NOTE 5 – TERM
NOTES PAYABLE
Term notes payable consisted
of the following at March 31, 2018 and December 31, 2017:
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
Unsecured
note payable dated March 8, 2016 to an individual at 5% interest, payable upon
the Company’s
availability of cash
|
|
$
|
0
|
|
|
$
|
13,500
|
|
|
Unsecured note
payable dated November 13, 2017 to a corporation at $10,000 lump
sum interest
at maturity on February 28, 2018. The terms are being re-negotiated with
the noteholder.
|
|
|
100,000
|
|
|
|
100,000
|
|
|
Unsecured
note payable dated December 28, 2017 to a corporation, due January 3, 2018
|
|
|
|
|
|
|
53,842
|
|
|
Total
term notes
|
|
$
|
100,000
|
|
|
$
|
153,842
|
|
NOTE 6 – 2017
CONVERTIBLE PROMISSORY NOTES
The
Company issued a $166,667 convertible promissory note bearing interest at 4.50% per annum to an accredited investor, payable in
equal installments of $6,000 commencing February 1, 2018 plus interest at rate of 4% per annum on December 20, 2018 and $80,000
plus
accrued
interest on December 20, 2019. The holder has the right to convert the note into common stock of the Company
at a conversion price of $0.08 per share for each one dollar of cash payment which may be due, (which would be 1,083,333 shares
for the $86,667 payment and 1,000,000 shares for the $80,000 payment.
The Company evaluated the terms
of the convertible note in accordance with ASC 815-40, Contracts in Entity’s Own Equity, and concluded that the Convertible
Note did not result 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. As of December 31, 2017, 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 of and during the three-months ended March 31, 2018, the remaining discount was $23,697 and $3,386 of the
discount was amortized.
The Company issued a $150,000 convertible
promissory note bearing interest at 4.50% per annum to an accredited investor, payable in equal installments of $6,000 plus accrued
interest until the principal and accrued interest are paid in full. The holder has the right to convert the note
into common stock of the Company at a conversion price of equal to 70% of the prior twenty (20) days average closing market price
of the Company’s common stock.
The Company evaluated the terms
of the convertible note in accordance with ASC 815-40, Contracts in Entity’s Own Equity, and concluded that the Convertible
Note resulted in a derivative. The Company evaluated the terms of the convertible note and concluded that there was a beneficial
conversion feature since the convertible note was convertible into shares of common stock at a discount to the market value of
the common stock. The discount related to the beneficial conversion feature on the note was valued at $58,494 based on the difference
between the fair value of the 1,578,947 convertible shares at the valuation date and the $150,000 note value. The discount related
to the beneficial conversion feature 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
. As of and during the three-months ended March
31, 2018, the remaining discount was $47,731 and $7,019 of the discount was amortized. The derivative liability for this note
at March 31, 2018 was $27,938.
NOTE 7 – CONVERTIBLE
PROMISSORY NOTE
May 2016 Convertible
Note
On May 4, 2016, the Company issued
a $224,000 convertible promissory note bearing interest at 10.0% per annum to an accredited investor, payable beginning November
10, 2016, in monthly installments of $44,800 plus accrued interest and a cash premium equal to 10.0% of the installment amount. The
convertible promissory note was paid in full on March 4, 2017. The holder had the right under certain circumstances to convert
the note into common stock of the Company at a conversion price equal to 70% of the average of the 3 lowest volume weighted average
trading prices during the 20-day period ending on the latest complete trading day prior to the conversion date.
The Company evaluated the terms
of the convertible note in accordance with ASC 815-40, Contracts in Entity’s Own Equity, and concluded that the Convertible
Note resulted in a derivative. The Company evaluated the terms of the convertible note and concluded that there was a beneficial
conversion feature since the convertible note was convertible into shares of common stock at a discount to the market value of
the common stock. The discount related to the beneficial conversion feature on the note was valued at $224,000 based on the
Black-Scholes
Model
. The discount related to the beneficial conversion feature ($51,829) was amortized over the term of the debt (10 months). For
the year ended December 31, 2017, the Company recognized interest expense of $9,327 related to the amortization of the discount.
In
connection with the issuance of the $224,000 note, the Company recorded debt issue cost and discount as follows:
|
|
|
$20,000
original issue discount and $4,000 debt issue cost, which was amortized over 10 months, with amortization of $4,000 for twelve-months
ended December 31, 2017.
|
|
|
|
The
convertible promissory note was paid in full on March 10, 2017, reducing the embedded derivative for the 2016 beneficial conversion
right to zero at December 31, 2017.
|
September 2014 Convertible
Note
In connection with the
issuance of a $158,000 convertible promissory note in 2014 (repaid in July 2015), the Company issued warrants to purchase shares
of common stock.
|
|
|
-
Warrants
– recorded at fair value ($79,537) upon issuance, and marked -to-market on the
balance sheet at
$58,317
as of March 31, 2018 and $47,149 as of December 31, 2017, which was computed as follows:
|
|
|
|
Commitment Date
|
|
|
Expected
dividends
|
|
|
0%
|
|
|
Expected
volatility
|
|
|
175.59%
|
|
|
Expected
term: conversion feature
|
|
2 years
|
|
|
Risk
free interest rate
|
|
|
2.27%
|
|
NOTE 8 – ACCRUED EXPENSES
Accrued expenses consisted of
the following at March 31, 2018 and December 31, 2017:
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
Accrued
consulting fees
|
|
$
|
249,500
|
|
|
$
|
249,500
|
|
|
Accrued
expense related to shareholder dispute
|
|
|
0
|
|
|
|
330,000
|
|
|
Accrued
expense related to warrant exercise
|
|
|
180,000
|
|
|
|
180,000
|
|
|
Other
accrued expenses
|
|
|
0
|
|
|
|
12,000
|
|
|
Accrued
interest expense
|
|
|
12,409
|
|
|
|
7,260
|
|
|
Total
accrued expenses
|
|
$
|
441,909
|
|
|
$
|
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 common stock share has one voting right and the right to dividends, if and when declared by
the Board of Directors.
Class
A Common Stock
At March
31, 2018, there were 283,828,915 shares of class A common stock issued and outstanding.
During the
three-months ended March 31, 2018, the Company: issued 4,780,254 shares of restricted class A common stock to 20 individuals through
private placements for cash of $536,500 at average of $0.1122 per share.
-
issued
3,000,000 of restricted common stock to the estate of a former officer of Greenway Innovative Energy, Inc. to satisfy a $330,000
accrual established at December 31, 2017 at an average of $0.11 per share.
-
canceled
11,663,164 shares returned to the Company by shareholders at a value of $1,163 added to paid-in-capital.
Class
B Stock
At March 31, 2018 and 2017, there were
0 and 126,938 shares of class B stock issued and outstanding, respectively.
During the year ended December 31, 2017, the Company;
exchanged 630,000 shares of class A common stock for 62,986 class B shares with a shareholder who held class B shares from the
2009 merger agreement between the Company and Dynalyst Manufacturing Corporation which set a conversion rate of 15 to 1. The Company
negotiated the 630,000 shares when the class B shareholder elected to convert.
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.
Stock options, warrants
and other rights
At March 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 three years and risk-free interest rate of 1.37%.
On January 8, 2018, the Company
issued 4,000,000 warrants, which were in lieu of 3,000,000 shares to a director, at $0.10 that expires in three years.
NOTE 10 - RELATED PARTY TRANSACTIONS
Shareholders made loans and advances
to the Company in the amounts of $3,000 during the three-months ended March 31, 2018 and $219,509 (Tunstall Canyon Group $166,667,
Kevin Jones $51,342 and Pat Six $1,500) during the year ended December 31, 2017, respectively. During the three-months ended
March 31, 2018 shareholders were repaid $3,500. During the year ended December 31, 2017, a shareholder Richard Halden purchased
2,250,000 shares of class A common stock for $225,000 ($0.10 per share) and Kevin Jones received repayment of a $59,690 loan.
NOTE 11 – INCOME TAXES
At March 31, 2018 and December 31, 2017,
the Company had approximately $16.5 million and $16.4 million, respectively, of net operating losses ("NOL") carry forwards
for federal and state income tax purposes. These losses are available for future years and expire through 2034. Utilization
of these losses may be severely or completely limited if the Company undergoes an ownership change pursuant to Internal Revenue
Code Section 382.
The provision for income taxes for continuing operations consists
of the following components for the three-months ended March 31, 2018 and the year ended December 31, 2017:
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
Current
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Deferred
|
|
|
-
|
|
|
|
-
|
|
|
Total
tax provision for (benefit from) income taxes
|
|
$
|
-
|
|
|
$
|
-
|
|
A comparison of the provision
for income tax expense at the federal statutory rate of 21% for the three-months ended March 31, 2018 and the year ended December
31, 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 March 31, 2018 and December 31, 2017:
|
|
|
2018
|
|
|
2017
|
|
|
Deferred
tax assets
|
|
|
|
|
|
|
|
Net
operating loss carry forwards
|
|
$
|
16,524,544
|
|
|
$
|
16,403,873
|
|
|
Deferred
compensation
|
|
|
836,272
|
|
|
|
821,572
|
|
|
Stock
based compensation
|
|
|
2,900,734
|
|
|
|
2,900,734
|
|
|
Other
|
|
|
581,639
|
|
|
|
581,639
|
|
|
Total
|
|
|
20,843,189
|
|
|
|
20,707,818
|
|
|
Less
valuation allowance
|
|
|
(20,843,189
|
)
|
|
|
(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 $135,371 and $12,784,855 for the three-months ended March 31, 2018 and the year ended December 31, 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 $20,843,189 and $20,707,818 at March
31, 2018 and December 31, 2017, respectively.
Utilization of
the Company’s net operating losses may be subject to substantial annual limitation if the Company experiences a 50% change
in ownership, as provided by the Internal Revenue Code and similar state provisions. Such an ownership change would substantially
increase the possibility of net operating losses expiring before complete utilization.
The ultimate realization of deferred tax
assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become
deductible. Management considers the scheduled reversal of deferred tax liabilities, historical taxable income including available
net operating loss carry forwards to offset taxable income, and projected future taxable income in making this assessment.
NOTE 12 – COMMITMENTS
Employment Agreements
In August 2012, the Company entered into employment agreements
with the president and chairman of the board of Greenway Innovative Energy, Inc. for a term of 5 years with compensation of $90,000
per year. In June of 2014, the president's employment agreement was amended to increase his annual pay to $180,000. The
employment agreement terminated August 12, 2017. During the three-months ended March 31, 2017, the Company paid and accrued a
total of $45,000 on the employment agreement.
In the August 2012 acquisition agreement with Greenway
Innovative Energy, Inc., the Company agreed to issue an additional 7,500,000 shares of restricted common stock when the first
GTL unit is built and becomes operational and is capable of producing 2,000 barrels of diesel or jet fuel per day and pay Greenway
Innovative Energy a 2% royalty on all gross production sales on each unit placed in production.
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.
See Subsequent Events Note 13.
Consulting Agreement
On November 28, 2017, the Company
entered into a three-year consulting agreement with Chisos Equity Consultants, LLC for public relations, consulting and corporate
communications services. The initial payment was 1,800,000 shares of our restricted common stock. Additional payments upon the
Company’s 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
Leases
In October 2015, the Company signed a
new two-year lease for new office space of approximately 1,800 square feet at the rate of $2,417 for the first twelve months and
$2,495 for the second twelve months. During the three months ended March 31, 2018 and 2017, the Company expensed $13,517
and $8,640, respectively, in rent expense.
Greenway Innovative Energy, Inc. rents
approximately 600 square feet of office space at 1511 North Cooper St., Suite 207, Arlington, Texas 76011, at a rate of $1,369
per month.
The Company pays approximately $11,600
in annual maintenance fees on its Arizona BLM mining leases, in addition to 10% royalties based on production.
Legal
The Company has been named as a co-defendant
in an action brought against the Company and Mamaki Tea, Inc., alleging, among other things, that the Company was named as a co-guarantor
on an $850,000 foreclosed note. Management does not believe the ultimate resolution will have an adverse impact on the Company’s
financial condition or results of operations.
On April 22, 2016, Greenway Technologies filed suit under Cause
No. DC-16-004718, in the 193rd District Court, Dallas County, Texas against Mamaki of Hawaii, Inc. (“Mamaki”), Hawaiian
Beverages, Inc.(“HBI”), Curtis Borman and Lee Jenison for breach of a Stock Purchase Agreement dated October 29, 2015,
wherein we sold our shares in Mamaki to HBI for $700,000 (along with the assumption of certain debt). The Defendants failed to
make payments of $150,000 each on November 30, 2015, December 28, 2015 and January 27, 2016. On January 13, 2017, we executed
a Settlement and Mutual Release Agreement with the Defendants. However, the Defendants defaulted in their payment obligations
under Settlement and Mutual Release Agreement. Due to the bankruptcy proceedings involving Curtis Borman, all action in this matter
has been stayed.
See Subsequent Events Note 13.
NOTE
13-SUBSEQUENT EVENTS
During the period from April 1, 2018 through
May 15, 2018, the Company issued 50,000 shares of restricted class A common stock to one individual for $6,000 at average
price of $0.12 per share.
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 will be done in connection with a legal opinion pursuant to Rule 144.
On May 10, 2018, the Company announced changes to its management
team and Board of Directors, including the election of a new Chairman of the Board, current Director Raymond Wright; the appointment
of a new independent director, Peter Hauser; the resignation of Patrick Six as President and Chief Financial Officer; the appointment
of John Olynick as the new President, and the appointment of Ransom Jones as the Company’s Chief Financial Officer, Secretary
and Treasurer.
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. The Bonus shall be payable, first in a cash lump sum payment of
Fifteen-Thousand Dollars ($15,000) at the conclusion of their first six (6) months of employment, and an additional Twenty-Thousand
Dollars ($20,000) no later than thirty (30) days after the end of their first twelve (12) months of employment by the Company,
such Bonus being subject to increases based upon the reasonable discretion of the majority of the board of directors of the Company
or the designated committee(s) thereof. 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. Their
employment agreements can be terminated, among the other things, by the Company with or without cause or by the employees at any
time during their term upon sixty (60) days’ notice. Their employment agreements also contain customary provisions of confidentiality
and non-competition and non-solicitation.
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.
|
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of Operations.
|
THE
FOLLOWING DISCUSSION SHOULD BE READ TOGETHER WITH THE INFORMATION CONTAINED IN THE FINANCIAL STATEMENTS AND RELATED NOTES INCLUDED
ELSEWHERE IN THIS REPORT ON FORM 10-Q.
The following discussion and analysis
of financial condition, results of operations, liquidity, and capital resources, should be read in conjunction with our audited
consolidated financial statements and notes thereto appearing elsewhere in this report, which have been prepared assuming that
we will continue as a going concern, and in conjunction with our Annual Form 10-K filed on April 5, 2018. As discussed in Note
2 to the consolidated financial statements, our recurring net losses and inability to generate sufficient cash flows to meet our
obligations and sustain our operations raise substantial doubt about our ability to continue as a going concern. Management’s
plans concerning these matters are also discussed in Note 2 to the consolidated financial statements. This discussion contains
forward-looking statements that involve risks and uncertainties, including information with respect to our plans, intentions and
strategies for our businesses. Our actual results may differ materially from those estimated or projected in any of these forward-looking
statements.
Unless the context otherwise suggests,
“we,” “our,” “us,” and similar terms, as well as references to “UMED” and “Greenway
Technologies,” all refer to Greenway Technologies, Inc, as of the date of this report.
Overview
Greenway Technologies, UMED Holdings,
Inc. (“Greenway” or “UMED”) 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, we changed our name to Universal
Media Corporation. The transaction was accounted for as a reverse merger, and Universal Media Corporation was the acquiring company
on the basis that Universal Media Corporation’s senior management became the entire senior management of the merged entity
and there was a change of control of Dynalyst. The transaction was accounted for as recapitalization of Dyanlyst’s capital
structure. In connection with the merger, Dynalyst issued 57,500,000 restricted common shares to the shareholders of Universal
Media Corporation for 100% of Universal Media Corporation.
On August 18, 2009, Dynalyst approved
the amendment of its Articles of Incorporation and filed with the Texas Secretary of State an amendment to change our name to
Universal Media Corporation and approved the increase in authorized shares to 300,000,000 shares of common A stock, par value
$0.0001 and 20,000,000 shares of common B, par value $0.0001.
On March 23, 2011, Universal Media
Corporation approved the amendment of its Articles of Incorporation and filed with the Texas Secretary of State an amendment to
change our name to UMED Holdings, Inc.
On June 22, 2017, UMED Holdings,
Inc. approved the amendment of our certificate of formation and filed on June 23, 2017, with the Texas Secretary of State an amendment
to change our name to Greenway Technologies, Inc.
Greenway Technologies is a holding
company with present interests in energy and mining. We have our corporate offices at 8851 Camp Bowie West, Suite 240, Fort Worth,
Texas 76116, consisting of approximately 1,800 square feet. Our wholly-owned subsidiary, Greenway Innovative Energy, Inc. (“GIE”),
has offices at 1521 North Cooper Street, Suite 207, Arlington, Texas 76011.
We will be unable to pay our obligations
in the normal course of business or service our debt in a timely manner throughout 2018 without raising additional debt or equity
capital. There can be no assurance that additional debt or equity capital will be raised.
Greenway Technologies is currently
evaluating strategic alternatives that include the following: (i) entering into a joint venture or partnership with an existing
oil and gas producer or refiner to exploit the Company’s patented technology, (ii) licensing or selling rights to the technology,
(iii) raising additional equity capital or (iv) entering into or issuing debt instruments. This process is ongoing and can be
lengthy and has inherent costs and risks. 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.
Energy Interest
In August 2012, Greenway Technologies
(formerly, UMED) acquired 100% of Greenway Innovative Energy, Inc. 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), Greenway Technologies’ proprietary G-Reformer™, combined with a Fischer-Tropsch process, is designed
to offer an economical and scalable method of converting natural gas to liquid fuel.
On June 26, 2017, Greenway Technologies,
in conjunction with UTA, announced that it had successfully demonstrated its GTL technology at the Conrad Greer Laboratory at
UTA proving the viability of the GTL system.
On March 6, 2018, the Company announced
the completion of its G-Reformer® which converts natural gas into synthesis gas. The G-Reformer® is a critical component
of the company’s innovative Greer-Wright Gas-to-Liquids system which converts natural gas into liquid fuels. A team consisting
of individuals from Greenway Technologies, Inc. and its wholly-owned subsidiary, Greenway Innovative Energy, the University of
Texas at Arlington (UTA), and Industrial Refractory Services, Inc. worked together to calibrate the newly-built G-Reformer®.
The G-Reformer® testing performed at that time substantiated the units’ synthesis gas generation capability and demonstrated
additional proficiencies within certain prior prescribed testing metrics.
The Company believes that the G-Reformer®
is a major innovation in GTL technology. It supersedes legacy technologies which are more costly, have a larger footprint, and
cannot be easily deployed at field sites to process stranded gas, coal-bed methane, vented gas, or flared gas, all markets the
Company seeks to pursue. This technology, based around the G-Reformer®, is unique in that it allows for GTL plants with a
demonstrably smaller footprint, especially in conjunction with the Company’s patented application for deployment on large
flat-bed tractor-trailer trucks, versus legacy large-scale technologies, which the Company believes will provide for substantially
lower up-front and ongoing costs. Greenway Technologies is now working to commercialize the system and related technology and
is in discussions with a number of oil and gas companies, smaller oil and gas operators and interested parties to obtain joint
venture or other forms of capital funding to build its first complete gas-to-liquid plant using Greenway’s proprietary GTL
conversion processes.
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 our restricted common stock. Early indications, from samples taken and processed,
provides reason to believe that the potential recovery value of the metals located on the 1,440 acres is significant, but actual
mining and processing will determine the ultimate value which may be realized from this property holding. The Company is currently
exploring strategic options to partner or sell its interest in this acreage.
Going Concern
As of March 31, 2018, we have
an accumulated deficit of $24,198,225. During the three-months ended March 31, 2018, we used net cash of $545,702 for operating
activities. These factors raise substantial doubt about our ability to continue as a going concern.
While we are attempting to commence
operations and generate revenues, our cash position may not be enough to support our daily operations. Management intends to raise
additional funds by way of a public or private offering. Management believes that the actions presently being taken to further
implement its business plan and generate revenues provide the opportunity for us 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. Our ability to continue as a going concern is dependent upon our ability to further implement our business plan
and generate revenues.
Three-months Ended
March 31, 2018, Compared to Three-months Ended March 31, 201
7.
Revenues.
During the three-months ended March 31, 2018, and 2017, we had no revenues from operations. Management is aggressively looking
for ways to leverage our technology to develop revenue streams.
Operating
Expenses.
Consulting
Fees
. During the three-months ended March 31, 2018, consulting expense increased to $65,000 as compared to $35,000 from the
prior year three-months ended March 31, 2017. The increase was primarily the result of increased fees for consulting services.
Officer
Compensation
. During the three-months ended March 31, 2018, officer compensation decreased to $90,000 as compared to $125,000
from the prior year three-months ended March 31, 2017. Officer compensation decreased due to the President in 2017 not being with
the Company in 2018.
Professional Fees
. During the
three-months ended March 31, 2018, professional fees increased to $17,902 as compared to $10,040 from the prior year three-months
ended March 31, 2017. Professional fees increased because of an increase in filing fees and press releases.
Operating Expenses
. During
the three-months ended March 31, 2018, operating expenses decreased to $577,956 as compared to $5,226,137 from the prior year
three-months ended March 31, 2017. The decrease was primarily due to $4,779,370 stock-based compensation recorded in the three-months
ended March 31, 2017, without a comparative charge in the three-months ended March 31, 2018. Travel expenses increased to $10,147
in the three-months ended March 31, 2018, compared to $5,323 in the three-months ended March 31, 2017. Legal expenses increased
to $35,021 in the three-months ended March 31, 2018, compared to $29,349 in the three-months ended March 31, 2017. The increase
in research and development costs of $309,215 in the three-months ended March 31, 2018, compared to $177,658 in the three-months
ended March 31, 2017.
Interest Expense
. During
the three-months ended March 31, 2018, interest expense increased to $16,055 as compared to interest income of $9,529 from the
prior year three-months ended March 31, 2017. The increase was primarily due to the amortization of debt issue cost related to
convertible promissory notes issued in the fourth quarter of 2017.
Derivative Adjustment
.
During the three-months ended March 31, 2018, the gain on derivative adjustment was $19,388 as compared to a loss of $53,385 for
the prior year three-months ended March 31, 2017. The change was due to the convertible note payable being paid in first quarter
2017 and the derivative liability for the three-months ended March 31, 2018 being calculated using the
Black-Scholes Model
only on the warrants.
Net Loss from Operations
.
Our net loss from operations decreased to $574,623 for the three-months ended March 31, 2018 compared to a loss of $5,269,993
for the three-months ended March 31, 2017. The decrease was primarily due to decrease of $4,779,370 in stock-based compensation.
Liquidity and Capital
Resources
Liquidity
is the ability of a company to generate adequate amounts of cash to meet its needs for cash. The following table provides certain
selected balance sheet comparisons between March 31, 2018, and December 31, 2017:
|
|
|
March
31,
|
|
December
31,
|
|
$
|
|
%
|
|
|
|
2018
|
|
2017
|
|
Change
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
Working
Capital
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$22,475
|
|
$91,518
|
|
$(69,043)
|
|
(75)%
|
|
Total
current assets
|
|
$166,475
|
|
$249,018
|
|
$(82,543)
|
|
(33)%
|
|
Total
assets
|
|
$186,475
|
|
$269,018
|
|
$(82,453)
|
|
(31)%
|
|
Accounts
payable and accrued liabilities
|
|
$2,281,305
|
|
$2,586,901
|
|
$(305,596)
|
|
(12)%
|
|
Notes
payable and accrued interest
|
|
$100,000
|
|
$388,675
|
|
$(288,675)
|
|
(74%)
|
|
Derivative
liability
|
|
$86,255
|
|
$105,643
|
|
$ 19,388
|
|
(18%)
|
|
Total
current liabilities
|
|
$2,622,799
|
|
$2,997,219
|
|
$(374,420)
|
|
(12)%
|
|
Total
liabilities
|
|
$2,706,799
|
|
$3,081,219
|
|
$(374,420)
|
|
(11)%
|
In the
three-months ended March 31, 2018, our working capital deficit decreased by $291,877 primarily as a result of a decrease in current
assets of $82,543 and a decrease in accounts payable and accrued liabilities of $305,596, and decreases in notes payable and accrued
interest of $288,675 and derivative liability of $19,388.
Operating
activities
Net cash used in continuing operating
activities during the three-months ended March 31, 2018, was $(545,702) as compared to $(499,262) for the three-months ended March
31, 2017. Items totaling approximately $42,309 contributing to the net cash used in continuing operating activities for the three-months
ended March 31, 2018, include:
|
|
|
$574,623
net loss, offset by:
$ 19,388
gain on derivatives
$ 13,500
decrease in prepaid expenses,
|
|
|
|
$ 4,405 debt
issue costs amortized,
$ 24,404
increase in accounts payable and accrued expenses
|
Net
cash used for continuing operating activities for the three-months ended March 31, 2017, was $499,262. Items totaling approximately
$304,059 contributing to the net cash used in continuing operating activities for the three-months ended March 31, 2017, include:
$5,269,993
net loss, offset by:
|
|
$4,779,370
representing the value of stock-based compensation,
$
28,544 loss on derivative liability adjustment,
$
(7,214) in prepaids
|
|
|
$
99 of depreciation,
$
15,000 increase in management fees
$
(59,496) decrease in accounts payable and accrued expenses
|
Investing activities
We
had no investing activities during the three-months ended March 31, 2018 and 2017.
F
inancing Activities
Net cash provided by financing
activities was $476,659 for the three-months ended March 31, 2018, composed of $536,500 in sales of common stock and $53,841 of
payments on note payable.
Net cash provided by financing
activities was $709,497 for the three-months ended March 31, 2017, composed primarily of $833,250 in sales of common stock, $120,753
repayment of convertible note payable, $3,000 payments on note payable.
Seasonality
We
do not anticipate that our business will be affected by seasonal factors.
Impact
of Inflation
General
inflation in the economy has driven the operating expenses of many businesses higher. We will continuously seek methods of reducing
costs and streamlining operations while maximizing efficiency through improved internal operating procedures and controls. While
we are subject to inflation as described above, our management believes that inflation currently does not have a material effect
on our operating results. However, inflation may become a factor in the future.
Commitments
Employment Agreements.
In August 2012, we entered into
employment agreements with the president and chairman of the board of Greenway Innovative Energy, 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 his
annual pay to $180,000. The employment agreement terminated in August 2017. During the three-months ended March 31, 2017, the
we paid and accrued a total of $45,000 for the Greenway Innovative Energy president.
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., we agreed to issue an additional 7,500,000 shares of restricted common stock
when the first portable GTL unit is build and becomes operational and is capable of producing 2,000 barrels of diesel or jet fuel
per day and pay Greenway Innovative Energy a 2% royalty on all gross production sales on each unit placed in production.
Leases.
In October 2015, we entered into
a two-year lease for approximately 1,800 square feet a base rate of $2,417 per month. During the three-months ended March 31,
2018, and 2016, we expensed $26,992 and $35,023.
Greenway Innovative
Energy, Inc. rents approximately 600 square feet of office space at 1511 North Cooper St., Suite 207, Arlington, Texas 76011,
at a rate of $1,369 per month.
Mining Interest.
In December
2010, we acquired from Melek Mining, Inc. and 4HM Partners, LLC 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 our restricted
common stock. Our minimum commitment for 2018 is approximately $11,160 in annual maintenance fees, which are due September 1,
2018, payable to the United States Bureau of Land Management. Once we enter the production phase, royalties owed to the BLM will
be are equal to 10% of production. As of the date of this report, the mining claims are not covered by any lease agreement, we
file an annual maintenance fee form to hold the claims.
Consulting
Agreement
On
November 28, 2017, we 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 our 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
-
1,000000 shares at the
time our common stock reaches $10.00 per share during the term of the agreement
Critical
Accounting Policies
Our financial statements and accompanying
notes are prepared in accordance with generally accepted accounting principles in the United States. Preparing financial statements
requires management to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenue, and expenses.
These estimates and assumptions are affected by management’s application of accounting policies. Critical accounting policies
include revenue recognition and impairment of long-lived assets.
We recognize revenue in accordance
with Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements.” Sales are recorded when products
are shipped to customers. Provisions for discounts and rebates to customers, estimated returns and allowances and other adjustments
are provided for in the same period the related sales are recorded.
We evaluate our long-lived assets
for financial impairment on a regular basis in accordance with Statement of Financial Accounting Standards No. 144, “Accounting
for the Impairment or Disposal of Long-Lived Assets” which evaluates the recoverability of long-lived assets not held for
sale by measuring the carrying amount of the assets against the estimated discounted future cash flows associated with them. At
the time such evaluations indicate that the future discounted cash flows of certain long-lived assets are not sufficient to recover
the carrying value of such assets, the assets are adjusted to their fair values.
Quantitative
and Qualitative Disclosures About Market Risk
We
conduct all of our transactions, including those with foreign suppliers and customers, in U.S. dollars. We are therefore not directly
subject to the risks of foreign currency fluctuations and do not hedge or otherwise deal in currency instruments in an attempt
to minimize such risks. Demand from foreign customers and the ability or willingness of foreign suppliers to perform their obligations
to us may be affected by the relative change in value of such customer or supplier’s domestic currency to the value of the
U.S. dollar. Furthermore, changes in the relative value of the U.S. dollar may change the price of our products relative to the
prices of our foreign competitors.
Stock-Based
Compensation
We
follow 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.
Recently Issued Accounting
Pronouncements
In September 2014, FASB issued
Accounting Standards Update (“ASU”) No. 2014-10, “Development Stage Entities (Topic 915): Elimination of Certain
Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation.”
The update removes all incremental financial reporting requirements from GAAP for development stage entities, including the removal
of Topic 915 from the FASB Accounting Standards Codification. In addition, the update adds an example disclosure in Risks and
Uncertainties (Topic 275) to illustrate one way that an entity that has not begun planned principal operations could provide information
about the risks and uncertainties related to Greenway Technologies’ current activities. Furthermore, the update removes
an exception provided to development stage entities in Consolidations (Topic 810) for determining whether an entity is a variable
interest entity-which may change the consolidation analysis, consolidation decision, and disclosure requirements for a company
that has an interest in a company in the development stage. The update is effective for the annual reporting periods beginning
after December 15, 2014, including interim periods therein. Early application with the first annual reporting period or interim
period for which the entity’s financial statements have not yet been issued (Public business entities) or made available
for issuance (other entities). We adopted this pronouncement for the three-months ended March 31, 2018.
Off-Balance Sheet
Arrangements
We
do not have any off-balance sheet arrangements.
|
|
Item
3.
|
Quantitative
and Qualitative Disclosures about Market Risk.
|
There
has been no material change in our market risks since the end of the fiscal year 2018.
|
|
Item 4.
|
Controls
and Procedures.
|
Disclosure Controls
and Procedures
The term disclosure controls
and procedures means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed
by the issuer in the reports that it files or submits under the Exchange Act (15 U.S.C. 78a,
et seq
) is recorded, processed,
summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by
an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s
management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate
to allow timely decisions regarding required disclosure.
Our management is responsible
for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting
is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision
of, our principal executive officer and principal financial officer and effected by our board of directors, management and other
personnel, 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 and includes those policies and procedures that:
|
|
·
|
Pertain
to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions
and
dispositions
of the assets of the issuer;
|
|
|
·
|
Provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements
in accordance with generally accepted accounting principles, and that receipts and expenditures of the
issuer are
being made only in accordance with authorizations of management and directors of the issuer; and
|
|
|
·
|
Provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or
disposition
of the issuer’s assets that could have a material effect on the financial statements.
|
Our
management, including our chief executive officer and chief financial officer, does not expect that our disclosure controls and
procedures or our internal controls over financial reporting will prevent all error and all fraud. A control system, no matter
how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system
are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of
controls must be considered relative to their costs. Because of inherent limitations in all control systems, internal control
over financial reporting may not prevent or detect misstatements, and no evaluation of controls can provide absolute assurance
that all control issues and instances of fraud, if any, within the Company have been detected. Also, projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may deteriorate.
Because of its inherent limitations,
internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.
In March 2018, we conducted
an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer,
of the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over
financial reporting established in “Internal Control -- Integrated Framework,” issued by the Committee of Sponsoring
Organizations revised 2013 (“COSO”) of the Treadway Commission. Based upon this assessment, we determined that our
internal control over financial reporting is ineffective.
