GREENWAY TECHNOLOGIES INC - Quarter Report: 2017 September (Form 10-Q)

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 September 30, 2017

[ ] 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)

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):

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 November 5, 2017, the registrant had outstanding 280,052,004 shares of our Class A common stock and 126,938 shares of Class B common stock.

Table of Contents

Part I – Financial Information.

PART I – FINANCIAL INFORMATION

GREENWAY TECHNOLOGIES, INC.

Condensed Consolidated Balance Sheet

(Unaudited)

See the accompanying notes to unaudited condensed consolidated financial statements.

GREENWAY TECHNOLOGIES, INC.

Condensed Consolidated Statements of Operations – Unaudited

For the three and nine-months ended September 30, 2017 and 2016

See the accompanying notes to unaudited condensed consolidated financial statements.

GREENWAY TECHNOLOGIES, INC.

Condensed Consolidated Statements of Cash Flows - Unaudited

For the nine-months ended September 30, 2017 and 2016

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

GREENWAY TECHNOLOGIES, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2017

(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 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. See discussion in Note 3.  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 condensed consolidated financial statements include the financial statements of the Company and its wholly-owned subsidiaries. All significant inter-company accounts and transactions were 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, 2017.  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, 2016.

The accompanying condensed consolidated financial statements include the accounts of the following entities.

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 $7.2 million for the nine-month period ended September 30, 2017, and has a working capital deficiency of approximately $2 million and an accumulated deficit of approximately $21.7 million at September 30, 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 to $50M 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 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 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 September 30, 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 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 (10,641,489) 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 6 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 September 30, 2017:

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 September 30, 2017, is as follows:

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 September 30, 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 $521,444 and $618,007 during the nine-months ended September 30, 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 condensed consolidated financial statements.

NOTE 4 – PROPERTY, PLANT, AND EQUIPMENT

NOTE 5 – TERM NOTES PAYABLE

Term notes payable consisted of the following at September 30, 2017, and December 31, 2016:

NOTE 6 – CONVERTIBLE PROMISSORY NOTES

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 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 nine-months ended September 30, 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:

September 2014 Convertible Note

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

NOTE 7 – ACCRUED EXPENSES

Accrued expenses consisted of the following at September 30, 2017, and December 31, 2016:

NOTE 8– CAPITAL STRUCTURE

The Company is authorized to issue 300,000,000 shares of class A common stock with a par value of $0.0001 per share and 20,000,000 shares of class B common with a par value of $0.0001 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 September 30, 2017, there were 278,252,004 shares of class A common stock issued and outstanding.

During the three-month period ended September 30, 2017, the Company issued 2,092,631 shares of restricted common stock to 9 individuals through private placements for cash of $214,000 at an average price of $0.1023 per share.

During the three-month period ended September 30, 2017, the Company canceled 31,250 of treasury shares recorded at $5,000.

During the three-month period ended September 30, 2017, the Company canceled 2,241,500 shares turned back to the Company by shareholders of Mamaki of Hawaii, Inc. and were recorded at par value of $0.0001 per share.

During the three-month period ended September 30, 2017, the Company issued 3,000,000 shares of restricted common stock to a shareholder to settle a dispute and valued the shares $390,300.

All of our unregistered securities were issued in reliance upon an exemption from registration pursuant to Section 4(a)(2) of the Securities Act or Rule 506 of Regulation D promulgated under the Securities Act.

Treasury Shares

During the three-month period ended September 30, 2017, the Company repurchased 31,250 shares of common stock for $5,000. These shares were canceled on August 11, 2017. 

During the three-month period ended September 30, 2017, the Company repurchased 860,110 shares of common stock for $64,508. These shares were carried as treasury shares at September 30, 2017.

Class B Common Stock

At September 30, 2017, there were 126,938 shares of class B common stock issued and outstanding. Class B shares have no voting rights. Each class B share is convertible, at the option of the class B shareholder, into one share of class A common stock.

Stock options, warrants and other rights

At September 30, 2017, the Company has not adopted any employee stock option plans.

