GREENWAY TECHNOLOGIES INC
For the period ended Jun 30, 2024. Filed Aug 13, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 13, 2024
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-08-07.
0001493152-24-030518
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-13.
0001493152-24-031528
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 127 previous paragraphs and 140 current paragraphs.
91 unchanged; 27 reworded; 20 added; 9 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 6 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (20)
Current report
On July 23, 2019, we announced that Mabert LLC, a Texas limited liability company (“Mabert”), 100% owned by Kevin Jones, acquired INFRA Technology Group’s U.S. GTL plant and technology located in Wharton, Texas (the “Wharton Plant”). Mabert purchased the entire 5.2-acre site, plant and equipment, including INFRA’s proprietary FT reactor system and operating license agreement.
Current report
On August 29, 2019, to further facilitate the commercialization process, we announced that Greenway entered into a joint venture with OPM Green Energy, LLC, a Texas limited liability company (“OPMGE”), for a 42.857% ownership interest in OPMGE. In exchange for its 42.857% ownership of OPMGE, Greenway agreed to contribute a G-Reformer to the entity. The other members of OPMGE are Mabert, which owns 42.857% and Tom Phillips, our former Vice President of Operations for GIE, who owns 14.286%. Additionally, OPMGE entered a LEASE AGREEMENT with Mabert whereby OPMGE leased the Wharton Plant from Mabert. Our involvement in OPMGE was intended to facilitate third-party certification of our G-Reformer and related equipment and technology. In addition, we anticipated that OPMGE’s operations would demonstrate that the G-Reformer is a commercially viable technology for producing Syngas and marketable fuel products. As the first operating GTL plant to use our proprietary reforming technology and equipment, the Wharton Plant was initially expected to yield a minimum of 75 - 100 barrels per day of gasoline and diesel fuels from converted natural gas.
Current report
Greenway never transferred the G-Reformer to OPMGE, as required by the LIMITED LIABILITY COMPANY AGREEMENT OF OPM GREEN ENERGY, LLC. Accordingly, it defaulted on its obligation under the agreement. Under the LEASE AGREEMENT between Mabert and OPMGE, OPMGE was required to pay rent and to pay the following expenses relating to the operation of the Wharton Plant:
Current report
The lease stated that this transaction was a “Triple Net Lease.”
Current report
If OPMG did not pay rent or the other expenses outlined above, it represented Events of Default, which allowed Mabert the right to terminate the lease. Based on the Events of Default that occurred, Mabert exercised its right to terminate the lease.
Current report
The decrease was related primarily to a decrease in legal expenses $107,704, a decrease in expenses on mining leases of $36,613, a decrease of $14,005 in SEC filing and compliance expense, a decrease of $20,000 in stock-based compensation and a decrease in professional fees of $23,500. These decreases were offset by an increase in consulting fees of $37,860..
Current report
1 – The decrease was primarily due to reductions in legal expenses of $21,299, salary expense of $20,000, and fees paid to external accountants in the amount of $10,000. The decreases were reduced by an increase in consulting fees of $6,484.
Current report
Six-months ended June 30, 2024, compared to the six-months ended June 30, 2023
Current report
We reported consolidated net losses for the six months ended June 30,2024 and 2023 of $845,864 and $706,863, respectively.
Current report
1 – The decrease was primarily due to a decrease in legal fees of $107,704, a decrease in lease expense on mining interests of $36,613, a decrease in SEC filing and compliance expenses of $14,005, a decrease in fees paid to external accountants in the amount of $23,500 and a decrease in employee stock-based compensation in the amount of $20,000. There were increases in consulting fees of $37,836, an increase in salaries of $20,000 and an increase is fees paid for our stock quoting services in the amount of $8,400.
Current report
1 – Cash decreased in connection with the payment of accounts payable and accrued expenses and other general and administrative expenses.
Current report
2 – Accounts payable and accrued expenses and accounts payable – related parties increase because the Company accrued more expenses than it paid on those liabilities.