The matters involving internal
controls and procedures that our management considers to be material weaknesses under COSO and SEC rules are: (1) lack of a functioning
audit committee and lack of independent directors on our board of directors, resulting in potentially ineffective oversight in
the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent
with control objectives; (3) insufficient written policies and procedures for accounting and financial reporting with respect
to the requirements and application of US GAAP and SEC disclosure requirements; and (4) ineffective controls over period end financial
disclosure and reporting processes. The aforementioned potential material weaknesses were identified by our chief financial officer
in connection with the preparation of our financial statements as of March 31, 2018, who communicated the matters to our management
and board of directors.
Management believes that the
material weaknesses set forth above did not have an effect on our financial results. However, the lack of a functioning audit
committee and lack of a majority of independent directors on our board of directors resulting in potentially ineffective oversight
in the establishment and monitoring of required internal controls and procedures, can impact our financial statements.
Management’s Remediation
Initiatives
Although we are unable to meet
the standards under COSO because of the limited funds available to a company of our size, we are committed to improving our financial
organization. As funds become available, we will undertake to: (1) create positions to segregate duties consistent with control
objectives, (2) increase our personnel resources and technical accounting expertise within the accounting function (3) appoint
one or more outside directors to our board of directors who shall be appointed to an audit committee resulting in a fully functioning
audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures;
and (4) prepare and implement sufficient written policies and checklists which will set forth procedures for accounting and financial
reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements.
We will continue to monitor
and evaluate the effectiveness of our internal controls and procedures and our internal control over financial reporting on an
ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary
and as funds allow. However, because of the inherent limitations in all control systems, no evaluation of controls can provide
absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud,
if any, within Greenway Technologies have been detected. These inherent limitations include the realities that judgments in decision
making can be faulty and that breakdowns can occur because of simple error or mistake. The design of any system of controls is
based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness
to future periods are subject to risks.
PART
II – OTHER INFORMATION
|
|
Item
1.
|
Legal
Proceedings.
|
We
have been named as a co-defendant in an action brought against us and Mamaki Tea, Inc., alleging, among other things, that the
Company was named as a co-guarantor on an $850,000 foreclosed note. Management does not believe the ultimate resolution will have
an adverse impact on the our financial condition or results of operations.
On
April 22, 2016, Greenway Technologies filed suit under Cause No. DC-16-004718, in the 193rd District Court, Dallas County, Texas
against Mamaki of Hawaii, Inc. (“Mamaki”), Hawaiian Beverages, Inc.(“HBI”), Curtis Borman and Lee Jenison
for breach of a Stock Purchase Agreement dated October 29, 2015, wherein we sold our shares in Mamaki to HBI for $700,000 (along
with the assumption of certain debt). The Defendants failed to make payments of $150,000 each on November 30, 2015, December 28,
2015 and January 27, 2016. On January 13, 2017, we executed a Settlement and Mutual Release Agreement with the Defendants. However,
the Defendants defaulted in their payment obligations under Settlement and Mutual Release Agreement. Due to the bankruptcy proceedings
involving Curtis Borman, all action in this matter has been stayed.
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 will be done in connection with a legal opinion
pursuant to Rule 144.
Not
applicable.
|
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds.
|
During
the three-month period ended March 31, 2018, we issued 4,780,254 shares of restricted common stock to 20 individuals through private
placements for cash of $536,500 at an average price of $0.1156 per share. There were no selling expenses or commissions with respect
to the sale of our common stock.
Subsequent to March 31, 2018,
we sold 50,000 shares of our class A restricted common stock to one individual for $6,000 ($0.12 per share).
The proceeds realized from the
sale of our common stock were used to pay our general and administrative expenses, salaries for our officers in the amount of
$536,500, and expenses associated with our GTL project at The University of Texas at Arlington.
Each investor took his securities
for investment purposes without a view to distribution and had access to information concerning Greenway Technologies 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, as defined in Regulation D 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.
Each purchaser or recipient of
our shares was an accredited investor, and either alone or with his purchaser representative(s) had such knowledge and experience
in financial and business matters that he was capable of evaluating the merits and risks of the prospective investment. Greenway
Technologies reasonably believed immediately prior to making any sale that such purchaser came within this description.
All of the above described investors
who received shares of our common were provided with access to our filings with the SEC, including the following:
|
|
·
|
The
information contained in our annual report on Form 10-K under the Exchange Act.
|
|
|
·
|
The
information contained in any reports or documents required to be filed by Greenway Technologies under
sections
13(a), 14(a), 14(c), and 15(d) of the Exchange Act since the distribution or filing of the reports specified above.
|
|
|
·
|
A
brief description of the securities being offered, and any material changes in our affairs that were not disclosed in the
documents furnished.
|
Purchases of Equity Securities by the Issuer and Affiliated
Purchasers
NONE
|
|
Item
3.
|
Defaults
Upon Senior Securities.
|
Not applicable.
|
|
Item
4.
|
Mine
Safety Disclosures.
|
Not applicable.
|
|
Item
5.
|
Other
Information.
|
None.
|
Exhibit
No.
|
Identification
of Exhibit
|
|
2.1**
|
Combination
Agreement executed as of August 18, 2009, between Dynalyst Manufacturing Corporation and Universal Media Corporation, filed
as Exhibit 10.2 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number
000-55030.
|
|
3.1**
|
Articles
of Incorporation of Dynalyst Manufacturing Corporation filed with the Secretary of State of Texas on March 13, 2002, filed
as Exhibit 3.1 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number
000-55030.
|
|
3.2**
|
Articles
of Amendment of Articles of Incorporation of Dynalyst Manufacturing Corporation filed with the Secretary of State of Texas
on June 7, 2006, filed as Exhibit 3.2 to the registrant’s registration statement on Form 10-12G on August 29, 2013,
Commission File Number 000-55030.
|
|
3.3**
|
Articles
of Amendment of Articles of Incorporation of Dynalyst Manufacturing Corporation filed with the Secretary of State of Texas
on August 28, 2009, changing the corporate name to Universal Media Corporation, filed as Exhibit 3.3 to the registrant’s
registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
3.4**
|
Articles
of Amendment of Articles of Incorporation of Universal Media Corporation filed with the Secretary of State of Texas on March
23, 2011, changing the corporate name to UMED Holdings, Inc., filed as Exhibit 3.4 to the registrant’s registration
statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
3.5*
*
|
Articles
of Amendment of Certificate of Formation of UMED Holdings, Inc. filed with the Secretary of State of Texas on June 23, 2017,
changing the corporate name to Greenway Technologies, Inc., filed as Exhibit 3.1 to the registrant’s Form 8-K/A on July
20, 2017, Commission File Number 000-55030.
|
|
3.6**
|
Bylaws
of Dynalyst Manufacturing Corporation, filed as Exhibit 3.5 to the registrant’s registration statement on Form 10-12G
on August 29, 2013, Commission File Number 000-55030.
|
|
3.7**
|
Articles
of Incorporation of Greenway Innovative Energy, Inc. filed with the Secretary of State of Nevada on July 6, 2012, filed as
Exhibit 3.7 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
|
|
3.8**
|
Bylaws
of Greenway Innovative Energy, Inc., filed as Exhibit 3.8 to the registrant’s Form 10-Q/A, amendment No. 1, on September
21, 2017, Commission File Number 000-55030.
|
|
10.1**
|
Code
of Ethics for Senior Financial Officers, filed as Exhibit 10.1 to the registrant’s registration statement on Form 10-12G
on August 29, 2013, Commission File Number 000-55030.
|
|
10.2**
|
Purchase
Agreement dated as of May 1, 2012, between Universal Media Corporation and Mamaki Tea & Extract, Inc., filed as Exhibit
10.3 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
10.3**
|
Addendum
and Modification to Purchase Agreement dated as of December 31, 2012, between Universal Media Corporation and Mamaki of Hawaii,
Inc. formerly Mamaki Tea & Extract, Inc., filed as Exhibit 10.4 to the registrant’s registration statement on Form
10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
10.4**
|
Second
Addendum and Modification to Purchase Agreement dated as of December 31, 2012, between Universal Media Corporation and Mamaki
of Hawaii, Inc. formerly Mamaki Tea & Extract, Inc., filed as Exhibit 10.5 to the registrant’s registration statement
on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
10.5**
|
Purchase
Agreement dated August 29th, 2012, between Universal Media Corporation and Greenway Innovative Energy, Inc., filed as Exhibit
10.6 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
10.6*
*
|
Purchase
Agreement dated as of February 23, 2012, between Rig Support Services, Inc. and UMED Holdings, Inc., filed as Exhibit 10.7
to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
10.7**
|
Asset
Purchase Agreement dated as of October 2, 2011, between Jet Regulators, L.C., R/T Jet Tech, L.P. and UMED Holdings, Inc.,
filed as Exhibit 10.8 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File
Number 000-55030.
|
|
10.8**
|
Employee
Agreement dated May 27, 2011, between UMED Holdings, Inc. and Kevin Bentley, filed as Exhibit 10.9 to the registrant’s
registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
10.9**
|
Employee
Agreement dated May 27, 2011, between UMED Holdings, Inc. Randy Moseley, filed as Exhibit 10.10 to the registrant’s
registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
10.10**
|
Employee
Agreement dated May 27, 2011, between UMED Holdings, Inc. and Richard Halden, filed as Exhibit 10.11 to the registrant’s
registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
10.11**
|
Employee
Agreement dated August 29, 2012, between UMED Holdings, Inc. and Raymond Wright, filed as Exhibit 10.12 to the registrant’s
registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
10.12**
|
Employee
Agreement dated August 29, 2012, between UMED Holdings, Inc. and Conrad Greer, filed as Exhibit 10.13 to the registrant’s
registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
10.13**
|
Consulting
Agreement dated May 27, 2011, between UMED Holdings, Inc. and Jabez Capital Group, LLC, filed as Exhibit 10.14 to the registrant’s
registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
10.14**
|
Promissory
Note in the amount of $850,000 dated August 17, 2012, executed by Mamaki Tea, Inc. payable to Southwest Capital Funding, Ltd.,
filed as Exhibit 10.15 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File
Number 000-55030.
|
|
10.15**
|
Modification
of Note and Liens effective as of October 1, 2012, between Southwest Capital Funding, Ltd. and Mamaki Tea, Inc., filed as
Exhibit 10.16 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
10.16**
|
Second
Modification of Note and Liens effective as of December 20, 2012, between Southwest Capital Funding, Ltd., Mamaki Tea, Inc.,
and Mamaki of Hawaii, Inc., filed as Exhibit 10.17 to the registrant’s registration statement on Form 10-12G on August
29, 2013, Commission File Number 000-55030.
|
|
10.17**
|
Promissory
Note in the amount of $150,000 dated August 17, 2012, executed by Mamaki Tea, Inc. payable to Robert R. Romer, filed as Exhibit
10.18 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
10.18**
|
Addendum
and Modification to Purchase Agreement dated as of December 31, 2012, between Rig Support Services, Inc. and UMED Holdings,
Inc., filed as Exhibit 10.19 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission
File Number 000-55030.
|
|
10.19**
|
Securities
Purchase Agreement dated September 18, 2014, between UMED Holdings, Inc. and Tonaquint, Inc., filed as Exhibit 10.19 to the
registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
|
|
10.20**
|
Promissory
Note in the amount of $158,000 dated September 18, 2014, executed by UMED Holdings, Inc. payable to Tonaquint, Inc., filed
as Exhibit 10.20 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
|
|
10.21**
|
Warrant
dated September 18, 2014, for $47,400 worth of UMED Holdings, Inc. shares issued to Tonaquint, Inc., filed as Exhibit 10.21
to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
|
|
10.22**
|
Office
Lease Agreement dated October 2015, between UMED Holdings, Inc. and The Atrium Remains the Same, LLC, filed as Exhibit 10.22
to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
|
|
10.23**
|
Warrant
dated October 31, 2015, for 4,000,000 shares issued to Norman T. Reynolds, Esq, filed as Exhibit 10.23 to the registrant’s
Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
|
|
10.24**
|
Promissory
Note in the amount of $36,000 dated March 8, 2016, executed by UMED Holdings, Inc. payable to Peter C. Wilson, filed as Exhibit
10.24 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
|
|
10.25**
|
Convertible
Promissory Note in the amount of $224,000 dated May 4, 2016, executed by UMED Holdings, Inc. payable to Tonaquint, Inc., filed
as Exhibit 10.25 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
|
|
10.26**
|
Severance
and Release Agreement by and between UMED Holdings, Inc. and Randy Moseley dated November 11, 2016, filed as Exhibit 10.26
to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
|
|
10.27**
|
Settlement
and Mutual Release Agreement dated January 13, 2017, executed by UMED Holdings, Inc. in connection with Cause No. DC-16-004718,
in the 193rd District Court, Dallas County, Texas against Mamaki of Hawaii, Inc., Hawaiian Beverages, Inc., Curtis Borman,
and Lee Jenison, filed as Exhibit 10.27 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission
File Number 000-55030.
|
|
10.28**
|
Warrant
dated February 1, 2017, for 2,000,000 shares issued to Richard J. Halden, filed as Exhibit 10.28 to the registrant’s
Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
|
|
10.29**
|
Warrant
dated February 1, 2017, for 4,000,000 shares issued to Richard J. Halden, filed as Exhibit 10.29 to the registrant’s
Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
|
|
10.30**
|
Severance
and Release Agreement by and between UMED Holdings, Inc. and Richard Halden dated February 1, 2017, filed as Exhibit 10.30
to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
|
|
10.31**
|
Assignment
Agreement dated December 27, 2010, between Melek Mining, Inc., 4HM Partners, LLC, and UMED Holdings, Inc., filed as Exhibit
10.31 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
|
|
10.32**
10.33**
10.34**
10.35**
10.36**
10.37*
10.38*
|
Consulting
Agreement by and between the registrant and Chisos Equity Consultants, LLC, as
Amended 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.
Promissory Note in
the amount of $100,000 dated November 13, 2017, executed by Greenway Technologies, Inc. to Wildcat Consulting Group LLC.as
Exhibit 10.33 to the registrant’s Form 10K on April 5, 2018, Commission File Number 000-55030.
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 filed at Exhibit 10.34 to the registrant’s Form 10K on April 5, 2018, Commission File
Number 000-55030.
Warrant dated November
30, 2017 for 1,000,000 shares issued to MTG Holdings, LTD.
filed at Exhibit 10.34
to the registrant’s Form 10K on April 5, 2018, Commission File Number 000-55030.
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.
Warrant dated January 8, 2018 for 4,000,000 shares issued to Kent Harer.
Settlement agreement
by and between Greenway Technologies, Inc. and Tonaquint, Inc. dated April 9, 2018.
|
|
10.39*
|
Employment
agreement with John Olynick, as President, dated May 10, 2018.
|
|
10.40*
|
Employment
agreement with Ransom Jones, as Chief Financial Officer, Secretary and Treasurer, dated May 10, 2018.
|
|
31.1*
|
Certification
of D. Patrick Six, Chief Executive Officer of Greenway Technologies, Inc., pursuant to 18 U.S.C. §1350, as adopted pursuant
to §302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2*
|
Certification
of D. Patrick Six, Chief Financial Officer and Principal Accounting Officer of Greenway Technologies, Inc., pursuant to 18
U.S.C. §1350, as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.
|
|
32.1*
|
Certification
of D. Patrick Six, Chief Executive Officer of Greenway Technologies, Inc., pursuant to 18 U.S.C. §1350, as adopted pursuant
to §906 of the Sarbanes-Oxley Act of 2002.
|
|
32.2*
|
Certification
of D. Patrick Six, Chief Financial Officer and Principal Accounting Officer of Greenway Technologies, Inc., pursuant to 18
U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.
|
____________
* Filed
herewith.
** Previously
filed.
SIGNATURES
In accordance with Section 13
or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
GREENWAY TECHNOLOGIES, INC.
Date: May 21, 2018.
By
/s/ John Olynick
John Olynick, President
By
/s/ Ransom Jones
Ransom Jones, Chief Financial Officer and
Principal Accounting Officer
=============================================================================================
Exhibit 10.37--FORM 10Q-March31, 2018
Exhibit 10.37
Greenway Technologies, Inc.
Stock Purchase Warrant Expiring: January 8, 2021.
THIS IS TO CERTIFY that, for value received, Kent Harer (the "Holder") is entitled at any time from the date hereof, but prior to 5:00 pm, Fort Worth, Texas time on January 8, 2021, subject to and upon the terms and conditions herein, to purchase up to 4,000,000 fully paid and non-assessable shares of the common stock, par value $0.0001 per share (the "Common Stock") of GREENWAY TECHNOLOGIES, INC. (formerly known as UMED Holdings, Inc.), a Texas corporation (the "Company") at a purchase price of $.15 (fifteen cents) per share (the "Exercise Price") of the Common Stock, after taking into account the restrictive nature of the shares of the Common Stock as described below (such number of shares of the Common Stock and the purchase price being subject to adjustment as provided herein). This Warrant shall be void and of no effect and all rights hereunder shall cease at 5:00 pm, Fort Worth, Texas time on January 8, 2021, except to the extent therefore exercised, provided that in the case of the earlier dissolution of the Company, this Warrant shall become void on the date fixed for such dissolution.
1. Covenants of the Company. The Company covenants that, while this Warrant is exercisable (a) it will reserve from its authorized and issued shares of the Common Stock a sufficient number of shares of the Common Stock to provide for the delivery of the shares of the Common Stock pursuant to the exercise of this Warrant, and (b) that all shares of the Common Stock which may be issued upon the exercise of this Warrant will be fully paid and non-assessable.
2. Protection
Against Dilution,
Etc. In any of the following events, occurring after the date of the issuance of this Warrant, appropriate adjustment shall be made in the number of shares of the Common Stock to be deliverable upon the exercise of the Warrant and the purchase price per share of the Common Stock to be paid, so as to maintain the proportionate interest of the Holder as of the date hereof (a) recapitalization of the Company through a split-up or reverse split of the outstanding shares of the Common Stock into a greater or lesser number, as the case may be, or (b) declaration of a dividend on the shares of the Common Stock, payable in shares of the Common Stock or other securities of the Company convertible into shares of the Common Stock, or (c) any of the events described in Paragraph 4 hereof.
3.
Merger, Etc
. In case the Company, or any successor, shall be consolidated or merged with another company, or substantially all of its assets shall be sold to another company in exchange for stock, cash or other property with the view to distributing such stock, cash or other property to its shareholders, each of the shares of the Common Stock purchasable by this Warrant shall be replaced for the purposes hereof by the securities of the Company or cash or property issuable or distributable in respect of one share of the Common Stock of the Company, or its successors, upon such consolidation, merger, or sale, and adequate provision to that effect shall be made at the time thereof. Provided, however, notwithstanding anything herein contained to the contrary, in the event that the terms of any such consolidation, merger or sale call for the distribution of any cash or property to the shareholders of the Company, no cash or property shall be distributable to the Holder in connection with any unexercised portion of this Warrant, unless the Holder shall have exercised this Warrant pursuant to the terms of Paragraph 6 hereof and all other terms of this Warrant.
4. Notice of Certain Events. Upon the happening of any event requiring an adjustment of the Warrant purchase price hereunder, the Company shall forthwith give written notice thereof to the Holder stating the adjusted Warrant purchase price and the adjusted number of shares of the Common Stock purchasable upon the exercise hereof resulting from such event and setting forth in reasonable detail the method of calculation is based. The Board of Directors of the Company shall determine the compensation made hereunder. In the case of (a) any consolidation, merger, or sale affecting the Company and calling for the payment of cash or the delivery of property to shareholders of the Company, or (b) any voluntary or involuntary dissolution, liquidation, or winding up of the Company shall at any time be proposed, the Company shall give at least 20 days' prior written notice thereof to the Holder stating the date on which such an event is to take place and the date (which shall be at least 20 days after the giving of such notice) as of which the holders of record of shares of the Common Stock shall be entitled to participate in ay such event. If the Holder does not elect to exercise any part of this Warrant as a result of any such notice, the Holder shall have no right with respect to any portion of this Warrant which shall remain unexercised to participate in (x) any such cash or other property resulting from any such consolidation, merger, or sale, or (y) any voluntary or involuntary dissolution, liquidation, or winding up of the Company.
PAGE QM-29
5. Shar
eholders' Rights
. Until the valid exercise of this Warrant, the Holder shall not be entitled to any rights od a shareholder with respect to the shares of the Common Stock covered by this Warrant; but immediately upon the exercise of this Warrant and upon payment as provided herein, the Holder shall be deemed a record holder of the shares of the Common Stock.
6.
Manner of Exercise
. In order to exercise this Warrant, the Holder should surrender this Warrant, duly endorsed or assigned to the Company or, in blank, at the office of the Company, accompanied by (a) written Form of Election to Purchase attached hereto (the "Exercise Notice") that the Holder elects to exercise this Warrant or, if less than the entire amount thereof is to be exercised, the portion thereof to be exercised, and (b) payment of the purchase price of the shares of the Common Stock to be purchased on each exercise, in cash or by cashier's or certified check.
This Warrant shall be deemed to have been exercised immediately prior to the close of business on the day of surrender of this Warrant for exercise in accordance with the foregoing provisions, and at such time the person or persons entitled to receive the shares of the Common Stock issuable upon exercise shall be treated for all purposes as the record holder or holders of the shares of the Common Stock at such time. As promptly as practicable on or after the exercise date, but in no event later than three business days, the Company shall issue and shall deliver to the Holder a certificate or certificates for the number of full shares of the Common Stock issuable upon exercise.
In case this Warrant is exercised in part only, upon such exercise the Company shall execute and deliver to the Holder thereof, at the expense of the Company, a new Warrant to purchase, in the aggregate, in the number of shares of the Common Stock covered by the unexercised portion of this Warrant.
7. Limitation on_Exercise. The Holder (including any successor, transferee or assignee) shall not have the right to convert any portion of this Warrant to the extent that giving effect to such exercise, the Holder (together with the Holder's affiliates) would beneficially own in excess of 9.9990/0 (the Maximum Percentage") of the number of shares of the Common Stock of the Company outstanding immediately after giving effect to such exercise. For the purposes of the foregoing sentence, the number of shares of the Common Stock beneficially owned by the Holder and its affiliates shall include the number of shares of the Common Stock issuable upon conversion of this Warrant with respect to which the determination of such sentence is being made, but shall exclude the number of shares of the Common Stock which shall be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its affiliates and (ii) exercise of the unexercised or non-converted portion of any other securities of the Company (including, without limitation, any other notes or warrants) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its affiliates. Except as set forth in the preceding sentence, for purposes of this paragraph, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended. For purposes of this paragraph, in determining the number of outstanding shares of the Common Stock, the Holder may rely on the number of outstanding shares of the Common Stock as reflected in (x) the Company's most recent Form 10-K, Form 10-Q or Form 8-K, as the case mat be, (y) a more recent public announcement by the Company, or (z) any other notice by the Company or the Transfer Agent setting forth the number of shares of the Common Stock outstanding. For any reason at any time, during regular business hours of the Company and upon the written request of the Holder, the Company shall within two business days confirm in writing to the Holder the number of shares of the Common Stock then outstanding. In any case, the number of outstanding shares of the Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its affiliates since the date as of which such number of outstanding shares of the Common Stock was reported. By written notice to the Company, the Holder may increase or decrease the Maximum Percentage to any other percentage specified in such notice; provided that (A) any such increase will not be effective until the 61st day after such notice is delivered to the Company, (B) any such increase or decrease will apply to the Holder and not to any other holder of warrants, and (C) and in no case shall the Holder or its affiliates acquire in excess of 9.999
0
/0 of the outstanding shares of the Common Stock or the voting power of the Company.
PAGE QM-30
8. Representations and Covena
nts of th
e Holder: The Holder represents and covenants that this Warrant has not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any other applicable securities law. This Warrant has been purchased for investment only and not a view to distribute or resale, and may not be sold, pledged, hypothecated or otherwise transferred unless this Warrant or the shares of the Common Stock represented hereby are registered under the Securities Act, any other applicable securities law, or the Company has received an opinion of counsel satisfactory to it that registration is not required. A legend in substantially the following form will be placed on ay certificates or other documents evidencing the shares of the Common Stock to be issued upon any exercise of this Warrant.
THE SECURITIES REPRESENTED BY THIS INSTRUMENT OR DOCUMENT HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAW OF ANY STATE. WITHOUT SUCH REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT UPON DELIVERY TO THE COMPANY OF AN OPINION OR COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER OR THE SUBMISSION TO THE COMPANY OR SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO THE COMPANY TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE SECURITIES ACT OF 1933, AS AMENDED, THE SECURITIES LAW OF ANY STATE, OR ANY RULE OR REGULATION PROMULGATED THEREUNDER.
Further, stop transfer instructions to the transfer agent of the shares of the mCommon Stock have been or will be placed with respect to the shares of the Common Stock so as to restrict the resale, pledge, hypothecation or other transfer thereof, subject to the further items hereof, including the provision of the legend set forth in this paragraph.
9. Frac
tional Warrants
. Upon the exercise of this Warrant, no fractions of shares of the Common Stock shall be issued; but fractional Warrants shall be delivered, entitling the Holder, upon surrender with other fractional Warrants aggregating one or more full shares of the Common Stock, to purchase such full shares of the Common Stock.
10. R
egistrati
on
Obli
gation. The Company has not agreed to file and the
Company does not anticipate the filing of the registration statement under the Securities Act to allow the public resale of any shares of the Common Stock issued upon the exercise of this Warrant.
11. Loss, The
ft, De
structio
n of a Warr
ant. Upon the receipt of evidence satisfactory to the Company of the loss, theft, destruction, or mutilation of this Warrant and, in the case of any such loss, theft, or destruction, upon receipt of indemnity reasonably satisfactory to the Company, or, in the case of any such mutilation, upon surrender and cancellation of this Warrant, the Company will make and deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor.
12. Arbitration. Any controversy or claim arising out of or relating to this Warrant, or the breach, termination, or validity thereof, shall be settled by final and binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association ("AAA Rules") in effect as of the effective date of this Warrant. The American Arbitration Association shall be responsible for (a) appointing a sole arbitrator, and (b) administering the case in accordance with the AAA Rules. The situs of the arbitration shall be Houston, Texas. Upon the application of either party to this Warrant, and whether or not an arbitration proceeding has yet been initiated, all courts having jurisdiction hereby are authorized to (x) issue and enforce in any lawful manner, such temporary restraining orders, preliminary injunctions and other interim measures of relief as may be necessary to prevent harm to a party's interest or as otherwise may be appropriate pending the conclusion of arbitration proceedings pursuant to this Warrant, and (y) enter and enforce in any lawful manner such judgments for permanent equitable relief as may be necessary to prevent harm to a party's interest or as otherwise may be appropriate following the issuance of arbitral awards pursuant to the Warrant. Any order or judgment rendered by the arbitrator may be entered and enforced by any court having competent jurisdiction.
13. Benefit. All the terms and provisions of this Warrant shall be binding upon and inure to the benefit of and be enforceable by the parties herein, and their respective successors and permitted assigns.
14. N
otic
es. All notices and communications hereunder shall be in writing and shall be deemed to have been given (a) on the date they are delivered in person; (b) on the date initially received if delivered by facsimile transmission or email followed by registered or certifies mail confirmation; (c) on the date delivered by an overnight courier service; or (d) on the third business day after it is mailed by registered or certified mail, return receipt requested with postage and other fees prepaid, if to the Company addressed to Mr. D. Patrick Six at 8851 Camp Bowie West, Suite 240, Fort Worth, Texas 76116, telephone 817-346-6900, and email
patrick.six@gw_techinc.com
; and if to the Holder, addressed to 4109 Mapleridge Drive, Grapevine, TX 76051, telephone 214-632-4431 and email:
kharer@gmail.com. Any party hereto may change its address upon 10 days' written notice to any other party hereto.
PAGE QM-31
15.
Construction
. Words of any gender used in this Warrant shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, and vice versa, unless the context requires otherwise. In addition, the pronouns used in this Warrant shall be understood and construed to apply whether the party referred to is an individual, partnership, joint venture, corporation, or an individual or individuals doing business under a firm or trade name, and the masculine, feminine and neuter pronouns shall each include the other and may be used interchangeably with the same meaning.
16.
Headings
. The headings used in this Warrant are for convenience and reference only and in no way define, limit, simplify or describe the scope or intent of this Warrant, and in no way effect or constitute a part of this Warrant.
17.
Invalidity
. In the event any one or more of the provisions contained in this Warrant shall, for any reason, be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceable shall not effect the other provisions of this Warrant.
18.
Law Governi
ng. This Warrant shall be construed and governed by the laws of the State of Texas, and all obligations hereunder shall be deemed performable in Tarrant County, Texas.
IN WITNESS WHEREOF, this Warrant has been issued on January 8, 2018.
GREENWAY TECHN LOGIES, INC.
/s/ D. Patrick Six, President
D. Patrick Six, President
FORM OF ELECTION TO PURCHASE
To: GREENWAY TECHNOLOGIES, INC.
In accordance with the Warrant enclosed with this Form of Election to Purchase, the undersigned hereby irrevocably elects to purchase 4,000,000 shares of the Common Stock (the "Common Stock"), $0.0001 par value, of Greenway Technologies, Inc. and encloses one Warrant and $.15 (fifteen cents) for each share of Common Stock being purchased or an aggregate of $as a credit on amounts owed to the Company to the undersigned, or in cash or certified or official bank check or checks, which sum represents the aggregate exercise price together with any applicable taxes payable by the undersigned pursuant to the Warrant.
The undersigned requests that certificates for the shares of the Common Stock issuable upon this exercise be issued in the name of: SSAN/EIN:
If the number of shares of the Common Stock issuable upon the exercise shall not be all of the shares of the Common Stock which the undersigned is entitled to purchase in accordance with the enclosed Warrant, the undersigned requests that a new Warrant evidencing the right to purchase the shares of the Common Stock not issuable pursuant to the exercise evidenced hereby be issued in the name of and delivered to:
Name of Holder: Kent Harer
Delivered to:
DATE:
PAGE QM-32
====================================================================================================================
Exhibit 10.39--FORM 10Q-March31, 2018
Exhibit 10.38
SETTLEMENT AGREEMENT, WAIVER AND RELEASE OF
CLAIMS
This Settlement Agreement, Waiver and Release of Claims (this "Agreement"), dated April 9, 2018 (the "Effective Date"), is entered into by and between Tonaquint, Inc., a Utah corporation ("Investor"), and Greenway Technologies, Inc., a Texas corporation (formerly known as UMED Holdings, Inc., a Texas corporation) ("Company"). Each of Investor and Company is sometimes individually referred to hereinafter as a "Party" and collectively as the "Parties". Capitalized terms used herein but not otherwise defined shall have the meaning ascribed thereto in the Warrant (as defined below).
A. On September 18, 2014, Company sold and issued to Investor a certain Convertible Promissory Note in the original principal amount of $158,000.00 (the "Note") and a certain Warrant to Purchase Shares of Common Stock (the "Warrant") pursuant to a certain Securities Purchase Agreement between Company and Investor (the "Purchase Agreement," and together with the Note, the Warrant, and all other documents entered into in conjunction therewith, the "Financing Documents").
B. On June 28, 2017, Investor delivered to Company a Notice of Exercise pursuant to which Investor sought to exercise the Warrant for 3,837,812 shares of Company's Common Stock (the "Tonaquint Warrant Shares").
C. Company refused to deliver the Tonaquint Warrant Shares to Investor.
D. As a result of Company's failure to deliver the
Tonaquint Warrant Shares to Investor, on or around September 13, 2017, Investor filed a lawsuit against Company in the Third Judicial District Court of Salt Lake County, State of Utah, as Case No. 170905756 (the "Lawsuit"), and on or around
September 13, 2017 Investor also sent Company an Arbitration Notice pursuant to Section 8.4 of the Purchase Agreement (the "Arbitration").
E. In order to resolve the Lawsuit, the Arbitration, and all other disputes between the Parties, the Parties have agreed, subject to the terms and conditions set forth herein, to (i) resolve all disputes regarding the number of shares of Common Stock to be issued to Investor, (ii) dismiss the Lawsuit and the Arbitration with prejudice, and (iii) affirmatively conclude all financial obligations under the Financing Documents.
PAGE QM-33
NOW, THEREFORE, in consideration of the promises set forth in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. Recitals. The foregoing recitals are contractual in nature and are incorporated herein as part of this Agreement.