On October 31, 2015, the Company issued 4,000,000 warrants for legal work. The warrants are exercisable at $0.20 per share for a period of five years from the date of issue. The Company valued the warrants as of December 31, 2015, at $386,549 using the Black-Scholes Model with expected dividend rate of 0%, expected volatility rate of 189%, expected conversion term of 4.75 years and risk-free interest rate of 1.75%.

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 787%, expected conversion term of two and three years and risk-free interest rate of 1.75%.

NOTE 9 - RELATED PARTY TRANSACTIONS

Shareholders have made advances to the Company in the amounts of $0 and $129,414 (Kevin Jones $109,414 and Tunstall Canyon Group LLC $20,000) during the nine-months ended September 30, 2017, and 2016, respectively.  Tunstall Canyon Group, LLC elected to convert advances of $0 and $51,500 to shares of common stock at market value ($0.08 per share) and Kevin Jones received repayments of $59,690 and $101,000 during the nine-months ended September 30, 2017, and 2016, respectively.

NOTE 10 – INCOME TAXES

At September 30, 2017, and December 31, 2016, the Company had approximately $8.0 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 nine-months ended September 30, 2017, and the year ended December 31, 2016:

A comparison of the provision for income tax expense at the federal statutory rate of 34% for the nine-months ended September 30, 2017, and the year ended December 31, 2016, the Company’s effective rate is as follows:

The net deferred tax assets and liabilities included in the financial statements consist of the following amounts at September 30, 2017, and December 31, 2016:

The change in the valuation allowance was $7,575,176 and $1,935,510 for the nine-months ended September 30, 2017, and the year ended December 31, 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 $22,051,381 and $14,476,205 at September 30, 2017, and December 31, 2016, respectively.

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 11 – 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 five years (ending on May, 31, 2016).  During the nine-months ended September 30, 2016, the Company accrued a total of $150,000 as management fees in accordance with the terms of these 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.  On April 30, 2015, accrual on the Greenway Innovative Energy chairman of the board agreement ceased due to his absence from the Company for more than a year. During the nine-months ended September 30, 2017, the Company paid $120,000 and accrued $135,000 for the Greenway Innovative Energy president. During the nine-months ended September 30, 2016, the Company paid $45,000 and accrued $135,000 for the Greenway Innovative Energy president.

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 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.

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 nine-months ended September 30, 2017, and 2016, respectively, the Company expensed $31,388 and $21,753.

The Company has a minimum commitment for 2017 of approximately $11,160 in annual maintenance fees for its United States Bureau of Land Management (“BLM”) mining lease, which are paid in August 2017.  Once the Company enters the production phase, royalties owed to the BLM will be equal to 10% of production. There is no actual lease agreement with the BLM, the Company files an annual maintenance fee form to hold the claims.

Legal

On April 22, 2016, the Company 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 (collectively, the “Defendants”) 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 Company executed a Settlement and Mutual Release Agreement with the Defendants. The Defendants subsequently failed to make payments pursuant to the provisions of the Settlement and Mutual Release Agreement. Due to the bankruptcy proceedings with respect to Curtis Borman, further action in the proceeding has been stayed.

On September 14, 2017, In The Third Judicial District Court Of Salt Lake County State Of 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, 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 Warrant allegedly provided Tonaquint with "the right to purchase at any time on or after September 18, 2014a number of fully paid and non assessable shares of UMED's common stock equal to $47,400.00 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 this Warrant to Purchase Shares of Common Stock."

Greenway Technologies disputes that it has any obligation to issue shares pursuant to the Warrant. The parties have agreed to mediate the dispute.

NOTE 12 – SUBSEQUENT EVENTS

Subsequent to September 30, 2017, we sold 1,800,000 shares of our class A restricted common stock to three individuals for $180,000 ($0.10 per share).