Current report
Our net cash used in operations increased primarily due to a decrease in our net loss of $139,001, an increase in accounts payable and accrued expenses of $263,787 and an increase in accounts payable and accrued expenses – related parties of $431,929.
Current report
In 2024, the Company sold stock for cash for $3,000. The Company issued shares of stock to related parties in the amount of $35,930 in repayment of advances – related parties.
Current report
In 2024, the Company received a $7,016 in advances from related parties.
Current report
For the six months ended June 30, 2023, the Company received $200 of advances – related party from our Chief Financial Officer, Ransom Jones, which was fully repaid in the quarter ended June 30, 2023. For the six months ended June 30, 2023, the Company issued 15,883,333 shares of Rule 144 restricted Common Stock, par value $0.0001 per share pursuant to private placement sales to various accredited investors, for ($0.01 - $0.02) per share.
Current report
On an ongoing basis, the Company utilizes the services of a variety of external consultants. There are Agreements in effect with 5 of the consultants.
Current report
On May 1, 2024 the Company issued 300,000 shares of Rule 144 restricted Common Stock, par value $0.0001 per share pursuant to private placement sales to various accredited investors, for $3,000 ($0.01/share).
Current report
For the year ended December 31, 2023, we received $31,700 in related party advances from our Chief Financial Officer, Ransom Jones, our Acting President, Kant Hater and a member of the Board of Directors, Micheal Wykrent. Ransom Jones was repaid $500 during 2023.
Current report
On May 1, 2024 the Company issued 2,395,334 shares of Rule 144 restricted Common Stock, par value $0.0001 per share pursuant to private placement sales to various accredited investors, for $35,930 ($0.015/share). The shares were issued to related-parties, in satisfaction of advances – related parties.
Removed paragraphs (9)
Previous report
2- Our net cash used in operations increased primarily due to the net loss decreasing by $126,648 and an increase of $788,370 in accounts payable and accrued expenses – related parties. This was partially offset by a $20,000 decrease related to stock issued for services – related party
Previous report
1 – General and administrative expenses decreased as follows - legal expenses decreased by $86,405, mining expenses decreased by $33,287, external accounting fees decreased by $13,500 and stock-based compensation decreased by $20,000. These decreases were partially offset by increases of $31,352 for consulting services.
Previous report
2 – Interest expense increased due to the first quarter of 2024 having one additional day than the first quarter of 2023.
Previous report
1 and 2 - Lack of cash resources resulted in increasing these liabilities.
Previous report
3 – This was a $5,000 payment on the loan payable.
Previous report
4 – Proceeds of $31,850 advanced by Officers and Directors and a repayments of an advance in the amount of $3,700 through issuance of stock in exchange for debt repayment.
Previous report
In 2023, the Company received proceeds from advances of $200 from its Chief Financial Officer. The Company sold stock for cash for $135,000. The Company repaid $15,000 in outstanding notes payable.
Previous report
For the year ended December 31, 2023, we received $31,500 in related party loans from officers and directors.
Reworded paragraphs (27)
Previous wording
We are engaged in the research and development of proprietary gas-to-liquids (“GTL”) synthesis gas (“Syngas”) conversion systems and micro-plants that can be scaled to meet specific gas field production requirements. Our patented and proprietary technologies have been realized in our first commercial G-Reformer TM unit (“G-Reformer”), a unique component used to convert natural gas into Syngas, which when combined with a Fischer-Tropsch (“FT”) reactor and catalyst, produces fuels including gasoline, diesel, jet fuel, methanol, ns high-value chemicals. We are also actively involved in producing G-Reformers to produce hydrogen. G-Reformer units can be deployed to process a variety of natural gas streams including pipeline gas, associated gas, flared gas, vented gas, coal-bed methane and/or biomass gas. When derived from any of these natural gas sources, the liquid fuels created are incrementally cleaner than conventionally produced oil-based fuels. Our Company’s objective is to become a material direct and licensed producer of renewable GTL synthesized diesel and jet fuels, with a near -term focus on U.S. market opportunities. For more information about our Company, please visit our website located athttps://gwtechinc.com/.