2. -Warrant-Exercise. Together with its execution of this Agreement, Investor has delivered to Company a Notice of Exercise pursuant to the terms of the Warrant, a copy of which is attached hereto as
Exhibit A
(the "Notice of Exercise"). By its execution below, Company acknowledges its receipt of the Notice of Exercise as of the date of this Agreement. Pursuant to the Notice of Exercise, Company is required, and hereby agrees, to issue to Investor 1,600,000 unrestricted, free-trading Delivery Shares in accordance with and in the manner and within the timeframes prescribed in Section 2.1 of the Warrant (the "Delivery Shares"). For the avoidance of doubt, in order for the Delivery Shares to be deemed to have been delivered to Investor, (a) the Delivery Shares or certificate(s) representing the Delivery Shares must have been cleared and approved for public resale by the compliance departments of Investor's brokerage firm and the clearing firm servicing such brokerage, and (b) the Delivery Shares must be held in the name of the clearing firm servicing Investor's brokerage firm and must have been deposited into such clearing firm's account for the benefit of Investor. Moreover, the Parties acknowledge and agree that (i) no additional cash or property has been or will be given for the Delivery Shares, (ii) Company was obligated to honor the Notice of Exercise in the amount of the 1,600,000 Delivery Shares prior to entering into this Agreement, and (iii) it is Company's and Investor's expectation that Investor's holding period for the Delivery Shares under Rule 144 will tack back to the Issue Date set forth in the Warrant.
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|
|
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3.
|
Restrictions-on-SalesoCDe1iyery-Shares.
|
3.1. Volume.-.Limitation. Investor agrees that, with respect to the Delivery Shares, in any given calendar week its Net Sales (as defined below) of such Delivery Shares shall not exceed the greater of (a) eight percent (8%) of Company's weekly dollar trading volume in such week (which, for purposes hereof, means the number of shares traded during such calendar week multiplied by the volume weighted average price per share for such week), and (b) $10,000.00 (the "Volume Limitation"). For purposes of this Agreement, the term "Net Sales" means the gross proceeds from sales of the Delivery Shares sold in a calendar week minus any trading commissions, fees for Rule 144 opinions, and all other costs associated with clearing and selling such Delivery Shares minus the purchase price paid for any shares of Common Stock purchased on the open market during such week. For the avoidance of doubt, any amounts received by Investor in connection with sales of shares of Common Stock previously received pursuant to the Warrant or the Note (or through Investor's open market purchases of Common Stock, pursuant to conversions of any other promissory note Company has issued to Investor, or exercises of any other warrant Company has issued to Investor) shall not be deemed to be Net Sales.
PAGE QM-34
3.2. Breach-Q
f Volu
me-Limitations. Company and Investor agree that in the event Investor breaches the Volume Limitation where its Net Sales of Delivery Shares during any week exceed the dollar volume it is permitted to sell during such week pursuant to the Volume Limitation (such excess, the "Excess Sales"), then in such event, as Company's sole and exclusive remedy for such breach (and which breach may not be used as a defense to Company's performance of its obligations hereunder), Investor shall be obligated to pay an amount in cash to Company equal to 100% of Investor's Excess Sales for such week. Such amount shall be due and payable to Company within two (2) business days of the date Investor receives written notice from Company of the Excess Sales as well as Company's calculation of the Excess Sales. Company must prove any breach of the Volume Limitation by clear and convincing evidence. For illustration purposes only, if Company's weekly dollar trading volume was $100,000.00 for a calendar week, Investor would be entitled to Net Sales of up to $10,000.00 during that week. If Investor's Net Sales for such week were equal to $13,000.00, then in such event Company could require Investor to pay to it $3,000.00 in cash (613,000 - $10,000) x 100%). For the avoidance of doubt, in such event Investor shall be entitled to retain the Excess Sales and shall have no obligation to return the Excess Sales to Company.
agrees to keep all such trading records confidential and not to disclose any such frading records to any third party for any reason without Investor's prior written consent. Company agrees that any such trading records from Investor's broker are and shall be conclusive evidence as to Investor's compliance (or lack thereof) with the Volume Limitation. Accordingly, Company acknowledges and agrees that it will be responsible to monitor whether Investor's Net Sales exceed the dollar volume of Common Stock it is permitted to sell in any calendar week pursuant to the Volume Limitation and further agrees to give written notice to Investor in the event it becomes aware of any Excess Sales of Company's Common Stock by Investor in any given calendar week.
4 .
Termin
ation-Qf---financing documents. Upon Investor's receipt of the Delivery Shares (based on the criteria for delivery and receipt thereof set forth in Section 2 above), the Parties agree that all of the Financing Documents will be deemed to be terminated and of no further force or effect.
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5.
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Representations-and-warranties.
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5.1. As a material inducement to Investor to enter into this Agreement, Company represents and warrants to Investor as follows:
(a)
Authorit
y—for-Agreement. Company has full power, authority and legal right and capacity to enter into and perform Company's obligations under this Agreement and each other document contemplated hereby to which Company is or will be a party and to consummate the transactions contemplated hereby and thereby. Company has approved this Agreement and the other documents contemplated hereby and the transactions contemplated hereby and thereby and has authorized the execution, delivery and performance of this Agreement and the other documents contemplated hereby and the consummation of the transactions contemplated hereby and thereby. No other proceedings on the part of Company, whether by the officers, directors, shareholders, or otherwise, are necessary to approve and authorize the execution, delivery and performance of this Agreement and the other documents contemplated hereby and the consummation of the transactions contemplated hereby and thereby. This Agreement and the other documents contemplated hereby to which Company is a party have been duly executed and delivered by Company and are legal, valid and binding 20's obligations of Company, enforceable against Company in accordance with their respective terms.
PAGE QM-35
(b) No-Violation---Result. The execution, delivery and performance by Company of this Agreement and the other documents contemplated hereby and the consummation by Company of the transactions contemplated hereby and thereby, do not and will not, directly or indirectly (with or without notice or lapse of time): (i) violate, breach, conflict with, constitute a default under, accelerate or permit the acceleration of the performance required by any note, debt instrument, security agreement, mortgage or any other contract to which Company is a party or by which Company is bound or any material law, judgment, decree, order, rule, regulation, permit, license or other legal requirement of any government authority applicable to Company; (ii) give any government authority or other person the right to challenge any of the transactions contemplated by this Agreement; or (iii) result in the creation or imposition of any encumbrance, lien, or claim, or the possibility of any encumbrance, lien or claim, or restriction in favor of any person upon the Delivery Shares or any of the properties or assets of Company. Except for a current report on Form 8-K under the 1934 Act (as defined below), no notice to, filing with, or consent of, any person is necessary in connection with, nor is any "change of control" provision triggered by, the execution, delivery or performance by Company of this Agreement and the other documents contemplated hereby nor the consummation by Company of the transactions contemplated hereby or thereby.
Company has given all notices, made all filings (other than a current report on Form 8-K) and obtained all consents necessary for the consummation of the transactions contemplated herein.
(c) Upon issuance, the Delivery Shares will be duly authorized, validly issued, fully paid and non-assessable.
(d) So long as Investor beneficially owns any of the Delivery Shares and for at least twenty (20) business days thereafter, Company shall file all reports required to be filed with the United States Securities and Exchange Commission (the "SEC") pursuant to Sections 13 or 15(d) of the Securities Exchange Act of 1934 (as amended, the "1934 Act"), and shall take all reasonable action under its control to ensure that adequate current public information with respect to Company, as required in accordance with Rule 144, is publicly available, and shall not terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations thereunder would permit such termination.
(e) Company is solvent as of the date of this Agreement, and none of the terms or provisions of this Agreement shall have the effect of rendering Company insolvent. The terms and provisions of this Agreement and all other instruments and agreements entered into in connection herewith are being given for full and fair consideration and exchange of value.
5.2 . Re
presentations—a-
a-warranties..-of-.lnvestor. As a material inducement to Company to enter into this Agreement, Investor represents and warrants to Company as follows:
(a) Authority for --Agreement. Investor has full power, authority and legal right and capacity to enter into and perform Investor's obligations under this Agreement and each other document contemplated hereby to which Investor is or will be a party and to consummate the transactions contemplated hereby and thereby. Investor has approved this Agreement and the other documents contemplated hereby and the transactions contemplated hereby and thereby and has authorized the execution, delivery and performance of this Agreement and the other documents contemplated hereby and the consummation of the transactions contemplated hereby and thereby. No other proceedings on the part of Investor, whether by the officers, directors, stockholders, or otherwise, are necessary to approve and authorize the execution, delivery and performance of this Agreement and the other documents contemplated hereby and the consummation of the transactions contemplated hereby and thereby. This Agreement and the other documents contemplated hereby to which Investor is a party have been duly executed and delivered by Investor and are legal, valid and binding obligations of Investor, enforceable against Investor in accordance with their respective terms.
PAGE QM-36
(b) The execution, delivery and performance by Investor of this Agreement and the other documents contemplated hereby and the consummation by Investor of the transactions contemplated hereby and thereby, do not and will not, directly or indirectly (with or without notice or lapse of time): (i) violate, breach, conflict with, constitute a default under, accelerate or permit the acceleration of the performance required by any note, debt instrument, security agreement, mortgage or any other contract to which Investor is a party or by which Investor is bound or any material law, judgment, decree, order, rule, regulation, permit, license or other legal requirement of any government authority applicable to Investor; or (ii) give any government authority or other person the right to challenge any of the transactions contemplated by this Agreement. No notice to, filing with, or consent of, any person is necessary in connection with, nor is any "change of control" provision triggered by, the execution, delivery or performance by Investor of this Agreement and the other documents contemplated hereby nor the consummation by Investor of the transactions contemplated hereby or thereby, Investor has given all notices, made all filings and obtained all consents necessary for the consummation of the transactions contemplated herein.
[2]
. Mutual-Release.
Release-by-In-u
s. Conditioned upon and subject to Investor's receipt of the Delivery Shares (based on the delivery criteria set forth in Section 2 above), Investor, on behalf of itself and its managers, members, officers, employees, agents, attorneys, successors and assigns, and any and all past and present such persons (collectively, the "Investor Parties"), forever relieves, releases and discharges Company and its directors, stockholders, officers, employees, agents, attorneys, successors and assigns, and any and all past and present such persons (collectively, the "Company Parties"), from any and all claims, counterclaims, debts, liabilities, demands, obligations, promises, acts, agreements, costs and expenses (including, but not limited to, attorneys' fees), damages, injuries, actions and causes of actions, of whatever kind or nature, whether legal or equitable, known or unknown, suspected or unsuspected, contingent or fixed (each a "Claim", and collectively, the "Claims"), that Investor or any of the Investor Parties may have that are based upon, relate to or arise out of the Lawsuit, the Arbitration, the Financing Documents, or any transaction contemplated by the Parties under the Financing Documents, arising or accruing before the Effective Date. Such release will not apply to or affect any breach of this Agreement or any other transaction entered into between Investor and Company that is outside the scope of the Financing Documents.
[3]
.
Release ad r
epresentations. Each Party hereto, for itself and on behalf of such Party's other respective releasing parties, represents, warrants and agrees that (a) such Party hereby waives any Claims such Party has against any of the parties it is releasing hereunder, (b) such Party covenants not to institute against any of the parties it is releasing hereunder any proceeding, suit or action, at law or in equity, of whatsoever kind or nature, whether criminal or civil, or in any way to aid in or encourage the institution or prosecution thereof, for damages, expenses, compensation, injunctive relief or otherwise, arising from or based upon any Claim, (c) none of the Claims such Party is releasing and waiving hereunder have been sold, assigned or otherwise transferred or encumbered (directly or indirectly) to any person or party whatsoever, (d) such Party has the full right and power to grant, execute and deliver the full and complete release and waiver contained herein, and (e) the release made by, and the representations, warranties, and covenants of the other Parties hereto, are accepted by each Party hereto as a material inducement to entering into and consummating the transactions contemplated by this Agreement.
6.4.
IJnknown
-Claims. Each Party hereto represents that it is not aware of any claim against or involving any Party it is releasing hereunder other than the Claims, all of which are released hereunder. Each Party hereto acknowledges that it has been advised by legal counsel and is familiar with the legal principle that provides that a general release does not extend to claims which the releasor does not know or suspect to exist in its favor at the time of executing the release, which if known by it must have materially affected its settlement with the releasee.
PAGE QM-37
Each Party hereto, being aware of said principle, agrees to expressly waive any rights to this effect, as well as under any other statute or common law principles of similar effect. after Investor's receipt of the Delivery Shares (based on the delivery criteria set forth in Section 2 above). The Parties agree that the Dismissal Documents shall have claim and issue preclusive effect on all claims and/or issues that were or could have been raised in the Lawsuit and/or the Arbitration. Notwithstanding the dismissal, the Parties agree that the arbitrator who handled the Arbitration shall maintain jurisdiction to the extent necessary to enforce this Agreement. The Parties further agree to cooperate with each other to the extent reasonably necessary in the drafting and filing of the Dismissal Documents and to take all reasonable additional steps necessary to effectuate the dismissal of the Lawsuit and the Arbitration.
8. The Parties agree that the affirmative obligations which each Party has undertaken in this Agreement are a material inducement to the other Parties entering into this Agreement. In the event of a breach of this Agreement, the breaching Party agrees that the non-breaching Party shall be entitled to temporary and permanent injunctive relief to enforce the provisions hereof, and that such relief may be granted without the necessity of proving actual damages. This provision with respect to injunctive relief shall not, however, diminish the right of the Parties to claim and recover damages, or to seek and obtain any other relief available to it at law or in equity, in addition to injunctive relief.
9. Miscellaneous.
9.1. NO-Admission of Liability-. This Agreement shall not be construed as an admission by any Party of any validity or invalidity of such Party's claims or defenses in any action or proceeding. Neither this Agreement's tenns nor the fact of this Agreement shall be offered or received in evidence or be admissible for any reason in any form in any action or proceeding in any court or tribunal (other than an action to enforce the terms hereof), or used, publicized or disclosed in any manner as an admission, concession or evidence of any liability or wrongdoing of any nature by any Party.
9.2.
Furthe
r-Assurances. At any time or from time to time after the Effective Date, at the request of a Party, and without further consideration, each of the Parties shall execute and deliver, or shall cause its respective affiliate(s) to execute and deliver, such other agreements, instruments, certifications or other documents as may be necessary or desirable to effectuate the transactions and fulfill its obligations under this Agreement.
9.3. Arbitration. Each Party agrees that any dispute arising
out of or relating to this Agreement shall be subject to the Arbitration Provisions (as defined in the Purchase Agreement).
9.4.
Governin
g-.Law.;-......Venue. This Agreement shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Agreement shall be governed by, the internal laws of the State of Utah, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Utah or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Utah. Without modifying the Parties' obligations to resolve disputes hereunder pursuant to the Arbitration Provisions, each of the Parties consents to the exclusive personal jurisdiction of the federal courts whose districts encompass any part of Salt Lake County, Utah or the state courts of the State of Utah sitting in Salt Lake County, Utah in connection with any dispute arising under this Agreement, and hereby waives, to the maximum extent permitted by law, any objection, including any objection based on forum non conveniens, to the bringing of any such proceeding in such jurisdictions or to any claim that such venue of the suit, action or proceeding is improper. Nothing in this subsection shall affect or limit any right to serve process in any other manner permitted by law.
PAGE QM-38
9.5. Waivcr.--of--Law--Trial. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ANY AND ALL RIGHTS SUCH PARTY MAY HAVE TO DEMAND THAT ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE RELATIONSHIPS OF THE PARTIES HERETO BE TRIED BY JURY. THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING UNDER LAW OR ANY APPLICABLE STATUTE, LAW, RULE OR REGULATION. FURTHER, EACH PARTY HERETO ACKNOWLEDGES THAT SUCH PARTY IS KNOWINGLY AND VOLUNTARILY WAIVING SUCH PARTY'S RIGHT TO DEMAND TRIAL BY JURY.
9.6.
Severability
_. If any part of this Agreement is construed to be in violation of any law, such part shall be modified to achieve the objective of the Parties to the fullest extent permitted and the balance of this Agreement shall remain in full force and effect.
9
.
7
. Successors. This Agreement shall be binding upon the Parties and their respective heirs, legal representatives, successors and assigns and shall inure to the benefit of the Parties and their respective heirs, successors and assigns.
9
.
8
Amendment-and-Waiver. The provisions of this Agreement may be amended and waived only with the prior written consent of the Parties to which such amendment and/or waiver applies.
9.9. Entire-.Agreement. This Agreement, together with all other documents contemplated herein, constitutes the sole and entire agreement between the Parties, whether written or oral, relating to the subject matter hereof and thereof. This Agreement may only be amended by the Parties in writing.
9.10. Expenses. Each Party shall pay its own legal fees and expenses incurred with respect to the Lawsuit, the Arbitration, the negotiation and drafting of this Agreement, and the transactions contemplated hereby.
9
.1.
ALL Legal.-Fees
. In the event of any action at law or in equity to enforce or interpret the terms of this Agreement or any document executed in connection herewith, the Parties agree that the prevailing party shall be entitled to an award of the full amount of the attorneys' fees and expenses paid by such prevailing party in connection with the litigation and/or dispute without reduction or apportionment based upon the individual claims or defenses giving rise to the fees and expenses. Nothing herein shall restrict or impair a court's power to award fees and expenses for frivolous or bad faith pleading.
9.12.
Notices
. Any notice required or permitted hereunder shall be given in writing (unless otherwise specified herein) and shall be deemed effectively given on the earliest of: (a) the date delivered, if delivered by personal delivery as against written receipt therefor or by email to an executive officer, or by facsimile (with successful transmission confirmation), (b) the earlier of the date delivered or the third Trading Day after deposit, postage prepaid, in the United States Postal Service by certified mail, or (c) the earlier of the date delivered or the third Trading Day after mailing by express courier, with delivery costs and fees prepaid, in each case, addressed to each of the other parties thereunto entitled at the following addresses (or at such other addresses as such party may designate by five (5) calendar days' advance written notice similarly given to each of the other parties hereto):
PAGE QM-39
If to Company:
Greenway Technologies, Inc.
Attn: D. Pafrick Six
8851 Camp Bowie West Boulevard, Suite 240 Fort worth, Texas 76116
If to Investor:
Tonaquint, Inc.
Attn: John Fife
303 East Wacker Drive, Suite 1040
Chicago, Illinois 60601
With a copy to (which copy shall not constitute notice):
Hansen Black Anderson Ashcraft PLLC
Attn: Jonathan K. Hansen
3051 West Maple Loop, Suite 325
Lehi, Utah 84043
13.
. Counter parts. This Agreement may be signed in one or more counterparts, which together shall constitute one document. Additionally, facsimile signatures or signatures conveyed via e-mail in one or more counterparts of this Agreement shall be binding.
14. Third--.Party--Beneficiaries. Except as expressly set forth herein, nothing in this Agreement, express or implied, is intended to confer upon any person, other than the Parties, any rights, remedies, obligations, or liabilities of any nature whatsoever.
with its counsel (or had the opportunity to be represented by counsel), that all of the tenns and conditions of this Agreement and the other documents executed and delivered in connection with this Agreement have been negotiated at arm's-length, and that this Agreement and all such otherdocuments have been negotiated, prepared, and executed without fraud, duress, undue influence, or coercion of any kind or nature whatsoever having been exerted by or imposed upon any Party by any other Party.
9.16. Time is expressly made of the essence with respect to each and every provision of this Agreement.
9.17. Drafting. The Parties acknowledge that they have participated jointly in the negotiation and drafting of this Agreement and, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed consistent with the joint drafting of this Ayeement by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.
[Remainder of page intentionally left blank; signature page to follow]
PAGE QM-40
====================================================================================================================
Exhibit 10.39--FORM 10Q-March31, 2018
Exhibit 10.39
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this “Agreement”)
with an effective date of May 10, 2018 (the “Effective Date”) and signed May 15, 2018 (the “Execution Date”),
is by and between Greenway Technologies Inc., a Texas corporation (together with its subsidiaries, the “Company”),
and John Olynick, an individual residing in Fairfield, Connecticut (the “Employee”).
W I T N E S S E T H:
WHEREAS, the Company and the Employee desire
for Employee to serve the Company as its President; and
WHEREAS, the parties desire to provide that
the Employee be employed by the Company under the terms of this Agreement.
NOW THEREFORE in consideration of the mutual
benefits to be derived from this Agreement, the Company and the Employee hereby agree as follows:
1.
Term of Employment;
Office and Duties.
(a) Commencing on the Effective
Date of this Agreement and for an initial one (1) year term, the Company shall employ the Employee as the chief executive of the
Company with the title of President, with the duties and responsibilities prescribed to such office in the Bylaws of the Company
and with such additional duties and responsibilities consistent with such positions as may from time to time be reasonably assigned
to the Employee by the Board of Directors. Employee agrees to perform such duties and discharge such responsibilities in accordance
with the terms of this Agreement. This Agreement shall automatically renew for successive additional one (1) terms, unless terminated
earlier under Section 4, or unless either the Company or the Employee (collectively the “Parties” or individually the
“Party”) gives the other Party written advance notice of an intent not to renew the Agreement at least sixty (60) days
prior to its expiration.
PAGE QM-41
(b) The Employee shall
devote substantially all of his working time to the business and affairs of the Company other than during vacations and periods
of illness or incapacity; provided, however, that nothing in this Agreement shall preclude the Employee from devoting time required:
(i) for serving as a director or officer of any organization or entity that does not compete with the Company or any other businesses
in which the Company is directly involved or becomes involved as a function of Employee’s duties; (ii) delivering lectures
or fulfilling speaking engagements; or (iii) engaging in charitable and community activities, including sitting on any Boards of
Directors and/or committees of such organizations related to such activities; provided, however, that such activities do not interfere
with the performance of his duties hereunder.
(c) The Employee’s
consulting agreement with the Company as a Business Development Consultant shall terminate upon the Employee’s entering into
this Employment Agreement. All prior approved accrued and unpaid compensation, along with any prior approved and unreimbursed business
expenses from the Employee’s previous consulting role will be due and payable as described in such consulting agreement.
2.
Compensation and
Benefits.
For all services rendered by the Employee in
any capacity during the period of Employee’s employment by the Company, including without limitation, services as an executive
officer or member of any committee of the Board of Directors or any subsidiary, affiliate or division thereof, from and after the
Effective Date the Employee shall be compensated as follows:
PAGE QM-42
(a)
Base
Salary
. The Company shall pay the Employee a fixed salary (“Base Salary”) of One Hundred Twenty Thousand Dollars
($120,000) per year, paid at a rate of Ten Thousand Dollars ($10,000.00) per month, bi-monthly. The Board of Directors shall review
the Employee’s Base Salary from time to time with a view to increasing such Base Salary if, in the judgment of the Board
of Directors, the earnings of the Company or the services of the Employee merit such an increase. The Base Salary shall be payable
in accordance with the customary payroll practices of the Company. In the event the Company does not have sufficient cash on hand
to pay such monthly Base Salary, Employee agrees to voluntarily defer such payment(s) until such time as sufficient cash is available
to make such payments. Such deferred compensation, if any, shall be a priority payment when cash is sufficient to make such payment(s).
The Employee may use his discretion, in conjunction with advice and counsel from the Company’s Chief Financial Officer, as
to what constitutes cash sufficiency from time-to-time. If there is disagreement with the CFO’s position as to what constitutes
cash sufficiency, the Employee shall request the Board of Directors to make such determination.
(b)
Bonus.
During each year that this Agreement is in effect, Employee will be entitled to receive a bonus (“Bonus”) totaling
at least Thirty-Five Thousand Dollars ($35,000) per year. The Bonus shall be payable, first in a cash lump sum payment of Fifteen-Thousand
Dollars ($15,000) at the conclusion of Employee’s first six (6) months of employment, and an additional Twenty-Thousand Dollars
($20,000) no later than thirty (30) days after the end of the Employee’s first twelve (12) months of employment by the Company,
such Bonus being subject to increases based upon the reasonable discretion of the majority of the board of directors of the Company
or the designated committee(s) thereof.
(c)
Stock
Grants.
(i) Except
as otherwise provided herein, the Employee shall be entitled to a grant of common stock (the “Stock Grant”) equal to
250,000 shares of the Company’s common stock, par value $.0001 per share (the “Common Stock”), with a price per
share based on the market closing price as of the Effective Date, with such Stock Grant to be completed within five (5) business
days of the Execution Date, and such shares shall vest immediately upon the execution of this Agreement. Additional stock grants
may be made subject to performance criteria (the “Performance Criteria” established and mutually agreed upon by a majority
of the Company’s Board of Directors (or the Compensation Committee or other designated Special Committee thereof) and the
Employee has been achieved, including such initial Performance Criteria as shown in Exhibit A to this Agreement.
PAGE QM-43
(b)
Fringe
Benefits and Miscellaneous Employment Matters.
The Employee shall be entitled to participate in such employee benefit plans
or programs, as may be offered by the Company, including, without limitation, coverage under the Company’s current Directors
and Officers (“D&O”) insurance plan, a true and correct copy of which shall be provided to Employee upon entering
into this Agreement), Section 401(k) retirement plan, health insurance benefits, and any other benefits provided by the Company,
if such exist and which may be amended from time to time by the Board of Directors, to the extent that his position, tenure, salary,
age, health and other qualifications make him eligible to participate, subject to the terms and provisions of such plans. Such
additional benefits shall include, but not be limited to: paid sick leave, individual and family health insurance and paid personal
days, all in accordance with the current policies of the Company.
(c)
Withholding
and Employment Tax.
The Company will be entitled to deduct or withhold from any amounts owing to Employee any federal, state,
local or foreign withholding taxes, excise tax, or employment taxes imposed with respect to Employee’s compensation or other
payments from the Company or Employee’s ownership interest in the Company (including, without limitation, wages, bonuses,
dividends, the receipt or exercise of equity options and/or the receipt or vesting of restricted ity).
(d)
Death.
In the event of Employee’s death, the Employee’s family shall continue to be covered by all of the Company’s
medical, health and dental plans as in effect at such time, at the Company’s expense for at least six (6) months following
the Employee’s death in accordance with the terms of such plans. In the event such coverage would violate applicable law,
Company shall take such actions as it deems appropriate in good faith to provide the benefits described in the preceding sentence.
(e)
Vacation.
Employee shall receive four (4) weeks of paid vacation annually, administered in accordance with the Company’s existing vacation
policy. Any existing accrued, unused vacation shall be paid to Employee at the time of employment termination, no matter the reason
for such termination. Vacation time actually accrued by the Employee shall be prorated by the time actually employed by the Company.
3.
Business Expenses.
The Company shall pay or reimburse Employee’s
travel and entertainment expenses incurred by the Employee in connection with the performance of his duties under this Agreement,
provided that all such expenses must be both reasonable and pre-approved by the Chief Financial Officer, or in the event of a disagreement,
an independent member of the Board of Directors, including reimbursement for attending out-of-town meetings of the Board of Directors
in accordance with such procedures as the Company may from time to time establish for senior officers and as required to preserve
any deductions for federal income taxation purposes to which the Company may be entitled and subject to the Company’s normal
requirements with respect to reporting and documentation of such expenses. All air travel must be in coach class, and not in business
class or first class. Notwithstanding the foregoing, all expenses must be promptly submitted for reimbursement by the Employee.
In no event shall any reimbursement be paid by the Company after the end of the year following the year in which the expense is
incurred by the Employee.
PAGE QM-44
4.
Termination of Employment.
Notwithstanding any other provision of this
Agreement, Employee’s employment with the Company may be terminated for any reason or no reason at all upon sixty (60) days’
written notice to the other Party. Provided further, that a majority of the Board may terminate Employee's employment with the
Company upon written notice to Employee at any time, and such termination shall be effective as of the date of termination provided
for in such notice. Upon termination of this Agreement under this Section 4, Employee shall be entitled to any accrued but unpaid
salary, any pre-approved and reasonable travel and entertainment business expenses accrued but unpaid, any accrued but unused vacation,
and nothing more. Such payment will be made as soon as practical by the Company, but in no event, longer than sixty (60) days following
termination of this Agreement.
5.
Non-Competition.
During the period of Employee’s employment
hereunder and for the one (1) year thereafter (“Non-Competition Period”), the Employee shall not, within any county
in which the Company or any subsidiary of the Company provides services, directly or indirectly own any interest in, manage, control,
participate in, consult with, render services for, or in any manner engage in any business substantially similar to the Company’s
current businesses. Investments in less than five percent (5%) of the outstanding securities of any class of a corporation subject
to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended, shall not be prohibited
by this Section 5.
6.
Inventions and Confidential
Information.
The parties hereto recognize that a major need
of the Company is to preserve its specialized knowledge, trade secrets, and confidential information. The strength and good will
of the Company is derived from the specialized knowledge, trade secrets, and confidential information generated from experience
with the activities undertaken by the Company and its subsidiaries. The disclosure of this information and knowledge to competitors
would be beneficial to them and detrimental to the Company, as would the disclosure of information about the marketing practices,
pricing practices, costs, profit margins, design specifications, analytical techniques, and similar items of the Company and its
subsidiaries. The Employee acknowledges that the proprietary information, observations and data obtained by him while employed
by the Company concerning the business or affairs of the Company are the property of the Company. By reason of his being a senior
executive of the Company, the Employee has or will have access to, and has obtained or will obtain, specialized knowledge, trade
secrets and confidential information about the Company’s operations and the operations of its subsidiaries, which operations
extend throughout the United States. Therefore, subject to the provisions of Section 14 hereof, the Employee hereby agrees as follows,
recognizing that the Company is relying on these agreements in entering into this Agreement:
PAGE QM-45
(i) During the period of
Employee’s employment with the Company and for an indefinite period thereafter, the Employee will not use, disclose to others,
or publish or otherwise make available to any other party any inventions or any confidential business information about the affairs
of the Company, including but not limited to confidential information concerning the Company’s products, methods, engineering
designs and standards, analytical techniques, technical information, customer information, employee information, and other confidential
information acquired by him in the course of his past or future services for the Company. Employee agrees to hold and keep as confidential
the Company’s books, papers, letters, formulas, memoranda, notes, plans, records, reports, computer tapes, printouts, software
and other documents, and all copies thereof and therefrom, in any way relating to the Company’s business and affairs, whether
made by him or otherwise coming into his possession, and on termination of his employment, or on demand of the Company, at any
time, to deliver the same to the Company within twenty four (24) hours of such termination or demand. However, nothing in this
Agreement prohibits the Employee from using such confidential information or disclosing such information to those with a need to
know such information to perform his job duties for the Company; from disclosing such confidential information as required by law
or subpoena; or from testifying truthfully in any proceeding. Additionally, confidential information shall not include information
(a) that is or shall become generally available to the public other than as a result of the Employee’s unauthorized disclosure,
(b) that was or becomes available to Employee on a non-confidential basis from a source other than the Company or any subsidiaries
of the Company, or (c) that was developed by or for Employee independently of, and without the use of, any confidential information.
(ii) During the period
of Employee’s employment with the Company and for the one (1) year thereafter (“Non-Solicitation Period”) (a)
the Employee will not directly or indirectly through another entity induce or otherwise attempt to influence any employee of the
Company to leave the Company’s employ and (b) the Employee will not directly or indirectly hire or cause to be hired or induce
a third party to hire, any such employee (unless the Board of Directors shall have authorized such employment and the Company shall
have consented thereto in writing) or in any way interfere with the relationship between the Company and any employee thereof and
(c) induce or attempt to induce any customer, supplier, licensee, licensor or other business relation of the Company to cease doing
business, or reduce the amount of business done, with the Company or in any way interfere with the relationship between any such
customer, supplier, licensee or business relation of the Company.
7.
Consolidation; Merger;
Sale of Assets; Change of Control.
Nothing in this Agreement shall preclude the
Company from combining, consolidating or merging with or into, transferring all or substantially all of its assets to, or entering
into a partnership or joint venture with, another corporation or other entity, or effecting any other kind of corporate combination
provided that the corporation resulting from or surviving such combination, consolidation or merger, or to which such assets are
transferred, or such partnership or joint venture, assumes this Agreement and all obligations and undertakings of the Company hereunder.
Upon such a consolidation, merger, transfer of assets or formation of such partnership or joint venture, this Agreement shall inure
to the benefit of, be assumed by, and be binding upon such resulting or surviving transferee corporation or such partnership or
joint venture, and the term “Company,” as used in this Agreement, shall mean such corporation, partnership or joint
venture or other entity, and this Agreement shall continue in full force and effect in accordance with its terms and shall entitle
the Employee and his heirs, beneficiaries and representatives to exactly the same compensation, benefits, payments and other rights
as would have been their entitlement had such combination, consolidation, merger, transfer of assets or formation of such partnership
or joint venture not occurred.
PAGE QM-46
8.
Survival of Obligations.