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 14, 2017. As discussed in Note 2 to the condensed consolidated financial statements, our recurring net losses and inability to generate sufficient cash flows to meet our obligations and sustain our operations raise substantial doubt about our ability to continue as a going concern. Management’s plans concerning these matters are also discussed in Note 2 to the condensed consolidated financial statements. This discussion contains forward-looking statements that involve risks and uncertainties, including information with respect to our plans, intentions and strategies for our businesses. Our actual results may differ materially from those estimated or projected in any of these forward-looking statements.

Unless the context otherwise suggests, “we,” “our,” “us,” and similar terms, 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 2017 without raising additional debt or equity capital. There can be no assurance that additional debt or equity capital will be raised.

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

Greenway Technologies currently has a need of approximately $130,000 per month to sustain operations and pay the University of Texas at Arlington (UTA) Sponsored Research Agreements until the first gas to liquids (“GTL”) Unit is completed.

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’ G-Reformer™, combined with   a Fischer-Tropsch process, offers an economical and scalable method to 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. Greenway Technologies now plans to commercialize the system and related technology and is in discussions with several oil and gas companies, and other individuals and organizations regarding joint venture funding for its first gas-to-liquids (GTL) plant using our proprietary processes. Should an agreement be made, the joint venture relationship will provide funding at a level of $20M to $50M with an ongoing profit-sharing arrangement between Greenway Technologies and the partner.

Greenway Technologies’ technology is unique in that it allows for plants with a smaller footprint, versus legacy large-scale technologies, combined with lower up-front and ongoing costs.

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

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

Our research has been centered on developing a portable production-scale FT system (“the Portable Technology”) to accommodate the needs of smaller gas plays that are increasingly beginning to characterize natural gas production within the United Stated and elsewhere. We are currently seeking funding of $20M to $50M to build the initial GTL unit.

Since March 1, 2016, we have raised approximately $3,706,750 and have built a small-scaled prototype unit at UTA in conjunction with a sponsored research agreement.

Mining Interest

In December 2010, UMED acquired the rights to approximately 1,440 acres of placer mining claims in Mohave County, Arizona for 5,066,000 shares of our restricted common stock. Early indications, from samples taken and processed, provides reason to believe that the potential recovery value of the metals located on the 1,440 acres is significant, but actual mining and processing will determine the ultimate value which may be realized. Funding of $500,000 is being sought to begin certified assaying, to determine the viability of continued development of the mining claims.

Going Concern

As of September 30, 2017, the registrant had an accumulated deficit during development stage of $22,051,381. During the three-months ended September 30, 2017, the registrant used net cash of $553,268 for operating activities. These factors raise substantial doubt about the registrant’s ability to continue as a going concern.

While the registrant is attempting to commence operations and generate revenues, the registrant’s cash position may not be significant enough to support the registrant’s 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 the registrant to continue as a going concern. While the registrant 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 ability of the registrant to continue as a going concern is dependent upon the registrant’s ability to further implement its business plan and generate revenues. 

Three-months Ended September 30, 2017, Compared to Three-months Ended September 30, 2016.

Revenues. During the three-months ended September 30, 2017, and 2016, the registrant had no revenues from operations. The registrant is aggressively looking for ways to leverage our technology to develop revenue streams.

Operating Expenses.

Consulting Fees. During the three-months ended September 30, 2017, consulting expense increased to $91,000 as compared to $88,060 from the prior year three-months ended September 30, 2016. The increase was primarily the result of more cash paid for consulting services.

Officer Compensation. During the three-months ended September 30, 2017, officer compensation increased to $105,000 as compared to $75,000 from the prior year three-months ended September 30, 2016. Officer compensation increased due to Greenway Innovative Energy executives beginning to receive salaries of $15,000 per month in 2017.

Professional Fees. During the three-months ended September 30, 2017, professional fees increased to $5,659 as compared to $1,449 from the prior year three-months ended September 30, 2016. Professional fees increased because of an increase in filing fees and press releases.