Current wording
We are engaged in the research and development of proprietary gas-to-liquids (“GTL”) synthesis gas (“Syngas”) conversion systems and micro-plants that can be scaled to meet specific gas field production requirements. Our patented and proprietary technologies have been realized in our first commercial G-Reformer TM unit (“G-Reformer”), a unique component used to convert natural gas into Syngas, which when combined with a Fischer-Tropsch (“FT”) reactor and catalyst, produces fuels including gasoline, diesel, jet fuel, methanol and high-value chemicals. G-Reformer units can be deployed to process a variety of natural gas streams including pipeline gas, associated gas, flared gas, vented gas, coal-bed methane and/or biomass gas. When derived from any of these natural gas sources, the liquid fuels created are incrementally cleaner than conventionally produced oil-based fuels. Our Company’s objective is to become a material direct and licensed producer of renewable GTL synthesized diesel and jet fuels, with a near -term focus on U.S. market opportunities. Our G-]Reformer also has the capability to convert natural gas into hydrogen. For more information about our Company, please visit our website located athttps://gwtechinc.com/.
Previous wording
On August 2012, we acquired 100% of GIE, pursuant to that certain Purchase Agreement, by and between us and GIE, dated August 29, 2012, and filed as Exhibit 10.5 to this Form 10-K, and incorporated by reference herein (the “GIE Acquisition Agreement”). GIE owns patents and trade secrets for proprietary technology to convert natural gas into Syngas. Based on a new, breakthrough process called Fractional Thermal Oxidation™ (“FTO”), we believe that the G-Reformer, combined with conventional FT processes, offers an economical and scalable method to converting natural gas to liquid fuels, high-value chemicals, methanol and hydrogen. On February 15, 2013, GIE filed for its first patent on this GTL technology, resulting in the issue of U.S. Patent 8,574,501 B1 on November 5, 2013. On November 4, 2013, GIE filed for a second patent covering other unique aspects of the design and was issued U.S. Patent 8,795,597 B2 on August 5, 2014. The Company has several other pending patent applications, both domestic and international, related to various components and processes relating to our proprietary GTL methods, complementing our existing portfolio of issued patents and pending patent applications.
Current wording
In August 2012, we acquired 100% of GIE, pursuant to that certain Purchase Agreement, by and between us and GIE, dated August 29, 2012, and filed as Exhibit 10.5, and incorporated by reference herein (the “GIE Acquisition Agreement”). GIE owns patents and trade secrets for a proprietary technology to convert natural gas into Syngas. Based on a new, breakthrough process called Fractional Thermal Oxidation™ (“FTO”), we believe that the G-Reformer, combined with conventional FT processes, offers an economical and scalable method to converting natural gas to liquid fuel. On February 15, 2013, GIE filed for its first patent on this GTL technology, resulting in the issue of U.S. Patent 8,574,501 B1 on November 5, 2013. On November 4, 2013, GIE filed for a second patent covering other unique aspects of the design and was issued U.S. Patent 8,795,597 B2 on August 5, 2014. The Company has several other pending patent applications, both domestic and international, related to various components and processes relating to our proprietary GTL methods, complementing our existing portfolio of issued patents and pending patent applications.
Previous wording
Products created by the GTL process include High Cetane Diesel, Naphtha, Technical Grade Water, and high value, high purity chemicals. The chemicals which would be produced in the GTL plant would be vital to many industries including pharmaceutical, cosmetics, fragrances, adhesives, and others. The vast majority of these chemicals are produced in China. Such dependencies make America captive to shortfalls whether they are manufacturing related or intentional. By making these chemicals in the USA, we reduce that dependency and keep the product, the jobs, and the profits in America.