Sections 2(e), 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 15 and 17 shall
survive the termination for any reason of this Agreement (whether such termination is by the Company, by the Employee, upon the
expiration of this Agreement or otherwise).
9.
Employee’s
Representations.
The Employee hereby represents and warrants
to the Company that (i) the execution, delivery and performance of this Agreement by the Employee do not and shall not conflict
with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which the Employee
is a party or by which he is bound, (ii) the Employee is not a party to or bound by any employment agreement, noncompete agreement
or confidentiality agreement with any other person or entity and (iii) upon the execution and delivery of this Agreement by the
Company, this Agreement shall be the valid and binding obligation of the Employee, enforceable in accordance with its terms. The
Employee hereby acknowledges and represents that he has consulted with legal counsel regarding his rights and obligations under
this Agreement and that he fully understands the terms and conditions contained herein.
10.
Company’s
Representations.
The Company hereby represents and warrants
to the Employee that (i) the execution, delivery and performance of this Agreement by the Company do not and shall not materially
conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which
the Company is a party or by which it is bound and (ii) upon the execution and delivery of this Agreement by the Employee, this
Agreement shall be the valid and binding obligation of the Company, enforceable in accordance with its terms.
11.
Enforcement.
Because the Employee’s services are unique
and because the Employee has access to confidential information concerning the Company, the parties hereto agree that money damages
would not be an adequate remedy for any breach of this Agreement. Therefore, in the event of a breach or threatened breach of this
Agreement, the Company may, in addition to other rights and remedies existing in its favor, apply to any court of competent jurisdiction
in Tarrant County, Texas for injunctive relief in order to enforce, or prevent any violations of, the provisions hereof (without
posting a bond or other security).
PAGE QM-47
12.
Severability.
In case any one or more of the provisions or
part of a provision contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect
in any jurisdiction, such invalidity, illegality or unenforceability shall be deemed not to affect any other jurisdiction or any
other provision or part of a provision of this Agreement, nor shall such invalidity, illegality or unenforceability affect the
validity, legality or enforceability of this Agreement or any provision or provisions hereof in any other jurisdiction; and this
Agreement shall be reformed and construed in such jurisdiction as if such provision or part of a provision held to be invalid or
illegal or unenforceable had never been contained herein and such provision or part reformed so that it would be valid, legal and
enforceable in such jurisdiction to the maximum extent possible. In furtherance and not in limitation of the foregoing, the Company
and the Employee each intend that the covenants contained in Sections 5 and 6 shall be deemed to be a series of separate covenants,
one for each county of the State of Texas and one for each and every other applicable county. If, in any judicial proceeding, a
court shall refuse to enforce any of such separate covenants, then such unenforceable covenants shall be deemed eliminated from
the provisions hereof for the purpose of such proceedings to the extent necessary to permit the remaining separate covenants to
be enforced in such proceedings. If, in any judicial proceeding, a court shall refuse to enforce any one or more of such separate
covenants because the total time, scope or area thereof is deemed to be excessive or unreasonable, then it is the intent of the
parties hereto that such covenants, which would otherwise be unenforceable due to such excessive or unreasonable period of time,
scope or area, be enforced for such lesser period of time, scope or area as shall be deemed reasonable and not excessive by such
court.
13.
Entire Agreement;
Amendment.
Except as otherwise set forth in this Agreement,
this Agreement contains the entire agreement between the Company and the Employee with respect to the subject matter hereof and
thereof. This Agreement may not be amended, waived, changed, modified or discharged except by an instrument in writing executed
by or on behalf of the party against whom enforcement of any amendment, waiver, change, modification or discharge is sought. No
course of conduct or dealing shall be construed to modify, amend or otherwise affect any of the provisions hereof.
14.
Notices.
All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given
if physically delivered, delivered by express mail or other expedited service or upon receipt if mailed, postage prepaid, via registered
mail, return receipt requested, or by electronic mail, addressed as follows:
(a) To the Company:
Greenway Technologies, Inc.
Attn: Ransom Jones
8851 Camp Bowie West, Suite 240
Fort Worth, TX 76116
Email: ransom.jones@gwtechinc.com
(b) To the Employee:
John Olynick
and/or to such other persons and addresses as any party shall have
specified in writing to the other from time-to-time. Either party may change its address for receiving notices by providing notice
of the new address to the other Party.
PAGE QM-48
15.
Assignability.
This Agreement shall be assignable by the Company
but not the Employee, and shall be binding upon, and shall inure to the benefit of, the heirs, executors, administrators, legal
representatives, successors and assigns of the parties. In the event that all or substantially all of the business of the Company
is sold or transferred, then this Agreement shall be binding on the transferee of the business of the Company whether or not this
Agreement is expressly assigned to the transferee. This Agreement shall inure to the benefit of and be enforceable by the Employee’s
personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.
16.
Governing Law.
This agreement shall be governed by and construed
in accordance with the laws of the State of Texas without giving effect to any conflict of laws principles to the contrary and
any dispute shall be submitted to binding arbitration, before a sole arbitrator, with such arbitration to be conducted in the State
of Texas, in Dallas County or Tarrant County and shall be conducted under the rules (but not the auspices) of the Commercial Section
of the Arbitration Association of America. The parties shall select the arbitrator from a list of ten arbitrators who agree to
work within fifty (50) miles East of the Tarrant County westernmost boundary and/or fifty (50) miles West of the Dallas County
easternmost boundary, by alternatively striking one name from the list until only one remains. The parties shall each advance one
half of the estimated fees to the arbitrator in advance of the commencement of the arbitration, and the prevailing party in any
arbitration shall recover the costs of the arbitration (including the reasonable attorneys’ fees). Each party irrevocably
consents to the exclusive venue and jurisdiction of the Courts of the State of Texas, in Dallas County or Tarrant County, for any
action to confirm an arbitration award, or to seek injunctive relief to prevent any then-ongoing violations of the Confidentiality,
Noncompetition or Non-solicitation obligations of the parties hereunder (which are the only issues that may be brought directly
to Court, as any other claims are fully compensable by an award of monetary damages). The commencement of an action seeking an
injunction shall not be deemed or construed to operate as a waiver of related or unrelated claims for monetary damages between
the parties or as a bar to the commencement of an arbitration (and subsequent action to confirm, vacate or modify the arbitration
award) relating to monetary damages arising from any related or unrelated claims, including those claims for monetary damages arising
from those same violations against which injunctive relief was sought.
17.
Waiver and Further
Agreement.
Any waiver of any breach of any terms or conditions
of this Agreement shall not operate as a waiver of any other breach of such terms or conditions or any other term or condition,
nor shall any failure to enforce any provision hereof operate as a waiver of such provision or of any other provision hereof. Each
of the parties hereto agrees to execute all such further instruments and documents and to take all such further action as the other
party may reasonably require in order to effectuate the terms and purposes of this Agreement.
18.
Headings of No
Effect.
The paragraph headings contained in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of this Agreement.
19.
Counter Party Signatures.
This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original and all of which together shall constitute one instrument.
PAGE QM-49
20.
280G.
Notwithstanding anything contained in this Agreement to the contrary to the extent that any of the payments and benefits provided
for under this Agreement together with any payments or benefits under any other agreement or arrangement between the Company or
any of their Subsidiaries and Employee (collectively, the “Payments”) would constitute a “parachute payment”
within the meaning of Section 280G of the Code, Employee shall receive total payments equal to the greater, after the application
of the excise tax imposed pursuant to Section 4999 of the Code, of the Payments provided under this Agreement or: the amount of
such Payments reduced to the greatest amount that would result in no portion of the Payments being subject to such excise tax.
[The remainder of this page intentionally left
blank. Signature page follows.]
IN WITNESS WHEREOF, the parties hereto have
executed this Employment Agreement as of the Execution Date first above written.
COMPANY:
GREENWAY TECHNOLOGIES, INC.
By: _________
/s/
________________________
Kent Harer, Director
EMPLOYEE:
By: _______
/s/
__________________________
John Olynick
PAGE QM-50
==============================================================================================================
Exhibit 10.40--FORM 10Q-March31, 2018
Exhibit 10.40
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this “Agreement”)
with an effective date of May 10, 2018 (the “Effective Date”) and signed May 15, 2018 (the “Execution Date”),
is by and between Greenway Technologies Inc., a Texas corporation (together with its subsidiaries, the “Company”),
and Ransom Jones, an individual residing in Frisco, Texas (the “Employee”).
W I T N E S S E T H:
WHEREAS, the Company and the Employee desire
for Employee to serve the Company as its Chief Financial Officer, Secretary and Treasurer; and
WHEREAS, the parties desire to provide that
the Employee be employed by the Company under the terms of this Agreement.
NOW THEREFORE in consideration of the mutual
benefits to be derived from this Agreement, the Company and the Employee hereby agree as follows:
1.
Term of Employment;
Office and Duties.
(a) Commencing on the Effective
Date of this Agreement and for an initial one (1) year term, the Company shall employ the Employee as the Chief Financial Officer
of the Company, and, having been duly appointed by the Board of Directors, also serving coterminously as the Company’s Secretary
and Treasurer, with the duties and responsibilities prescribed to such offices in the Bylaws of the Company and with such additional
duties and responsibilities consistent with such positions as may from time to time be reasonably assigned to the Employee by the
Board of Directors. Employee agrees to perform such duties and discharge such responsibilities in accordance with the terms of
this Agreement. This Agreement shall automatically renew for successive additional one (1) terms, unless terminated earlier under
Section 4, or unless either the Company or the Employee (collectively the “Parties” or individually the “Party”)
gives the other Party written advance notice of an intent not to renew the Agreement at least sixty (60) days prior to its expiration.
PAGE QM-51
(b) The Employee shall
devote substantially all of his working time to the business and affairs of the Company other than during vacations and periods
of illness or incapacity; provided, however, that nothing in this Agreement shall preclude the Employee from devoting time required:
(i) for serving as a director or officer of any organization or entity that does not compete with the Company or any other businesses
in which the Company is directly involved or becomes involved as a function of Employee’s duties; (ii) delivering lectures
or fulfilling speaking engagements; or (iii) engaging in charitable and community activities, including sitting on any Boards of
Directors and/or committees of such organizations related to such activities; provided, however, that such activities do not interfere
with the performance of his duties hereunder.
2.
Compensation and
Benefits.
For all services rendered by the Employee in
any capacity during the period of Employee’s employment by the Company, including without limitation, services as an executive
officer or member of any committee of the Board of Directors or any subsidiary, affiliate or division thereof, from and after the
Effective Date the Employee shall be compensated as follows:
(a)
Base
Salary
. The Company shall pay the Employee a fixed salary (“Base Salary”) of One Hundred Twenty Thousand Dollars
($120,000) per year, paid at a rate of Ten Thousand Dollars ($10,000.00) per month, bi-monthly. The Board of Directors shall review
the Employee’s Base Salary from time to time with a view to increasing such Base Salary if, in the judgment of the Board
of Directors, the earnings of the Company or the services of the Employee merit such an increase. The Base Salary shall be payable
in accordance with the customary payroll practices of the Company. In the event the Company does not have sufficient cash on hand
to pay such monthly Base Salary, Employee agrees to voluntarily defer such payment(s) until such time as sufficient cash is available
to make such payments. Such deferred compensation, if any, shall be a priority payment when cash is sufficient to make such payment(s).
The Employee may use his discretion, in conjunction with advice and counsel from the Company’s President, as to what constitutes
cash sufficiency from time-to-time. If there is disagreement with the President’s position as to what constitutes cash sufficiency,
the Employee shall request the Board of Directors to make such determination.
(b)
Bonus.
During each year that this Agreement is in effect, Employee will be entitled to receive a bonus (“Bonus”) totaling
at least Thirty-Five Thousand Dollars ($35,000) per year. The Bonus shall be payable, first in a cash lump sum payment of Fifteen-Thousand
Dollars ($15,000) at the conclusion of Employee’s first six (6) months of employment, and an additional Twenty-Thousand Dollars
($20,000) no later than thirty (30) days after the end of the Employee’s first twelve (12) months of employment by the Company,
such Bonus being subject to increases based upon the reasonable discretion of the majority of the board of directors of the Company
or the designated committee(s) thereof.
(c)
Stock
Grants.
(i) Except
as otherwise provided herein, the Employee shall be entitled to a grant of common stock (the “Stock Grant”) equal to
250,000 shares of the Company’s common stock, par value $.0001 per share (the “Common Stock”), with a price per
share based on the market closing price as of the Effective Date, with such Stock Grant to be completed within five (5) business
days of the Execution Date, and such shares shall vest immediately upon the execution of this Agreement. Additional stock grants
may be made subject to performance criteria (the “Performance Criteria” established and mutually agreed upon by a majority
of the Company’s Board of Directors (or the Compensation Committee or other designated Special Committee thereof) and the
Employee has been achieved, including such initial Performance Criteria as shown in Exhibit A to this Agreement.
(b)
Fringe
Benefits and Miscellaneous Employment Matters.
The Employee shall be entitled to participate in such employee benefit plans
or programs, as may be offered by the Company, including, without limitation, coverage under the Company’s current Directors
and Officers (“D&O”) insurance plan, a true and correct copy of which shall be provided to Employee upon entering
into this Agreement), Section 401(k) retirement plan, health insurance benefits, and any other benefits provided by the Company,
if such exist and which may be amended from time to time by the Board of Directors, to the extent that his position, tenure, salary,
age, health and other qualifications make him eligible to participate, subject to the terms and provisions of such plans. Such
additional benefits shall include, but not be limited to: paid sick leave, individual and family health insurance and paid personal
days, all in accordance with the current policies of the Company.
(c)
Withholding
and Employment Tax.
The Company will be entitled to deduct or withhold from any amounts owing to Employee any federal, state,
local or foreign withholding taxes, excise tax, or employment taxes imposed with respect to Employee’s compensation or other
payments from the Company or Employee’s ownership interest in the Company (including, without limitation, wages, bonuses,
dividends, the receipt or exercise of equity options and/or the receipt or vesting of restricted equity).
(d)
Death.
In the event of Employee’s death, the Employee’s family shall continue to be covered by all of the Company’s
medical, health and dental plans as in effect at such time, at the Company’s expense for at least six (6) months following
the Employee’s death in accordance with the terms of such plans. In the event such coverage would violate applicable law,
Company shall take such actions as it deems appropriate in good faith to provide the benefits described in the preceding sentence.
PAGE QM-52
(e)
Vacation.
Employee shall receive four (4) weeks of paid vacation annually, administered in accordance with the Company’s existing vacation
policy. Any existing accrued, unused vacation shall be paid to Employee at the time of employment termination, no matter the reason
for such termination. Vacation time actually accrued by the Employee shall be prorated by the time actually employed by the Company.
3.
Business Expenses.
The Company shall pay or reimburse Employee’s
travel and entertainment expenses incurred by the Employee in connection with the performance of his duties under this Agreement,
provided that all such expenses must be both reasonable and pre-approved by the Chief Financial Officer, or in the event of a disagreement,
an independent member of the Board of Directors, including reimbursement for attending out-of-town meetings of the Board of Directors
in accordance with such procedures as the Company may from time to time establish for senior officers and as required to preserve
any deductions for federal income taxation purposes to which the Company may be entitled and subject to the Company’s normal
requirements with respect to reporting and documentation of such expenses. All air travel must be in coach class, and not in business
class or first class. Notwithstanding the foregoing, all expenses must be promptly submitted for reimbursement by the Employee.
In no event shall any reimbursement be paid by the Company after the end of the year following the year in which the expense is
incurred by the Employee.
4.
Termination of Employment.
Notwithstanding any other provision of this
Agreement, Employee’s employment with the Company may be terminated for any reason or no reason at all upon sixty (60) days’
written notice to the other Party. Provided further, that a majority of the Board may terminate Employee's employment with the
Company upon written notice to Employee at any time, and such termination shall be effective as of the date of termination provided
for in such notice. Upon termination of this Agreement under this Section 4, Employee shall be entitled to any accrued but unpaid
salary, any pre-approved and reasonable travel and entertainment business expenses accrued but unpaid, any accrued but unused vacation,
and nothing more. Such payment will be made as soon as practical by the Company, but in no event, longer than sixty (60) days following
termination of this Agreement.
5.
Non-Competition.
During the period of Employee’s employment
hereunder and for the one (1) year thereafter (“Non-Competition Period”), the Employee shall not, within any county
in which the Company or any subsidiary of the Company provides services, directly or indirectly own any interest in, manage, control,
participate in, consult with, render services for, or in any manner engage in any business substantially similar to the Company’s
current businesses. Investments in less than five percent (5%) of the outstanding securities of any class of a corporation subject
to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended, shall not be prohibited
by this Section 5.
6.
Inventions and Confidential
Information.
The parties hereto recognize that a major need
of the Company is to preserve its specialized knowledge, trade secrets, and confidential information. The strength and good will
of the Company is derived from the specialized knowledge, trade secrets, and confidential information generated from experience
with the activities undertaken by the Company and its subsidiaries. The disclosure of this information and knowledge to competitors
would be beneficial to them and detrimental to the Company, as would the disclosure of information about the marketing practices,
pricing practices, costs, profit margins, design specifications, analytical techniques, and similar items of the Company and its
subsidiaries. The Employee acknowledges that the proprietary information, observations and data obtained by him while employed
by the Company concerning the business or affairs of the Company are the property of the Company. By reason of his being a senior
executive of the Company, the Employee has or will have access to, and has obtained or will obtain, specialized knowledge, trade
secrets and confidential information about the Company’s operations and the operations of its subsidiaries, which operations
extend throughout the United States. Therefore, subject to the provisions of Section 14 hereof, the Employee hereby agrees as follows,
recognizing that the Company is relying on these agreements in entering into this Agreement:
PAGE QM-53
(i) During the period of
Employee’s employment with the Company and for an indefinite period thereafter, the Employee will not use, disclose to others,
or publish or otherwise make available to any other party any inventions or any confidential business information about the affairs
of the Company, including but not limited to confidential information concerning the Company’s products, methods, engineering
designs and standards, analytical techniques, technical information, customer information, employee information, and other confidential
information acquired by him in the course of his past or future services for the Company. Employee agrees to hold and keep as confidential
the Company’s books, papers, letters, formulas, memoranda, notes, plans, records, reports, computer tapes, printouts, software
and other documents, and all copies thereof and therefrom, in any way relating to the Company’s business and affairs, whether
made by him or otherwise coming into his possession, and on termination of his employment, or on demand of the Company, at any
time, to deliver the same to the Company within twenty four (24) hours of such termination or demand. However, nothing in this
Agreement prohibits the Employee from using such confidential information or disclosing such information to those with a need to
know such information to perform his job duties for the Company; from disclosing such confidential information as required by law
or subpoena; or from testifying truthfully in any proceeding. Additionally, confidential information shall not include information
(a) that is or shall become generally available to the public other than as a result of the Employee’s unauthorized disclosure,
(b) that was or becomes available to Employee on a non-confidential basis from a source other than the Company or any subsidiaries
of the Company, or (c) that was developed by or for Employee independently of, and without the use of, any confidential information.
(ii) During the period
of Employee’s employment with the Company and for the one (1) year thereafter (“Non-Solicitation Period”) (a)
the Employee will not directly or indirectly through another entity induce or otherwise attempt to influence any employee of the
Company to leave the Company’s employ and (b) the Employee will not directly or indirectly hire or cause to be hired or induce
a third party to hire, any such employee (unless the Board of Directors shall have authorized such employment and the Company shall
have consented thereto in writing) or in any way interfere with the relationship between the Company and any employee thereof and
(c) induce or attempt to induce any customer, supplier, licensee, licensor or other business relation of the Company to cease doing
business, or reduce the amount of business done, with the Company or in any way interfere with the relationship between any such
customer, supplier, licensee or business relation of the Company.
7.
Consolidation; Merger;
Sale of Assets; Change of Control.
Nothing in this Agreement shall preclude the
Company from combining, consolidating or merging with or into, transferring all or substantially all of its assets to, or entering
into a partnership or joint venture with, another corporation or other entity, or effecting any other kind of corporate combination
provided that the corporation resulting from or surviving such combination, consolidation or merger, or to which such assets are
transferred, or such partnership or joint venture, assumes this Agreement and all obligations and undertakings of the Company hereunder.
Upon such a consolidation, merger, transfer of assets or formation of such partnership or joint venture, this Agreement shall inure
to the benefit of, be assumed by, and be binding upon such resulting or surviving transferee corporation or such partnership or
joint venture, and the term “Company,” as used in this Agreement, shall mean such corporation, partnership or joint
venture or other entity, and this Agreement shall continue in full force and effect in accordance with its terms and shall entitle
the Employee and his heirs, beneficiaries and representatives to exactly the same compensation, benefits, payments and other rights
as would have been their entitlement had such combination, consolidation, merger, transfer of assets or formation of such partnership
or joint venture not occurred.
PAGE QM-54
8.
Survival of Obligations.
Sections 2(e), 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 15 and 17 shall
survive the termination for any reason of this Agreement (whether such termination is by the Company, by the Employee, upon the
expiration of this Agreement or otherwise).
9.
Employee’s
Representations.
The Employee hereby represents and warrants
to the Company that (i) the execution, delivery and performance of this Agreement by the Employee do not and shall not conflict
with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which the Employee
is a party or by which he is bound, (ii) the Employee is not a party to or bound by any employment agreement, noncompete agreement
or confidentiality agreement with any other person or entity and (iii) upon the execution and delivery of this Agreement by the
Company, this Agreement shall be the valid and binding obligation of the Employee, enforceable in accordance with its terms. The
Employee hereby acknowledges and represents that he has consulted with legal counsel regarding his rights and obligations under
this Agreement and that he fully understands the terms and conditions contained herein.
10.
Company’s
Representations.
The Company hereby represents and warrants
to the Employee that (i) the execution, delivery and performance of this Agreement by the Company do not and shall not materially
conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which
the Company is a party or by which it is bound and (ii) upon the execution and delivery of this Agreement by the Employee, this
Agreement shall be the valid and binding obligation of the Company, enforceable in accordance with its terms.
11.
Enforcement.
Because the Employee’s services are unique
and because the Employee has access to confidential information concerning the Company, the parties hereto agree that money damages
would not be an adequate remedy for any breach of this Agreement. Therefore, in the event of a breach or threatened breach of this
Agreement, the Company may, in addition to other rights and remedies existing in its favor, apply to any court of competent jurisdiction
in Tarrant County, Texas for injunctive relief in order to enforce, or prevent any violations of, the provisions hereof (without
posting a bond or other security).
12.
Severability.
In case any one or more of the provisions or
part of a provision contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect
in any jurisdiction, such invalidity, illegality or unenforceability shall be deemed not to affect any other jurisdiction or any
other provision or part of a provision of this Agreement, nor shall such invalidity, illegality or unenforceability affect the
validity, legality or enforceability of this Agreement or any provision or provisions hereof in any other jurisdiction; and this
Agreement shall be reformed and construed in such jurisdiction as if such provision or part of a provision held to be invalid or
illegal or unenforceable had never been contained herein and such provision or part reformed so that it would be valid, legal and
enforceable in such jurisdiction to the maximum extent possible. In furtherance and not in limitation of the foregoing, the Company
and the Employee each intend that the covenants contained in Sections 5 and 6 shall be deemed to be a series of separate covenants,
one for each county of the State of Texas and one for each and every other applicable county. If, in any judicial proceeding, a
court shall refuse to enforce any of such separate covenants, then such unenforceable covenants shall be deemed eliminated from
the provisions hereof for the purpose of such proceedings to the extent necessary to permit the remaining separate covenants to
be enforced in such proceedings. If, in any judicial proceeding, a court shall refuse to enforce any one or more of such separate
covenants because the total time, scope or area thereof is deemed to be excessive or unreasonable, then it is the intent of the
parties hereto that such covenants, which would otherwise be unenforceable due to such excessive or unreasonable period of time,
scope or area, be enforced for such lesser period of time, scope or area as shall be deemed reasonable and not excessive by such
court.
PAGE QM-55
13.
Entire Agreement;
Amendment.
Except as otherwise set forth in this Agreement,
this Agreement contains the entire agreement between the Company and the Employee with respect to the subject matter hereof and
thereof. This Agreement may not be amended, waived, changed, modified or discharged except by an instrument in writing executed
by or on behalf of the party against whom enforcement of any amendment, waiver, change, modification or discharge is sought. No
course of conduct or dealing shall be construed to modify, amend or otherwise affect any of the provisions hereof.
14.
Notices.
All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given
if physically delivered, delivered by express mail or other expedited service or upon receipt if mailed, postage prepaid, via registered
mail, return receipt requested, or by electronic mail, addressed as follows:
(a) To the Company:
Greenway Technologies, Inc.
Attn: Ray Wright
8851 Camp Bowie West, Suite 240
Fort Worth, TX 76116
Email: ray.wright@gwtechinc.com
(b) To the Employee:
Ransom Jones
and/or to such other persons and addresses as any party shall have
specified in writing to the other from time-to-time. Either party may change its address for receiving notices by providing notice
of the new address to the other Party.
15.
Assignability.
This Agreement shall be assignable by the Company
but not the Employee, and shall be binding upon, and shall inure to the benefit of, the heirs, executors, administrators, legal
representatives, successors and assigns of the parties. In the event that all or substantially all of the business of the Company
is sold or transferred, then this Agreement shall be binding on the transferee of the business of the Company whether or not this
Agreement is expressly assigned to the transferee. This Agreement shall inure to the benefit of and be enforceable by the Employee’s
personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.
PAGE QM-56
16.
Governing Law.
This agreement shall be governed by and construed
in accordance with the laws of the State of Texas without giving effect to any conflict of laws principles to the contrary and
any dispute shall be submitted to binding arbitration, before a sole arbitrator, with such arbitration to be conducted in the State
of Texas, in Dallas County or Tarrant County and shall be conducted under the rules (but not the auspices) of the Commercial Section
of the Arbitration Association of America. The parties shall select the arbitrator from a list of ten arbitrators who agree to
work within fifty (50) miles East of the Tarrant County westernmost boundary and/or fifty (50) miles West of the Dallas County
easternmost boundary, by alternatively striking one name from the list until only one remains. The parties shall each advance one
half of the estimated fees to the arbitrator in advance of the commencement of the arbitration, and the prevailing party in any
arbitration shall recover the costs of the arbitration (including the reasonable attorneys’ fees). Each party irrevocably
consents to the exclusive venue and jurisdiction of the Courts of the State of Texas, in Dallas County or Tarrant County, for any
action to confirm an arbitration award, or to seek injunctive relief to prevent any then-ongoing violations of the Confidentiality,
Noncompetition or Non-solicitation obligations of the parties hereunder (which are the only issues that may be brought directly
to Court, as any other claims are fully compensable by an award of monetary damages). The commencement of an action seeking an
injunction shall not be deemed or construed to operate as a waiver of related or unrelated claims for monetary damages between
the parties or as a bar to the commencement of an arbitration (and subsequent action to confirm, vacate or modify the arbitration
award) relating to monetary damages arising from any related or unrelated claims, including those claims for monetary damages arising
from those same violations against which injunctive relief was sought.
17.
Waiver and Further
Agreement.
Any waiver of any breach of any terms or conditions
of this Agreement shall not operate as a waiver of any other breach of such terms or conditions or any other term or condition,
nor shall any failure to enforce any provision hereof operate as a waiver of such provision or of any other provision hereof. Each
of the parties hereto agrees to execute all such further instruments and documents and to take all such further action as the other
party may reasonably require in order to effectuate the terms and purposes of this Agreement.
18.
Headings of No
Effect.
The paragraph headings contained in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of this Agreement.
19.
Counter Party Signatures.
This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original and all of which together shall constitute one instrument.
PAGE QM-57
20.
280G.
Notwithstanding anything contained in this Agreement to the contrary to the extent that any of the payments and benefits provided
for under this Agreement together with any payments or benefits under any other agreement or arrangement between the Company or
any of their Subsidiaries and Employee (collectively, the “Payments”) would constitute a “parachute payment”
within the meaning of Section 280G of the Code, Employee shall receive total payments equal to the greater, after the application
of the excise tax imposed pursuant to Section 4999 of the Code, of the Payments provided under this Agreement or: the amount of
such Payments reduced to the greatest amount that would result in no portion of the Payments being subject to such excise tax.
[The remainder of this page intentionally left
blank. Signature page follows.]
IN WITNESS WHEREOF, the parties hereto have
executed this Employment Agreement as of the Execution Date first above written.
COMPANY:
GREENWAY TECHNOLOGIES, INC.
By: ________
/s/
_________________________
Kent Harer, Director
EMPLOYEE:
By: ________
/s/
_________________________
Ransom Jones
PAGE QM-58
==========================================================================================================
Exhibit 31.1--FORM 10Q-March31, 2018
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-Q 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: May 21, 2018.
/s/ John Olynick
John Olynick, President
PAGE QM-59
======================================================================================================================
Exhibit 31.2--FORM 10Q-March31, 2018
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-Q 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: May 21, 2018.
/s/ Ransom Jones
Ransom Jones, Chief Financial
Officer and Principal Accounting Officer
PAGE QM-60
============================================================================================================================
Exhibit 32.1--FORM 10Q-March31, 2018
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
Quarterly Report on Form 10-Q of Greenway Technologies, Inc. for the fiscal quarter ending March 31, 2018, I, John Olynick, President
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
Quarterly Report on Form 10-Q for the fiscal quarter ending March 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 Quarterly Report on Form 10-Q for the fiscal quarter ending March 31, 2018, fairly presents, in all
material respects, the financial condition and results of operations of Greenway Technologies, Inc.
Date: May 21, 2018.
/s/ John Olynick
John Olynick, President
PAGE QM-61
=====================================================================================================================
Exhibit 32.2--FORM 10Q-March31, 2018
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
Quarterly Report on Form 10-Q of Greenway Technologies, Inc. for the fiscal quarter ending March 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
Quarterly Report on Form 10-Q for the fiscal quarter ending March 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 Quarterly Report on Form 10-Q for the fiscal quarter ending March 31, 2018, fairly presents, in all
material respects, the financial condition and results of operations of Greenway Technologies, Inc.
Date: May 21, 2018.
/s/ Ransom Jones
Ransom Jones, Chief Financial
Officer and Principal Accounting Officer
PAGE QM-62
=====================================================================================================================
EXHIBIT- FORM 10Q- Three Months Ended June 30, 2018
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________________________________________
FORM 10-Q
[X] Quarterly report under Section 13 or 15(d) of the
Securities Exchange Act of 1934 For the quarterly period ended June 30, 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 registrant as specified in its
charter)
|
|
|
|
Texas
(State or other jurisdiction of
incorporation or organization)
|
90-0893594
(I.R.S. Employer Identification Number)
|
|
8851 Camp Bowie West Boulevard,
Suite 240
Fort Worth, Texas
(Address of principal executive offices)
|
76116
(Zip Code)
|
|
(817) 346-6900
(Registrant’s telephone
number, including area code)
|
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 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 (Check One):
|
|
|
|
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 ]
Indicate the number of shares outstanding
of each of the registrant’s classes of common stock, as of the latest practicable date. At May 5, 2018, the registrant had
outstanding 283,828,915 shares of our Class A common stock and 0 shares of Class B common stock.
Table of Contents
Part I – Financial Information.
|
Item 1. Financial Statements
|
1
|
|
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
17
|
|
Item 3. Quantitative and Qualitative Disclosures about Market Risk
|
24
|
|
Item 4. Controls and Procedures
|
24
|
|
|
|
|
Part II- Other Information
|
|
|
|
|
|
Item 1. Legal Proceedings
|
26
|
|
Item 1A. Risk Factors
|
26
|
|
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
|
26
|
|
Item 3. Defaults Upon Senior Securities
|
27
|
|
Item 4. Mine Safety Disclosures
|
27
|
|
Item 5. Other Information
|
27
|
|
Item 6. Exhibits
|
28
|
|
Signatures
|
31
|
PART I – FINANCIAL INFORMATION
|
|
Item 1.
|
Financial Statements.
|
GREENWAY TECHNOLOGIES, INC.