Operating Expenses. During the three-months ended September 30, 2017, operating expenses increased to $1,273,246 as compared to $664,376 from the prior year three-months ended September 30, 2016. The increase was primarily due to $720,300 recorded as settlements of shareholder disputes in the three-months ended September 30, 2017, compared to $0 in the three-months ended September 30, 2016. Travel expenses increased to $29,023 in the three-months ended September 30, 2017, compared to $18,391 in the three-months ended September 30, 2016. Legal expenses increased to $59,790 in the three-months ended September 30, 2017, compared to $18,764 in the three-months ended September 30, 2016. The decrease in research and development costs of $183,512 in the three-months ended September 30, 2017, compared to $358,336 in the three-months ended September 30, 2016.

Interest Expense. During the three-months ended September 30, 2017, interest expense decreased to $120 as compared to $28,749 from the prior year three-months ended September 30, 2016. The decrease was primarily due to the convertible promissory note being paid in March of 2017, thus no accruals in three-months ended September 30, 2017 for interest expense and amortization of original issue discount and issue costs.

Derivative Adjustment. During the three-months ended September 30, 2017, loss on derivative adjustment was $26,329 as compared to $204,445 for the prior year three-months ended September 30, 2016. The change was due to the convertible note payable being paid in first quarter 2017 and the derivative liability for the three-months ended September 30, 2017 being calculated using the Black-Scholes Model only on the warrants.

Net Loss from Operations. Our net loss from operations increased to $1,299,695 for the three-months ended September 30, 2017 compared to $897,570 for the three-months ended September 30, 2016. The increase was primarily due to increase on settlements on shareholder disputes, decrease in research and development, increase in travel expenses and increase in legal expenses discussed in operating expenses above.

Nine-months Ended September 30, 2017, Compared to Nine-months Ended September 30, 2016.

Revenues. During the nine-months ended September 30, 2017, and 2016, the registrant had no revenues. The registrant is aggressively looking for ways to leverage our technology to develop revenue streams.

Operating Expenses.

Consulting Fees. During the nine-months ended September 30, 2017, consulting expense increased to $209,450 as compared to $199,460 for the nine-months ended September 30, 2016. The increase was primarily the result of consultants added for the Greenway Technologies GTL project.

Officer Compensation. During the nine-months ended September 30, 2017, officer compensation increased to $381,000 as compared to $317,000 for the nine-months ended September 30, 2016. Officer compensation increased due to additional payments made to our chief executive officer, and salary increase for Greenway Innovative Energy executives in 2017.

Professional Fees. During the nine-months ended September 30, 2017, professional fees increased to $18,511 as compared to $5,963 from the prior year nine-months ended September 30, 2016. Professional fees increased because of listing fees charged by the OTC Market.

Operating Expenses. During the nine-months ended September 30, 2017, operating expenses increased to $7,568,528 as compared to $1,361,588 for the nine-months ended September 30, 2016. The increase was due primarily increase of stock based compensation to $5,320,938 for the nine-months ended September 30, 2017, compared to $0 for the nine-months ended September 30, 2016 and $720,300 recorded as settlements of shareholder disputes in the three-months ended September 30, 2017, compared to $0 in the three-months ended September 30, 2016. Travel expenses increased to $46,997 in the nine-months ended September 30, 2017, compared to $23,139 in the nine-months ended September 30, 2016. Legal expenses increased to $131,827 in the nine-months ended September 30, 2017, compared to $51,386 in the nine-months ended September 30, 2016. Research and development costs decrease to $521,444 in the nine-months ended September 30, 2017, compared to $618,007 in the nine-months ended September 30, 2016.

Interest Expense. During the nine-months ended September 30, 2017, interest expense increased to income of $9,285 as compared to expense of $40,479 from the prior year nine-months ended September 30, 2016. The decrease was primarily due to the convertible promissory note being paid in March of 2017, thus no accruals from April 2017 through September 30, 2017, for interest expense and amortization of original issue discount and issue costs.

Derivative Adjustment. During the nine-months ended September 30, 2017, loss on derivative adjustment was $15,933 as compared to loss of $229,510 for the prior year nine-months ended September 30, 2016. The change was due to the derivative liability calculated using the Black-Scholes Model pursuant to the outstanding convertible note payable and warrants.