Current wording
Products created by the GTL process include High Cetane Diesel, Naphtha, Technical Grade Water, and high value, high purity chemicals. The chemicals which would be produced in the GTL plant would be vital to many industries including pharmaceutical, cosmetics, fragrances, adhesives, and others. The vast majority of these chemicals are produced in China. Such dependency makes America captive to shortfalls whether they are manufacturing related or intentional. By making these chemicals in the USA, we reduce that dependency and keep the product, the jobs, and the profits in America.
Previous wording
As of the filing date of this Form 10-Q, we have three (3) employees. One of the employees has no employment agreement and receives no compensation. The other two (2) employees have employment agreements and compensation is accrued pursuant to those agreements. None of our employees are covered by collective bargaining agreements. We consider our employee relations to be satisfactory.
Current wording
As of the filing date of this Form 10-Q, we have three (3) employees. One of the employees has no employment agreement and receives no compensation. The other tow (2) employees have employment agreements and compensation is accrued pursuant to those agreements. None of our employees are covered by collective bargaining agreements. We consider our employee relations to be satisfactory.
Previous wording
We remain dependent on both third party and related party sources of funding for continuation of our operations (debt and/or equity based). Our independent registered public accounting firm issued a going concern qualification in their report dated July 16, 2024 and filed with our annual report on Form 10-K, which is included by reference to our Financial Statements and raises substantial doubt about our ability to continue as a going concern.
Current wording
We remain dependent on both third-party and related-party sources of funding for continuation of our operations (debt and/or equity based). Our independent registered public accounting firm issued a going concern qualification in their report dated July16, 2024 and filed with our annual report on Form 10-K, which is included by reference to our Financial Statements and raises substantial doubt about our ability to continue as a going concern.
Previous wording
1 – Our net loss decreased by $126,648, primarily due to a decrease in general and administrative expenses of $128,648. Legal expenses decreased by $86,405, mining expenses decreased by $33,287, external accounting fees decreased by $13,500 and stock-based compensation decreased by $20,000. These decreases were partially offset by increases of $31,352 for consulting services.
Current wording
1 – Our net loss decreased by $139,001, due to a decrease in general and administrative expenses of $138,220.
Previous wording
Our net cash used in operations decreased due primarily to a decrease of $126,648 of net loss and an increase of $788,370 in accounts payable and accrued expenses – related parties.
Current wording
2- Our net cash used in operations decreased due to a decrease in net loss of $139,001, an increase in accounts payable and accrued expenses of $263,787 and a change in accounts payable and accrued expenses – related parties of $60,558.
Previous wording
3 – The increase in our working capital deficit related to increases in accounts payable and accrued expenses of $506,067, accounts payable, accrued expenses – related parties of $788,370 and advances – related parties of $28,150.
Current wording
3 – The increase in our working capital deficit resulted primarily from an increase in accounts payable and accrued expenses of $263,787 and increase accounts payable and accrued expenses – related parties of $431,929.
Previous wording
4 – The increase in stockholders’ deficit related to our net loss of $357,071.
Current wording
4 – The increase in stockholders’ deficit is related to our net loss.
Previous wording
As of March 31, 2024, we had total liabilities in excess of assets by $12,386,382 and used net cash of $1,782 for our operating activities. This is as compared to the most recent year ended December 31, 2023, when we used net cash of $302,663 for operating activities.
Current wording
As of June 30, 2024, we had total liabilities in excess of assets by $12,697,244 and used net cash of $11,147 for our operating activities. This is as compared to the most recent year ended December 31, 2023, when we used net cash of $480,953 for operating activities.
Previous wording
We reported consolidated net losses for the three months ended March 31, 2024 and 2023 of $357,071 and $483,719 respectively.
Current wording
We reported consolidated net losses for the three months ended June 30, 2024 and 2023 of $349,792 and $362,145, respectively.