Condensed Consolidated Balance Sheet
(Unaudited)
|
|
|
June 30,
|
|
December 31,
|
|
|
|
2018
|
|
2017
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
4,847
|
|
|
$
|
91,518
|
|
|
Prepaid expense
|
|
|
|
|
|
|
157,500
|
|
|
Total Current Assets
|
|
|
4,847
|
|
|
|
249,018
|
|
|
Fixed assets
|
|
|
|
|
|
|
|
|
|
Property & equipment
|
|
|
4,015
|
|
|
|
4,015
|
|
|
Less depreciation
|
|
|
4,015
|
|
|
|
4,015
|
|
|
|
|
|
0
|
|
|
|
0
|
|
|
Other Assets
|
|
|
19,000
|
|
|
|
20,000
|
|
|
Total Assets
|
|
$
|
23,847
|
|
|
$
|
269,018
|
|
|
Liabilities & Stockholders’ Deficit
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
240,694
|
|
|
$
|
140,039
|
|
|
Stockholder advances
|
|
|
27,491
|
|
|
|
1,500
|
|
|
Accrued management fees
|
|
|
1,646,602
|
|
|
|
1,666,602
|
|
|
Notes payable
|
|
|
100,000
|
|
|
|
153,841
|
|
|
Accrued expenses
|
|
|
710,799
|
|
|
|
778,760
|
|
|
Current portion of convertible note payable, net of
|
|
|
|
|
|
|
|
|
|
discount of $61,023 and $81,833
|
|
|
189,644
|
|
|
|
150,834
|
|
|
Derivative liability – warrants
|
|
|
68,056
|
|
|
|
105,643
|
|
|
Total Current Liabilities
|
|
|
2,983,286
|
|
|
|
2,997,219
|
|
|
Long term convertible note payable, less current portion
|
|
|
60,000
|
|
|
|
84,000
|
|
|
Total Liabilities
|
|
|
3,043,286
|
|
|
|
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 June 30, 2018
|
|
|
|
|
|
|
|
|
|
and December 31, 2107
|
|
|
0
|
|
|
|
0
|
|
|
Common Class A stock 300,000,000 shares authorized, par value $0.0001, 286,050,581 and 287,681,826 issued and outstanding at
|
|
|
|
|
|
|
|
|
|
June 30, 2018 and December 31, 2017, respectively
|
|
|
44,942
|
|
|
|
28,771
|
|
|
Additional paid-in capital
|
|
|
21,936,959
|
|
|
|
20,782,630
|
|
|
Accumulated deficit
|
|
|
(25,001,340)
|
|
|
|
(23,623,602
|
)
|
|
Total Stockholders’ Deficit
|
|
|
(3,019,439)
|
|
|
|
(2,812,201
|
)
|
|
Total Liabilities & Stockholders’ Deficit
|
|
$
|
23,847
|
|
|
$
|
269,018
|
|
See the accompanying notes to unaudited condensed
consolidated financial statements.
GREENWAY TECHNOLOGIES, INC.
Condensed Consolidated Statements
of Operations – Unaudited
For the three months ended June 30, 2018
and 2017
|
|
|
2018
|
|
2017
|
|
Sales
|
|
$
|
0
|
|
|
$
|
0
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
543,066
|
|
|
|
5,048,380
|
|
|
Research and development
|
|
|
232,068
|
|
|
|
177,658
|
|
|
Depreciation
|
|
|
0
|
|
|
|
99
|
|
|
Total Expense
|
|
|
775,134
|
|
|
|
5,226,137
|
|
|
Operating loss
|
|
|
(775,134
|
)
|
|
|
(5,226,137
|
)
|
|
Other income (expenses)
|
|
|
|
|
|
|
|
|
|
Gain (loss) on change in fair value of derivative
|
|
|
18,199
|
|
|
|
(53,385
|
)
|
|
Interest (expense) income
|
|
|
(18,181
|
)
|
|
|
9,529
|
|
|
Settlement (expense) – loan agreement
|
|
|
(208,000
|
)
|
|
|
|
|
|
Warrant conversion gain
|
|
|
180,000
|
|
|
|
|
|
|
Total other income (expense)
|
|
|
(27,982
|
)
|
|
|
(43,856
|
)
|
|
Loss before income taxes
|
|
|
(803,116
|
)
|
|
|
(5,269,993
|
)
|
|
Provision for income taxes
|
|
|
0
|
|
|
|
0
|
|
|
Net loss
|
|
|
(803,116
|
)
|
|
$
|
(5,269,993
|
)
|
|
Net loss per share;
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per shares
|
|
|
(0.00
|
)
|
|
$
|
(0.03
|
)
|
|
Weighted average shares
|
|
|
|
|
|
|
|
|
|
Outstanding;
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
284,281,233
|
|
|
|
273,028,802
|
|
See the accompanying notes to unaudited condensed
consolidated financial statements.
GREENWAY TECHNOLOGIES, INC.
Condensed Consolidated Statements of Cash
Flows - Unaudited
For the three months ended June 30, 2018
and 2017
|
|
|
2018
|
|
2017
|
|
Cash Flows from Operating Activities
|
|
|
|
|
|
|
|
|
|
Net Loss from operations
|
|
$
|
(803,116
|
)
|
|
$
|
(5,269,993
|
)
|
|
Adjustments to reconcile net loss to net cash used in
|
|
|
|
|
|
|
|
|
|
Operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
0
|
|
|
|
99
|
|
|
Stock based compensation
|
|
|
0
|
|
|
|
4,779,370
|
|
|
(Gain) loss on derivative
|
|
|
(18,199
|
)
|
|
|
28,544
|
|
|
Debt issue costs amortized
|
|
|
10,405
|
|
|
|
0
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Prepaid expense
|
|
|
144,000
|
|
|
|
7,214
|
|
|
Accounts payable
|
|
|
138,901
|
|
|
|
(58,874
|
)
|
|
Accrued management fees
|
|
|
(90,000
|
)
|
|
|
15,000
|
|
|
Stockholder advances
|
|
|
27,491
|
|
|
|
0
|
|
|
Accrued expenses
|
|
|
268,890
|
|
|
|
(622
|
)
|
|
Net Cash Used in Operating Activities
|
|
|
(321,628
|
)
|
|
|
(499,262
|
)
|
|
Cash
Flows from Investing Activities
|
|
|
0
|
|
|
|
0
|
|
|
Cash Flows from Financing Activities
|
|
|
|
|
|
|
|
|
|
Repayments on note payable
|
|
|
(3,000
|
)
|
|
|
|
|
|
Repayments on convertible note payable
|
|
|
(120,753
|
)
|
|
|
|
|
|
Proceeds from sale of common stock
|
|
|
304,000
|
|
|
|
833,250
|
|
|
Net Cash Provided by Financing Activities
|
|
|
304,000
|
|
|
|
709,497
|
|
|
Net (Decrease) Increase in Cash
|
|
|
(17,628
|
)
|
|
|
210,235
|
|
|
Cash Beginning of Period
|
|
|
22,475
|
|
|
|
67,964
|
|
|
Cash End of Period
|
|
$
|
4,847
|
|
|
$
|
278,199
|
|
|
Supplemental Disclosure of Cash Flow Information:
|
|
|
|
|
|
|
|
|
|
Cash Paid during the period for interest
|
|
$
|
0
|
|
|
$
|
2,287
|
|
|
Cash Paid during the period for taxes
|
|
$
|
0
|
|
|
$
|
0
|
|
|
Shares returned and cancelled
|
|
$
|
100,000
|
|
|
$
|
0
|
|
The accompanying notes are an integral part
of these unaudited condensed consolidated financial statements.
GREENWAY TECHNOLOGIES, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
June 30, 2018
(Unaudited)
NOTE 1 – ORGANIZATION
Nature of Operations
Greenway Technologies, Inc. (“Greenway Technologies,”
“GTI,” 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 (“Universal Media”). The
Company changed its name to UMED Holdings, Inc. on March 23, 2011, and to Greenway Technologies, Inc. on June 23, 2017.
The Company’s mission is to operate as a holding company
to provide funding for commercializing the proprietary process held by its 100% owned subsidiary, Greenway Innovative Energy, Inc.
(“GIE”).
In September 2010, the Company acquired 1,440 acres of placer
mining claims on Bureau of Land Management land in Mohave County, Arizona. See discussion in Note 3. Due to the Company not
producing any revenue from its BLM mining leases since its acquisition of the leases, nor achieving cash flow levels to independently
fund the development of its BLM mining leases in December 2010 and not having current resources for an appraisal or assay, the
Company recognized an impairment charge of $100,000 during the year ended December 31, 2014. The Company believes that this investment
could be very lucrative if sufficient resources are committed to its development. However, at this time, the Company has made the
decision to commit is resources to commercialization of the Gas-To-Liquids (“GTL”) technology owned by GIE.
In August 2012, the Company acquired 100% of Greenway Innovative
Energy, Inc. (“GIE”) which owns patents and trade secrets for a proprietary process and related technology to convert
natural gas into synthesis gas (syngas), and then to liquid fuels, also known as gas-to-liquids or “GTL” processing.
In addition to its usefulness in the GTL process, 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 reforming process is called Fractional
Thermal Oxidation™ (FTO). The Company believes it will be able to offer a new economical, relatively small scale (125 to
2,475 barrels/day) method of converting natural gas into liquid fuels that can be located in field locations where applicable to
smaller scale GTL processing requirements. Commercialization of its proprietary reforming and GTL processes are the primary focus
of the Company.
NOTE 2 - BASIS OF PRESENTATION AND GOING CONCERN UNCERTAINTIES
Principles of Consolidation
The accompanying condensed consolidated financial statements
include the financial statements of the Company and its wholly-owned subsidiaries. All significant inter-company accounts and transactions
are eliminated in consolidation.
Basis of Presentation
The accompanying unaudited interim condensed consolidated
financial statements of the Company have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”)
for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulations S-X. Accordingly,
they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the periods presented are not necessarily indicative of the results that may be
expected for the year ending December 31, 2018. For further information, refer to the consolidated financial statements
and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2017.
The accompanying condensed consolidated financial statements
include the accounts of the following entities.
|
Name of Entity
|
%
|
|
Entity
|
Incorporation
|
Relationship
|
|
Greenway Technologies, Inc.
|
|
|
Corporation
|
Texas
|
Parent
|
|
Universal Media Corporation
|
100
|
%
|
Corporation
|
Wyoming
|
Subsidiary
|
|
Greenway Innovative Energy, Inc.
|
100
|
%
|
Corporation
|
Nevada
|
Subsidiary
|
|
Logistix Technology Systems, Inc.
|
100
|
%
|
Corporation
|
Texas
|
Subsidiary
|
Going Concern Uncertainties
The accompanying 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 shown in the accompanying condensed consolidated financial statements, the Company sustained a loss
of approximately $803,000 for the three-month period ended June 30, 2018 and has a working capital deficiency of approximately
$3.0 million and an accumulated deficit of approximately $25 million at June 30, 2018. 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.
With the successful test of the Company’s G-Reformer®
unit and FTO process during the first quarter 2018, the Company has started discussions with a number of oil and gas companies,
smaller oil and gas operators and investors regarding potential joint venture funding for a commercial scale gas-to-liquids (GTL)
plant using the Company’s unique GTL system. A commercial GTL plant will include the Company’s proprietary G-Reformer®,
a Fischer-Tropsch unit, and all necessary components to develop a fully functional GTL plant with a minimum output of ~125 barrels/day
of high-cetane blendstock (diesel fuel). Should an agreement be reached, a joint venture relationship would be anticipated to provide
funding for a plant, as well as sufficient additional operating capital for the Company to complete the commercialization process.
While there are no assurances that financing for an initial plant will be obtained on acceptable terms and in a timely manner,
the failure to obtain the necessary working capital may cause the Company to move in one or more alternate directions to transition
this revolutionary GTL system into production.
In parallel, Company is also seeking agreements and/or partnerships
with other GTL system providers to use the Company’s proprietary synthesis gas production unit, the G-Reformer®, as part
of existing, planned, or new GTL systems in partnership with the Company. While there are no assurances that such agreements and
partnerships will be obtained on acceptable terms and in a timely manner, the failure to obtain the necessary working capital may
cause the Company to move in one or more alternate directions to commercialize its proprietary G-Reformer® technology. Several
alternate paths are under consideration.
The accompanying condensed 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 condensed consolidated financial statements are as follows.
Property and Equipment
Property and equipment are 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 useful life of the assets.
The Company continues to use its fully depreciated property and equipment.
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 Company has not, to date, generated any
revenues.
Use of Estimates
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amount of revenue and expenses during the reported period. Actual results could differ materially
from the estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased
with an original maturity of three-months or less to be cash equivalents. There were no cash equivalents at June 30,
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 2013 – 2016.
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 or beneficial conversion features (11,356,238) 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 Notes 6 and 7 below for disclosures associated with the
Company’s convertible notes payable and warrants.
Fair Value of Financial Instruments
Effective January 1, 2008, fair value measurements are determined
by the Company’s adoption of authoritative guidance issued by the FASB, with the exception of the application of the statement
to non-recurring, non-financial assets and liabilities, as permitted. Fair value is defined in the authoritative guidance as the
price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for
the asset or liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy was
established, which prioritizes the inputs used in measuring fair value into three levels as follows:
Level 1 – Valuation based on unadjusted quoted market prices
in active markets for identical assets or liabilities.
Level 2 – Valuation based on, observable inputs (other than
level one prices), quoted market prices for similar assets such as at the measurement date; quoted prices in the market that are
not active; or other inputs that are observable, either directly or indirectly.
Level 3 – Valuation based on unobservable inputs that
are supported by little or no market activity, therefore requiring management’s best estimate of what market participants
would use as fair value.
Original Issue Discount
For certain convertible debt issued, the Company provides
the debt holder with an original issue discount (“OID”). An OID is the difference between the original cash
proceeds and the amount of the note upon maturity. The Note is originally recorded for the total amount payable. The OID is amortized
into interest expense pro-rata over the term of the Note.
In instances where the determination of the fair value measurement
is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire
fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety.
The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires
judgment and considers factors specific to the asset or liability. The valuation of the Company’s notes recorded at fair
value is determined using Level 3 inputs, which consider (i) time value, (ii) current market and (iii) contractual prices.
The carrying amounts of financial assets and liabilities,
such as cash and cash equivalents, receivables, accounts payable, notes payable and other payables, approximate their fair values
because of the short maturity of these instruments.
The following table represents the Company’s assets
and liabilities by level measured at fair value on a recurring basis at June 30, 2018 and December 31, 2017:
|
Description
|
|
Level 1
|
|
|
Level 2
|
|
Level 3
|
|
|
June 30, 2018 Derivative Liabilities
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
68,056
|
|
|
December 31, 2017
Derivative Liabilities
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
105,643
|
|
The following assets and liabilities
are measured on the balance sheets at fair value on a recurring basis utilizing significant unobservable inputs or Level 3 assumptions
in their valuation. The following tables provide a reconciliation of the beginning and ending balances of the liabilities:
The change in the notes payable
at fair value for the nine-month period ended June 30, 2018, is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair
Value
|
|
Change in
|
|
New
|
|
|
|
Fair
Value
|
|
|
|
|
January 1, 2018
|
|
|
|
Fair
Value
|
|
|
|
Convertible
Notes
|
|
|
|
Conversions
|
|
|
|
June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative Liabilities
|
|
$
|
106,643
|
|
|
$
|
37,587
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
(68,056
|
)
|
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 condensed consolidated financial statements.
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 June 30, 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 $232,068 and $177,658 during the three-months ended June 30, 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
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 condensed consolidated
financial statements.
NOTE 4 – PROPERTY, PLANT, AND EQUIPMENT
|
|
|
Range of Lives
in Years
|
|
June 30, 2018
|
|
December 31, 2017
|
|
Equipment
|
|
|
5
|
|
|
$
|
2,032
|
|
|
$
|
2,032
|
|
|
Furniture and fixtures
|
|
|
5
|
|
|
|
1,983
|
|
|
|
1,983
|
|
|
|
|
|
|
|
|
|
4,015
|
|
|
|
4,015
|
|
|
Less accumulated depreciation
|
|
|
|
|
|
|
(4,015
|
)
|
|
|
(4,015
|
)
|
|
|
|
|
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Depreciation expense was $0 and $99 for the three-months ended
June 30, 2018 and 2017, respectively.
NOTE 5 – TERM NOTES PAYABLE
Term notes payable consisted of the following at June 30, 2018
and December 31, 2017:
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
Unsecured note payable dated March 8, 2016 to an individual
at 5% interest, payable upon
the Company’s availability of cash
|
|
$
|
0
|
|
|
$
|
13,500
|
|
|
Unsecured note payable dated November 13, 2017 to
a corporation at $10,000 lump
sum interest at maturity on February 28, 2018. The
terms are being re-negotiated with
the noteholder.
|
|
|
100,000
|
|
|
|
100,000
|
|
|
Unsecured note payable dated December 28, 2017 to a corporation, due January 3, 2018
|
|
|
|
|
|
|
53,842
|
|
|
Total term notes
|
|
$
|
100,000
|
|
|
$
|
153,842
|
|
NOTE 6 – 2017 CONVERTIBLE PROMISSORY NOTES
The Company issued a $166,667
convertible promissory note bearing interest at 4.50% per annum to an accredited investor, payable in equal installments of
$6,000 commencing February 1, 2018 plus interest at rate of 4% per annum on December 20, 2018 and $80,000 plus accrued
interest on December 20, 2019. The holder has the right to convert the note into common stock of the Company
at a conversion price of $0.08 per share for each one dollar of cash payment which may be due, (which would be 1,083,333
shares for the $86,667 payment and 1,000,000 shares for the $80,000 payment).
The Company evaluated the terms
of the convertible note in accordance with ASC 815-40, Contracts in Entity’s Own Equity, and concluded that the Convertible
Note did not result 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. As of December 31, 2017, 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 of and during the three-months ended June 30, 2018, the remaining discount was $20,313 and $3,386 of the
discount was amortized.
The Company issued a $150,000 convertible
promissory note bearing interest at 4.50% per annum to an accredited investor, payable in equal installments of $6,000 plus accrued
interest until the principal and accrued interest are paid in full. The holder has the right to convert the note
into common stock of the Company at a conversion price of equal to 70% of the prior twenty (20) days average closing market price
of the Company’s common stock.
The Company evaluated the terms
of the convertible note in accordance with ASC 815-40, Contracts in Entity’s Own Equity, and concluded that the Convertible
Note resulted in a derivative. The Company evaluated the terms of the convertible note and concluded that there was a beneficial
conversion feature since the convertible note was convertible into shares of common stock at a discount to the market value of
the common stock. The discount related to the beneficial conversion feature on the note was valued at $58,494 based on the difference
between the fair value of the 1,578,947 convertible shares at the valuation date and the $150,000 note value. The discount related
to the beneficial conversion feature 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
. As of and during the three-months ended June
30, 2018, the remaining discount was $40,711 and $7,019 of the discount was amortized. The derivative liability for this note
at June 30, 2018 was $68,056.
NOTE 7 – CONVERTIBLE
PROMISSORY NOTE
May 2016 Convertible Note
On May 4, 2016, the Company issued
a $224,000 convertible promissory note bearing interest at 10.0% per annum to an accredited investor, payable beginning November
10, 2016, in monthly installments of $44,800 plus accrued interest and a cash premium equal to 10.0% of the installment amount. The
convertible promissory note was paid in full on March 4, 2017. The holder had the right under certain circumstances to convert
the note into common stock of the Company at a conversion price equal to 70% of the average of the 3 lowest volume weighted average
trading prices during the 20-day period ending on the latest complete trading day prior to the conversion date.
The Company evaluated the terms
of the convertible note in accordance with ASC 815-40, Contracts in Entity’s Own Equity, and concluded that the Convertible
Note resulted in a derivative. The Company evaluated the terms of the convertible note and concluded that there was a beneficial
conversion feature since the convertible note was convertible into shares of common stock at a discount to the market value of
the common stock. The discount related to the beneficial conversion feature on the note was valued at $224,000 based on the
Black-Scholes
Model
. The discount related to the beneficial conversion feature ($51,829) was amortized over the term of the debt (10 months). For
the year ended December 31, 2017, the Company recognized interest expense of $9,327 related to the amortization of the discount.
In connection with the issuance
of the $224,000 note, the Company recorded debt issue cost and discount as follows:
|
|
|
$20,000 original issue discount and $4,000 debt issue cost, which was amortized over 10 months, with amortization of $4,000 for twelve-months ended December 31, 2017.
|
|
|
|
The convertible promissory note was paid in full on March 10, 2017, reducing the embedded derivative for the 2016 beneficial conversion right to zero at December 31, 2017.
|
September 2014 Convertible Note
In connection with the issuance of a $158,000 convertible
promissory note in 2014 (repaid in July 2015), the Company issued warrants to purchase shares of common stock.
|
|
|
-
Warrants – recorded at fair value ($79,537) upon issuance,
and marked -to-market on the balance sheet at
$58,317 as of June 30, 2018 and $47,149 as of
December 31, 2017, which was computed as follows:
|
|
|
|
Commitment Date
|
|
|
Expected dividends
|
|
|
0%
|
|
|
Expected volatility
|
|
|
175.59%
|
|
|
Expected term: conversion feature
|
|
2 years
|
|
There was a controversy with the lender
regarding the number of shares that would be issued with wa
A controversy and litigation between the lender and the
Company emerged regarding the number of warrants attached to the loan agreement. The parties reached a settlement whereby the
Company issued 1,600,000 shares of freely-tradable stock to the lender. As a result of the settlement, all of the remaining balance
sheet amounts relating to the promissory note were eliminated in the quarter ended June 30, 2018. The Company recorded Settlement
Expense in the amount of $208,000 and Gain on Exchange in Fair Value of Derivative in the amount of $58,316.
NOTE 8 – ACCRUED EXPENSES
Accrued expenses consisted of the following at June 30, 2018
and December 31, 2017:
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
Accrued consulting fees
|
|
$
|
447,280
|
|
|
$
|
249,500
|
|
|
Accrued expense related to shareholder dispute
|
|
|
0
|
|
|
|
330,000
|
|
|
Accrued expense related to warrant exercise
|
|
|
0
|
|
|
|
180,000
|
|
|
Other accrued expenses
|
|
|
243,334
|
|
|
|
12,000
|
|
|
Accrued interest expense
|
|
|
20,185
|
|
|
|
7,260
|
|
|
Total accrued expenses
|
|
$
|
710,799
|
|
|
$
|
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 and the right to dividends, if and when declared
by the Board of Directors. Class B common stock does not vote.
Class A Common Stock
At June 30, 2018, there were 286,050,581
shares of class A common stock issued and outstanding.
During the three-months ended June 30,
2018, the Company: issued 650,000 shares of restricted class A common stock to 2 individuals through private placements for cash
of $76,000 at average of $0.12 per share.
-
Issued 1,600,000 of unrestricted common stock to the holder of a convertible
promissory note payable. The note had warrants attached to the note The Company negotiated a settlement with the lender to issue
the 1,600,000 shares to the lender at an price of $0.13 per share.
-
Issued 250,000 shares of stock to each the President and Chief Financial
Officer as required under Employment Agreements. The shares were issued at $.06 per share
-
Canceled 100,000 shares returned to the Company by shareholders
at a value of $10 added to paid-in-capital.
Class B Stock
At June 30, 2018 and 2017, there were 0
and 126,938 shares of class B stock issued and outstanding, respectively.
During the year ended December 31, 2017, the Company;
exchanged 630,000 shares of class A common stock for 62,986 class B shares with a shareholder who held class B shares from the
2009 merger agreement between the Company and Dynalyst Manufacturing Corporation which set a conversion rate of 15 to 1. The Company
negotiated the 630,000 shares when the class B shareholder elected to convert.
·
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.
Stock options, warrants and other rights
At June 30, 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 June 30, 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 three years and risk-free interest rate of 1.37%.
On January 8, 2018, the Company
issued 4,000,000 warrants to a director, which were provided in lieu of 3,000,000 shares that the director returned to the Company
and were subsequently cancelled, at $0.10 per share which expire in three years.
NOTE 10 - RELATED PARTY TRANSACTIONS
Shareholders made loans and advances to the Company in the amounts
of $27,491 (Kevin Jones $26,391 and Pat Six $1,100) during the three-months ended June 30, 2018 and $219,509 (Tunstall Canyon Group
$166,667, Kevin Jones $51,342 and Pat Six $1,500) during the year ended December 31, 2017, respectively. During the year
ended December 31, 2017, a shareholder, Richard Halden, purchased 2,250,000 shares of class A common stock for $225,000 ($0.10
per share) and Kevin Jones received repayment of a $59,690 loan.
NOTE 11 – INCOME TAXES
At June 30, 2018 and December 31, 2017,
the Company had approximately $17.3 million and $16.4 million, respectively, of net operating losses ("NOL") carry forwards
for federal and state income tax purposes. These losses are available for future years and expire through 2034. Utilization
of these losses may be severely or completely limited if the Company undergoes an ownership change pursuant to Internal Revenue
Code Section 382.
The provision for income taxes for continuing operations consists
of the following components for the three-months ended June 30, 2018 and the year ended December 31, 2017:
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
Current
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Deferred
|
|
|
-
|
|
|
|
-
|
|
|
Total tax provision for (benefit from) income taxes
|
|
$
|
-
|
|
|
$
|
-
|
|
A comparison of the provision for income tax expense at the
federal statutory rate of 21% for the three-months ended June 30, 2018 and the year ended December 31, 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 June 30, 2018 and December 31, 2017:
|
|
|
2018
|
|
|
2017
|
|
|
Deferred tax assets
|
|
|
|
|
|
|
|
Net operating loss carry forwards
|
|
$
|
16,524,544
|
|
|
$
|
16,403,873
|
|
|
Deferred compensation
|
|
|
790,360
|
|
|
|
821,572
|
|
|
Stock based compensation
|
|
|
2,900,734
|
|
|
|
2,900,734
|
|
|
Other
|
|
|
581,639
|
|
|
|
581,639
|
|
|
Total
|
|
|
20,797,277
|
|
|
|
20,707,818
|
|
|
Less valuation allowance
|
|
|
(20,797,277
|
)
|
|
|
(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
$45,912 and $12,784,855 for the three-months ended June 30, 2018 and the year ended December 31, 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 $20,797,277 and $20,707,818 at June 30,
2018 and December 31, 2017, respectively.
Utilization of
the Company’s net operating losses may be subject to substantial annual limitation if the Company experiences a 50% change
in ownership, as provided by the Internal Revenue Code and similar state provisions. Such an ownership change would substantially
increase the possibility of net operating losses expiring before complete utilization.
The ultimate realization of deferred tax
assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become
deductible. Management considers the scheduled reversal of deferred tax liabilities, historical taxable income including available
net operating loss carry forwards to offset taxable income, and projected future taxable income in making this assessment.
NOTE 12 – COMMITMENTS
Employment Agreements
In August 2012, the Company entered into employment agreements
with the president and chairman of the board of Greenway Innovative Energy, Inc. for a term of 5 years with compensation of $90,000
per year. In June of 2014, the president's employment agreement was amended to increase his annual pay to $180,000. The employment
agreement terminated August 12, 2017. During the three-months ended June 30, 2017, the Company paid and accrued a total of $45,000
on the employment agreement.
In the August 2012 acquisition agreement with Greenway
Innovative Energy, Inc., the Company agreed to issue an additional 7,500,000 shares of restricted common stock when the first GTL
unit is built and becomes operational and is capable of producing 2,000 barrels of diesel or jet fuel per day and pay Greenway
Innovative Energy a 2% royalty on all gross production sales on each unit placed in production.
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. Under their employment agreements, Mr. Olynick and Mr. Jones
were each issued 250,000 shares of Common Stock, par value $.0001 during the three months ended June 30, 2018.On the date of issuance,
the stock was valued at $.06 per share and the Company recorded an expense of $30,000. 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.
See Subsequent Events Note 13.
Consulting Agreement
On November 28, 2017, the Company entered into a three-year
consulting agreement with Chisos Equity Consultants, LLC for public relations, consulting and corporate communications services.
The initial payment was 1,800,000 shares of the Company’s restricted common stock. Additional payments upon the Company’s
common stock reaching certain price points are 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.
In October 2015, the Company signed a new
two-year lease for new office space of approximately 1,800 square feet at the rate of $2,417 for the first twelve months and $2,495
for the second twelve months. During the three months ended June 30, 2018 and 2017, the Company expensed $14,510 and $8,640,
respectively, in rent expense.
Greenway Innovative Energy, Inc. rents
approximately 600 square feet of office space at 1511 North Cooper St., Suite 207, Arlington, Texas 76011, at a rate of $1,369
per month.
The Company pays approximately $11,600
in annual maintenance fees on its Arizona BLM mining leases, in addition to 10% royalties based on production.
Legal
The Company has been named as a co-defendant
in an action brought against the Company and Mamaki Tea, Inc., alleging, among other things, that the Company was named as a co-guarantor
on an $850,000 foreclosed note. Management does not believe the ultimate resolution will have an adverse impact on the Company’s
financial condition or results of operations.
On April 22, 2016, Greenway Technologies filed suit under Cause
No. DC-16-004718, in the 193rd District Court, Dallas County, Texas against Mamaki of Hawaii, Inc. (“Mamaki”), Hawaiian
Beverages, Inc.(“HBI”), Curtis Borman and Lee Jenison for breach of a Stock Purchase Agreement dated October 29, 2015,
wherein the Company sold its shares in Mamaki to HBI for $700,000 (along with the assumption of certain debt). The Defendants failed
to make payments of $150,000 each on November 30, 2015, December 28, 2015 and January 27, 2016. On January 13, 2017, the parties
executed a Settlement and Mutual Release Agreement (Agreement). However, the Defendants defaulted in their payment obligations
under 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. Because of bankruptcy proceedings involving Curtis Borman, all action in this matter has been stayed.
See Subsequent Events Note 13.
NOTE 13-SUBSEQUENT EVENTS
There are no subsequent events to report.
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
THE FOLLOWING DISCUSSION SHOULD BE READ
TOGETHER WITH THE INFORMATION CONTAINED IN THE FINANCIAL STATEMENTS AND RELATED NOTES INCLUDED ELSEWHERE IN THIS REPORT ON FORM
10-Q.
The following discussion and analysis
of financial condition, results of operations, liquidity, and capital resources, should be read in conjunction with our audited
consolidated financial statements and notes thereto appearing elsewhere in this report, which have been prepared assuming that
we will continue as a going concern, and in conjunction with our Annual Form 10-K filed on April 5, 2018. As discussed in Note
2 to the consolidated financial statements, our recurring net losses and inability to generate sufficient cash flows to meet our
obligations and sustain our operations raise substantial doubt about our ability to continue as a going concern. Management’s
plans concerning these matters are also discussed in Note 2 to the consolidated financial statements. This discussion contains
forward-looking statements that involve risks and uncertainties, including information with respect to our plans, intentions and
strategies for our businesses. Our actual results may differ materially from those estimated or projected in any of these forward-looking
statements.
Unless the context otherwise suggests,
“we,” “our,” “us,” and similar terms, as well as references to “UMED” and “Greenway
Technologies,” all refer to Greenway Technologies, Inc, as of the date of this report.
Overview
Greenway Technologies, UMED Holdings, Inc. (“Greenway”
or “UMED”) was originally incorporated as Dynalyst Manufacturing Corporation (“Dynalyst”) under the laws
of the State of Texas on March 13, 2002.
In connection with the merger with Universal Media Corporation
(“UMC”), a Nevada corporation, on August 17, 2009, the Company changed its name to Universal Media Corporation. The
transaction was accounted for as a reverse merger, and Universal Media Corporation was the acquiring company on the basis that
Universal Media Corporation’s senior management became the entire senior management of the merged entity and there was a
change of control of Dynalyst. The transaction was accounted for as recapitalization of Dynalyst’s capital structure. In
connection with the merger, Dynalyst issued 57,500,000 restricted common shares to the shareholders of Universal Media Corporation
for 100% of Universal Media Corporation.
On August 18, 2009, Dynalyst approved the amendment of its
Articles of Incorporation and filed with the Texas Secretary of State an amendment to change its name to Universal Media Corporation
and approved the increase in authorized shares to 300,000,000 shares of common A stock, par value $0.0001 and 20,000,000 shares
of common B, par value $0.0001.
On March 23, 2011, Universal Media Corporation approved the
amendment of its Articles of Incorporation and filed with the Texas Secretary of State an amendment to change its name to UMED
Holdings, Inc.
On June 22, 2017, UMED Holdings, Inc. approved the amendment
of its certificate of formation and filed on June 23, 2017, with the Texas Secretary of State, an amendment to change the company
name to Greenway Technologies, Inc.
Greenway Technologies, Inc. is a holding company with present
interests in energy and mining. Corporate offices are located at 8851 Camp Bowie West, Suite 240, Fort Worth, Texas 76116, consisting
of approximately 1,800 square feet.. The Company’s wholly-owned subsidiary, Greenway Innovative Energy, Inc. (“GIE”),
has offices at 1521 North Cooper Street, Suite 207, Arlington, Texas 76011.
The Company will be unable to pay its obligations in the normal
course of business or service its debt in a timely manner throughout 2018 without raising additional debt or equity capital. There
can be no assurance that additional debt or equity capital will be raised.