Net Loss from Operations. Our net loss from operations increased to $7,575,176 for the nine-months ended September 30, 2017, compared to $1,631,577 for the nine-months ended September 30, 2016. The increase was due primarily increase of stock based compensation to $5,320,938 and $720,300 recorded as settlements of shareholder disputes.

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 September 30, 2017, and December 31, 2016:

In the nine-months ended September 30, 2017, our working capital deficit decreased by $23,602 primarily as a result of an increase in current assets of $84,895 and increase in accounts payable and accrued liabilities of $198,954, and decreases in notes payable and accrued interest of $128,753 and derivative liability of $8,908.

Operating activities

Net cash used in continuing operating activities during the three-months ended September 30, 2017, was $(553,268) as compared to $(593,511) for the three-months ended September 30, 2016. Items totaling approximately $527,746 contributing to the net cash used in continuing operating activities for the three-months ended September 30, 2017, include:

Net cash used for continuing operating activities for the three-months ended September 30, 2016, was $593,511. Items totaling approximately $304,059 contributing to the net cash used in continuing operating activities for the three-months ended September 30, 2016, include:

Investing activities

Net cash used in investing activities was $0 for the three-months ended September 30, 2017, and $58,700 for the three-months ended September 30 2016.

Financing Activities

Net cash provided by financing activities was $141,492 for the three-months ended September 30, 2017, composed of $204,000 in sales of common stock, $3,000 of payments on note payable and $59,508 purchase of treasury shares.

Net cash provided by financing activities was $1,230,917 for the three-months ended September 30, 2016, composed primarily of $1,243,500 in sales of common stock, $77,913 in of repayments of shareholder advances, $5,000 payments on note payable, and debt issue costs of $7,583.  

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 May 2011, we entered into employment agreements with its chief executive officer, president and chief financial officer. The Agreements were for a term of five years expired on May 31, 2016. During the nine-months ended September 30, 2016, UMED expensed a total of $90,000 in expense and accrual as management fees in accordance with the terms of these 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. On March 31, 2015, accrual on the Greenway chairman of the board agreement was ceased due to his absence from the Company for more than a year. During the nine-months ended September 30, 2017, the Company paid $110,000 and accrued $30,000 for the Greenway Innovative Energy president. During the nine-months ended September 30, 2016, the Company paid $45,000 and accrued $90,000 for the Greenway Innovative Energy president.

Greenway Technologies, Inc. does not have any other employment agreements.

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 nine-months ended September 30, 2017, and 2016, we expensed $26,992 and $35,023.

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 in Mohave County, Arizona for 5,066,000 shares of our restricted common stock. Our minimum commitment for 2017 is approximately $11,160 in annual maintenance fees, which were due September 1, 2017, payable to the United States Bureau of Land Management (“BLM”). 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.

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 nine-months ended September 30, 2017.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

There has been no material change in our market risks since the end of the fiscal year 2016.

 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:

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 September 2017, 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 September 30, 2017, 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

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.

Greenway Technologies disputes that it has any obligation to issue shares pursuant to the Warrant. The parties have agreed to mediate the dispute.

Not applicable.

During the three-month period ended September 30, 2017, we issued 2,092,631 shares of restricted common stock to nine individuals through private placements for cash of $214,000 at an average price of $0.1023 per share. There were no selling expenses or commissions with respect to the sale of our common stock.

Subsequent to September 30, 2017, we sold 1,800,000 shares of our class A restricted common stock to three individuals for $180,000 ($0.10 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 $90,000, 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:

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Issuer Purchase of Equity Securities

______________

(1)       The purchase of securities was not part of any publicly announced plan or program.

Not applicable.

Not applicable.

None.

____________

*       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: November 20, 2017.

By /s/ D. Patrick Six

D. Patrick Six, Chief Executive Officer

By /s/ D. Patrick Six

D. Patrick Six, Chief Financial Officer and

Principal Accounting Officer