Previous wording
We do not currently have sufficient working capital to fund our expected future operations. We cannot assure investors that we will be able to continue our operations without securing additional adequate funding. As of March 31, 2024, we had $0 in cash, total assets of $0, and total liabilities of $12,386,382. Our total accumulated deficit at March 31, 2024 was $38,216,675.
Current wording
We do not currently have sufficient working capital to fund our expected future operations. We cannot assure investors that we will be able to continue our operations without securing additional adequate funding. As of June 30, 2024, we had $1 in cash, total assets of $1, and total liabilities of $12,697,245. Our total accumulated deficit at June 30, 2024 was $38,566,467.
Previous wording
5 – See all discussions in #1 - #5.
Current wording
3 – See all discussions in #1- #2.
Previous wording
Net cash used in investing activities for the three months ended March 31, 2024 and 2023 was $0 and $0, respectively.
Current wording
Net cash used in investing activities for the six months ended June 30, 2024 and 2023 was $0 and $0, respectively.
Previous wording
Net cash provided by financing activities was $0 and $120,200 for the three months ended March 31, 2024 and 2023, respectively.
Current wording
Net cash provided by financing activities was $10,016 and $218,000 for the six months ended June 30, 2024 and 2023, respectively.
Previous wording
As shown in the accompanying consolidated financial statements, we have incurred an accumulated deficit of $38,216,675 and $37,859,604 as of March 31, 2024 and December 31, 2023, respectively.
Current wording
As shown in the accompanying consolidated financial statements, we have incurred an accumulated deficit of $38,566,467 and $37,124,733 as of June 30, 2024 and June 30, 2023, respectively.
Previous wording
In August 2012, we entered into an employment agreement with our chairman of the board, Ray Wright, as president of Greenway Innovative Energy, Inc., for a term of five years with compensation of $90,000 per year. In September 2014, Wright’s employment agreement was amended to increase such annual pay to $180,000. By its terms, the employment agreement automatically renews each year for successive one-year periods, unless otherwise earlier terminated. During the three-months ended March 31, 2024, the Company paid and/or accrued a total of $45,000 for the period under the terms of the agreement.
Current wording
In August 2012, we entered into an employment agreement with our chairman of the board, Ray Wright, as president of Greenway Innovative Energy, Inc., for a term of five years with compensation of $90,000 per year. In September 2014, Wright’s employment agreement was amended to increase such annual pay to $180,000. By its terms, the employment agreement automatically renews each year for successive one-year periods, unless otherwise earlier terminated. During the six months ended June 30, 2024 and June 30, 2023, the Company accrued $90,000 under the terms of the agreement.
Previous wording
Effective May 10, 2018, we entered into an employment agreement with Ransom Jones, as Chief Financial Officer. 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 Mr. Jones’ agreement is in effect, he is entitled to receive a bonus (“Bonus”) equal to at least Thirty-Five Thousand Dollars ($35,000) per year. The Company has accrued $10,000 and $10,000 at March 31, 2024 and December 31, 2023, respectively. For the 3 months ended March 31, 2024, $30,000 was accrued under the employment agreements.
Current wording
Effective May 10, 2018, we entered into an employment agreement with Ransom Jones, as Chief Financial Officer. 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 Mr. Jones’ agreement is in effect, he is entitled to receive a bonus (“Bonus”) equal to at least Thirty-Five Thousand Dollars ($35,000) per year. During the six months ended June 30, 2024 and 2023, the Company accrued $95,000 and $75,000, respectively, under the terms of the agreement.
Previous wording
Financing – Three Months Ended March 31, 2024 and the Year Ended December 31, 2023
Current wording
Financing – Six Months Ended June 30, 2024 and the Year Ended December 31, 2023
Previous wording
For the period ended March 31, 2024, we received $650 in related party loans from our Chief Financial Officer, Ransom Jones.