Greenway Technologies is currently evaluating strategic alternatives
that include the following: (i) entering into joint ventures or partnerships with existing oil and gas producers or refiners to
exploit the Company’s patented technology, (ii) licensing or selling rights to its technology, (iii) raising additional equity
capital through the issuance of shares or (iv) entering into or issuing debt instruments. This process is ongoing and can be lengthy
and has inherent costs and risks. 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.
Energy Interest
In August of 2012, the Company acquired
Greenway Innovative Energy, Inc. Greenway Innovative Energy (“GIE”) began work in 2009 on its gas-to-liquids (GTL)
system to economically covert natural gas into high-cetane liquid fuels while making no wax product and avoiding the need for further
refining. In 2011, Greenway Innovative Energy engaged Houston-based Commonwealth Engineering to design a 1,500 barrel/day GTL system
based on steam methane reforming (SMR). This form of reforming proved to be too expensive for commercialization. As a result, GIE
embarked on a redesign of the reforming process, with such redesigned process and methodology leading to the issuance of patents
in 2013 as described below.
On February 15, 2013, GIE filed for a patent
on its GTL technology. U.S. Patent number 8,574,501 was issued on November 5, 2013.
ABSTRACT:
A method and apparatus for converting
natural gas from a source, such as a wellhead, pipeline, or a storage facility, into hydrocarbon liquid stable at room temperature,
comprising a skid or trailer mounted portable gas to liquids reactor. The reactor includes a preprocessor which desulfurizes and
dehydrates the natural gas, a first stage reactor which transforms the preprocessed natural gas into synthesis gas, and a liquid
production unit using a Fischer-Tropsch or similar polymerization process. The hydrocarbon liquid may be stored in a portable tank
for later transportation or further processed on site.
On November 4, 2013, GIE filed for a second
patent covering other aspects of the design.
Also, in November, 2013, GIE reinstated a Sponsored
Research Agreement (“SRA”) with the University of Texas at Arlington (“UTA”). The original agreement was
initiated in 2009 for GTL proof of concept, scalability, and portability. Under the 2013 agreement, and based on the GIE’s
ideas and vision, UTA began research focused solely on catalyst studies for the Fischer-Tropsch (FT) component of the GIE’s
GTL system design with a goal of developing a lab platform capable of running 24/7 catalyst testing for one week or longer to prove
the viability and commerciality of the process. Under the agreement, parametric studies were conducted for process conditions including
reaction temperature and space velocity.
During 2013, GIE and UTA worked closely together
meeting weekly, and sometimes daily, to review FT catalyst alternatives, identifying those most efficient and optimized to yield
synthetic diesel without wax or other compounds that would require refining.
In 2014, research conducted under the SRA established
that a liquid product could be produced under the right combination of temperature, pressure, and flow velocity. Deviations from
the defined conditions resulted in either catalyst activity loss, an undesired solid product (wax), or an undesired gaseous product
(methane).
In 2014, GIE began work with Air Liquide
on the development of the reforming process and entered into a contract for oxygen and for future patent rights to certain aspects
of reforming process associated with GTL.
In 2014, the company engaged in unsuccessful exploratory work with
Chicago Bridge & Iron to develop a smaller, less expensive SMR system. Separately, the company sought assistance from Schlumberger
on Sulphur removal techniques in order to purify natural gas as part of the GTL process. Sulphur is detrimental to the system’s
catalysts.
Also, in 2014, GIE worked with the University of Texas at Arlington
(UTA), under its Sponsored Research Agreement (SRA), to develop and enhance its patented GTL system with a goal of developing commercial
GTL plants to convert natural gas into liquid fuels.
During 2014, the company continued to have weekly, and sometimes
daily interactions with UTA to review results and modify research objectives.
During 2015, under the SRA with UTA, the company refined requirements
around FT catalyst longevity and the optimization of syn-fuel productivity. In addition, research was conducted into the nature
and purity of the water by-product from the FT reaction as well as the impact of CO2 contamination in the production of synthesis
gas.
Also, during 2015, under the SRA, the Company launched a project
to build a laboratory-scale GTL system at UTA for the purpose of refining and proving its proprietary GTL technology and engaged
Thermal Dynamics, an industrial manufacturer and fabricator, to build a laboratory-scale prototype reformer in order to prove scalability
and functionality. Numerous meetings were conducted with UTA, Air Liquide, and Thermal Dynamics regarding the planning for the
laboratory-scale prototype.
During 2016, under the SRA with UTA, GIE directed UTA to conduct
studies to evaluate the impact of the CO2 to syngas ratio in the reforming process. It was established that ratios above a certain
level would result in undesirable wax output. This finding was significant because it revealed a design parameter required to produce
wax-less fuel a critical design goal.
During 2016, under the SRA, GIE continued moving forward on the prototype
GTL system at UTA for the purpose or refining and proving its proprietary GTL technology. The lab will be named the Conrad Greer
Laboratory after the patent-holder and co-founder of the company Mr. Conrad Greer. Numerous meetings were conducted with UTA, Air
Liquide, and Thermal Dynamics to refine and finalize plans for the laboratory-scale prototype.
During 2016, Greenway Innovative Energy personnel worked closely
with UTA personnel, under the SRA, to develop process design and flow diagrams as well as completing heat and material calculations
for the laboratory-scaled system. During the year, the company continued to have weekly, and sometimes daily interactions with
UTA to review and modify research objectives.
On June 26, 2017, Greenway Technologies, in conjunction with
UTA, announced that it had successfully demonstrated its GTL technology at the Conrad Greer Laboratory at UTA proving the viability
of the GTL system.
On March 6, 2018, the Company announced the completion of its first
G-Reformer® system, which converts natural gas into synthesis gas. The G-Reformer® is a critical component of the company’s
innovative Greer-Wright Gas-to-Liquids system which converts natural gas into liquid fuels. A team consisting of individuals from
Greenway Technologies, Inc. and its wholly-owned subsidiary, Greenway Innovative Energy, the University of Texas at Arlington (UTA),
and Industrial Refractory Services, Inc. worked together to calibrate the newly-built G-Reformer®. The G-Reformer® testing
performed at that time substantiated the units’ synthesis gas generation capability and demonstrated additional proficiencies
within certain prior prescribed testing metrics.
The Company believes that the G-Reformer® is a major innovation
in gas reforming and GTL technology. It 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. This technology, based around the G-Reformer®, is unique in that it allows for transportable
GTL plants with a smaller footprint, when compared to legacy large-scale technologies.The Company believes its technologies and
processes will allow for GTL plants withsubstantially lower up-front and ongoing costs resulting in profitable operations. Greenway
Technologies 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 obtain joint venture or other forms of
capital funding to build its first complete gas-to-liquid plant using Greenway’s proprietary GTL conversion processes. The
Company is also exploring licensing its G-Reformer® product with representatives of various industries.
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 our restricted common stock. Early indications, from samples taken and processed, provides reason to believe
that the potential recovery value of the metals located on the 1,440 acres is significant, but actual mining and processing will
determine the ultimate value which may be realized from this property holding. The Company is currently exploring strategic options
to partner or sell its interest in this acreage.
Going Concern
As of June 30, 2018, the Company has an accumulated deficit
of $25,001,340. During the three-months ended June 30, 2018, the Company used net cash of $321,628 for operating activities. These
factors raise substantial doubt about the Company’s ability to continue as a going concern.
While the Company is attempting to commence operations and
generate revenues, the current cash position is not sufficient to support its daily operations. Management intends to raise additional
funds by way of a public or private offering or both. Management believes that the actions presently being taken to further implement
its business plan and generate revenues 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.
Three-months Ended June 30, 2018, Compared to Three-months
Ended June 30, 201
7.
Revenues.
During the three-months ended June 30, 2018, and 2017, the
Company had no revenues from operations. Management is aggressively looking for ways to leverage our technology to develop revenue
streams.
Operating Expenses.
Consulting Fees
. During the three-months ended June
30, 2018, consulting expense increased to $382,299 as compared to $43,450 from the prior year three-months ended June 30, 2017.
The increase was primarily the result of increased use of consultants in conducting operations.
Officer Compensation
. During the three-months ended
June 30, 2018, officer compensation decreased to $(1,666) as compared to $40,000 from the prior year three-months ended June 30,
2017. Officer compensation decreased due to two factors. There was a reversal of $90,000 of compensation accrued in the first quarter
that was not contractual and, on May 10, 2018, the Company hired a President and Chief Financial Officer. Under their Employment
Agreements, the Company accrued $33,334 in officer compensation for the quarter.
Operating Expenses
. During the three-months ended June
30, 2018, operating expenses decreased to $543,066 as compared to $1,069,145 from the prior year three-months ended June 30, 2017.
The decrease was primarily due to $327,500 of stock-based compensation recorded in the three-months ended June 30, 2017, without
a comparative charge in the three-months ended June 30, 2018. Travel expenses decreased to $4,311 in the three-months ended June
30, 2018, compared to $12,702 in the three-months ended June 30, 2017. Legal expenses increased to $118,861 in the three-months
ended June 30, 2018, compared to $42,688 in the three-months ended June 30, 2017. Research and development expenses increased to
$232,068 in the three-months ended June 30, 2018, compared to $160,274 in the three-months ended June 30, 2017.
Interest Expense
. During the three-months ended June
30, 2018, interest expense increased to $18,181 as compared to interest expense of $124 in the prior year three-months ended June
30, 2017. The increase was primarily due to the amortization of debt issue cost related to convertible promissory notes issued
in the fourth quarter of 2017.
Derivative Adjustment
. During the three-months ended
June 30, 2018, the gain on derivative adjustment was $18,199 as compared to a gain of $63,781 for the prior year three-months
ended June 30, 2017. The change was due to the convertible note payable being paid in first quarter 2017 and the derivative liability
for the three-months ended June 30, 2018 being calculated using the
Black-Scholes Model
only on the warrants.
Net Loss from Operations
. Our net loss from operations
decreased to $775,134 for the three-months ended June 30, 2018 compared to a loss of $1,005,548 for the three-months ended June
30, 2017. The decrease was primarily due to decrease the changes in expenses, as described above.
Liquidity and Capital Resources
Liquidity is the ability of a company to generate adequate
amounts of cash to meet its needs for cash. The following table provides certain selected balance sheet comparisons between June
30, 2018, and December 31, 2017:
|
|
|
June 30,
|
|
December 31,
|
|
$
|
|
%
|
|
|
|
2018
|
|
2017
|
|
Change
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
Working Capital
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$4,847
|
|
$91,518
|
|
$(69,043)
|
|
(75)%
|
|
Total current assets
|
|
$19,000
|
|
$249,018
|
|
$(82,543)
|
|
(33)%
|
|
Total assets
|
|
$23,847
|
|
$269,018
|
|
$(82,453)
|
|
(31)%
|
|
Accounts payable and accrued liabilities
|
|
$2,598,095
|
|
$2,586,901
|
|
$(305,596)
|
|
(12)%
|
|
Notes payable and accrued interest
|
|
$100,000
|
|
$388,675
|
|
$(288,675)
|
|
(74%)
|
|
Derivative liability
|
|
$68,056
|
|
$105,643
|
|
$ 19,388
|
|
(18%)
|
|
Total current liabilities
|
|
$2,983,286
|
|
$2,997,219
|
|
$(374,420)
|
|
(12)%
|
|
Total liabilities
|
|
$3,043,286
|
|
$3,081,219
|
|
$(374,420)
|
|
(11)%
|
In the three-months ended June 30, 2018, the Company’s working
capital deficit increased by $522,115 as a result of a decrease in current assets of $161,628 and an increase in accounts payable
and accrued liabilities of $360,487, an increase in accrued interest of $7,776 and a decrease in derivative liability of $18,199.
Operating activities
Net cash used in continuing operating activities during the
three-months ended June 30, 2018, was $(321,628) as compared to $(1,062,160) for the three-months ended June 30, 2017. Items totaling
approximately $481,488 contributing to the net cash used in continuing operating activities for the three-months ended June 30,
2018, include:
|
|
|
$803,116 net loss, offset by:
$ 18,199 gain on derivatives$ (18,199) loss on derivatives
$ 144,000 decrease in prepaid expenses,
|
|
|
|
$ 10,405 debt issue costs amortized
$ 407,791 increase in accounts payable and accrued expenses
$ (90,000) decrease in accrued management fees
$ 27,491 increase in shareholder advances
|
Net cash used for continuing operating activities for the
three-months ended June 30, 2017, was $1,062,160. Items totaling approximately $5,366,368 contributing to the net cash used in
continuing operating activities for the three-months ended June 30, 2017, include:
$6,275,481 net loss, offset by:
|
|
$5,326,244 representing the value of
stock-based compensation,
$ 10,396 loss on derivative liability
adjustment,
$ (13,476) in prepaids
|
|
|
$ 198 of depreciation,
$ 87,500 increase in management fees
$ (44,494) decrease in accounts payable
and accrued expenses
|
Investing activities
The Company had no investing activities
during the three-months ended June 30, 2018 and 2017.
F
inancing Activities
Net cash provided by financing activities was $70,000 for
the three-months ended June 30, 2018, composed of $70,000 in sales of common stock.
Seasonality
The Company does not anticipate that our business will be
affected by seasonal factors.
Impact of Inflation
General inflation in the economy has driven the operating
expenses of many businesses higher. The Company will continuously seek methods of reducing costs and streamlining operations while
maximizing efficiency through improved internal operating procedures and controls. While the Company’s businesses are subject
to inflation as described above, management believes that inflation currently does not have a material effect on our operating
results. However, inflation may become a factor in the future.
Commitments
Employment Agreements.
In August 2012, The Company entered into employment agreements
with the president and chairman of the board of Greenway Innovative Energy, Inc. for a term of five years with compensation of
$90,000 per year. In September 2014, the president’s employment agreement was amended to increase his annual pay to $180,000.
The employment agreement terminated in August 2017. During the three-months ended June 30, 2017, the Company paid and accrued
a total of $45,000 for the Greenway Innovative Energy president.
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., 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.
I
n
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 amount of shares and other consideration. As a result, only 3,750,000 share are
committed to be issued under this agreement.
The
Company is in default under a consulting agreement with a shareholder. As of June 30, 208, the Company has accrued $33,519 as
a payable. The Company is in discussions with the party regarding a restructuring and deferral of payments due under the agreement.
There are no assurances that the Company will be successful in restructuring the existing agreement.
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. During the three-months ended June 30, 2018, and 2017, the
Company expensed $26,992 and $35,023.
Greenway Innovative Energy, Inc. rents
approximately 600 square feet of office space at 1511 North Cooper St., Suite 207, Arlington, Texas 76011, at a rate of $1,369
per month.
Mining Interest.
In December 2010, the Company acquired from Melek Mining,
Inc. and 4HM Partners, LLC 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 stock. Our minimum commitment for
2018 is approximately $11,160 in annual maintenance fees, which are due September 1, 2018, payable to the United States Bureau
of Land Management. Once the production phase begins, royalties owed to the BLM will be are equal to 10% of production. As of the
date of this report, the mining claims are not covered by any lease agreement, we file an annual maintenance fee form to hold the
claims.
Consulting Agreement
On November 28, 2017, the Company entered into a three-year
consulting agreement with Chisos Equity Consultants, LLC for public relations, consulting and corporate communications services.
The initial payment was 1,800,000 shares of 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. 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.
Critical Accounting Policies
Financial statements and accompanying notes are prepared
in accordance with generally accepted accounting principles in the United States. Preparing financial statements requires management
to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenue, and expenses. These estimates
and assumptions are affected by management’s application of accounting policies. Critical accounting policies include revenue
recognition and impairment of long-lived assets.
The Company recognizes revenue in accordance with Staff Accounting
Bulletin No. 101, “Revenue Recognition in Financial Statements.” Sales are recorded when products are shipped to customers.
Provisions for discounts and rebates to customers, estimated returns and allowances and other adjustments are provided for in the
same period the related sales are recorded.
The Company evaluates long-lived assets for financial impairment
on a regular basis in accordance with Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment
or Disposal of Long-Lived Assets” which evaluates the recoverability of long-lived assets not held for sale by measuring
the carrying amount of the assets against the estimated discounted future cash flows associated with them. At the time such evaluations
indicate that the future discounted cash flows of certain long-lived assets are not sufficient to recover the carrying value of
such assets, the assets are adjusted to their fair values.
Quantitative and Qualitative Disclosures About Market
Risk
The Company conducts all transactions, including those with
foreign suppliers and customers, in U.S. dollars. The Company is therefore not directly subject to the risks of foreign currency
fluctuations and do not hedge or otherwise deal in currency instruments in an attempt to minimize such risks. Demand from foreign
customers and the ability or willingness of foreign suppliers to perform their obligations to us may be affected by the relative
change in value of such customer or supplier’s domestic currency to the value of the U.S. dollar. Furthermore, changes in
the relative value of the U.S. dollar may change the price of products relative to the prices of our foreign competitors.
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.
Recently Issued Accounting Pronouncements
In September 2014, FASB issued Accounting Standards Update
(“ASU”) No. 2014-10, “Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements,
Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation.” The update removes all incremental
financial reporting requirements from GAAP for development stage entities, including the removal of Topic 915 from the FASB Accounting
Standards Codification. In addition, the update adds an example disclosure in Risks and Uncertainties (Topic 275) to illustrate
one way that an entity that has not begun planned principal operations could provide information about the risks and uncertainties
related to Greenway Technologies’ current activities. Furthermore, the update removes an exception provided to development
stage entities in Consolidations (Topic 810) for determining whether an entity is a variable interest entity-which may change the
consolidation analysis, consolidation decision, and disclosure requirements for a company that has an interest in a company in
the development stage. The update is effective for the annual reporting periods beginning after December 15, 2014, including interim
periods therein. Early application with the first annual reporting period or interim period for which the entity’s financial
statements have not yet been issued (Public business entities) or made available for issuance (other entities). We adopted this
pronouncement for the three-months ended June 30, 2018.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements.
|
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk.
|
There has been no material change in
our market risks since the end of the fiscal year 2018.
|
|
Item 4.
|
Controls and Procedures.
|
Disclosure Controls and Procedures
The term disclosure controls and procedures means controls
and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports
that it files or submits under the Exchange Act (15 U.S.C. 78a,
et seq
) is recorded, processed, summarized and reported,
within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that
it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal
executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding
required disclosure.
The Company’s management is responsible for establishing
and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule
13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal
executive officer and principal financial officer and effected by our board of directors, management and other personnel, 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 and includes those policies and procedures that:
|
|
·
|
Pertain to the maintenance of records that in reasonable
detail accurately and fairly reflect the transactions and
dispositions of the assets of the issuer;
|
|
|
·
|
Provide reasonable assurance that transactions are recorded
as necessary to permit preparation of financial
statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the
issuer is being made only in accordance with authorizations
of management and directors of the issuer; and
|
|
|
·
|
Provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or
disposition of the issuer’s assets that could have
a material effect on the financial statements.
|
The Company’s management, including
the chief executive officer and chief financial officer, does not expect that the Company’s disclosure controls and procedures
or internal controls over financial reporting will prevent all error and all fraud. A control system, no matter how well conceived
and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further,
the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be
considered relative to their costs.
Because of inherent limitations in all control systems, internal
control over financial reporting may not prevent or detect misstatements, and no evaluation of controls can provide absolute assurance
that all control issues and instances of fraud, if any, within the Company have been detected. Also, projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may deteriorate.
Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are
subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with
the policies or procedures may deteriorate.
In March 2018, the Company conducted an evaluation, under
the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness
of our internal control over financial reporting based on the criteria for effective internal control over financial reporting
established in “Internal Control -- Integrated Framework,” issued by the Committee of Sponsoring Organizations revised
2013 (“COSO”) of the Treadway Commission. Based upon this assessment, we determined that our internal control over
financial reporting is ineffective.
The matters involving internal controls and procedures that
our management considers to be material weaknesses under COSO and SEC rules are: (1) lack of a functioning audit committee and
lack of independent directors on our board of directors, resulting in potentially ineffective oversight in the establishment and
monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives;
(3) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application
of US GAAP and SEC disclosure requirements; and (4) ineffective controls over period end financial disclosure and reporting processes.
The aforementioned potential material weaknesses were identified by our chief financial officer in connection with the preparation
of our financial statements as of June 30, 2018, who communicated the matters to our management and board of directors.
Management believes that the material weaknesses set forth
above did not have an effect on our financial results. However, the lack of a functioning audit committee and lack of a majority
of independent directors on our board of directors resulting in potentially ineffective oversight in the establishment and monitoring
of required internal controls and procedures, can impact our financial statements.
Management’s Remediation Initiatives
Although the Company is unable to meet the standards under
COSO because of limited funds, the Company is committed to improving its financial organization. As funds become available, the
Company will undertake to: (1) create positions to segregate duties consistent with control objectives, (2) increase personnel
resources and technical accounting expertise within the accounting function (3) appoint one or more outside directors to our board
of directors who shall be appointed to an audit committee resulting in a fully functioning audit committee who will undertake the
oversight in the establishment and monitoring of required internal controls and procedures; and (4) prepare and implement sufficient
written policies and checklists which will set forth procedures for accounting and financial reporting with respect to the requirements
and application of US GAAP and SEC disclosure requirements.
The Company will continue to monitor and evaluate the effectiveness
of our internal controls and procedures and our internal control over financial reporting on an ongoing basis and are committed
to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow. However, because
of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements
due to error or fraud will not occur or that all control issues and instances of fraud, if any, within Greenway Technologies have
been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns
can occur because of simple error or mistake. The design of any system of controls is based in part on certain assumptions about
the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under
all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks.
PART II – OTHER INFORMATION
|
|
Item 1.
|
Legal Proceedings.
|
The
Company has been named as a co-defendant in an action brought against us and Mamaki Tea, Inc., alleging, among other things, that
the Company was named as a co-guarantor on an $850,000 foreclosed note. Management does not believe the ultimate resolution will
have an adverse impact on the financial condition or results of operations.
On April 22, 2016, Greenway Technologies filed suit under
Cause No. DC-16-004718, in the 193rd District Court, Dallas County, Texas against Mamaki of Hawaii, Inc. (“Mamaki”),
Hawaiian Beverages, Inc.(“HBI”), Curtis Borman and Lee Jenison for breach of a Stock Purchase Agreement dated October
29, 2015, wherein we sold our shares in Mamaki to HBI for $700,000 (along with the assumption of certain debt). The Defendants
failed to make payments of $150,000 each on November 30, 2015, December 28, 2015 and January 27, 2016. On January 13, 2017, we
executed a Settlement and Mutual Release Agreement with the Defendants. However, the Defendants defaulted in their payment obligations
under Settlement and Mutual Release Agreement. Due to the bankruptcy proceedings involving Curtis Borman, all action in this matter
has been stayed.
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 will be done in connection with a legal opinion pursuant to Rule 144.
Not applicable.
|
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds.
|
During the three-month period ended June 30, 2018, the Company
issued 650,000 shares of restricted common stock to 2 individuals through private placements for cash of $66,000 at an average
price of $0.1015 per share. There were no selling expenses or commissions with respect to the sale of our common stock.
The proceeds realized from the sale of the Company’s
common stock was used to pay the Company’s general and administrative expenses, salaries of officers and consultants in
the amount of $543,066, and expenses associated with the Company’s GTL project at The University of Texas at Arlington.
Each investor took his or her securities for investment purposes
without a view to distribution and had access to information concerning the Company and its 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, as defined in Regulation D with whom the Company had a direct personal preexisting relationship,
and after a thorough discussion. Each certificate contained a restrictive legend as required by the Securities Act. Finally, the
Company’s 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.
Each purchaser or recipient of the Company’s shares
was an accredited investor, and either alone or with his purchaser representative(s) had such knowledge and experience in financial
and business matters that he was capable of evaluating the merits and risks of the prospective investment. The Company reasonably
believed immediately prior to making any sale that such purchaser came within this description.
All of the above described investors who received shares of
our common were provided with access to our filings with the SEC, including the following:
|
|
·
|
The information contained in our annual report on Form 10-K under the Exchange Act.
|
|
|
·
|
The information contained in any reports or documents required
to be filed by Greenway Technologies under
sections 13(a), 14(a), 14(c), and 15(d) of the Exchange
Act since the distribution or filing of the reports specified above.
|
|
|
·
|
A brief description of the securities being offered, and any material changes in our affairs that were not disclosed in the documents furnished.
|
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
NONE
|
|
Item 3.
|
Defaults Upon Senior Securities.
|
Not applicable.
|
|
Item 4.
|
Mine Safety Disclosures.
|
Not applicable.
|
|
Item 5.
|
Other Information.
|
None.
|
Exhibit No.
|
Identification of Exhibit
|
|
2.1**
|
Combination Agreement executed as of August 18, 2009, between Dynalyst Manufacturing Corporation and Universal Media Corporation, filed as Exhibit 10.2 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
3.1**
|
Articles of Incorporation of Dynalyst Manufacturing Corporation filed with the Secretary of State of Texas on March 13, 2002, filed as Exhibit 3.1 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
3.2**
|
Articles of Amendment of Articles of Incorporation of Dynalyst Manufacturing Corporation filed with the Secretary of State of Texas on June 7, 2006, filed as Exhibit 3.2 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
3.3**
|
Articles of Amendment of Articles of Incorporation of Dynalyst Manufacturing Corporation filed with the Secretary of State of Texas on August 28, 2009, changing the corporate name to Universal Media Corporation, filed as Exhibit 3.3 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
3.4**
|
Articles of Amendment of Articles of Incorporation of Universal Media Corporation filed with the Secretary of State of Texas on March 23, 2011, changing the corporate name to UMED Holdings, Inc., filed as Exhibit 3.4 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
3.5**
|
Articles of Amendment of Certificate of Formation of UMED Holdings, Inc. filed with the Secretary of State of Texas on June 23, 2017, changing the corporate name to Greenway Technologies, Inc., filed as Exhibit 3.1 to the registrant’s Form 8-K/A on July 20, 2017, Commission File Number 000-55030.
|
|
3.6**
|
Bylaws of Dynalyst Manufacturing Corporation, filed as Exhibit 3.5 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
3.7**
|
Articles of Incorporation of Greenway Innovative Energy, Inc. filed with the Secretary of State of Nevada on July 6, 2012, filed as Exhibit 3.7 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
|
|
3.8**
|
Bylaws of Greenway Innovative Energy, Inc., filed as Exhibit 3.8 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
|
|
10.1**
|
Code of Ethics for Senior Financial Officers, filed as Exhibit 10.1 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
10.2**
|
Purchase Agreement dated as of May 1, 2012, between Universal Media Corporation and Mamaki Tea & Extract, Inc., filed as Exhibit 10.3 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
10.3**
|
Addendum and Modification to Purchase Agreement dated as of December 31, 2012, between Universal Media Corporation and Mamaki of Hawaii, Inc. formerly Mamaki Tea & Extract, Inc., filed as Exhibit 10.4 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
10.4**
|
Second Addendum and Modification to Purchase Agreement dated as of December 31, 2012, between Universal Media Corporation and Mamaki of Hawaii, Inc. formerly Mamaki Tea & Extract, Inc., filed as Exhibit 10.5 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
10.5**
|
Purchase Agreement dated August 29th, 2012, between Universal Media Corporation and Greenway Innovative Energy, Inc., filed as Exhibit 10.6 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
10.6**
|
Purchase Agreement dated as of February 23, 2012, between Rig Support Services, Inc. and UMED Holdings, Inc., filed as Exhibit 10.7 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
10.7**
|
Asset Purchase Agreement dated as of October 2, 2011, between Jet Regulators, L.C., R/T Jet Tech, L.P. and UMED Holdings, Inc., filed as Exhibit 10.8 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
10.8**
|
Employee Agreement dated May 27, 2011, between UMED Holdings, Inc. and Kevin Bentley, filed as Exhibit 10.9 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
10.9**
|
Employee Agreement dated May 27, 2011, between UMED Holdings, Inc. Randy Moseley, filed as Exhibit 10.10 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
10.10**
|
Employee Agreement dated May 27, 2011, between UMED Holdings, Inc. and Richard Halden, filed as Exhibit 10.11 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
10.11**
|
Employee Agreement dated August 29, 2012, between UMED Holdings, Inc. and Raymond Wright, filed as Exhibit 10.12 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
10.12**
|
Employee Agreement dated August 29, 2012, between UMED Holdings, Inc. and Conrad Greer, filed as Exhibit 10.13 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
10.13**
|
Consulting Agreement dated May 27, 2011, between UMED Holdings, Inc. and Jabez Capital Group, LLC, filed as Exhibit 10.14 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
10.14**
|
Promissory Note in the amount of $850,000 dated August 17, 2012, executed by Mamaki Tea, Inc. payable to Southwest Capital Funding, Ltd., filed as Exhibit 10.15 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
10.15**
|
Modification of Note and Liens effective as of October 1, 2012, between Southwest Capital Funding, Ltd. and Mamaki Tea, Inc., filed as Exhibit 10.16 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
10.16**
|
Second Modification of Note and Liens effective as of December 20, 2012, between Southwest Capital Funding, Ltd., Mamaki Tea, Inc., and Mamaki of Hawaii, Inc., filed as Exhibit 10.17 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
10.17**
|
Promissory Note in the amount of $150,000 dated August 17, 2012, executed by Mamaki Tea, Inc. payable to Robert R. Romer, filed as Exhibit 10.18 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
10.18**
|
Addendum and Modification to Purchase Agreement dated as of December 31, 2012, between Rig Support Services, Inc. and UMED Holdings, Inc., filed as Exhibit 10.19 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030.
|
|
10.19**
|
Securities Purchase Agreement dated September 18, 2014, between UMED Holdings, Inc. and Tonaquint, Inc., filed as Exhibit 10.19 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
|
|
10.20**
|
Promissory Note in the amount of $158,000 dated September 18, 2014, executed by UMED Holdings, Inc. payable to Tonaquint, Inc., filed as Exhibit 10.20 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
|
|
10.21**
|
Warrant dated September 18, 2014, for $47,400 worth of UMED Holdings, Inc. shares issued to Tonaquint, Inc., filed as Exhibit 10.21 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
|
|
10.22**
|
Office Lease Agreement dated October 2015, between UMED Holdings, Inc. and The Atrium Remains the Same, LLC, filed as Exhibit 10.22 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
|
|
10.23**
|
Warrant dated October 31, 2015, for 4,000,000 shares issued to Norman T. Reynolds, Esq, filed as Exhibit 10.23 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
|
|
10.24**
|
Promissory Note in the amount of $36,000 dated March 8, 2016, executed by UMED Holdings, Inc. payable to Peter C. Wilson, filed as Exhibit 10.24 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
|
|
10.25**
|
Convertible Promissory Note in the amount of $224,000 dated May 4, 2016, executed by UMED Holdings, Inc. payable to Tonaquint, Inc., filed as Exhibit 10.25 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
|
|
10.26**
|
Severance and Release Agreement by and between UMED Holdings, Inc. and Randy Moseley dated November 11, 2016, filed as Exhibit 10.26 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
|
|
10.27**
|
Settlement and Mutual Release Agreement dated January 13, 2017, executed by UMED Holdings, Inc. in connection with Cause No. DC-16-004718, in the 193rd District Court, Dallas County, Texas against Mamaki of Hawaii, Inc., Hawaiian Beverages, Inc., Curtis Borman, and Lee Jenison, filed as Exhibit 10.27 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
|
|
10.28**
|
Warrant dated February 1, 2017, for 2,000,000 shares issued to Richard J. Halden, filed as Exhibit 10.28 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
|
|
10.29**
|
Warrant dated February 1, 2017, for 4,000,000 shares issued to Richard J. Halden, filed as Exhibit 10.29 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
|
|
10.30**
|
Severance and Release Agreement by and between UMED Holdings, Inc. and Richard Halden dated February 1, 2017, filed as Exhibit 10.30 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
|
|
10.31**
|
Assignment Agreement dated December 27, 2010, between Melek Mining, Inc., 4HM Partners, LLC, and UMED Holdings, Inc., filed as Exhibit 10.31 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030.
|
|
10.32**
10.33**
10.34**
10.35**
10.36**
10.37**
10.38**
|
Consulting Agreement by and between the registrant and Chisos Equity
Consultants, LLC, as
Amended 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.
Promissory Note in the amount of $100,000 dated November 13, 2017,
executed by Greenway Technologies, Inc. to Wildcat Consulting Group LLC.as Exhibit 10.33 to the registrant’s Form 10K on
April 5, 2018, Commission File Number 000-55030.
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 filed at Exhibit 10.34 to
the registrant’s Form 10K on April 5, 2018, Commission File Number 000-55030.
Warrant dated November 30, 2017 for 1,000,000 shares issued to MTG
Holdings, LTD.
filed at Exhibit 10.34 to the registrant’s Form 10K on April
5, 2018, Commission File Number 000-55030.
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.
Warrant dated January 8, 2018 for 4,000,000 shares issued to Kent
Harer.
Settlement agreement by and between Greenway Technologies, Inc. and
Tonaquint, Inc. dated April 9, 2018.
|
|
10.39**
|
Employment agreement with John Olynick, as President, dated May 10, 2018.
|
|
10.40**
|
Employment agreement with Ransom Jones, as Chief Financial Officer, Secretary and Treasurer, dated May 10, 2018.
|
|
31.1*
|
Certification of D. Patrick Six, Chief Executive Officer of Greenway Technologies, Inc., pursuant to 18 U.S.C. §1350, as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.
|
|
31.2*
|
Certification of D. Patrick Six, Chief Financial Officer and Principal Accounting Officer of Greenway Technologies, Inc., pursuant to 18 U.S.C. §1350, as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.
|
|
32.1*
|
Certification of D. Patrick Six, Chief Executive Officer of Greenway Technologies, Inc., pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.
|
|
32.2*
|
Certification of D. Patrick Six, Chief Financial Officer and Principal Accounting Officer of Greenway Technologies, Inc., pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.
|
____________
* Filed herewith.
** Previously filed.
SIGNATURES
In accordance with Section 13 or 15(d)
of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GREENWAY TECHNOLOGIES, INC.
Date: August 20, 2018.
By
/s/ John Olynick
John Olynick, President
By
/s/ Ransom Jones
Ransom Jones, Chief Financial Officer and
Principal Accounting Officer
=====================================================================================================================
Exhibit 31.1--FORM 10Q-June 30, 2018
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-Q 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:
August 20, 2018.
/s/
John Olynick
John
Olynick, President
PAGE QJ-32
============================================================================================================================
Exhibit 31.2--FORM 10Q-June 30, 2018
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-Q 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:
August 20, 2018.
/s/
Ransom Jones
Ransom
Jones, Chief Financial Officer and Principal Accounting Officer
PAGE QJ-33
============================================================================================================================
Exhibit 32.1--FORM 10Q-June 30, 2018
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 Quarterly Report on Form 10-Q of Greenway Technologies, Inc. for the fiscal quarter ending
June 30, 2018, I, John Olynick, President 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
Quarterly Report on Form 10-Q for the fiscal quarter ending June 30, 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 Quarterly Report on Form 10-Q for the fiscal quarter ending June 30, 2018, fairly presents, in
all material respects, the financial condition and results of operations of Greenway Technologies, Inc.
Date:
August 20, 2018.
/s/
John Olynick
John
Olynick, President
PAGE QJ-34
============================================================================================================================
Exhibit 32.2--FORM 10Q-June 30, 2018
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 Quarterly Report on Form 10-Q of Greenway Technologies, Inc. for the fiscal quarter ending
June 30, 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
Quarterly Report on Form 10-Q for the fiscal quarter ending June 30, 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 Quarterly Report on Form 10-Q for the fiscal quarter ending June 30, 2018, fairly presents, in
all material respects, the financial condition and results of operations of Greenway Technologies, Inc.
Date:
August 20, 2018.
/s/
Ransom Jones
Ransom
Jones, Chief Financial Officer and Principal Accounting Officer
PAGE QJ-35
============================================================================================================================
EXHIBIT FORM 8-K-FILED MARCH 8, 2018
United
States
Securities and Exchange Commission
Washington, D.C. 20549
____________________________________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 6, 2018
GREENWAY TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Texas
(State or other jurisdiction of incorporation or organization)
000-55030
(Commission File Number)
|
90-0893594
(IRS Employer Identification No.)
|
|
8851 Camp Bowie West Boulevard, Suite 240
Fort Worth, Texas
(principal executive offices)
|
76116
(Zip Code)
|
(817) 346-6900
(registrant’s telephone number, including area code)
_____________________________________________________________________________________________
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written
communications pursuant to Rule 425 under the Securities Act
[ ] Soliciting
material pursuant to Rule 14a-12 under the Exchange Act
[ ] Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
[ ] Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
Item
8.01 Other Events
On March 6, 2018,
Greenway Technologies, Inc. (the “registrant”) announced the completion of the first of its kind G-Reformer® which
converts natural gas into synthesis gas. The G-Reformer® is a critical component of the registrant’s innovative Greer-Wright
Gas-to-Liquids system which converts natural gas into liquid fuels.
A copy of the press
release is attached hereto as an exhibit.
Item 9.01
Financial Statements and Exhibits
(a) Financial
statements of business acquired. Not applicable.
(b) Pro
forma financial information. Not applicable.
(c) Shell
registrant transactions. Not applicable.
(d) Exhibits
.
|
Exhibit No.
|
Identification of Exhibit
|
|
99.1*
|
Press Release issued on March 6, 2018, with respect to the completion of first commercial G-Reformer®.
|
____________
* Filed
herewith.
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
|
Date: March 7, 2018.
|
GREENWAY TECHNOLOGIES, INC.
|
|
|
|
|
|
|
|
|
By
/s/ D. Patrick Six
|
|
|
D. Patrick Six, chief executive officer
|
Greenway Technologies Inc.
Marks Milestone, Completes First Commercial G-Reformer®
FORT
WORTH, Texas, March 6, 2018
Greenway
Technologies, Inc. (OTCQB: GWTI), today announced the completion of the first of its kind G-Reformer® which converts natural
gas into synthesis gas. The G-Reformer® is a critical component of the company’s innovative Greer-Wright Gas-to-Liquids
system which converts natural gas into liquid fuels.
A team
consisting of individuals from Greenway Technologies, Inc. and its wholly-owned subsidiary, Greenway Innovative Energy, the University
of Texas at Arlington (UTA), and Industrial Refractory Services, Inc. worked together over a three-day period ending March 2,
2018, to calibrate the newly-built G-Reformer®.
“We
are pleased to announce that the initial production metrics of our first commercial G-Reformer® confirmed our expectations
for synthesis gas production in the field. The unit met all of our team’s expectations, and we could not be more pleased,”
said Tom Phillips, Vice President of Operations.
Ray
Wright, President of Greenway Innovative Energy, said “the results validated our unique process called Fractional Thermal
Oxidation™ (FTO). Reforming with FTO has many advantages over more expensive, legacy, large-scale methods. Our FTO-based
GTL systems can be deployed in the field where needed, a first in the industry. “FTO,” he said, “will facilitate
monetization of natural gas that is stranded, flared, or vented. Also, our fuel is cleaner than diesel made from petroleum. It
has less heavy metals and impurities offering an incremental environmental improvement.”
Pat
Six, President of Greenway Technologies, Inc. said that the company is engaged in ongoing discussions with funding joint venture
partner candidates and “is optimistic that we will be able to begin construction of the first field-located Greer-Wright
GTL System in 2018.”
Forward-Looking Statements
This document contains forward-looking
statements and information as that term is defined in the Private Securities Litigation Reform Act of 1995, and, therefore, is
subject to certain risks and uncertainties. There can be no assurance that the actual results, business conditions, business developments,
losses, and contingencies, and local and foreign factors will not differ materially from those suggested in the forward-looking
statements as a result of various factors, including market conditions, competition, advances in technology, and other factors.
Greenway Technologies,
Inc.
Contact Investor
Relations
817-346-6900
PAGE 8K-4
============================================================================================================================
EXHIBIT FORM 8-K-FILED MARCH 21, 2018
United
States
Securities and Exchange Commission
Washington, D.C. 20549
____________________________________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 28, 2017
GREENWAY TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Texas
(State or other jurisdiction of incorporation or organization)
000-55030
(Commission File Number)
|
90-0893594
(IRS Employer Identification No.)
|
|
8851 Camp Bowie West Boulevard, Suite 240
Fort Worth, Texas
(principal executive offices)
|
76116
(Zip Code)
|
(817) 346-6900
(registrant’s telephone number, including area code)
_____________________________________________________________________________________________
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written
communications pursuant to Rule 425 under the Securities Act
[ ] Soliciting
material pursuant to Rule 14a-12 under the Exchange Act
[ ] Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
[ ] Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
Item 1.01 Entry
into a Material Definitive Agreement.
On November 28, 2017,
Greenway Technologies, Inc. (the “registrant”) and Chisos Equity Consultants, LLC (“Chisos”) executed a
Consulting Agreement (the “Consulting Agreement”). On February 16, 2018, and March 19, 2018, the Consulting Agreement
was further amended by the registrant and the Consultant.
Pursuant to the
Consulting Agreement, Chisos was engaged to provide public relations, consulting and corporate communications services, so the
registrant could more fully and effectively deal and communicate with its shareholders and the investment community, as more fully
described in the Consulting Agreement.
Chisos has the
right to engage other consultants, not affiliated with Chisos, to assist Chisos in its obligations under the Consulting Agreement.
Under the Consulting Agreement, Chisos shall be responsible for the non-affiliated consultants so retained by Chisos as agents
of Chisos.
The Consulting
Agreement shall be for a period of three years, and shall only be terminated by the registrant for cause as defined in the Consulting
Agreement.
As compensation
under the Consulting Agreement, Chisos received 1,800,000 restricted shares of the registrant and is entitled to additional restricted
shares of the registrant as provided in the Consulting Agreement.
A copy of the Consulting
Agreement is filed as an exhibit with this Form 8-K.
Item 9.01 Financial
Statements and Exhibits.
(a) Financial
statements of business acquired. Not applicable.
(b) Pro
forma financial information. Not applicable.
(c) Shell
registrant transactions. Not applicable.
(d) Exhibits
.
|
Exhibit No.
|
Identification of Exhibit
|
|
10.1*
|
Consulting Agreement by and between the registrant and Chisos Equity Consultants, LLC, as amended on February 16, 2018, and March 19, 2018.
|
____________
* Filed
herewith.
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
|
Date: March 20, 2018.
|
GREENWAY TECHNOLOGIES, INC.
|
|
|
|
|
|
|
|
|
By
/s/ D. Patrick Six
|
|
|
D. Patrick Six, President
|
EXHIBIT 10.1
PAGE 8K-7
PAGE 8K-8
PAGE 8K-9
PAGE 8K-10
PAGE 8K-11
PAGE 8K-12
PAGE 8K-13
============================================================================================================================
EXHIBIT FORM 8-K-FILED MAY 5, 2018
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________________________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 10, 2018
GREENWAY TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Texas
(State or other jurisdiction of incorporation or organization)
000-55030
(Commission File Number)
|
90-0893594
(IRS Employer Identification No.)
|
|
8851 Camp Bowie West Boulevard, Suite 240
Fort Worth, Texas
(Principal executive offices)
|
76116
(Zip Code)
|
(817) 346-6900
(Registrant’s telephone number, including area code)
_____________________________________________________________________________________________
Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written
communications pursuant to Rule 425 under the Securities Act
[ ] Soliciting
material pursuant to Rule 14a-12 under the Exchange Act
[ ] Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
[ ] Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 ( §230.405 of this chapter) or Rule
12b-2 of the Securities Exchange Act of 1934 ( § 240.12b-2 of this chapter).
Emerging growth company ☒
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
PAGE 8K-12
Item 5.02. Departure of Directors
or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(b) Departure of Directors or Certain
Officers
On May 10, 2018, D. Patrick Six, President
and Chief Financial Officer of the Company resigned his position as President and Chairman of the Board of Greenway Technologies,
Inc. Mr. Six will remain as a board member.
(c) Appointment of Certain Officers
On May 10, 2018 (the “Effective Date”),
the Board voted to accept Mr. Six’s resignation and to appoint John Olynick as President of the Company, pursuant to an employment
agreement as discussed further herein. Mr. Olynick, 70, brings over 40 years of experience in senior management positions at industry
leading technology corporations including Digital Equipment Corp, 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.
On May 10, 2018, Ransom Jones was
engaged as Chief Financial Officer of the Company, as well as Secretary and Treasurer, pursuant to an employment agreement as discussed
further herein. Mr. Jones, 69, brings over 40 years of financial expertise and 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. Jones 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 had previously served as President and Chief Financial Officer
of UMED Holdings, Inc. nka Greenway Technologies, Inc., ended April 2017. He graduated from the University of Texas at El Paso
in 1971 with a BBA, Accounting.
Compensatory Arrangements of
Certain Officers
The Company has 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, our President earns a salary of $120,000 per year. Ransom Jones, our
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. The Bonus shall be payable, first in a cash lump sum payment of
Fifteen-Thousand Dollars ($15,000) at the conclusion of their first six (6) months of employment, and an additional Twenty-Thousand
Dollars ($20,000) no later than thirty (30) days after the end of their first twelve (12) months of employment by the Company,
such Bonus being subject to increases based upon the reasonable discretion of the majority of the board of directors of the Company
or the designated committee(s) thereof. 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. Their
employment agreements can be terminated, among the other things, by the Company with or without cause or by the employees at any
time during their term upon sixty (60) days’ notice. Their employment agreements also contain customary provisions of confidentiality
and non-competition and non-solicitation.
PAGE 8K-13
The foregoing summary of the Employment
Agreements is qualified in its entirety by reference to the Employment Agreements, copies of which are filed as Exhibit 10.01 and
10.02 to this report and are incorporated herein by reference.
(d) Election of a Director
On May 10, 2018, Raymond Wright,
the current President of Greenway Innovative Energy, Inc., (“GIE”) a wholly-owned subsidiary of the Company, was elected
Chairman of the Board by a majority vote of the Board of Directors. Mr. Wright, 81, has served as the President of GIE since August
2012. Prior to Greenway, Mr. Wright was a co-founder of DFW Genesis in 2009, where he began working on the natural gas to liquid
(GTL) processing through 2012, when he and the late Dr. Conrad Greer formed Greenway Innovative Energy, Inc. to continue working
on the GTL process independently. Previously, Mr. Wright worked as a senior manager at Dallas-based Texas Instruments (NYSE: TI)
managing operations and opening up new markets for TI in Europe.
On May 10, 2018, Peter Hauser was appointed
to the board as a director. Mr. Hauser’s appointment expands the Board to seven (7) active directors. Mr. Hauser, 63, joins
current directors, Raymond Wright, Chairman, D. Patrick Six, T. Craig Takacs, Kent Harer, Kevin Jones, and Ransom Jones. Mr. Hauser
brings over 40 years of business experience and has been working with GWTI and Greenway Innovative Energy as a business consultant
since April of 2017. Mr Hauser has spent most of his career in sales and management positions in the information technology industry
supporting the mission of government agencies in positions at EMC Corporation, Storage Technology Corporation, and others. He earned
a BA in English/Journalism from Lehigh University, as well as an MS in Management from Rensselaer Polytechnic Institute at Hartford,
Connecticut.
There are no related party transactions
involving Mr. Hauser that are reportable under Item 404(a) of Regulation S-K. There is no arrangement or understanding between
Mr. Hauser and any other person pursuant to which Mr. Hauser was selected as a director. There are no family relationships among
any of the Company’s directors, executive officers and Mr. Hauser. There are no material plans, contracts or arrangements
to which Mr. Hauser is a party nor in which he participates nor has there been any material amendment to any plan, contract or
arrangement by virtue of Mr. Hauser’s appointment. Mr. Hauser is a current stockholder of the Company.
Item 5.03 Amendments to Articles of Incorporation
or Bylaws; Change in Fiscal Year.
Bylaw Amendments
Effective as of May 10, 2018, the Board, by
the affirmative vote of at least a majority of its members, voted to amend Article Two, Section 2.12 of the Company’s Bylaws,
as amended to date, to read in its entirety as follows:
“2.12. NUMBER OF DIRECTORS. The number
of Directors of this Corporation shall be seven (7). No Director need be a resident of Texas or a Shareholder. The number of Directors
may be increased or decreased from time to time by amendment to these Bylaws. Any decrease in the number of Directors shall not
have the effect of shortening the tenure which any incumbent Director would otherwise enjoy.”
Effective as of May 10, 2018, the Board, by
the affirmative vote of at least a majority of its members, voted to amend Article Two, Section 2.15(b) of the Company’s
Bylaws, as amended to date, to read in its entirety as follows:
“2.15(b) FILLING VACANCIES BY DIRECTORS.
Vacancies may be filled temporarily by majority vote of the remaining Directors, though less than a quorum, or by a sole remaining
Director. Each Director so elected shall hold office until a qualified successor is elected at the next duly scheduled Shareholders'
meeting.”
On May 10, 2018, in accordance with
the amended Bylaws of the Company, the Board of Directors (“Board”) appointed Mr. Peter Hauser to the Board of Directors
to fill a vacancy on the Board resulting from a duly authorized increase in the size of the Board. Mr. Hauser will serve for a
term that commences immediately and expires at the next annual meeting of stockholders, or until his earlier resignation or removal.
PAGE 8K-14
|
Item 7.01.
|
Regulation FD Disclosure
|
Attached as Exhibit 99.1 and incorporated
by reference herein is a press release dated May 17, 2018 issued by the Company.
|
|
Item 9.01
|
Financial Statements and Exhibits.
|
(d) Exhibits.
Exhibit
No.
Description
|
|
10.01
|
Employment Agreement, effective May 10, 2018, by and between Greenway Technologies, Inc. and John
Olynick.
|
|
|
10.02
|
Employment Agreement, effective May 10, 2018, by and between Greenway Technologies, Inc. and Ransom
Jones.
|
|
|
99.1
|
Press Release of Greenway
Technologies, Inc. dated May 17, 2018.
|
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Date: May 17, 2018, 2018 GREENWAY
TECHNOLOGIES, INC.
By:
/s/ Raymond
Wright
Raymond Wright, Chairman
Dated May 17, 2018
PAGE 8K-15
EXHIBIT INDEX
|
Number
|
Description
|
Method of Filing
|
|
10.01
|
Employment Agreement, effective May 10, 2018, by and between Greenway Technologies, Inc. and John Olynick.
|
Filed herewith.
|
|
10.02
|
Employment Agreement, effective May 10, 2018, by and between Greenway Technologies, Inc. and Ransom Jones.
|
Filed herewith.
|
|
99.1
|
Press Release of Greenway Technologies, Inc. dated May 17, 2018.
|
Filed herewith.
|
PAGE 8K-16
Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this “Agreement”)
with an effective date of May 10, 2018 (the “Effective Date”) and signed May 15, 2018 (the “Execution Date”),
is by and between Greenway Technologies Inc., a Texas corporation (together with its subsidiaries, the “Company”),
and John Olynick, an individual residing in Fairfield, Connecticut (the “Employee”).
W I T N E S S E T H:
WHEREAS, the Company and the Employee desire
for Employee to serve the Company as its President; and
WHEREAS, the parties desire to provide that
the Employee be employed by the Company under the terms of this Agreement.
NOW THEREFORE in consideration of the mutual
benefits to be derived from this Agreement, the Company and the Employee hereby agree as follows:
1.
Term of Employment;
Office and Duties.
(a) Commencing on the Effective
Date of this Agreement and for an initial one (1) year term, the Company shall employ the Employee as the chief executive of the
Company with the title of President, with the duties and responsibilities prescribed to such office in the Bylaws of the Company
and with such additional duties and responsibilities consistent with such positions as may from time to time be reasonably assigned
to the Employee by the Board of Directors. Employee agrees to perform such duties and discharge such responsibilities in accordance
with the terms of this Agreement. This Agreement shall automatically renew for successive additional one (1) terms, unless terminated
earlier under Section 4, or unless either the Company or the Employee (collectively the “Parties” or individually the
“Party”) gives the other Party written advance notice of an intent not to renew the Agreement at least sixty (60) days
prior to its expiration.
(b) The Employee shall
devote substantially all of his working time to the business and affairs of the Company other than during vacations and periods
of illness or incapacity; provided, however, that nothing in this Agreement shall preclude the Employee from devoting time required:
(i) for serving as a director or officer of any organization or entity that does not compete with the Company or any other businesses
in which the Company is directly involved or becomes involved as a function of Employee’s duties; (ii) delivering lectures
or fulfilling speaking engagements; or (iii) engaging in charitable and community activities, including sitting on any Boards of
Directors and/or committees of such organizations related to such activities; provided, however, that such activities do not interfere
with the performance of his duties hereunder.
(c) The Employee’s
consulting agreement with the Company as a Business Development Consultant shall terminate upon the Employee’s entering into
this Employment Agreement. All prior approved accrued and unpaid compensation, along with any prior approved and unreimbursed business
expenses from the Employee’s previous consulting role will be due and payable as described in such consulting agreement.
2.
Compensation and
Benefits.
For all services rendered by the Employee in
any capacity during the period of Employee’s employment by the Company, including without limitation, services as an executive
officer or member of any committee of the Board of Directors or any subsidiary, affiliate or division thereof, from and after the
Effective Date the Employee shall be compensated as follows:
PAGE 8K-17
(a)
Base
Salary
. The Company shall pay the Employee a fixed salary (“Base Salary”) of One Hundred Twenty Thousand Dollars
($120,000) per year, paid at a rate of Ten Thousand Dollars ($10,000.00) per month, bi-monthly. The Board of Directors shall review
the Employee’s Base Salary from time to time with a view to increasing such Base Salary if, in the judgment of the Board
of Directors, the earnings of the Company or the services of the Employee merit such an increase. The Base Salary shall be payable
in accordance with the customary payroll practices of the Company. In the event the Company does not have sufficient cash on hand
to pay such monthly Base Salary, Employee agrees to voluntarily defer such payment(s) until such time as sufficient cash is available
to make such payments. Such deferred compensation, if any, shall be a priority payment when cash is sufficient to make such payment(s).
The Employee may use his discretion, in conjunction with advice and counsel from the Company’s Chief Financial Officer, as
to what constitutes cash sufficiency from time-to-time. If there is disagreement with the CFO’s position as to what constitutes
cash sufficiency, the Employee shall request the Board of Directors to make such determination.
(b)
Bonus.
During each year that this Agreement is in effect, Employee will be entitled to receive a bonus (“Bonus”) totaling
at least Thirty-Five Thousand Dollars ($35,000) per year. The Bonus shall be payable, first in a cash lump sum payment of Fifteen-Thousand
Dollars ($15,000) at the conclusion of Employee’s first six (6) months of employment, and an additional Twenty-Thousand Dollars
($20,000) no later than thirty (30) days after the end of the Employee’s first twelve (12) months of employment by the Company,
such Bonus being subject to increases based upon the reasonable discretion of the majority of the board of directors of the Company
or the designated committee(s) thereof.
(c)
Stock
Grants.
(i) Except
as otherwise provided herein, the Employee shall be entitled to a grant of common stock (the “Stock Grant”) equal to
250,000 shares of the Company’s common stock, par value $.0001 per share (the “Common Stock”), with a price per
share based on the market closing price as of the Effective Date, with such Stock Grant to be completed within five (5) business
days of the Execution Date, and such shares shall vest immediately upon the execution of this Agreement. Additional stock grants
may be made subject to performance criteria (the “Performance Criteria” established and mutually agreed upon by a majority
of the Company’s Board of Directors (or the Compensation Committee or other designated Special Committee thereof) and the
Employee has been achieved, including such initial Performance Criteria as shown in Exhibit A to this Agreement.
(b)
Fringe
Benefits and Miscellaneous Employment Matters.
The Employee shall be entitled to participate in such employee benefit plans
or programs, as may be offered by the Company, including, without limitation, coverage under the Company’s current Directors
and Officers (“D&O”) insurance plan, a true and correct copy of which shall be provided to Employee upon entering
into this Agreement), Section 401(k) retirement plan, health insurance benefits, and any other benefits provided by the Company,
if such exist and which may be amended from time to time by the Board of Directors, to the extent that his position, tenure, salary,
age, health and other qualifications make him eligible to participate, subject to the terms and provisions of such plans. Such
additional benefits shall include, but not be limited to: paid sick leave, individual and family health insurance and paid personal
days, all in accordance with the current policies of the Company.
(c)
Withholding
and Employment Tax.
The Company will be entitled to deduct or withhold from any amounts owing to Employee any federal, state,
local or foreign withholding taxes, excise tax, or employment taxes imposed with respect to Employee’s compensation or other
payments from the Company or Employee’s ownership interest in the Company (including, without limitation, wages, bonuses,
dividends, the receipt or exercise of equity options and/or the receipt or vesting of restricted equity).
PAGE 8K-18
(d)
Death.
In the event of Employee’s death, the Employee’s family shall continue to be covered by all of the Company’s
medical, health and dental plans as in effect at such time, at the Company’s expense for at least six (6) months following
the Employee’s death in accordance with the terms of such plans. In the event such coverage would violate applicable law,
Company shall take such actions as it deems appropriate in good faith to provide the benefits described in the preceding sentence.
(e)
Vacation.
Employee shall receive four (4) weeks of paid vacation annually, administered in accordance with the Company’s existing vacation
policy. Any existing accrued, unused vacation shall be paid to Employee at the time of employment termination, no matter the reason
for such termination. Vacation time actually accrued by the Employee shall be prorated by the time actually employed by the Company.
3.
Business Expenses.
The Company shall pay or reimburse Employee’s
travel and entertainment expenses incurred by the Employee in connection with the performance of his duties under this Agreement,
provided that all such expenses must be both reasonable and pre-approved by the Chief Financial Officer, or in the event of a disagreement,
an independent member of the Board of Directors, including reimbursement for attending out-of-town meetings of the Board of Directors
in accordance with such procedures as the Company may from time to time establish for senior officers and as required to preserve
any deductions for federal income taxation purposes to which the Company may be entitled and subject to the Company’s normal
requirements with respect to reporting and documentation of such expenses. All air travel must be in coach class, and not in business
class or first class. Notwithstanding the foregoing, all expenses must be promptly submitted for reimbursement by the Employee.
In no event shall any reimbursement be paid by the Company after the end of the year following the year in which the expense is
incurred by the Employee.
4.
Termination of Employment.
Notwithstanding any other provision of this
Agreement, Employee’s employment with the Company may be terminated for any reason or no reason at all upon sixty (60) days’
written notice to the other Party. Provided further, that a majority of the Board may terminate Employee's employment with the
Company upon written notice to Employee at any time, and such termination shall be effective as of the date of termination provided
for in such notice. Upon termination of this Agreement under this Section 4, Employee shall be entitled to any accrued but unpaid
salary, any pre-approved and reasonable travel and entertainment business expenses accrued but unpaid, any accrued but unused vacation,
and nothing more. Such payment will be made as soon as practical by the Company, but in no event, longer than sixty (60) days following
termination of this Agreement.
5.
Non-Competition.
During the period of Employee’s employment
hereunder and for the one (1) year thereafter (“Non-Competition Period”), the Employee shall not, within any county
in which the Company or any subsidiary of the Company provides services, directly or indirectly own any interest in, manage, control,
participate in, consult with, render services for, or in any manner engage in any business substantially similar to the Company’s
current businesses. Investments in less than five percent (5%) of the outstanding securities of any class of a corporation subject
to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended, shall not be prohibited
by this Section 5.
PAGE 8K-19
6.
Inventions and Confidential
Information.
The parties hereto recognize that a major need
of the Company is to preserve its specialized knowledge, trade secrets, and confidential information. The strength and good will
of the Company is derived from the specialized knowledge, trade secrets, and confidential information generated from experience
with the activities undertaken by the Company and its subsidiaries. The disclosure of this information and knowledge to competitors
would be beneficial to them and detrimental to the Company, as would the disclosure of information about the marketing practices,
pricing practices, costs, profit margins, design specifications, analytical techniques, and similar items of the Company and its
subsidiaries. The Employee acknowledges that the proprietary information, observations and data obtained by him while employed
by the Company concerning the business or affairs of the Company are the property of the Company. By reason of his being a senior
executive of the Company, the Employee has or will have access to, and has obtained or will obtain, specialized knowledge, trade
secrets and confidential information about the Company’s operations and the operations of its subsidiaries, which operations
extend throughout the United States. Therefore, subject to the provisions of Section 14 hereof, the Employee hereby agrees as follows,
recognizing that the Company is relying on these agreements in entering into this Agreement:
(i) During the period of
Employee’s employment with the Company and for an indefinite period thereafter, the Employee will not use, disclose to others,
or publish or otherwise make available to any other party any inventions or any confidential business information about the affairs
of the Company, including but not limited to confidential information concerning the Company’s products, methods, engineering
designs and standards, analytical techniques, technical information, customer information, employee information, and other confidential
information acquired by him in the course of his past or future services for the Company. Employee agrees to hold and keep as confidential
the Company’s books, papers, letters, formulas, memoranda, notes, plans, records, reports, computer tapes, printouts, software
and other documents, and all copies thereof and therefrom, in any way relating to the Company’s business and affairs, whether
made by him or otherwise coming into his possession, and on termination of his employment, or on demand of the Company, at any
time, to deliver the same to the Company within twenty four (24) hours of such termination or demand. However, nothing in this
Agreement prohibits the Employee from using such confidential information or disclosing such information to those with a need to
know such information to perform his job duties for the Company; from disclosing such confidential information as required by law
or subpoena; or from testifying truthfully in any proceeding. Additionally, confidential information shall not include information
(a) that is or shall become generally available to the public other than as a result of the Employee’s unauthorized disclosure,
(b) that was or becomes available to Employee on a non-confidential basis from a source other than the Company or any subsidiaries
of the Company, or (c) that was developed by or for Employee independently of, and without the use of, any confidential information.
(ii) During the period
of Employee’s employment with the Company and for the one (1) year thereafter (“Non-Solicitation Period”) (a)
the Employee will not directly or indirectly through another entity induce or otherwise attempt to influence any employee of the
Company to leave the Company’s employ and (b) the Employee will not directly or indirectly hire or cause to be hired or induce
a third party to hire, any such employee (unless the Board of Directors shall have authorized such employment and the Company shall
have consented thereto in writing) or in any way interfere with the relationship between the Company and any employee thereof and
(c) induce or attempt to induce any customer, supplier, licensee, licensor or other business relation of the Company to cease doing
business, or reduce the amount of business done, with the Company or in any way interfere with the relationship between any such
customer, supplier, licensee or business relation of the Company.
7.
Consolidation; Merger;
Sale of Assets; Change of Control.
PAGE 8K-20
Nothing in this Agreement shall preclude the
Company from combining, consolidating or merging with or into, transferring all or substantially all of its assets to, or entering
into a partnership or joint venture with, another corporation or other entity, or effecting any other kind of corporate combination
provided that the corporation resulting from or surviving such combination, consolidation or merger, or to which such assets are
transferred, or such partnership or joint venture, assumes this Agreement and all obligations and undertakings of the Company hereunder.
Upon such a consolidation, merger, transfer of assets or formation of such partnership or joint venture, this Agreement shall inure
to the benefit of, be assumed by, and be binding upon such resulting or surviving transferee corporation or such partnership or
joint venture, and the term “Company,” as used in this Agreement, shall mean such corporation, partnership or joint
venture or other entity, and this Agreement shall continue in full force and effect in accordance with its terms and shall entitle
the Employee and his heirs, beneficiaries and representatives to exactly the same compensation, benefits, payments and other rights
as would have been their entitlement had such combination, consolidation, merger, transfer of assets or formation of such partnership
or joint venture not occurred.
8.
Survival of Obligations.
Sections 2(e), 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 15 and 17 shall
survive the termination for any reason of this Agreement (whether such termination is by the Company, by the Employee, upon the
expiration of this Agreement or otherwise).
9.
Employee’s
Representations.
The Employee hereby represents and warrants
to the Company that (i) the execution, delivery and performance of this Agreement by the Employee do not and shall not conflict
with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which the Employee
is a party or by which he is bound, (ii) the Employee is not a party to or bound by any employment agreement, noncompete agreement
or confidentiality agreement with any other person or entity and (iii) upon the execution and delivery of this Agreement by the
Company, this Agreement shall be the valid and binding obligation of the Employee, enforceable in accordance with its terms. The
Employee hereby acknowledges and represents that he has consulted with legal counsel regarding his rights and obligations under
this Agreement and that he fully understands the terms and conditions contained herein.
10.
Company’s
Representations.
The Company hereby represents and warrants
to the Employee that (i) the execution, delivery and performance of this Agreement by the Company do not and shall not materially
conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which
the Company is a party or by which it is bound and (ii) upon the execution and delivery of this Agreement by the Employee, this
Agreement shall be the valid and binding obligation of the Company, enforceable in accordance with its terms.
11.
Enforcement.
Because the Employee’s services are unique
and because the Employee has access to confidential information concerning the Company, the parties hereto agree that money damages
would not be an adequate remedy for any breach of this Agreement. Therefore, in the event of a breach or threatened breach of this
Agreement, the Company may, in addition to other rights and remedies existing in its favor, apply to any court of competent jurisdiction
in Tarrant County, Texas for injunctive relief in order to enforce, or prevent any violations of, the provisions hereof (without
posting a bond or other security).
12.
Severability.
PAGE 8K-21
In case any one or more of the provisions or
part of a provision contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect
in any jurisdiction, such invalidity, illegality or unenforceability shall be deemed not to affect any other jurisdiction or any
other provision or part of a provision of this Agreement, nor shall such invalidity, illegality or unenforceability affect the
validity, legality or enforceability of this Agreement or any provision or provisions hereof in any other jurisdiction; and this
Agreement shall be reformed and construed in such jurisdiction as if such provision or part of a provision held to be invalid or
illegal or unenforceable had never been contained herein and such provision or part reformed so that it would be valid, legal and
enforceable in such jurisdiction to the maximum extent possible. In furtherance and not in limitation of the foregoing, the Company
and the Employee each intend that the covenants contained in Sections 5 and 6 shall be deemed to be a series of separate covenants,
one for each county of the State of Texas and one for each and every other applicable county. If, in any judicial proceeding, a
court shall refuse to enforce any of such separate covenants, then such unenforceable covenants shall be deemed eliminated from
the provisions hereof for the purpose of such proceedings to the extent necessary to permit the remaining separate covenants to
be enforced in such proceedings. If, in any judicial proceeding, a court shall refuse to enforce any one or more of such separate
covenants because the total time, scope or area thereof is deemed to be excessive or unreasonable, then it is the intent of the
parties hereto that such covenants, which would otherwise be unenforceable due to such excessive or unreasonable period of time,
scope or area, be enforced for such lesser period of time, scope or area as shall be deemed reasonable and not excessive by such
court.
13.
Entire Agreement;
Amendment.
Except as otherwise set forth in this Agreement,
this Agreement contains the entire agreement between the Company and the Employee with respect to the subject matter hereof and
thereof. This Agreement may not be amended, waived, changed, modified or discharged except by an instrument in writing executed
by or on behalf of the party against whom enforcement of any amendment, waiver, change, modification or discharge is sought. No
course of conduct or dealing shall be construed to modify, amend or otherwise affect any of the provisions hereof.
14.
Notices.
All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given
if physically delivered, delivered by express mail or other expedited service or upon receipt if mailed, postage prepaid, via registered
mail, return receipt requested, or by electronic mail, addressed as follows:
(a) To the Company:
Greenway Technologies, Inc.
Attn: Ransom Jones
8851 Camp Bowie West, Suite 240
Fort Worth, TX 76116
Email: ransom.jones@gwtechinc.com
(b) To the Employee:
John Olynick
and/or to such other persons and addresses as any party shall have
specified in writing to the other from time-to-time. Either party may change its address for receiving notices by providing notice
of the new address to the other Party.
PAGE 8K-22
15.
Assignability.
This Agreement shall be assignable by the Company
but not the Employee, and shall be binding upon, and shall inure to the benefit of, the heirs, executors, administrators, legal
representatives, successors and assigns of the parties. In the event that all or substantially all of the business of the Company
is sold or transferred, then this Agreement shall be binding on the transferee of the business of the Company whether or not this
Agreement is expressly assigned to the transferee. This Agreement shall inure to the benefit of and be enforceable by the Employee’s
personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.
16.
Governing Law.
This agreement shall be governed by and construed
in accordance with the laws of the State of Texas without giving effect to any conflict of laws principles to the contrary and
any dispute shall be submitted to binding arbitration, before a sole arbitrator, with such arbitration to be conducted in the State
of Texas, in Dallas County or Tarrant County and shall be conducted under the rules (but not the auspices) of the Commercial Section
of the Arbitration Association of America. The parties shall select the arbitrator from a list of ten arbitrators who agree to
work within fifty (50) miles East of the Tarrant County westernmost boundary and/or fifty (50) miles West of the Dallas County
easternmost boundary, by alternatively striking one name from the list until only one remains. The parties shall each advance one
half of the estimated fees to the arbitrator in advance of the commencement of the arbitration, and the prevailing party in any
arbitration shall recover the costs of the arbitration (including the reasonable attorneys’ fees). Each party irrevocably
consents to the exclusive venue and jurisdiction of the Courts of the State of Texas, in Dallas County or Tarrant County, for any
action to confirm an arbitration award, or to seek injunctive relief to prevent any then-ongoing violations of the Confidentiality,
Noncompetition or Non-solicitation obligations of the parties hereunder (which are the only issues that may be brought directly
to Court, as any other claims are fully compensable by an award of monetary damages). The commencement of an action seeking an
injunction shall not be deemed or construed to operate as a waiver of related or unrelated claims for monetary damages between
the parties or as a bar to the commencement of an arbitration (and subsequent action to confirm, vacate or modify the arbitration
award) relating to monetary damages arising from any related or unrelated claims, including those claims for monetary damages arising
from those same violations against which injunctive relief was sought.
17.
Waiver and Further
Agreement.
Any waiver of any breach of any terms or conditions
of this Agreement shall not operate as a waiver of any other breach of such terms or conditions or any other term or condition,
nor shall any failure to enforce any provision hereof operate as a waiver of such provision or of any other provision hereof. Each
of the parties hereto agrees to execute all such further instruments and documents and to take all such further action as the other
party may reasonably require in order to effectuate the terms and purposes of this Agreement.
18.
Headings of No
Effect.
The paragraph headings contained in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of this Agreement.
19.
Counter Party Signatures.
This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original and all of which together shall constitute one instrument.
PAGE 8K-23
20.
280G.
Notwithstanding anything contained in this Agreement to the contrary to the extent that any of the payments and benefits provided
for under this Agreement together with any payments or benefits under any other agreement or arrangement between the Company or
any of their Subsidiaries and Employee (collectively, the “Payments”) would constitute a “parachute payment”
within the meaning of Section 280G of the Code, Employee shall receive total payments equal to the greater, after the application
of the excise tax imposed pursuant to Section 4999 of the Code, of the Payments provided under this Agreement or: the amount of
such Payments reduced to the greatest amount that would result in no portion of the Payments being subject to such excise tax.
[The remainder of this page intentionally left
blank. Signature page follows.]
PAGE 8K-24
IN WITNESS WHEREOF, the parties hereto have
executed this Employment Agreement as of the Execution Date first above written.
COMPANY:
GREENWAY TECHNOLOGIES, INC.
By: _________
/s/
________________________
Kent Harer, Director
EMPLOYEE:
By: _______
/s/
__________________________
John Olynick
PAGE 8K-25
Exhibit 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this “Agreement”)
with an effective date of May 10, 2018 (the “Effective Date”) and signed May 15, 2018 (the “Execution Date”),
is by and between Greenway Technologies Inc., a Texas corporation (together with its subsidiaries, the “Company”),
and Ransom Jones, an individual residing in Frisco, Texas (the “Employee”).
W I T N E S S E T H:
WHEREAS, the Company and the Employee desire
for Employee to serve the Company as its Chief Financial Officer, Secretary and Treasurer; and
WHEREAS, the parties desire to provide that
the Employee be employed by the Company under the terms of this Agreement.
NOW THEREFORE in consideration of the mutual
benefits to be derived from this Agreement, the Company and the Employee hereby agree as follows:
1.
Term of Employment;
Office and Duties.
(a) Commencing on the Effective
Date of this Agreement and for an initial one (1) year term, the Company shall employ the Employee as the Chief Financial Officer
of the Company, and, having been duly appointed by the Board of Directors, also serving coterminously as the Company’s Secretary
and Treasurer, with the duties and responsibilities prescribed to such offices in the Bylaws of the Company and with such additional
duties and responsibilities consistent with such positions as may from time to time be reasonably assigned to the Employee by the
Board of Directors. Employee agrees to perform such duties and discharge such responsibilities in accordance with the terms of
this Agreement. This Agreement shall automatically renew for successive additional one (1) terms, unless terminated earlier under
Section 4, or unless either the Company or the Employee (collectively the “Parties” or individually the “Party”)
gives the other Party written advance notice of an intent not to renew the Agreement at least sixty (60) days prior to its expiration.
(b) The Employee shall
devote substantially all of his working time to the business and affairs of the Company other than during vacations and periods
of illness or incapacity; provided, however, that nothing in this Agreement shall preclude the Employee from devoting time required:
(i) for serving as a director or officer of any organization or entity that does not compete with the Company or any other businesses
in which the Company is directly involved or becomes involved as a function of Employee’s duties; (ii) delivering lectures
or fulfilling speaking engagements; or (iii) engaging in charitable and community activities, including sitting on any Boards of
Directors and/or committees of such organizations related to such activities; provided, however, that such activities do not interfere
with the performance of his duties hereunder.
2.
Compensation and
Benefits.
For all services rendered by the Employee in
any capacity during the period of Employee’s employment by the Company, including without limitation, services as an executive
officer or member of any committee of the Board of Directors or any subsidiary, affiliate or division thereof, from and after the
Effective Date the Employee shall be compensated as follows:
(a)
Base
Salary
. The Company shall pay the Employee a fixed salary (“Base Salary”) of One Hundred Twenty Thousand Dollars
($120,000) per year, paid at a rate of Ten Thousand Dollars ($10,000.00) per month, bi-monthly. The Board of Directors shall review
the Employee’s Base Salary from time to time with a view to increasing such Base Salary if, in the judgment of the Board
of Directors, the earnings of the Company or the services of the Employee merit such an increase. The Base Salary shall be payable
in accordance with the customary payroll practices of the Company. In the event the Company does not have sufficient cash on hand
to pay such monthly Base Salary, Employee agrees to voluntarily defer such payment(s) until such time as sufficient cash is available
to make such payments. Such deferred compensation, if any, shall be a priority payment when cash is sufficient to make such payment(s).
The Employee may use his discretion, in conjunction with advice and counsel from the Company’s President, as to what constitutes
cash sufficiency from time-to-time. If there is disagreement with the President’s position as to what constitutes cash sufficiency,
the Employee shall request the Board of Directors to make such determination.
PAGE 8K-26
(b)
Bonus.
During each year that this Agreement is in effect, Employee will be entitled to receive a bonus (“Bonus”) totaling
at least Thirty-Five Thousand Dollars ($35,000) per year. The Bonus shall be payable, first in a cash lump sum payment of Fifteen-Thousand
Dollars ($15,000) at the conclusion of Employee’s first six (6) months of employment, and an additional Twenty-Thousand Dollars
($20,000) no later than thirty (30) days after the end of the Employee’s first twelve (12) months of employment by the Company,
such Bonus being subject to increases based upon the reasonable discretion of the majority of the board of directors of the Company
or the designated committee(s) thereof.
(c)
Stock
Grants.
(i) Except
as otherwise provided herein, the Employee shall be entitled to a grant of common stock (the “Stock Grant”) equal to
250,000 shares of the Company’s common stock, par value $.0001 per share (the “Common Stock”), with a price per
share based on the market closing price as of the Effective Date, with such Stock Grant to be completed within five (5) business
days of the Execution Date, and such shares shall vest immediately upon the execution of this Agreement. Additional stock grants
may be made subject to performance criteria (the “Performance Criteria” established and mutually agreed upon by a majority
of the Company’s Board of Directors (or the Compensation Committee or other designated Special Committee thereof) and the
Employee has been achieved, including such initial Performance Criteria as shown in Exhibit A to this Agreement.
(b)
Fringe
Benefits and Miscellaneous Employment Matters.
The Employee shall be entitled to participate in such employee benefit plans
or programs, as may be offered by the Company, including, without limitation, coverage under the Company’s current Directors
and Officers (“D&O”) insurance plan, a true and correct copy of which shall be provided to Employee upon entering
into this Agreement), Section 401(k) retirement plan, health insurance benefits, and any other benefits provided by the Company,
if such exist and which may be amended from time to time by the Board of Directors, to the extent that his position, tenure, salary,
age, health and other qualifications make him eligible to participate, subject to the terms and provisions of such plans. Such
additional benefits shall include, but not be limited to: paid sick leave, individual and family health insurance and paid personal
days, all in accordance with the current policies of the Company.
(c)
Withholding
and Employment Tax.
The Company will be entitled to deduct or withhold from any amounts owing to Employee any federal, state,
local or foreign withholding taxes, excise tax, or employment taxes imposed with respect to Employee’s compensation or other
payments from the Company or Employee’s ownership interest in the Company (including, without limitation, wages, bonuses,
dividends, the receipt or exercise of equity options and/or the receipt or vesting of restricted equity).
(d)
Death.
In the event of Employee’s death, the Employee’s family shall continue to be covered by all of the Company’s
medical, health and dental plans as in effect at such time, at the Company’s expense for at least six (6) months following
the Employee’s death in accordance with the terms of such plans. In the event such coverage would violate applicable law,
Company shall take such actions as it deems appropriate in good faith to provide the benefits described in the preceding sentence.
PAGE 8K-27
(e)
Vacation.
Employee shall receive four (4) weeks of paid vacation annually, administered in accordance with the Company’s existing vacation
policy. Any existing accrued, unused vacation shall be paid to Employee at the time of employment termination, no matter the reason
for such termination. Vacation time actually accrued by the Employee shall be prorated by the time actually employed by the Company.
3.
Business Expenses.
The Company shall pay or reimburse Employee’s
travel and entertainment expenses incurred by the Employee in connection with the performance of his duties under this Agreement,
provided that all such expenses must be both reasonable and pre-approved by the Chief Financial Officer, or in the event of a disagreement,
an independent member of the Board of Directors, including reimbursement for attending out-of-town meetings of the Board of Directors
in accordance with such procedures as the Company may from time to time establish for senior officers and as required to preserve
any deductions for federal income taxation purposes to which the Company may be entitled and subject to the Company’s normal
requirements with respect to reporting and documentation of such expenses. All air travel must be in coach class, and not in business
class or first class. Notwithstanding the foregoing, all expenses must be promptly submitted for reimbursement by the Employee.
In no event shall any reimbursement be paid by the Company after the end of the year following the year in which the expense is
incurred by the Employee.
4.
Termination of Employment.
Notwithstanding any other provision of this
Agreement, Employee’s employment with the Company may be terminated for any reason or no reason at all upon sixty (60) days’
written notice to the other Party. Provided further, that a majority of the Board may terminate Employee's employment with the
Company upon written notice to Employee at any time, and such termination shall be effective as of the date of termination provided
for in such notice. Upon termination of this Agreement under this Section 4, Employee shall be entitled to any accrued but unpaid
salary, any pre-approved and reasonable travel and entertainment business expenses accrued but unpaid, any accrued but unused vacation,
and nothing more. Such payment will be made as soon as practical by the Company, but in no event, longer than sixty (60) days following
termination of this Agreement.
5.
Non-Competition.
During the period of Employee’s employment
hereunder and for the one (1) year thereafter (“Non-Competition Period”), the Employee shall not, within any county
in which the Company or any subsidiary of the Company provides services, directly or indirectly own any interest in, manage, control,
participate in, consult with, render services for, or in any manner engage in any business substantially similar to the Company’s
current businesses. Investments in less than five percent (5%) of the outstanding securities of any class of a corporation subject
to the reporting requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended, shall not be prohibited
by this Section 5.
6.
Inventions and Confidential
Information.
The parties hereto recognize that a major need
of the Company is to preserve its specialized knowledge, trade secrets, and confidential information. The strength and good will
of the Company is derived from the specialized knowledge, trade secrets, and confidential information generated from experience
with the activities undertaken by the Company and its subsidiaries. The disclosure of this information and knowledge to competitors
would be beneficial to them and detrimental to the Company, as would the disclosure of information about the marketing practices,
pricing practices, costs, profit margins, design specifications, analytical techniques, and similar items of the Company and its
subsidiaries. The Employee acknowledges that the proprietary information, observations and data obtained by him while employed
by the Company concerning the business or affairs of the Company are the property of the Company. By reason of his being a senior
executive of the Company, the Employee has or will have access to, and has obtained or will obtain, specialized knowledge, trade
secrets and confidential information about the Company’s operations and the operations of its subsidiaries, which operations
extend throughout the United States. Therefore, subject to the provisions of Section 14 hereof, the Employee hereby agrees as follows,
recognizing that the Company is relying on these agreements in entering into this Agreement:
PAGE 8K-28
(i) During the period of
Employee’s employment with the Company and for an indefinite period thereafter, the Employee will not use, disclose to others,
or publish or otherwise make available to any other party any inventions or any confidential business information about the affairs
of the Company, including but not limited to confidential information concerning the Company’s products, methods, engineering
designs and standards, analytical techniques, technical information, customer information, employee information, and other confidential
information acquired by him in the course of his past or future services for the Company. Employee agrees to hold and keep as confidential
the Company’s books, papers, letters, formulas, memoranda, notes, plans, records, reports, computer tapes, printouts, software
and other documents, and all copies thereof and therefrom, in any way relating to the Company’s business and affairs, whether
made by him or otherwise coming into his possession, and on termination of his employment, or on demand of the Company, at any
time, to deliver the same to the Company within twenty four (24) hours of such termination or demand. However, nothing in this
Agreement prohibits the Employee from using such confidential information or disclosing such information to those with a need to
know such information to perform his job duties for the Company; from disclosing such confidential information as required by law
or subpoena; or from testifying truthfully in any proceeding. Additionally, confidential information shall not include information
(a) that is or shall become generally available to the public other than as a result of the Employee’s unauthorized disclosure,
(b) that was or becomes available to Employee on a non-confidential basis from a source other than the Company or any subsidiaries
of the Company, or (c) that was developed by or for Employee independently of, and without the use of, any confidential information.
(ii) During the period
of Employee’s employment with the Company and for the one (1) year thereafter (“Non-Solicitation Period”) (a)
the Employee will not directly or indirectly through another entity induce or otherwise attempt to influence any employee of the
Company to leave the Company’s employ and (b) the Employee will not directly or indirectly hire or cause to be hired or induce
a third party to hire, any such employee (unless the Board of Directors shall have authorized such employment and the Company shall
have consented thereto in writing) or in any way interfere with the relationship between the Company and any employee thereof and
(c) induce or attempt to induce any customer, supplier, licensee, licensor or other business relation of the Company to cease doing
business, or reduce the amount of business done, with the Company or in any way interfere with the relationship between any such
customer, supplier, licensee or business relation of the Company.
7.
Consolidation; Merger;
Sale of Assets; Change of Control.
Nothing in this Agreement shall preclude the
Company from combining, consolidating or merging with or into, transferring all or substantially all of its assets to, or entering
into a partnership or joint venture with, another corporation or other entity, or effecting any other kind of corporate combination
provided that the corporation resulting from or surviving such combination, consolidation or merger, or to which such assets are
transferred, or such partnership or joint venture, assumes this Agreement and all obligations and undertakings of the Company hereunder.
Upon such a consolidation, merger, transfer of assets or formation of such partnership or joint venture, this Agreement shall inure
to the benefit of, be assumed by, and be binding upon such resulting or surviving transferee corporation or such partnership or
joint venture, and the term “Company,” as used in this Agreement, shall mean such corporation, partnership or joint
venture or other entity, and this Agreement shall continue in full force and effect in accordance with its terms and shall entitle
the Employee and his heirs, beneficiaries and representatives to exactly the same compensation, benefits, payments and other rights
as would have been their entitlement had such combination, consolidation, merger, transfer of assets or formation of such partnership
or joint venture not occurred.
PAGE 8K-29
8.
Survival of Obligations.
Sections 2(e), 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 15 and 17 shall
survive the termination for any reason of this Agreement (whether such termination is by the Company, by the Employee, upon the
expiration of this Agreement or otherwise).
9.
Employee’s
Representations.
The Employee hereby represents and warrants
to the Company that (i) the execution, delivery and performance of this Agreement by the Employee do not and shall not conflict
with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which the Employee
is a party or by which he is bound, (ii) the Employee is not a party to or bound by any employment agreement, noncompete agreement
or confidentiality agreement with any other person or entity and (iii) upon the execution and delivery of this Agreement by the
Company, this Agreement shall be the valid and binding obligation of the Employee, enforceable in accordance with its terms. The
Employee hereby acknowledges and represents that he has consulted with legal counsel regarding his rights and obligations under
this Agreement and that he fully understands the terms and conditions contained herein.
10.
Company’s
Representations.
The Company hereby represents and warrants
to the Employee that (i) the execution, delivery and performance of this Agreement by the Company do not and shall not materially
conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which
the Company is a party or by which it is bound and (ii) upon the execution and delivery of this Agreement by the Employee, this
Agreement shall be the valid and binding obligation of the Company, enforceable in accordance with its terms.
11.
Enforcement.
Because the Employee’s services are unique
and because the Employee has access to confidential information concerning the Company, the parties hereto agree that money damages
would not be an adequate remedy for any breach of this Agreement. Therefore, in the event of a breach or threatened breach of this
Agreement, the Company may, in addition to other rights and remedies existing in its favor, apply to any court of competent jurisdiction
in Tarrant County, Texas for injunctive relief in order to enforce, or prevent any violations of, the provisions hereof (without
posting a bond or other security).
12.
Severability.
In case any one or more of the provisions or
part of a provision contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect
in any jurisdiction, such invalidity, illegality or unenforceability shall be deemed not to affect any other jurisdiction or any
other provision or part of a provision of this Agreement, nor shall such invalidity, illegality or unenforceability affect the
validity, legality or enforceability of this Agreement or any provision or provisions hereof in any other jurisdiction; and this
Agreement shall be reformed and construed in such jurisdiction as if such provision or part of a provision held to be invalid or
illegal or unenforceable had never been contained herein and such provision or part reformed so that it would be valid, legal and
enforceable in such jurisdiction to the maximum extent possible. In furtherance and not in limitation of the foregoing, the Company
and the Employee each intend that the covenants contained in Sections 5 and 6 shall be deemed to be a series of separate covenants,
one for each county of the State of Texas and one for each and every other applicable county. If, in any judicial proceeding, a
court shall refuse to enforce any of such separate covenants, then such unenforceable covenants shall be deemed eliminated from
the provisions hereof for the purpose of such proceedings to the extent necessary to permit the remaining separate covenants to
be enforced in such proceedings. If, in any judicial proceeding, a court shall refuse to enforce any one or more of such separate
covenants because the total time, scope or area thereof is deemed to be excessive or unreasonable, then it is the intent of the
parties hereto that such covenants, which would otherwise be unenforceable due to such excessive or unreasonable period of time,
scope or area, be enforced for such lesser period of time, scope or area as shall be deemed reasonable and not excessive by such
court.
PAGE 8K-30
13.
Entire Agreement;
Amendment.
Except as otherwise set forth in this Agreement,
this Agreement contains the entire agreement between the Company and the Employee with respect to the subject matter hereof and
thereof. This Agreement may not be amended, waived, changed, modified or discharged except by an instrument in writing executed
by or on behalf of the party against whom enforcement of any amendment, waiver, change, modification or discharge is sought. No
course of conduct or dealing shall be construed to modify, amend or otherwise affect any of the provisions hereof.
14.
Notices.
All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given
if physically delivered, delivered by express mail or other expedited service or upon receipt if mailed, postage prepaid, via registered
mail, return receipt requested, or by electronic mail, addressed as follows:
(a) To the Company:
Greenway Technologies, Inc.
Attn: Ray Wright
8851 Camp Bowie West, Suite 240
Fort Worth, TX 76116
Email: ray.wright@gwtechinc.com
(b) To the Employee:
Ransom Jones
and/or to such other persons and addresses as any party shall have
specified in writing to the other from time-to-time. Either party may change its address for receiving notices by providing notice
of the new address to the other Party.
15.
Assignability.
This Agreement shall be assignable by the Company
but not the Employee, and shall be binding upon, and shall inure to the benefit of, the heirs, executors, administrators, legal
representatives, successors and assigns of the parties. In the event that all or substantially all of the business of the Company
is sold or transferred, then this Agreement shall be binding on the transferee of the business of the Company whether or not this
Agreement is expressly assigned to the transferee. This Agreement shall inure to the benefit of and be enforceable by the Employee’s
personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.
PAGE 8K-31
16.
Governing Law.
This agreement shall be governed by and construed
in accordance with the laws of the State of Texas without giving effect to any conflict of laws principles to the contrary and
any dispute shall be submitted to binding arbitration, before a sole arbitrator, with such arbitration to be conducted in the State
of Texas, in Dallas County or Tarrant County and shall be conducted under the rules (but not the auspices) of the Commercial Section
of the Arbitration Association of America. The parties shall select the arbitrator from a list of ten arbitrators who agree to
work within fifty (50) miles East of the Tarrant County westernmost boundary and/or fifty (50) miles West of the Dallas County
easternmost boundary, by alternatively striking one name from the list until only one remains. The parties shall each advance one
half of the estimated fees to the arbitrator in advance of the commencement of the arbitration, and the prevailing party in any
arbitration shall recover the costs of the arbitration (including the reasonable attorneys’ fees). Each party irrevocably
consents to the exclusive venue and jurisdiction of the Courts of the State of Texas, in Dallas County or Tarrant County, for any
action to confirm an arbitration award, or to seek injunctive relief to prevent any then-ongoing violations of the Confidentiality,
Noncompetition or Non-solicitation obligations of the parties hereunder (which are the only issues that may be brought directly
to Court, as any other claims are fully compensable by an award of monetary damages). The commencement of an action seeking an
injunction shall not be deemed or construed to operate as a waiver of related or unrelated claims for monetary damages between
the parties or as a bar to the commencement of an arbitration (and subsequent action to confirm, vacate or modify the arbitration
award) relating to monetary damages arising from any related or unrelated claims, including those claims for monetary damages arising
from those same violations against which injunctive relief was sought.
17.
Waiver and Further
Agreement.
Any waiver of any breach of any terms or conditions
of this Agreement shall not operate as a waiver of any other breach of such terms or conditions or any other term or condition,
nor shall any failure to enforce any provision hereof operate as a waiver of such provision or of any other provision hereof. Each
of the parties hereto agrees to execute all such further instruments and documents and to take all such further action as the other
party may reasonably require in order to effectuate the terms and purposes of this Agreement.
18.
Headings of No
Effect.
The paragraph headings contained in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of this Agreement.
19.
Counter Party Signatures.
This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original and all of which together shall constitute one instrument.
PAGE 8K-31
20.
280G.
Notwithstanding anything contained in this Agreement to the contrary to the extent that any of the payments and benefits provided
for under this Agreement together with any payments or benefits under any other agreement or arrangement between the Company or
any of their Subsidiaries and Employee (collectively, the “Payments”) would constitute a “parachute payment”
within the meaning of Section 280G of the Code, Employee shall receive total payments equal to the greater, after the application
of the excise tax imposed pursuant to Section 4999 of the Code, of the Payments provided under this Agreement or: the amount of
such Payments reduced to the greatest amount that would result in no portion of the Payments being subject to such excise tax.
[The remainder of this page intentionally left
blank. Signature page follows.]
IN WITNESS WHEREOF, the parties hereto have
executed this Employment Agreement as of the Execution Date first above written.
COMPANY:
GREENWAY TECHNOLOGIES, INC.
By: ________
/s/
_________________________
Kent Harer, Director
EMPLOYEE:
By: ________
/s/
_________________________
Ransom Jones
PAGE 8K-32
Exhibit 99.1
Greenway
Technologies Announces New Leadership Changes
FORT WORTH, Texas, May 17, 2018 -
Greenway Technologies, Inc. (OTCQB: GWTI), today announced changes to its management team and Board of Directors, all effective
May 10, 2018, including the election of a new Chairman of the Board, current Director Raymond Wright; the appointment of a new
independent director, Peter Hauser; the resignation of Patrick Six as President and Chief Financial Officer; the appointment of
John Olynick as the new President, and the appointment of Ransom Jones as the Company’s new Chief Financial Officer, Secretary
and Treasurer.
Board member and President of wholly-owned
subsidiary Greenway Innovative Energy (“GIE”), Raymond Wright succeeds Patrick Six as Chairman of the Board. Mr Wright
has served as the President of GIE since August 2012. Prior to Greenway, Mr. Wright was the co-founder of DFW Genesis in 2009,
where he began working on a novel approach to natural Gas-to-Liquid (“GTL”) syngas conversion processes. In 2012, he
and the late Dr. Conrad Greer formed Greenway Innovative Energy, Inc. to continue working on their proprietary GTL process, which
was subsequently acquired by the Company in August of that year. Previously, Mr. Wright worked with Dallas-based Texas Instruments
managing operations and opening up new markets for its European division.
A former consultant to GIE and the
Company, Peter Hauser, was appointed as a director to fill an opening created by the recent increase in the number of directors.
Mr. Hauser’s appointment expands the Board to seven directors. Mr. Hauser joins six current directors, Raymond Wright, Patrick
Six, Craig Takacs, Kent Harer, Kevin Jones and Ransom Jones. Mr. Hauser has over 40 years of business experience and has been working
with the Company since April 2017. Mr. Hauser has spent most of his career in the information technology industry, with specific
expertise supporting government agencies in management and sales positions at EMC Corporation, Storage Technology Corporation,
among others.
After accepting Mr. Six’s resignation,
the Board appointed John Olynick as the new President and chief executive of Greenway. Mr. Olynick brings over 40 years of experience
in senior management positions at industry leading technology corporations including Digital Equipment Corp, 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.
The Board of Directors also appointed Ransom
Jones to the position of Chief Financial Officer, Secretary and Treasurer of the Company. Mr. Jones has over 40 years of diverse
financial management and business experience, including as a former partner of KPMG Peat Marwick and Chief Financial Officer for
two publicly traded corporations, Western Preferred Corporation and El Paso Refining, Inc. Mr. Jones has also served as an officer
for some of the largest and most prestigious global financial institutions including, Goldman Sachs, Citicorp, ABN-AMRO Bank and
AIG. More recently, Mr. Jones previously served as President and Chief Financial Officer of UMED Holdings, now Greenway through
April 2017. He graduated from the University of Texas at El Paso with a BBA in Accounting.
PAGE 8K-33
Commenting on the announcement, Greenway Technologies
Chairman, Ray Wright stated, “The changes announced today are consistent with our ongoing evolution since the recent completion
of our first-of-its-kind G-Reformer® unit, a critical component to our unique syngas conversion process. The addition of John
Olynick, an experienced public company chief executive and business builder, brings another dimension of business insight and experience
to the Company and this Board. Peter Hauser has been supporting our mission to bring our innovative GTL solution to market by assisting
with public relations, marketing, sales and finance. His thought leadership in these areas has been invaluable to us thus far,
and we look forward to his continued service on our Board of Directors. Last, but certainly not least, Ransom Jones rejoining us
as CFO will be of invaluable importance as we seek new investment and financial relationships, business and operational partnerships.
I’m thankful that this team has stepped forward at this critical time in the Company’s history to lead the way forward
and develop our GTL technology commercialization and go-to-market strategy. I look forward to an exciting year ahead.”
About Greenway Technologies, Inc.
Based in Fort Worth, Texas, Greenway Technologies
through its wholly owned subsidiary, Greenway Innovative Energy is engaged in the research and development of small-scale gas-to-liquids
(GTL) syngas conversion systems that can be scaled to meet individual field requirements. The Company’s proprietary and patented
technology is realized in the Company’s recently completed first generation commercial G-Reformer® unit, a unique and
critical component to the Company’s GTL technology solution for converting natural gas to diesel and jet fuels. Additionally,
the Company owns 1,440 acres of placer mining claims on federal Bureau of Land Management land located in Mohave County, Arizona.
The company was formerly known as UMED Holdings, Inc. and changed its name to Greenway Technologies, Inc. in June 2017.
# # #
Safe Harbor Statement:
All statements
from Greenway Technologies, Inc. in this news release that are not based on historical fact are "forward-looking statements"
within the meaning of the PSLRA of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. While the Company’s management has based any forward-looking statements
contained herein on its current expectations, the information on which such expectations were based may change. These forward-looking
statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties, and other
factors, many of which are outside of our control, that could cause actual results to materially differ from such statements. Such
risks, uncertainties, and other factors include, among others, statements regarding ability of the Company to secure new investment
and financial relationships, business and operational partnerships and other activities that meet our commercialization, market
and research and developement investment strategies. For other factors that may cause our actual results to differ from those that
are expected, see the information under the caption “Risk Factors” in the Company’s most recent Form 10-K and
10-Q filings, and amendments thereto, as well as other public filings with the SEC since such date. The Company operates in a rapidly
changing and competitive environment, and new risks may arise. Accordingly, investors should not place any reliance on forward-looking
statements as a prediction of actual results. The Company disclaims any intention to, and undertakes no obligation to, update or
revise any forward-looking statement.
Investors & Analysts Contact:
Greenway Investor Relations
817-346-6900
ir@gwtechinc.com
PAGE 8K-34