Current wording
For the period ended June 30, 2024, we received $7,016 in related party advances from our Chief Financial Officer, Ransom Jones, our Acting President and a member of the Board of Directors.
Previous wording
On various dates throughout the year ended December 31, 2023, the Company issued 21,233,333 shares of Rule 144 restricted Common Stock, par value $0.0001 per share pursuant to a private placement sale to various accredited investors, for $265,500 ($0.01 - $0.02/share).
Current wording
On various dates throughout the year ended December 31, 2023, the Company issued 21,233,333 shares of Rule 144 restricted Common Stock, par value $0.0001 per share pursuant to private placement sales to various accredited investors, for $265,500 ($0.01 - $0.02/share).
Previous wording
While we are subject to general inflationary trends, including for basic manufacturing production materials, our management believes that inflation in and of itself does not have a material effect on our operating results. However, inflation may become a factor in the future. However, the COVID-19 virus and its current extraordinary impact on the world economy has reduced oil consumption globally, decreasing crude oil prices, to levels not seen since the early 1980’s. The economics of GTL conversion rely in part on the arbitrage between oil and natural gas prices, with economic models for many producers, including our own models, using a range of $30-60/bbl (for WTI or Brent Crude as listed daily on the Nymex and ICE commodities exchanges) to determine relative profitability of their GTL operations.
Current wording
While we are subject to general inflationary trends, including for basic manufacturing production materials, our management believes that inflation in and of itself does not have a material effect on our operating results. However, inflation may become a factor in the future. However, the COVID-19 virus and its current extraordinary impact on the world economy has reduced oil consumption globally, decreasing crude oil prices, to levels not seen since the early 1980’s. The economics of GTL conversion rely in part on the arbitrage between oil and natural gas prices, with economic models for many producers, including our own models, using a range of $30-60/bbl (for WTI or Brent Crude as listed daily on the Nymex and ICE commodities exchanges) to determine relative profitability of their GTL operations. While the COVID-19 virus may run its human course in the near term, we believe (as many others in the U.S. government and media believe), that the economic impacts will be long lasting and for all practical matters, remain largely unknown at this time.
Previous wording
We believe that the critical accounting policies discussed below affect our more significant judgments and estimates used in the preparation of our financial statements.
Current wording
We believe that the critical accounting policies discussed above affect our more significant judgments and estimates used in the preparation of our financial statements.
Previous wording
Significant estimates during the three months ended March 31, 2024 and 2023, respectively, include valuation of stock-based compensation, uncertain tax positions, and the valuation allowance on deferred tax assets.
Current wording
Significant estimates during the six months ended June 30, 2024 and 2023, respectively, include valuation of stock-based compensation, uncertain tax positions, and the valuation allowance on deferred tax assets.
Previous wording
The Company recognizes interest and penalties related to uncertain income tax positions in other expense. No interest and penalties related to uncertain income tax positions were recorded during the three months ended March 31, 2024 and 2023, respectively.
Current wording
The Company recognizes interest and penalties related to uncertain income tax positions in other expense. No interest and penalties related to uncertain income tax positions were recorded during the six months ended June 30, 2024 and 2023, respectively.
Previous wording
The Company incurred research and development expenses of $0 and $0 for the three months ended March 31, 2024 and 2023, respectively.
Current wording
The Company incurred research and development expenses of $0 and $0 for the six months ended June 30, 2024 and 2023, respectively.
Previous wording
The Company uses the fair value method for equity instruments granted to non-employees and use the Black-Scholes or other acceptable binomial methods for measuring the fair value of options.
Current wording
The Company uses the fair value method for equity instruments granted to non-employees and use the Black-Scholes or other acceptable binomial models for measuring the fair value of options.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
We had no revenues for our consolidated operations for the six months ended June 30,2024 and 2023, respectively.
Current report — wording carried from elsewhere
The following table summarizes consolidated operating expenses and other income and expenses for thesix months ended June 30, 2024 and 2023: