The Company's financing
Related parties
Financing to date has been provided by loans, advances from shareholdersShareholders and by issuing sharesDirectors and issuances of its common stockour Common Stock in various private placements to accredited investors, related parties and individuals. institutions.
For the year ended December 31, 2022 there was no related party financing. However, $51,769 in advances were converted to a related party note for Kevin Jones.
For the year ended December 31, 2021, we received $429,247 in related party loans from Mabert, acting as agent for various lenders to the Company.
As of December 31, 2021, we received $68,014 in cash and payment advances, net of repayments, from our director, Kevin Jones, a greater than 5% shareholder which has been accrued as “Advances - related parties” for the period.
Third-party financing
On various dates throughout the year ended December 31, 2022, the Company issued 20,667,999 shares of Rule 144 restricted Common Stock, par value $0.0001 per share pursuant to a private placement sale to various accredited investors, for $482,200 ($0.02 - $0.03/share).
On December 23, 2021, the Company 333,333 shares of Rule 144 restricted Common Stock, par value $.0001 per share pursuant to a private placement sale to one (1) accredited investor, for $10,000, or $0.03 per share.
On December 22, 2021, the Company issued 1,500,000 shares of Rule 144 restricted Common Stock, par value $.0001 per share pursuant to a private placement sale to two (2) accredited investors, for $45,000, or $0.03 per share.
On December 20, 2021, the Company issued 1,000,000 shares of Rule 144 restricted Common Stock, par value $.0001 per share pursuant to a private placement sale to one (1) accredited investor, for $30,000, or $0.03 per share.
On December 2, 2021, the Company issued 166,667 shares of Rule 144 restricted Common Stock, par value $.0001 per share pursuant to a private placement sale to one (1) accredited investor, for $5,000, or $0.03 per share.
On November 29, 2021, the Company issued 1,000,000 shares of Rule 144 restricted Common Stock, par value $.0001 per share pursuant to a private placement sale to one (1) accredited investor, for $30,000, or $0.03 per share.
On November 24, 2021, the Company 166,667 shares of Rule 144 restricted Common Stock, par value $.0001 per share pursuant to a private placement sale to one (1) accredited investor, for $5,000, or $0.03 per share.
On November 23, 2021, the Company 333,333 shares of Rule 144 restricted Common Stock, par value $.0001 per share pursuant to a private placement sale to one (1) accredited investor, for $10,000, or $0.03 per share.
On November 18, 2021, the Company issued 1,666,667 shares of Rule 144 restricted Common Stock, par value $.0001 per share pursuant to a private placement sale to one (1) accredited investor, for $50,000, or $0.03 per share.
On November 3, 2021, the Company issued 1,000,000 shares of Rule 144 restricted Common Stock, par value $.0001 per share pursuant to a private placement sale to one (1) accredited investor, for $30,000, or $0.03 per share.
On November 1, 2021, the Company issued 666,667 shares of Rule 144 restricted Common Stock, par value $.0001 per share pursuant to a private placement sale to one (1) accredited investor, for $20,000, or $0.03 per share.
On October 8, 2021, the Company issued 625,000 shares of Rule 144 restricted Common Stock, par value $.0001 per share pursuant to a private placement sale to one (1) accredited investor, for $25,000, or $0.04 per share.
On September 7, 2021, the Company issued 62,500 shares of Rule 144 restricted Common Stock, par value $.0001 per share pursuant to a private placement sale to one (1) accredited investor, for $2,500, or $0.04 per share.
On September 3, 2021, the Company issued 125,000 shares of Rule 144 restricted Common Stock, par value $.0001 per share pursuant to a private placement sale to one (1) accredited investor, for $5,000, or $0.04 per share.
On August 31, 2021, the Company issued 600,000 shares of Rule 144 restricted Common Stock, par value $.0001 per share pursuant to a private placement sale to one (1) accredited investor, for $30,000, or $0.05 per share.
On August 30, 2021, the Company issued 200,000 shares of Rule 144 restricted Common Stock, par value $.0001 per share pursuant to a private placement sale to one (1) accredited investor, for $10,000, or $0.05 per share.
On August 27, 2021, the Company issued 300,000 shares of Rule 144 restricted Common Stock, par value $.0001 per share pursuant to a private placement sale to three (3) accredited investors, for $15,000, or $0.05 per share.
On August 13, 2021, the Company issued 400,000 shares of Rule 144 restricted Common Stock, par value $.0001 per share pursuant to a private placement sale to one (1) accredited investor, for $20,000, or $0.05 per share.
On August 10, 2021, the Company issued 800,000 shares of Rule 144 restricted Common Stock, par value $.0001 per share pursuant to a private placement sale to two (2) accredited investors, for $40,000, or $0.05 per share.
On August 9, 2021, the Company issued 100,000 shares of Rule 144 restricted Common Stock, par value $.0001 per share pursuant to a private placement sale to one (1) accredited investor, for $5,000, or $0.05 per share.
On August 5, 2021, the Company issued 400,000 shares of Rule 144 restricted Common Stock, par value $.0001 per share pursuant to a private placement sale to two (2) accredited investors, for $20,000, or $0.05 per share.
On August 3, 2021, the Company issued 500,000 shares of Rule 144 restricted Common Stock, par value $.0001 per share pursuant to a private placement sale to one (1) accredited investor, for $25,000, or $0.05 per share.
On August 2, 2021, the Company issued 200,000 shares of Rule 144 restricted Common Stock, par value $.0001 per share pursuant to a private placement sale to one (1) accredited investor, for $10,000, or $0.05 per share.
On June 22, 2021, the Company issued 382,500 shares of Rule 144 restricted Common Stock, par value $.0001 per share pursuant to a private placement sale to an accredited investor, in lieu of cash payment for consulting fees of $11,475, or $0.03 per share.
On June 3, 2021, the Company issued 2,000,000 shares of Rule 144 restricted Common Stock, par value $.0001 per share pursuant to a private placement sale to three (3) accredited investors, for $100,000, or $0.05 per share.
On May 7, 2021, the Company issued 100,000 shares of Rule 144 restricted Common Stock, par value $.0001 per share pursuant to a private placement sale to an accredited investor, in lieu of cash payment for consulting fees of $3,000, or $0.03 per share.
On May 6, 2021, the Company issued 166,667 shares of Rule 144 restricted Common Stock, par value $.0001 per share pursuant to a private placement sale to an accredited investor, for $5,000, or $0.03 per share.
On May 6, 2021, the Company issued 2,000,000 shares of Rule 144 restricted Common Stock, par value $.0001 per share pursuant to a private placement sale to an accredited investor, for $50,000, or $0.025 per share.
On May 6, 2021, the Company issued 600,000 shares of Rule 144 restricted Common Stock, par value $.0001 per share pursuant to a private placement sale to an accredited investor, for $18,000, or $0.03 per share.
On March 18, 2021, the Company issued 1,200,000 shares of Rule 144 restricted Common Stock, par value $.0001 per share pursuant to a private placement sale to an accredited investor, for $36,000, or $0.03 per share.
Off-Balance Sheet Arrangements
Seasonality
We do not have any off balance sheet arrangementsanticipate that our business will be affected by seasonal factors.
Impact of Inflation
While we are reasonably likelysubject to general inflationary trends, including for basic manufacturing production materials, our management believes that inflation in and of itself does not have a current or futurematerial effect on our financial condition, revenues,operating results. However, inflation may become a factor in the future. However, the COVID-19 virus and resultsits 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 operations, liquidityGTL 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 capital expenditures.
Significant Accounting Policies
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.
Off-Balance Sheet Arrangements
During the year ended December 2019, we entered into a revenue interest research and development venture with Mabert and an employee, Tom Phillips, OPMGE. However, based on events of default in their agreement with the Company, Mabert no longer has any formal arrangements with OPMGE or Tom Phillips. Since inception of this arrangement, we have advanced a total of $412,885 to OPMGE. Given the uncertainty of the collectability of this receivable, the Company has fully reserved for this amount as of December 31, 2022 and 2021, respectively.
Critical Accounting Policies and Estimates
Our discussionFinancial Statements and analysis of our financial condition and results of operationsaccompanying notes are based upon financial statements which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these financial statementsStates (“GAAP”). Preparing our Financial Statements requires usmanagement to make estimates and judgmentsassumptions that affectimpact the reported amounts of assets, liabilities, revenue, and expenses, and related
disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate these estimates. We base our estimates on historical experience and on assumptions that are believed to be reasonable.expenses. These estimates and assumptions
provideare affected by management’s application of accounting policies. Critical accounting policies include revenue recognition and impairment of long-lived assets.
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 making judgments aboutthe Impairment or Disposal of Long-Lived Assets,” which evaluates the recoverability of long-lived assets not held for sale by measuring the carrying valuesamount of the assets and liabilitiesagainst 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 readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions, and these differences may be material.
sufficient to recover the carrying value of such assets, the assets are adjusted to their fair values.
We believe that the following critical accounting policies discussed below affect our more significant judgments and estimates used in the preparation of our financial statements.
Revenue Recognition
The Company will recognize revenue in accordance with Accounting Standards Codification subtopic 605-10, Revenue Recognition ("ASC 605-10") which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably
assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. 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.
ASC 605-10 incorporates Accounting Standards Codification subtopic 605-25, Multiple-Element Arrangements ("ASC 605-25"). ASC 605-25 addresses accounting for arrangements that may involve the delivery or performance of multiple products, services and/or rights to use assets. The effect of implementing 605-25 on the Company's financial position and results of operations was not significant.
Stock-Based Compensation
Accounting Standard 718, "Accounting for Stock-Based Compensation" ("ASC 718") established financial accounting and reporting standards for stock-based employee compensation plans. It defines a fair value based method of accounting for an employee stock option or similar equity instrument. In January 2006, UMED implemented ASC 718, and accordingly, UMED accounts for compensation cost for stock option plans in accordance with ASC 718.
The Company accounts for share based payments to non-employees in accordance with ASC 505-50 "Accounting for Equity Instruments Issued to Non-Employees for Acquiring, or in Conjunction with Selling, Goods or Services".
The preparation of the consolidated
Preparing financial statements in conformity with accounting principles generally acceptedU.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates, and those estimates may be material.
Changes in estimates are recorded in the United Statesperiod in which they become known. The Company bases its estimates on historical experience and other assumptions, which include both quantitative and qualitative assessments that it believes to be reasonable under the circumstances.
Significant estimates during the years ended December 31, 2022 and 2021, respectively, include valuation of stock-based compensation, uncertain tax positions, and the valuation allowance on deferred tax assets.
Equity Method Investment
On August 29, 2019, the Company entered into a Material Definitive Agreement related to the formation of OPMGE. The Company contributed a limited license to use its proprietary and patented GTL technology for no actual cost basis in exchange for 42.86% (300 of 700 currently owned member units) revenue interest in OPMGE, expected to be later reduced to a 30% interest upon the completion of certain expected third-party investments for the remaining 300 of 1,000 member units available. However, 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. Since the Wharton Plant is owned by Mabert, OPMGE was no longer a viable entity as of December 31, 2022 and 2021, respectively.
As of December 31, 2022 and 2021, respectively, there were no assets within OPMGE. Accordingly, the Company’s receivable with this entity is fully reserved for as of December 31, 2022 and 2021.
Cash and Cash Equivalents and Concentration of Credit Risk
For purposes of the statements of cash flows, the Company considers all highly liquid instruments with a maturity of three months or less at the purchase date and money market accounts to be cash equivalents.
At December 31, 2022 and 2021, respectively, the Company did not have any cash equivalents.
The Company is exposed to credit risk on its cash and cash equivalents in the event of default by the financial institutions to the extent account balances exceed the amount insured by the FDIC, which is $250,000. At December 31, 2022 and 2021, respectively, the Company did not have any cash in excess of the insured FDIC limit.
Use of Estimates
The preparation of our Financial Statements in conformity with GAAP 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 statementsour Financial Statements and the reported amount of revenue and expenses during the reported period. Actual results could differ materially from the estimates.
Mine Exploration and Development Costs
Income Taxes
The Company accounts for mine exploration costs in accordance with Accounting Standards Codification 932, Extractive Activities. All exploration expenditures are expensed as incurred. Mine development costs are capitalized until production, other than production incidental toincome tax using the mine development process, commencesasset and are amortized on a units of productionliability method based on the estimated proven and probable reserves. Mine development costs represent costs incurred in establishing access to mineral reserves and include costs associated with sinking or driving shafts and underground drifts, permanent excavations, roads and tunnels. The end of the development phase and the beginning of the production phase takes place when construction of the mine for economic extraction is substantially complete. Amortization of capitalized mine development is computed based on the estimated life of the mine and commences when production, other than production incidental to the mine development process, begins. At December 31, 2015, the Company had not incurred any mine development costs.
Mining Properties
The Company accounts for mine properties in accordance with Accounting Standard Codification 930, Extractive Activities-Mining. Costs of acquiring mine properties are capitalizedprescribed by project area upon purchase of the associated claims. Mine properties are periodically assessed for impairment of value and any diminution in value. Due 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 of 2010 and not having current resources for an appraisal, we recognized an impairment charge of $100,000 during the year ended December 31, 2014.
Income Taxes
The Company has adopted Accounting Standards Codification subtopic 740-10, ("ASC
740-10") which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statement or tax returns.740, “Income Taxes”. Under this method, deferred tax
liabilitiesassets and
assetsliabilities are determined based on the difference between
the financial
statementsreporting and tax
basisbases of assets and liabilities using enacted tax rates
that will be in effect
forin the year in which the differences are expected to reverse.
Temporary differences between taxableThe Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income
reportedor loss in the period that includes the enactment date.
The Company follows the accounting guidance for uncertainty in income taxes using the provisions of ASC 740 “Income Taxes”. Using that guidance, tax positions initially need to be recognized in the financial reporting purposesstatements when it is more likely than not the position will be sustained upon examination by the tax authorities. As of December 31, 2022 and December 31, 2021, respectively, the Company had no uncertain tax positions that qualify for either recognition or disclosure in the financial statements.
The Company recognizes interest and penalties related to uncertain income tax purposes consist primarily of timing differences such as deferred officers' compensationpositions in other expense. No interest and stock compensation accounting versuspenalties related to uncertain income tax differences.
Net Loss Per Share, basicpositions were recorded during the years ended December 31, 2022 and diluted
2021, respectively.
Research and Development
The Company accounts for research and development costs in accordance with ASC 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 adopted Accounting Standards Codification Subtopic 260-10,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 $54,275 and $158,000 for the years ended December 31, 2022 and 2021, respectively.
Stock-Based Compensation
The Company accounts for our stock-based compensation under ASC 718 “Compensation – Stock Compensation” using the fair value-based method. Under this method, compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. This guidance establishes standards for the accounting for transactions in which an entity exchanges it equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments.
The Company uses the fair value method for equity instruments granted to non-employees and use the Black-Scholes model for measuring the fair value of options.
The fair value of stock-based compensation is determined as of the date of the grant or the date at which the performance of the services is completed (measurement date) and is recognized over the vesting periods.
When determining fair value, the Company considers the following assumptions in the Black-Scholes model:
| ● | Exercise price, |
| ● | Expected dividends, |
| ● | Expected volatility, |
| ● | Risk-free interest rate; and |
| ● | Expected life of option |
Basic and Diluted Earnings Per(Loss) per Share ("
Pursuant to ASC 260-10), specifying the computation, presentation and disclosure requirements of earning per share information. Basic260-10-45, basic loss per common share has beenis computed by dividing net loss available to common shareholders by the weighted average number of shares of common sharesstock outstanding for the period. Shares issuable upon conversion of the notes payable and exercise of warrants has been excluded as a common stock equivalent in the dilutedperiods presented. Diluted loss per share because their effect is anti-dilutive oncomputed by dividing net loss by the computation.
Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. UMED evaluates allweighted average number of
it financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accountedshares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. Potentially dilutive common shares may consist of common stock issuable for
as liabilities,stock options and warrants (using the
derivative instrument is initially recorded at its fair valuetreasury stock method), convertible notes and
is then re-valued at each reporting date, with changescommon stock issuable. These common stock equivalents may be dilutive in the
fair value reported as charges or credits to income. For option-based derivative financial instruments, UMED uses the Black-Scholes option-pricing model to value the derivative instruments at inceptionfuture.
At December 31, 2022 and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.
Concentration and Credit Risk
Financial instruments and related items, which potentially subject2021, respectively, the Company to concentrations of credit risk, consist primarily of cash, cashhad the following common stock equivalents and trade receivables. The Company places its cash and temporary cash investments with high credit quality institutions. At times, such investments may be in excess of the FDIC insurance limit.
Impact of Newoutstanding, which are potentially dilutive equity securities:
| | | December 31, 2022 | | | December 31, 2021 | |
| | | | | | | |
| Convertible debt | | | 3,689,400 | | | | 2,083,338 | |
| Warrants | | | - | | | | 3,000,000 | |
| | | | 3,689,400 | | | | 5,083,338 | |
Recent Accounting Standards
The Company has adopted
Changes to accounting principles are established by the Financial Accounting Standards Board ("FASB")in the form of Accounting Standards Codification ("ASC"Updates (“ASU’s”) 105-10, Generally Accepted Accounting Principles – Overall ("ASC 105-10"), which was formerly knownto the FASB’s Codification. We consider the applicability and impact of all ASU’s on our consolidated financial position, results of operations, stockholders’ deficit, cash flows, or presentation thereof. Management has evaluated all recent accounting pronouncements as SFAS 168. ASC 105-10 establishes the FASB Accounting Standards Codification (the "Codification") as the source of authoritative accounting principles recognizedissued by the FASB to be applied by nongovernmental entities in the preparationform of financial statements in conformity with U.S. GAAP. Rules and interpretive releases of the Securities and Exchange Commission (the "SEC") under authority of federal securities laws are also sources of authoritative U.S. GAAP for SEC registrants. All guidance contained in the Codification carries an equal level of authority. The Codification superseded all existing non-SEC accounting and reporting standards and all other non-grandfathered, non-SEC accounting literature not included in the Positions or Emerging Issues Task Force Abstracts. Instead, it will issue Accounting Standards Updates ("ASUs"(“ASU”). The FASB will not consider ASUs as authoritative in their own right. ASUs will serve only through the date these financial statements were available to update the Codification, provide background information about the guidancebe issued and provide the basis of conclusions on the change(s) in the Codification. References made to FASB guidance throughout this document have been updated for the Codification.
The Company has reviewed all other recentlyfound no recent accounting pronouncements issued, but not yet
adopted,effective accounting
standards in order to determine their effects, if any, on its results of operation, financial position or cash flows. Based on that review, the Company believes that none of these pronouncements,
when adopted, will have a
significant effectmaterial impact on
its consolidatedthe financial
statements.statements of the Company.
Subsequent Events
From January 1, 2023 through April 14, 2023, the Company issued 10,333,333 shares of common stock comprised of: 8,333,333 shares of Rule 144 restricted Common Stock issued in a private placement to three accredited investors at $0.015 - $0.020 per share $160,000 and 2,000,000 shares to our Chief Financial Officer for services rendered, having a fair value of $20,000 ($0.01/share), based upon the quoted closing trading price.
| Item 7A. | Quantitative and Qualitative Disclosures About Market Risk. |
As a smaller reporting company, as defined by Rule12b-2 of the Securities Exchange Act of 1934 and Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Pursuant to Item 305(e)10(f)(1) of Regulation S-K, (§ 229.305(e)), the Company iswe are not required to provide the information requiredrequested by this Item as it is a "smaller reporting company," as defined by Rule 229.10(f)(1).
item.
| Item 8. | Financial Statements and Supplementary Data. |
Our Financial Statements and Supplementary Data.
See Financial Statements beginningrelated notes are included as part of this Form 10-K as indexed in the appendix on page F-1.
F-1, et seq.
Item 9. | Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. |
At no time have there been any disagreements with Accountants on Accounting and Financial Disclosure.
a) On May 6, 2015, UMED Holdings, Inc. (the "Company") accepted the resignation of Terry L. Johnson, CPA as the independent registered public accounting firm of the Company. The resignation of Terry L. Johnson, CPA was approved by the Company's Board.
During the Company's two most recent fiscal years, the subsequent interim period thereto, and through May 6, 2015, there were no disagreements (as defined in Item 304 of Regulation S-K) with Terry L, Johnson, CPA onour accountants regarding any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Terry L. Johnson, CPA, would have caused it to make reference in connection with his opinion to the subject matter of the disagreement. Further during the Company's two most recent fiscal years, the subsequent interim periods thereto, and through May 6, 2015, there were no reportable events (as defined in Item 304(a)(1)(v) of Regulation S-K.
On September 24, 2015, the Company was made aware of the Securities and Exchange Commission (SEC) order dated September 17, 2015, against Terry L. Johnson, CPA instituting a public administrative and cease-and-desist order against Terry L. Johnson, CPA, the previous auditor for the registrant who resigned as the Company's auditor on May 6, 2015. On July 7, 2015, the PCAOB withdrew the registration of Terry L. Johnson, CPA. As a result of the Commission's order, Terry L. Johnson, CPA was denied the privilege of appearing or practicing before the Commission for failing to comply with PCAOB auditing standards. Terry L. Johnson, CPA was also cited for the issuance of audit reports that falsely stated that Terry L. Johnson, CPA conducted its audits in accordance with the standards of PCAOB. Due to the Commission's order, the registrant can no longer include the audit reports of Terry L. Johnson, CPA in the registrant's filings with the Commission. The Company filed an 8K/A on September 30, 2015 to disclose the SEC and PCAOB actions.
(b) New Independent Registered Public Accounting Firm
On June 3, 2015, the Company's Board of Directors engaged Patrick D. Heyn, CPA, P.A. as its new independent registered public accounting firm to audit the Company's financial statements for the Company's fiscal year ending December 31, 2015.
During the last two fiscal years ending December 31, 2014 and December 31, 2013, and the subsequent interim periods thereto, and through May 6, 2015, neither the Company nor anyone acting on its behalf consulted Patrick D. Heyn, CPA, P.A. with respect to (i) the application of accounting principles to a specified transaction, either contemplated or proposed, or the type of audit opinion that might be rendered on the Company's financial statements, and neither a written report or oral advice was provided to the Company that Patrick D, Heyn, CPA, P.A. concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issues: or (ii) any matter that was the subject of disagreement or a reportable event set forth in Item 304(a)(1)(iv) and (v), respectively, of Regulation S-K.
procedure.
Item 9A. Controls and Procedures.
| Item 9A. | Controls and Procedures. |
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of ourProcedures.
The term disclosure controls and procedures (as definedmeans controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the Securitiesreports that it files or submits under the Exchange Act of 1934 Rules 13a-15(e)is recorded, processed, summarized and 15d-15(e)) as ofreported, within the
end of time periods specified in the period covered by this Annual Report on Form 10-K. In designingSEC’s rules and evaluating the disclosureforms. Disclosure controls and procedures management recognizes that anyinclude, without limitation, controls and procedures no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact
to ensure that there are resource constraints and that management isinformation required to applybe 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 judgment in evaluating the benefits of possible controlsprincipal executive and procedures relativeprincipal financial officers, or persons performing similar functions, as appropriate to their costs.
Based on our evaluation, our Principal Executive Officer and Principal Financial Officer, after considering the existence of material weaknesses identified, determined that our internal control over financial reporting disclosure controls and procedures were not effective as of December 31, 2015.
Management's Annual Report on Internal Control over Financial Reporting
allow timely decisions regarding required disclosure.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended. Our internalreporting. 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 our 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 U.S. generally accepted accounting principles.
Our internal control over financial reportingGAAP and includes those policies and procedures that:
(i) pertain
| ● | Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer; |
| | |
| ● | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the issuer; and |
| | |
| ● | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer’s assets that could have a material effect on the financial statements. |
Our management, including our chief executive officer and chief financial officer, does not expect that our disclosure controls and procedures or our internal controls over financial reporting will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the transactionsfact that there are resource constraints, and dispositionsthe benefits of our assets, (ii) provide reasonable assurance that
transactions are recorded as necessarycontrols must be considered relative to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.
their costs. Because of
its inherent limitations
in all control systems, internal control over financial reporting may not prevent or detect
misstatements.misstatements, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, 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.
Management, including our Principal Executive Officer and Principal Financial Officer, assessed
In the year ending December 31, 2022, we conducted an evaluation of the effectiveness of our internal controlcontrols over financial reporting as of December 31, 2015. In making this assessment, management usedbased on the criteria set forthframework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2013. Management’s assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of our internal control over financial reporting. Based on this evaluation, our principal executive officer and principal financial officer, have concluded that as of December 31, 2022, our internal control over financial reporting was ineffective.
Management’s Annual Report on Internal Control over Financial ReportingReporting.
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.
As of December 31, 2022, 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 controls over financial reporting based on the framework in Internal Control - Guidance for Smaller Public Companies.
Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Our management’s assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of our internal control over financial reporting. Based on this evaluation, management has concluded that as of December 31, 2022, our internal control over financial reporting was ineffective.
We have identified at least the following deficiencies, which together constitute a material weakness in our assessment of the effectiveness of internal control over financial reporting as of December 31, 2015;
2022:
| 1. | O | The Company hasWe have inadequate segregation of duties within itsour cash disbursement control design. |
| O |
| 2. | During the year ended December 31, 2015, the Company2022, we internally performed all aspects of itsour financial reporting process including, but not limited to, the underlying accounting records and record journal entries and internally maintained responsibility for the preparation of the financial statement duestatements. Due to the fact these duties were performed often timesperformed by the same people, a lack of independent review process was created over the financial reporting process that might result in a failure to detect errors in spreadsheets, calculations, or assumptions used to compile the financial statements and related disclosures as filed with the SEC. These control deficiencies could result in a material misstatement to our interim or annual financial statements that would not be prevented or detected. |
| O |
| 3. | The Company doesWe do not have a sufficient number of independent or qualified directors for its boardour Board of Directors and audit committee.a qualified Audit Committee. We currently have only two (2) independent directors on our board, which is fully comprised of sevensix directors, and accordingly we do not yet have a functioning audit committee. Ascommittee, as the only otherwise qualified director is not independent. Further, as a publicly-tradedpublicly traded company, we should strive to have a majority of our Boardboard of Directorsdirectors be independent. |
The Company is
We are continuing the process of remediating itsour control deficiencies. However, the material weakness in internal control over financial reporting that hashave been identified will not be remediated until numerous new internal controls are implemented and operate for a period of time, are tested, and the Company iswe are able to conclude that such internal controls are operating effectively. The CompanyWe cannot provide assurance that these procedures will be successful in identifying material errors that may exist in the financial statements. The Companyour Financial Statements. We cannot make assurances that itwe will not identify additional material weaknesses in itsour internal control over financial reporting in the future. ManagementOur management plans, as capital becomes available to the Company,us, to increase the accounting and financial reporting staff and provide future investments in the continuing education and public company accounting training of our accounting and financial professionals.
It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control system, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.
This annual report does
Our management believes that the material weaknesses set forth above did not includehave a material 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 results in potentially ineffective oversight in the establishment and monitoring of required internal controls and procedures and could potentially have an attestation report of the Company's registered public accounting firm regarding internal control overimpact our financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit us to provide only management's report in this annual report.
statements.
Changes in Internal Controls over Financial Reporting
We regularly review
There were no changes (including corrective actions with regard to significant deficiencies or material weaknesses) in our system of internal control over financial reporting to ensure we continue to work towards an effective internal control environment. There were no changes that occurred during the fourth quarter of the fiscal year covered by the Annual Report on Form 10-Kended December 31, 2022, that have materially affected, or are reasonably likely to materially affect, the Company'sour internal control over financial reporting.
Item 9B. | Item 9B. | Other Information. |
None.
None.
Item 10. | Item 10. | Directors, Executive Officers and Corporate Governance. |
The following table sets forth the names, ages, and Corporate Governance.
Executive Officers and Directors
Set forth below arepositions of our
presentexecutive officers, directors and
executive officers. Note that there are no other persons who have been nominated or chosen to become directors nor are there any other persons who have been chosen to become executive officers. There are no arrangements or understandings between anykey employees as of the
directors,date of this report. Executive officers
are elected annually by our Board of Directors. Each executive officer holds his office until he resigns, is removed by the Board of Directors, or his successor is elected and
other persons pursuant to which such person was selected as a director or an officer.qualified. Directors are elected
annually by our Shareholders at the annual meeting of the Shareholders. Each director holds his office until his successor is elected and qualified or his earlier resignation or removal.
| Name | | Age | | Position | | Director |
| Raymond Wright | | 86 | | Chairman of the Board, President of GIE, and Director | | 2016 |
| Ransom Jones | | 74 | | Director, Chief Financial Officer, Secretary and Treasurer | | 2016 |
| Kent Harer | | 66 | | Director and President | | 2017 |
| Paul Alfano | | 67 | | Director (Independent) | | 2019 |
| Michael Wykrent | | 79 | | Director (Independent) | | 2019 |
The members of our Board of Directors are subject to serve untilchange from time to time by the vote of our Shareholders at special or annual meetings to elect directors. Our current Board of Directors consists of five directors, who have expertise in our business. No date for the next annual meeting of stockholdersShareholders is specified in our bylaws or has been fixed by the Board of Directors. Officers are elected annually by the directors. The term of office of each officer ends at the next annual meeting of our Board of Directors, expected to take place immediately after the next annual meeting of Shareholders, or until such time when such officer’s successor is elected and qualified.
The foregoing notwithstanding, except as otherwise provided in any resolution or resolutions of the board, directors who are elected at an annual meeting of Shareholders, and directors elected and/or appointed in the interim to fill vacancies and newly created directorships, will hold office for the term for which elected and/or appointed until their successors have beenare elected and have qualified. Officers serve atqualified or until their earlier death, resignation or removal.
Whenever the discretionholders of any class or classes of stock or any series thereof are entitled to elect one or more directors pursuant to any resolution or resolutions of the Board of Directors.
| | | | Present Position |
Name | | Age | | and Offices |
| | | | |
Ransom Jones | | 67 | | Interim Chief Executive Officer, Director |
| | | | |
Randy Moseley | | 68 | | Treasurer, Chief Financial Officer, Director |
| | | | Principal Accounting Officer |
| | | | and Secretary |
| | | | |
Richard Halden | | 62 | | Director |
| | | | |
Craig Takacs | | 49 | | Director |
| | | | |
Kevin Jones | | 51 | | Director |
| | | | |
Raymond Wright | | 79 | | Director |
| | | | |
D. Patrick Six | | 63 | | Director |
Set forth below are brief accountsDirectors, vacancies and newly created directorships of such class or classes or series thereof may generally be filled by a majority of the
directors elected by such class or classes or series then in office, or, by a sole remaining director so elected or by the unanimous written consent, or, the affirmative vote of a majority of the outstanding shares of such class or classes of stock or any series thereof, entitled to elect such director or directors.
Kevin Jones served on the Board of Directors prior to his resignation on November 3, 2021. Ransom Jones and Kevin Jones are brothers.
We may employ additional management personnel, as our Board of Directors deems necessary. We have not identified or reached an agreement or understanding with any other individuals to serve in management positions.
Directors and Officers Biographies
Raymond Wright - Chairman of our Board of Directors, Co-Founder and President of our wholly owned subsidiary, GIE
Mr. Wright has been a Director since March 6, 2016 and was elected by the Board as Chairman in 2017, while also serving as the President of GIE since August 2012. Mr. Wright was the co-founder of DFW Genesis with F. Conrad Greer, in 2009, where he began working on current natural gas GTL processes until 2012, when he and the late Mr. Greer formed GIE to continue working on a new GTL solution, which has gone on to become the basis of our proprietary G-Reformer technology. Previously, Mr. Wright worked with Dallas-based Texas Instruments (TI) managing operations and opening up new markets for TI in England. He developed and built a materials manufacturing facility for TI’s European operation and introduced TI’s Light Sensor technology in Europe. Mr. Wright was asked to join the Board of Directors due to his specific experience in the GTL industry, his early contributions and leadership to our GTL technology, and his general business, experience duringmanagement and analytical skills. He received an undergraduate degree in Accounting from Southern Methodist University.
Kenton Harer – Director and President (Interim)
Kenton J. Harer joined our Board of Directors on February 3, 2017 and was appointed by our Board of Directors serve as our interim President on July 19, 2019, as reported on our Current Report on Form 8-K, filed with the past fiveSEC on July 23, 2019, which is incorporated by reference herein. Mr. Harer has over 35 years of each directorindustrial gas experience, starting his career working for the oilfield division of LTV Corporation in 1981, and executive officerin 1984, began working with industrial gas, where he developed an extensive knowledge of the Company.
RANSOM JONESindustrial gas business and the various technologies of the diverse industries it serves. He has been and remains an instrumental part of the North Texas business operations of world-renowned French company Air Liquide in the United States. In his capacity at Air Liquide, Mr. Harer was appointed interim chief executive officerdirectly involved in the development of the original G-Reformer technology and was instrumental in negotiating certain agreements between Air Liquide and us that allowed us to further develop and begin commercialization such technology. Mr. Harer was asked to join the Board of Directors due to his significant experience in the industrial gas industry, his early contributions and leadership to our GTL technology, and his general business, investment and analytical skills. He graduated from the University of South Dakota with a Bachelor of Science in Business Administration in 1980.
Ransom Jones – Director, Chief Financial Officer, Secretary and Treasurer
Ransom B. Jones has served as a director since March 6, 2016, was our Interim Chief Executive Officer and President from January 2016 to April 2017, and became our Chief Financial Officer, Secretary and Treasurer on January 14, 2016 and director on March 7, 2016.
May 10, 2018. Mr. Jones has over
4045 years of diverse business experience. He is a retired partner of KPMG Peat Marwick and former Chief Financial Officer of two publicly traded corporations, Western Preferred Corporation and El Paso Refining, Inc. He has also served as an officer of some of the largest and most prestigious global financial institutions including Goldman Sachs, Citicorp, ABN-AMRO Bank, and AIG.
After resigning from AIG, Mr. Jones
created a very successful smallwas asked to join the Board of Directors due to his significant senior executive management and deep accounting practice experience, general business,
for life insurance lending.investment and superior analytical skills. He graduated from the University of Texas at El Paso in 1971 with a BBA, Accounting.
Ransom
Paul Alfano – Director (Independent)
Paul Alfano joined our Board of Directors June 26, 2019. Mr. Alfano is a greater than 5% Shareholder and Kevin Jones are brothers.
RANDY MOSELEY was appointed chief executive officer, chief financial officer and chairman of the board on August 18, 2009. Mr. Moseleyhas served as chief financial officera consultant to us since 2016, until he became a director in 2019. He has extensive leadership experience in Silicon Valley and director (August 2009currently runs his own consulting firm based in Rochester, NY. Mr. Alfano has led worldwide sales and business development teams, alliances and joint ventures while at Hewlett-Packard (“HP”), Network Appliance and Portal Software (acquired by Oracle). He has worked with “C-Level” Fortune 50 Executives throughout his career. Most notably Mr. Alfano had a successful 25-year career at HP Headquarters (Palo Alto, CA), with his last assignment as Director of Worldwide Sales & Business Development for the HP-Cisco Alliance, ending in 2007. He reported to December 2012)the senior management teams at both HP & Cisco. Mr. Alfano also led HP’s SBC-PacBell account team for Swordfish Financial, Inc., a financial company focusing on recovering financial assets in dormant accountsmany years, which was one of HP’s largest and most profitable. Mr. Alfano was asked to join the Board of Directors due to his specific sales skills, and for clients. Mr. Moseley served as the chief financial officerhis general business, management and director (March 2007 to February 2013) for Utilicraft Aerospace Industries, Inc., a developing aerospace company focusing on freight related aircraft. Mr. Moseley served (2001 to 2006) as executive vice president, chief financial officer and director of Urban Television Network Corp, a network created to serve independent broadcast television stations and cable operators. From 1999 to 2001, Mr. Moseley served as executive vice president and chief financial officer for Tensor Information Systems, Inc., a private Fort Worth company in the business of developing custom software applications. Mr. Moseley, a certified public accountant, earned a BBA degree from Southern Methodist University.analytical skills. He is a membergraduate of the Texas SocietySt. John Fisher College (Rochester, NY) having earned a BS in Marketing, as well as an MBA in Finance from Rochester Institute of CPAs.
RICHARD HALDENTechnology.
Michael Wykrent - Director (Independent)
Michael Wykrent was appointed president and director of UMED Holdings, Inc. on August 18, 2009. On January 14, 2016, Mr. Halden resigned as President of the Company but continueselected to serve as a director.member of our Board of Directors June 26, 2019. Mr. HaldenWykrent is a major Shareholder and has been an advisor to the Board since 2012. Mr. Wykrent retired from United Parcel Service (“UPS”) after a 27-year career working in Human Resources as a Region Communications Manager. When he began his career at UPS, the company was comprised of only a few thousand managers. By the end of his career, UPS had become a world-wide service provider, with over 481,000 employees. Mr. Wykrent helped open new operating areas as UPS was expanding and also headed up region employee opinion surveys and coordinated the charitable contributions throughout the southwest. His duties brought him into contact with management and employees working in package sorting and delivery operations, labor relations, engineering, accounting, air operations, fleet rentals, vehicle maintenance, legal, customer service, delivery information and loss prevention. Mr. Wykrent was asked to join the Board of Directors due to his sales, business, management and analytical skills. He served in the Navy for four years in communications and later graduated from Henry Ford College.
Committees of the Board
On June 22, 2018, pursuant to the authority granted to our Board of Directors in Section 2.10 of Article Two of our bylaws, the Board of Directors created an executive committee (the “Executive Committee”). As of the date of this report, the designated directors comprising the Executive Committee include Ray Wright, Kent Harer, Paul Alfano and Ransom Jones. The Executive Committee may consider and review any and all such matters or issues it deems necessary coming before us and take such further lawful actions as it determines to be consistent with its responsibilities. Given our small size, with the exception of the Executive Committee, our entire Board of Directors participates in all of the considerations with respect to our audit, compensation and nomination deliberations.
The responsibilities of other committees now or to be adopted in the future are currently servesare fulfilled by our Board of Directors and all of our directors participate in such responsibilities, two of whom are “independent” as presidentdefined in the listing standards of Capital Equity Partners, LLC, (2007the Nasdaq Stock Market, Inc., which states in part, that, “that an independent director must not be an officer or employee of the company or its subsidiaries or any other individual having a relationship that, in the opinion of the company’s board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.”
Audit Committee
Our entire Board of Directors currently performs the functions of an audit committee, but no written charter governs the actions of our Board of Directors when performing the functions of what would generally be performed by an audit committee. Our Board of Directors approves the selection of our independent accountants and meets and interacts with the independent accountants to present) adiscuss issues related to financial reporting. In addition, our Board of Directors reviews the scope and results of the audit with the independent accountants, reviews with management services firm providing corporateand the independent accountants our annual operating results, considers the adequacy of our internal accounting procedures and considers other auditing and accounting matters including fees to be paid to the independent auditor and the performance of the independent auditor. At the present time, Ransom Jones, our Chief Financial Officer and one of our directors, is considered to be our expert in financial and marketing servicesaccounting matters.
Nomination Committee
Due to public companies. Mr. Halden was co-founderour size and the size of Channel 28,our Board of Directors, we do not require a separate nominating committee at this time. When evaluating director nominees, our directors consider the following factors:
| ● | The appropriate size of our Board of Directors; |
| | |
| ● | The knowledge, skills and experience of nominees, including experience in finance, administration or public service, in light of prevailing business conditions and the knowledge, skills and experience already possessed by other members of our Board of Directors; |
| | |
| ● | Experience in political affairs; |
| | |
| ● | Experience with accounting rules and practices; and |
| | |
| ● | The desire to balance the benefit of continuity with the periodic injection of the fresh perspective provided by new members of our Board of Directors. |
Our goal is to assemble a Board of Directors that brings together a variety of perspectives and skills derived from high-quality business and professional experience. In doing so, our Board of Directors will also consider candidates with appropriate non-business backgrounds.
Other than the foregoing, there are no stated minimum criteria for director nominees, although our Board of Directors may also consider such other factors as it may deem are in 2004,our best interests as well as the interests of our Shareholders. In addition, our Board of Directors identifies nominees by first evaluating the current members of our Board of Directors willing to continue in service. Current members of our Board of Directors with skills and experience that are relevant to our business and who are willing to continue in service are considered for re-nomination. If any member of our Board of Directors does not wish to continue in service or if our Board of Directors decides not to re-nominate a Dallas, Texas independent television station airing programming provided by Urban Television Network Corporation, which contracted with Mr. Halden from 2001 to 2006. Prior tomember for re-election, our Board of Directors then identifies the foundingdesired skills and experience of Channel 28, Mr. Halden provided consulting services to American Independent Network Corporation, Hispanic Television Network, Inc. and American Tire from 1996 to 2001.
CRAIG TAKACS has served as a Directornew nominee in light of the Company since its incorporationcriteria above. Current members of our Board of Directors are polled for suggestions as to individuals meeting the criteria described above. Our Board of Directors may also engage in March 2002. Mr. Takacs served as president and chief executive officer ofresearch to identify qualified individuals. To date, we have not engaged third parties to identify or evaluate or assist in identifying potential nominees, although we reserve the Company's predecessor, Dynalyst Manufacturing Corporation, from March 2002 until his resignation in August 2009. Prior to Dynalyst, Mr. Takacs worked for Institutional Capital Management, where he served as the firm's technology analyst. Mr. Takacs received his BBA in Business Management in 1984 from Texas A&M University.
KEVIN JONES was elected as a director of the Company on March 7, 2016. Kevin founded All Commercial Floors in 1999 and is responsible for its overall operation. Under his leadership ACF has grown from a two-person business in the corner of his garage to one of the largest and, we feel, one of the most respected commercial flooring companies in the country with offices throughout the United States, and with annual sales exceeding $40 million. Today, ACF may well be considered the premier healthcare flooring contractor in the country, serving customers from Alaska to Florida, Maine to California and beyond. ACF has also spread beyond the healthcare sector with expansion into the general commercial flooring sector with offices in key U.S. markets. This has led to landmark projects at venues such as the Gaylord Texan, American Airlines Center, the University of Alabama and Cowboys Stadium. We believe that no other flooring contractor in the country has the ability to reach any corner of North American continent with the skill and success of ACF. He attended Texas Tech University in Lubbock, Texas. Kevin Jones and Ransom B. Jones are brothers
RAYMOND WRIGHT was elected as a director of the Company on March 7, 2016. Ray has served as the President of Greenway Innovative Energy, Inc. (a wholly-owned subsidiary of the registrant) since August 2012. Mr. Wright was a co-founder of DFW Genesis in 2009, where he began working on the natural gas to liquid (GTL) process and worked through 2012, when he and Conrad Greer formed Greenway Innovative Energy, Inc. to continue working on the GTL process. Previously, Mr. Wright worked with Dallas based Texas Instruments (TI) operations he managed and opened up new markets for (TI) in England. He developed and built a materials manufacturing facility for TI's European operation and introduced TI's Light Sensor technology in Europe.
D. PATRICK SIX was elected as a director of the Company on March 7, 2016. Patrick has served as a Vice-President of Greenway Innovative Energy, Inc. since 2013. He has also provided consulting serves to the registrant, since May 2011. He has been in the oil and gas industry for 37 years as an independent operator of oil and gas properties both as an owner and consultant. He received a BBA in marketing from Texas Tech University in Lubbock, Texas.
Ransom Jones and Kevin Jones are brothers. Otherwise, none of the other directors and officers is related to any other director or officer of the Company.
Significant Employees
We have no employees who are not executive officers, but who are expected to make a significant contribution to our business. We intendright in the future to
hire independent geologists, engineersretain a third-party search firm, if necessary. Our Board of Directors does not typically consider Shareholder nominees, because it believes that our current nomination process is sufficient to identify directors who serve our Shareholders’ best interests.
As approved by our Shareholders at a Special Shareholders meeting (“Special Shareholders Meeting”) held on December 11, 2019, we amended our Certificate of Formation (Articles of Incorporation) to change the voting requirements specifying that the vote required to approve certain actions before our Stockholders, including “fundamental actions,” as defined by Texas Business Organizations Code (the “TBOC”) Section 21.364, and excavation subcontractors on an“fundamental business transactions,” as needed basis.
Involvement in Certain Legal Proceedings
To the knowledge of the Company, there have been no events under any bankruptcy act, no criminal proceedings and no judgments, injunctions, orders or decrees as listed indefined by TBOC Section 401(f) of Regulation S-K within the past ten-years material to the evaluation of the ability and integrity of any director and executive officer of the Company.
Code of Ethics
We have a Code of Ethics that applies to1.002(32). See our principal executive officers and our principal financial officers, principal accounting officer or controller, or persons performing similar functions. We undertake to provide to any person, without charge, upon request, a copy of our Code of Ethics. You may request a copy of our Code of EthicsForm 8-K filed December 16, 2019 for more detailed information, incorporated by mailing your written request to us. Your written request must contain the phrase "Request for a Copy of the Code of Ethics of UMED Holdings, Inc." A copy of our Code of Ethics is also posted on our website, www.UMED.com. Our address is: UMED Holdings, Inc., 8851 Camp Bowie West Blvd., Suite 240, Fort Worth, Texas 76116.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
reference herein.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act (“Section 16(a)”) requires our officers, directors and persons who beneficially own more than 10% of our common stockCommon Stock to file reports of ownership and changes in ownership with the SEC. These reporting persons also are required to furnish us with copies of all Section 16(a) forms they file. Based solely on the reports
Communication with Directors
Shareholders and other interested parties may contact any of our directors by writing to them at Greenway Technologies, Inc. at 1521 N. Cooper Street, Suite 205, Arlington, TX 76011. Attention: Secretary.
Our Board of Directors has approved a process for handling letters received by us the transaction reportand addressed to any of Company transactions supplied by our transfer agentdirectors. Under that process, one of our officers reviews all such correspondence and our shareholders list as of March 31, 2016,regularly forwards to the bestdirectors a summary of our knowledge all required directors, officers and greater than 9.99% percent shareholders compliedsuch correspondence, together with applicable filing requirements duringcopies of all such correspondence that, in the fiscal year ended December 31, 2015.
DIRECTOR INDEPENDENCE.
We currently have seven membersopinion of such officer, deal with functions of our Board of Directors
or committees thereof or that he otherwise determines requires their attention. Directors may at any time review a log of all correspondence received by us that are addressed to members of the board and request copies of such correspondence.
Conflicts of Interest
With respect to transactions involving real or apparent conflicts of interest, we have adopted written policies and procedures, which require that the: (i) the fact of the relationship or interest giving rise to the potential conflict be disclosed or known to the directors who were electedauthorize or approve the transaction prior to such authorization or approval; and hold office until their successors are elected(ii) the transaction be fair and qualified.reasonable to us at the time it is authorized or approved by our directors.
Code of Ethics for Senior Executive officers are appointed by the BoardOfficers and Senior Financial Officers
We have adopted a written code of Directorsbusiness conduct and serve until their successors have been duly electedethics (our “Code of Ethics”), which applies to our principal executive officer, principal financial officer, principal accounting officer and qualified. Ransom Jonesall persons providing similar functions. Our Code of Ethics is designed to deter wrongdoing and Kevin Jones are brothers. Otherwise, there is no family relationship between anyto promote:
| ● | honest and ethical conduct; |
| ● | full, fair, accurate, timely and understandable disclosure in regulatory filings and public statements; |
| ● | compliance with applicable laws, rules and regulations; |
| ● | the prompt reporting violation of the code; and |
| ● | Ongoing accountability for adherence to our Code of Ethics. |
A copy of our directors and executive officers.Code of Ethics is provided in Exhibit 14.1, incorporated by reference herein. We will also provide a copy of our Code of Ethics free of charge upon request to any person submitting a written request to our Secretary.
BOARD OF DIRECTORS MEETINGS.
During the fiscal year ended December 31, 2015, the Board of Directors held three meetings which were attended by all members.
NOMINATING COMMITTEE.
We do not have any nominating committee of the Board, or committee performing a similar function. Shareholders may recommend nominees for Director by sending written communications to the company's Board of Directors to the attention of the Chairman of the Board, Randy Moseley at UMED Holdings, Inc., 8851 Camp Bowie West Blvd., Suite 240, Fort Worth, Texas 76116. Every director will participate in the consideration of director nominees.
AUDIT COMMITTEE.
We do not have an audit committee of the Board. Our Board of Directors serves as the audit committee.
Members of the Board of Directors acting in the capacity of the Audit Committee have (1) reviewed and discussed the audited financial statements with management; (2) discussed with the independent auditors the matters required to be discussed by the statement on Auditing Standards No. 61, as amended, as adopted by the Public Accounting Oversight Board in Rule 3200T; (3) have received the
written disclosures and the letter from the independent accountant required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant's communications with the audit committee concerning independence, and (4) have discussed with the independent accountant the independent accountant's independence; and based on the review and discussions referred to above, the audit committee recommended to the board of directors that the audited financial statements be included in the company's annual report on Form 10-K for the last fiscal year for filing with the Commission. The entire Board of Directors is currently acting in the capacity of the Audit Committee.
COMPENSATION COMMITTEE.
We do not have a compensation committee. Our Board of Directors serves as the compensation committee
SHAREHOLDER COMMUNICATIONS.
Shareholders may send written communications to the company's Board of Directors to the attention of the Chairman of the Board, Randy Moseley. Persons wishing to write to the Board or to a specified director or committee of the Board should send correspondence to the Corporate Secretary at UMED Holdings, Inc., 8851 Camp Bowie West Blvd., Suite 240, Fort Worth, Texas 76116. Electronic submissions of shareholder correspondence will not be accepted.
Item 11. Executive Compensation.
| Item 11. | Executive Compensation. |
Summary of Cash and Certain Other Compensation
At present, we have three executive officers, Messrs. Wright, Harer and R. Jones.
Summary Compensation Table
The following table sets forth the aggregate compensation paid for services rendered toour named executive officers for each of the Company during the last three fiscal years by the Named Executive Officers:
Summary of Compensation of Executive Officers
The following summary compensation table sets forth information concerning the compensation paid during thetwo completed fiscal years ended December 31, 2015, 20142022, and 2013 to our principal executive officers and principal financial officers. No other officer or person received total annual compensation in excess of $100,000 since in our date of incorporation.
December 31, 2021:
| Name and Principal Position | | Year | | | Salary ($) | | | Bonus ($) | | | Stock Awards ($) | | | Option Awards ($) | | | Non-Equity Incentive Plan Compensation ($) | | | Nonqualified deferred compensation earnings ($) | | | All Other Compensation ($) | | | Total ($) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Ray Wright (1) | | | 2021 | | | | 180,000 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 180,000 | |
| | | | 2022 | | | | 180,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 180,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Ransom Jones (2) | | | 2021 | | | | 120,000 | | | | 35,000 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | 155,000 | |
| | | | 2022 | | | | 120,000 | | | | 35,000 | | | | | | | | | | | | | | | | | | | | | | | | 155,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Kent Harer (3) | | | 2021 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| | | | 2022 | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | |
| Name and Position | | Year | | Salary ($) | | Bonus($) | | Compensation ($) | | Total ($) |
| | | | | | | | | | | | | |
Ransom Jones, Interim Chief Executive Officer, effective January 14, 2016, Chief Operating Officer, April 1, 2015 – January 14, 2016 | | 2015 | | 20,400 | | | - | | 37,500 | (1) | | 57,900 |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Kevin Bentley, Chief Executive Officer, resigned April 6, 2105 | | 2015 | | 0 | | | - | | 743,750 | (2) | | 743,750 |
| | | 2014 | | 165,000 | (3) | | - | | | | | 165,000 |
| | | 2013 | | 0 | (4) | | - | | | | | 0 |
| | | | | | | | | | | | | |
| Richard Halden, President | | 2015 | | 180,000 | (5) | | - | | 603,750 | (6) | | 783,750 |
| resigned on January 14, 2016 | | 2014 | | 165,000 | (7) | | - | | | | | 165,000 |
| | | 2013 | | 0 | (8) | | | | | | | 0 |
| | | | | | | | | | | | | |
| Randy Moseley, Chief Financial Officer | | 2015 | | 180,000 | (9) | | - | | 603,750 | (10) | | 783,750 |
| and Principal Financial Officer | | 2014 | | 165,000 | (11) | | - | | | | | 165,000 |
| | | 2013 | | 0 | (12) | | | | | | | 0 |
(1) | Represents 375,000(1) | Mr. Wright is our President and Chairman of our Board of Directrors. |
| (2) | On January 23, 2023, Mr. Jones our Chief Financial Officer and Secretary received 2,000,000 shares of restricted class A common stock due Executive per his employment agreement,our Common Stock valued at $0.10 per share. | |
(2) | Represents 4,375,000 shares of restricted class A common stock due Executive per his employment agreement, valued at $0.17 per share. | |
(3) | Represents amount of 2014 annual salary accrued but unpaid by agreement with the Executive. | |
(4) | Executive agreed to eliminate 50% of his total deferred compensation which made 2013 have 0 accrual. | |
(5) | Represents amount of 2014 annual salary accrued but unpaid by agreement with the Executive. | |
(6) | Represents 4,375,000 shares of restricted class A common stock due Executive per his employmentagreement, valued at $0.138$0.01 per share. |
(7) | Represents amount(3) | Mr. Harer is our interim President. Mr. Harer has not taken a salary or any other form of 2014 annual salary accrued but unpaid by agreement with the Executive. | |
(8) | Executive agreed to eliminate 50% of his total deferred compensation which made 2013compensation. Mr. Harer does not have 0 accrual. | |
(9) | Represents amount of 2014 annual salary accrued but unpaid by agreement with the Executive. | |
(10) | Represents 4,375,000 shares of restricted class A common stock due Executive per hisan employment agreement valuedand serves at $0.138 per share. | |
(11) | Represents amountthe pleasure of 2014 annual salary accrued but unpaid by agreement with the Executive | |
(12) | Executive agreed to eliminate 50%our Board of his total deferred compensation which made 2013 have 0 accrual. | Directors. |
Noawards during the year ended December 31, 2022 and 2021 were made according to the aggregate date fair value computed in accordance with FASB ASC Topic 718, with such grants
being valued as of
the closing price of the Company’s stock
options or stock appreciation rights have been made sinceon effective date of the agreements underlying such grants.
Outstanding Equity Awards at Fiscal Year-End
There were no outstanding equity awards for our inception.
Compensationnamed executive officers as of Directors
No cash compensation was paid tothe end of our last completed fiscal year, December 31, 2022.
Director Compensation
Currently, our directors receive no compensation for their services asparticipation on our board, board committees or other activities related to the Company. There are no plans by the directors since our inception. Wepay retirement benefits to directors or executive officers.
Executive Compensation
Ray Wright and Ransom Jones each have employment agreements that automatically renew on each employment anniversary date unless a party provides notice of non-renewal before sixty (60) days before each annual period’s end. Mr. Jones was provided with 250,000 shares at the inception of his agreement, and he is due a bonus of $35,000 each year he is employed by us. There were no standard arrangement pursuant to which our directors are to be compensated for their services in their capacity as directors except for the granting from time to time of incentive stock options. The board of directors may award special remunerationchanges to any director undertaking any special services on behalf of our company other than services ordinarily required of a director. Other than indicated below,the named executives’ duties as described by their respective employment agreements. Kent Harer does not have an employment agreement and receives no director received and/or accrued any compensation for his services asmanagement roles and responsibilities. Mr. Harer has agreed to this arrangement until a director, including committee participation and/or special assignments.new chief executive is hired by us.
Item 12. | Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. |
Securities Authorized for Issuance under Equity Compensation Plans
None.
Securities Beneficial Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Table
The following table sets forthpresents information regarding the beneficial ownership of all shares of our Common Stock as of information concerning the number of shares of common stock owned beneficially as of March 24, 2016 which was 98,811,192 shares, by: (i) each person (including any group) known by us to own more than five (5%) of any class of our voting securities, (ii) each of our directors and executive officers, and (iii) our officers and directors as a group. Unless otherwise indicated, the shareholders listed possess sole voting and investment power with respect to the shares shown.
| | | | | | | |
Name and Address | | Amount and Nature of Beneficial Ownership (1) | | | Percent of Class (2) |
| | | | | | | |
| Randy Moseley (3) | | | 35,567,574 | | | | 17.50 | % |
| | | | | | | | | |
| Richard Halden (4) | | | 32,677,721 | | | | 16.07 | % |
| | | | | | | | | |
| Ransom Jones | | | 375,000 | | | | .18 | % |
| | | | | | | | | |
| Craig Takacs | | | 3,157,563 | | | | 1.55 | % |
| | | | | | | | | |
| Kevin Jones (5) | | | 15,333,334 | | | | 7.54 | % |
| | | | | | | | | |
| Raymond Wright | | | 7,000,000 | | | | 3.44 | % |
| | | | | | | | | |
| D. Patrick Six (6) | | | 4,700,000 | | | | 2.31 | % |
as a group (7 persons) | | | 98,811,192 | | | | 48.59 | % |
December 31, 2022:
| Beneficial Ownership Table | | | |
| Directors and Named Executive Officers (10) | | Shares of Common Stock Beneficially Owned (1) | |
| | | Number | | | Percent | |
| Paul Alfano(2) | | | 29,450,000 | | | | 7.7 | % |
| Kent Harer (5) | | | 70,000 | | | | <1.0 | % |
| Kevin Jones (3) | | | 24,739,683 | | | | 6.4 | % |
| Ransom Jones (6) | | | 6,181,867 | | | | 1.6 | % |
| Raymond Wright (4) | | | 17,500,000 | | | | 4.6 | % |
| Michael Wykrent (7) | | | 11,160,000 | | | | 2.9 | % |
| | | | | | | | | |
| All current Directors and Named Executive Officers as a group | | | 89,101,550 | | | | 23.3 | % |
| (6 persons) (9) | | | | | | | | |
| | | | | | | | 0.0 | % |
| 5% or Greater Stockholders | | | | | | | | |
| Paul Alfano (2) | | | 29,450,000 | | | | 7.7 | % |
| Kevin Jones (3) | | | 24,739,683 | | | | 6.4 | % |
(1) | 1) | Applicable percentages are based on 382,610,871 shares of Common Stock outstanding as of December 31, 2022. Beneficial ownership is determined by rules promulgated by the SEC and generally includes voting or investment power with respect to securities. Common Stock underlying options, warrants, and convertible notes currently exercisable or convertible, or exercisable or convertible within 60 days of year end are deemed outstanding for computing the percentage of the person holding such securities but are not deemed outstanding for computing the percentage of any other person. Unless otherwise indicated in the footnotes to this table, we believe that each of the individuals named in the table has sole voting and investment power with respect to the Common Stock indicated as beneficially owned by such individual. The table includes Common Stock and options, warrants, and convertible notes exercisable or convertible into Common Stock that are either vested or may vest within 60 days of year end. |
| 2) | Paul Alfano. Mr. Alfano is an independent director and greater than 5% Shareholder. |
| 3) | Kevin Jones. Mr. Kevin Jones is a greater than 5% Shareholder and a former director. Mr. Jones resigned as a director during 2021. Kevin Jones and Ransom Jones are brothers. Mr. K. Jones has sole voting and dispositive power with respect to 8,364,683 shares. In addition, the amount of Common Stock beneficially owned by Mr. K. Jones includes: (a) 4,875,000 Shares held by Mabert, in which Mr. K. Jones has 100% ownership interest and for which he serves as sole manager; (b) 8,500,000 Shares owned by Mr. K. Jones’s late spouse, Ms. Christine Earley, in which Mr. K. Jones has a spousal interest; and (c) 1,867,843 Shares issuable to Mr. K. Jones pursuant to that certain Loan Agreement by and between Mabert and the Company, dated September 14, 2018, filed as Exhibit 10.49 to the Company’s Form 10-K/A, filed with the SEC on May 13, 2019; (c) 2,000,000 shares beneficially held for Mr. K. Jones by Equity Trust and (d) 1,000,000 shares owned by Topical Floors, LLC, in which Mr. K. Jones owns 100% ownership interest and for which he serves as sole manager. |
| 4) | Raymond Wright. Mr. Wright is the chairman of our Board of Directors, and president of GIE our wholly owned subsidiary. |
| 5) | Kent Harer. Mr. Harer is a director and our acting president, making him a named executive officer. The Common Stock beneficially owned by Mr. Harer are those shares immediately issuable upon Mr. Harer’s exercise of a Stock Purchase Warrant, dated January 8, 2018, by and between our Company and Mr. Harer, filed as Exhibit 10.37, and incorporated by reference herein. |
| 6) | Ransom Jones. Mr. Ransom Jones is a director and our chief financial officer, secretary and treasurer, making him a named executive officer. Mr. Jones has sole voting and dispositive power with respect to 2,306,867 shares of Common Stock. In addition, the amount of Common Stock beneficially owned by Mr. Jones includes 3,875,000 shares owned by Mr. Jones’s spouse, Ms. Jan Jones, in which Mr. Jones has a spousal interest. Ransom Jones and Kevin Jones are brothers. |
| 7) | Michael Wykrent. Mr. Wykrent is an independent director. |
| 9) | All current directors and named executive officers as a group. This ownership includes only the ownership of our current named executive officers and directors. Mr. Jones is listed as he resigned from being a director during 2021. |
| 10) | Unless otherwise indicated, the address for each of these stockholdersshareholders is c/o UMED Holdings,Greenway Technologies, Inc., at 8851 Camp Bowie Blvd. West,1521 N. Cooper Street, Suite 240, Fort Worth, Texas 76116. Also, unless otherwise indicated, each person named in the table above has the sole voting and investment power with respect to our shares of common stock which he beneficially owns.Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission.205, Arlington, TX 76011. |
(2) | Percentage of beneficial ownership is based on the 188,219,085 shares of class A common stock outstanding as of March 24, 2016 and the 15,126,938 class B common shares outstanding at March 24, 2016 for a total of 203,346,023 shares used to determine percent of ownership.
|
(3) | Includes 18,280,809 shares of class A common held directly by Mr. Moseley, 2,797,000 shares of class A common held by Mr. Moseley's spouse, 7,500,000 shares of class B shares held directly by Mr. Moseley, 1,183,164 shares of class A common held by Capital Equity Partners, LLC of which Mr. Moseley is a member, 5,000,000 shares of class A common held by Media Advertising LLC of which Mr. Moseley is a member, 3,500,000 shares of class A common held by Arkansas Partners of which Mr. Moseley is a partner, and 2,148,183 shares of class A common held by BioEnergy LLC of which Mr. Moseley is a member. |
| |
(4) | Includes 15,836,139 shares of class A common held directly by Mr. Halden, 4,500,000 shares of class A common held by Mr. Halden's spouse, 7,500,000 shares of class B shares held directly by Mr. Halden, 1,183,164 shares of class A common held by Capital Equity Partners, LLC of which Mr. Halden is a member, 5,000,000 shares of class A common held by Media Advertising Partners LLC of which Mr. Halden is a member and 3,500,000 shares of class A common held by Arkansas Partners of which Mr. Halden is a partner. |
| |
(5) | Includes 2,583,334 shares of class A common held directly by Mr. Jones and 12,750,000 shares of class A common held by Mabert LLC. |
| |
(6) | Includes 200,000 shares of class A common held directly by Mr. Six and 4,500,000 shares of class A common held by Jabeez LLC. |
Change in Control
There
Other than as stated herein, there are no present arrangements or understandings, known to the Company,us, including any pledge by any person of the Company's securities, the operation of which may at a subsequent date result in a change in control of the Company.
our securities:
| ● | The operation of which may at a subsequent date result in a change in control of the registrant; or |
| | |
| ● | With respect to the election of directors or other matters. |
Item 13. | Item 13. | Certain Relationships and Related Transactions and Director Independence. |
Other than as stated herein, there are no other agreements with any of our officers and Related Transactions,directors.
After approval given during a properly called special meeting of the Board of Directors, on September 14, 2018, Mabert, which is owned and Director Independence.
Shareholderscontrolled by our former director and Shareholder, Kevin Jones, and his late wife Christine Early, entered into a loan agreement with us (the “Loan Agreement”), for the purpose of funding working capital and general corporate expenses of up to $1,500,000 (the “Loan Amount”). With Board of Directors consent, the Loan Amount was subsequently increased to provide up to a total $5,000,000 of availability under the Loan Agreement for us. The Company’s bylaws provide no bar from transactions with Interested Directors, so long as the interested party does not vote on such transaction. Mr. Jones did not vote on this transaction.
Mr. K. Jones and his late wife and Mabert have made advancesloaned a total $2,057,341 to the Company and four other Shareholders have loaned the balance of $793,433, pursuant to the Loan Agreement, through the year ending December 31, 2022. These loans are secured by the assets of our Company. A financing statement and UCC-1 have been filed according to Texas statutes. Should a default under the Loan Agreement occur, there could be a foreclosure or a bankruptcy proceeding filed by Mabert on behalf of the lenders party to the Loan Agreement. A foreclosure sale or distribution through bankruptcy could only result in the amountscreditors receiving a pro rata payment based upon the terms of $383,878the Loan Agreement. Mabert did not nor will it receive cash compensation for its efforts.
Mr. K. Jones, as the owner and $715,070 duringmanaging member of Mabert, was also the years ended December 31, 2015managing and 2014, respectively. The shareholders have electedcontrol member of OPMGE, a research and development venture in and to convert advances of $314,517 and $1,527,180 to shares of class A common stock at market value ($.173 and $.228 per share) and received repayments of $122,976 and $0 during the years ended December 31, 2015 and 2014, respectively.
In April 2015, the Company's then Chief Executive Officer resigned and in his settlement agreement gave up claims to receive deferred compensation, which amounted to $518,300 as discussed in Note 12 above.
In May 2015, the Company issued 13,125,000 shareshad a significant revenue member interest and has licensed its proprietary GTL technology and equipment. Any relationship between Greenway and OPMG has been terminated.Due to Mr. Kevin Jones’ family relationship as the brother of restricted class A common stockMr. Ransom Jones, our CFO, and his control position over Mabert , Mr. Jones was not considered an independent director.
Mr. Michael Wykrent, a director, made loans totaling $425,000 under the Mabert Loan Agreement to its former CEO, its President and Chief Financial Officer per their employment agreements. The shares were valued at $0.15 per share based on market value.
In July 2015, us prior to his being elected as a director of the Company issuedand has had $80,000 of loans subsequently. Mabert operates as an agent for various lenders, including Mr. Wykrent, and manages such loans on behalf of the various lenders under the Loan Agreement. Mr. Wykrent was elected as a non-executive director and we believe that Mr. Wykrent remains an independent director, despite having this lending relationship through Mabert, which, in the opinion of the Company’s Board of Directors, would not interfere with the exercise of his independent judgment in carrying out the responsibilities of a director.
Mr. Paul Alfano, a director, was contracted as a consultant by the Company in April 2018 prior to his being elected as a director of the Company, thereupon such consulting contract was terminated. In his consulting role, Mr. Alfano’s total fees never exceeded $120,000 for any prior period. We have accrued a total of 9,179,340 shares of restricted class A common stock to its President and Chief Financial Officer$120,988 for the conversion of 611,956 shares of class B stockfees and expenses that were remaining under his consulting agreement at the ratetime Mr. Alfano was elected as a non-executive director and the associated accrued interest on these fees. During 2022, the Company and Mr. Alfano agreed to issue shares in full satisfaction of fifteen sharesthe $120,988.
Director Independence
Mr. Alfano and Mr. Wykrent serve as our two independent directors. We use the definition of restricted common stock for each share“independent director” as defined in the listing standards of Class B stock, on terms set by the Company's predecessor, Dynalyst Manufacturing Corporation.
Nasdaq Stock Market, Inc. Under this standard, an “independent director” is a person other than an executive officer or employee of a company or any other individual having a relationship which, in the opinion of the issuer’s board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In addition, the following persons shall not be considered independent:
| ● | A director who is, or at any time during the past three years was, employed by the Company; |
| | |
| ● | A director who accepted or who has a family member who accepted any compensation from the company in excess of $120,000 during any period of 12 consecutive months within the three years preceding the determination of independence, other than the following: (i) compensation for board or board committee service; (ii) compensation paid to a family member who is an employee (other than as an executive officer) of the issuer; or (iii) benefits under a tax-qualified retirement plan, or non-discretionary compensation; |
| | |
| ● | A director who is a family member of an individual who is, or at any time during the past three years was, employed by the company as an executive officer; |
| | |
| ● | A director who is, or has a family member who is, a partner in, or a controlling shareholder or an executive officer of, any organization to which the company made, or from which the company received, payments for property or services in the current or any of the past three fiscal years that exceed five percent of the recipient’s consolidated gross revenues for that year, or $200,000, whichever is more, other than the following: (i) payments arising solely from investments in the company’s securities; or (ii) payments under non-discretionary charitable contribution matching programs; |
| | |
| ● | A director of the issuer who is, or has a family member who is, employed as an executive officer of another entity where at any time during the past three years any of the executive officers of the issuer serve on the compensation committee of such other entity; or |
| | |
| ● | A director who is, or has a family member who is, a current partner of the company’s outside auditor, or was a partner or employee of the registrant’s outside auditor who worked on the company’s audit at any time during any of the past three years. |
Under these standards required to an independent director, none of Mr. Harer, Mr. R. Jones, nor Mr. Wright qualify as independent directors.
We hope to add additional qualified independent members to our Board of Directors at a later date, depending upon our ability to reach and maintain financial stability and/or continuing operations.
Item 14. Principal Accountant Fees and Services.
UMED Holdings, Inc. Independent Public Accountant's Fees
| Item 14. | Principal Accounting Fees and Services. |
The following table presents fees for professional services rendered by itsAssurance Dimensions (“Assurance”), our independent auditors for the years ended December 31, 2022 and 2021, respectively:
| | | 2022 | | | 2021 | |
| Audit Fees | | $ | 41,000 | | | $ | 35,906 | |
| Audit Related Fees | | | -0- | | | | -0- | |
| Tax Fees | | | -0- | | | | -0- | |
| All Other Fees | | | -0- | | | | -0- | |
| Total | | $ | 41,000 | | | $ | 35,906 | |
Audit fees billed were for professional services rendered for the audit of the Company'sour financial statements and review of our interim financial statements for the years ended December 31, 20152022 and 2014:
| | | 2015 | | | 2014 | |
| Audit Fees | | $ | 28,500 | | | $ | 34,000 | |
| Audit Related Fees | | $ | 0 | | | $ | 0 | |
| Tax Fees | | $ | 0 | | | $ | 0 | |
| All Other Fees | | $ | 0 | | | $ | 0 | |
| Total | | $ | 28,500 | | | $ | 34,000 | |
Audit Fees were for professional services for auditing and reviewing the Company's financial statements, as well as for consents and assistance with and review of documents filed with the Securities and Exchange Commission.
December 31, 2021.
Pre-Approval Policy for Services of UMED HoldingsOur Independent Auditors
The
Our Board of Directors reviews theour Quarterly Reports on Form 10-Q and our Annual Reports on Form 10-K filings before their filing.we file them with the SEC. In addition, theour Board of Directors reviews the audit plans and anticipated fees for audit and tax work prior to the commencement of that work. All fees paid to the independent auditors are pre-approved by theour Board of Directors. These services may include audit services, audit-related services, tax services and other services.
There were no services performed by our independent registered public accounting firm of the type described in Item 9(e)(2) of Schedule 14A. Our board of directors acting in the capacity of the Audit Committee considers that the work done for us by Terry Johnson is compatible with maintaining Patrick Heyn's independence.
Item 15. Exhibits and Financial Statement Schedules.
(b) Exhibits.
| Item 15. | Exhibits, Financial Statement Schedules. |
| (a) | All financial statements are included in Item 8 of this report. |
| (b) | All financial statement schedules required to be filed by Item 8 of this report and the exhibits contained in this report are described in Item 8 of this report and are included as indexed in the appendix on page F-1, et seq. |
Exhibit No. | Name | Identification of Exhibit |
3.1*2.1** | Articles | Combination Agreement executed as of Incorporation filed March 13, 2002 |
3.2** | Amended Articles of Incorporation filed June 7, 2006 |
3.3** | Amended Articles of Incorporation filed August 18, 2009, |
3.4** | Amended Articles of Incorporation filed March 23, 2011 |
3.5** | Bylaws |
10.1* | Code of Ethics |
10.2* | Agreement and Plan of Merger by end between Dynalyst Manufacturing Corporation and Universal Media Corporation, datedfiled as Exhibit 10.2 to the registrant’s registration statement on Form 10-12G on August 18, 200929, 2013, Commission File Number 000-55030. |
10.3*3.1** | | Articles of Incorporation of Dynalyst Manufacturing Corporation filed with the Secretary of State of Texas on March 13, 2002, filed as Exhibit 3.1 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030. |
| 3.2** | | Articles of Amendment of Articles of Incorporation of Dynalyst Manufacturing Corporation filed with the Secretary of State of Texas on June 7, 2006, filed as Exhibit 3.2 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030. |
| 3.3** | | Articles of Amendment of Articles of Incorporation of Dynalyst Manufacturing Corporation filed with the Secretary of State of Texas on August 28, 2009, changing the corporate name to Universal Media Corporation, filed as Exhibit 3.3 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030. |
| 3.4** | | Articles of Amendment of Articles of Incorporation of Universal Media Corporation filed with the Secretary of State of Texas on March 23, 2011, changing the corporate name to UMED Holdings, Inc., filed as Exhibit 3.4 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030. |
| 3.5** | | Articles of Amendment of Certificate of Formation of UMED Holdings, Inc. filed with the Secretary of State of Texas on June 23, 2017, changing the corporate name to Greenway Technologies, Inc., filed as Exhibit 3.1 to the registrant’s Form 8-K/A on July 20, 2017, Commission File Number 000-55030. |
| 3.6** | | Bylaws of Dynalyst Manufacturing Corporation, filed as Exhibit 3.5 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030. |
| 3.7** | | Articles of Incorporation of Greenway Innovative Energy, Inc. filed with the Secretary of State of Nevada on July 6, 2012, filed as Exhibit 3.7 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030. |
| 3.8** | | Bylaws of Greenway Innovative Energy, Inc., filed as Exhibit 3.8 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030. |
| 3.9** | | Certificate of Amendment to the Articles of Incorporation approved by the Shareholders at the Special Shareholders Meeting on December 11, 2019 |
| 10.2** | | Purchase Agreement dated as of May 1, 2012, between UMEDUniversal Media Corporation and Mamaki Tea & Extract, Inc. dated May 1, 2012, filed as Exhibit 10.3 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030. |
10.4*10.3** | | Addendum and Modification to Purchase Agreement dated as of December 31, 2012, between UMEDUniversal Media Corporation and Mamaki of Hawaii, Inc. formerly Mamaki Tea & Extract, Inc. dated December 31, 2012, filed as Exhibit 10.4 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030. |
10.5*10.4** | | Second Addendum and Modification to Purchase Agreement dated as of December 31, 2012, between UMEDUniversal Media Corporation and Mamaki of Hawaii, Inc. formerly Mamaki Tea & Extract, Inc. dated December 31, 2012, filed as Exhibit 10.5 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030. |
10.6*10.5** | | Purchase Agreement dated August 29th, 2012, between UMEDUniversal Media Corporation and Greenway Innovative Energy, Inc., filed as Exhibit 10.6 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030. |
| 10.6** | | Purchase Agreement dated as of February 23, 2012, between Rig Support Services, Inc. and UMED Holdings, Inc., filed as Exhibit 10.7 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030. |
| 10.7** | | Asset Purchase Agreement dated as of October 2, 2011, between Jet Regulators, L.C., R/T Jet Tech, L.P. and UMED Holdings, Inc., filed as Exhibit 10.8 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030. |
| 10.8** | | Employee Agreement dated May 27, 2011, between UMED Holdings, Inc. and Kevin Bentley, filed as Exhibit 10.9 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030. |
| 10.9** | | Employee Agreement dated May 27, 2011, between UMED Holdings, Inc. Randy Moseley, filed as Exhibit 10.10 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030. |
| 10.10** | | Employee Agreement dated May 27, 2011, between UMED Holdings, Inc. and Richard Halden, filed as Exhibit 10.11 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030. |
| 10.11** | | Employee Agreement dated August 29, 2012, between UMED Holdings, Inc. and Raymond Wright, filed as Exhibit 10.12 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030. |
10.7*10.12** | | Employee Agreement dated August 29, 2012, between UMED Holdings, Inc. and Conrad Greer, filed as Exhibit 10.13 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030. |
| 10.13** | | Consulting Agreement dated May 27, 2011, between UMED Holdings, Inc. and Jabez Capital Group, LLC, filed as Exhibit 10.14 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030. |
| 10.14** | | Promissory Note in the amount of $850,000 dated August 17, 2012, executed by Mamaki Tea, Inc. payable to Southwest Capital Funding, Ltd., filed as Exhibit 10.15 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030. |
| 10.15** | | Modification of Note and Liens effective as of October 1, 2012, between Southwest Capital Funding, Ltd. and Mamaki Tea, Inc., filed as Exhibit 10.16 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030. |
| 10.16** | | Second Modification of Note and Liens effective as of December 20, 2012, between Southwest Capital Funding, Ltd., Mamaki Tea, Inc., and Mamaki of Hawaii, Inc., filed as Exhibit 10.17 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030. |
| 10.17** | | Promissory Note in the amount of $150,000 dated August 17, 2012, executed by Mamaki Tea, Inc. payable to Robert R. Romer, filed as Exhibit 10.18 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030. |
| 10.18** | | Addendum and Modification to Purchase Agreement dated as of December 31, 2012, between UMED and Rig Support Services, Inc. and UMED Holdings, Inc., filed as Exhibit 10.19 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030. |
| 10.20** | | Promissory Note in the amount of $158,000 dated September 18, 2014, executed by UMED Holdings, Inc. payable to Tonaquint, Inc., filed as Exhibit 10.20 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030. |
| 10.21** | | Warrant dated September 18, 2014, for $47,400 worth of UMED Holdings, Inc. shares issued to Tonaquint, Inc., filed as Exhibit 10.21 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030. |
| 10.22** | | Office Lease Agreement dated October 2015, between UMED Holdings, Inc. and The Atrium Remains the Same, LLC, filed as Exhibit 10.22 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030. |
| 10.23** | | Warrant dated October 31, 2015, for 4,000,000 shares issued to Norman T. Reynolds, Esq, filed as Exhibit 10.23 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030. |
| 10.24** | | Promissory Note in the amount of $36,000 dated March 8, 2016, executed by UMED Holdings, Inc. payable to Peter C. Wilson, filed as Exhibit 10.24 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030. |
| 10.25** | | Convertible Promissory Note in the amount of $224,000 dated May 4, 2016, executed by UMED Holdings, Inc. payable to Tonaquint, Inc., filed as Exhibit 10.25 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030. |
| 10.26** | | Severance and Release Agreement by and between UMED Holdings, Inc. and Randy Moseley dated November 11, 2016, filed as Exhibit 10.26 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030. |
| 10.27** | | Settlement and Mutual Release Agreement dated January 13, 2017, executed by UMED Holdings, Inc. in connection with Cause No. DC-16-004718, in the 193rd District Court, Dallas County, Texas against Mamaki of Hawaii, Inc., Hawaiian Beverages, Inc., Curtis Borman, and Lee Jenison, filed as Exhibit 10.27 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030. |
| 10.28** | | Warrant dated February 23, 20121, 2017, for 2,000,000 shares issued to Richard J. Halden, filed as Exhibit 10.28 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030. |
10.8*10.29** | Asset | Warrant dated February 1, 2017, for 4,000,000 shares issued to Richard J. Halden, filed as Exhibit 10.29 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030. |
| 10.30** | | Severance and Release Agreement by and between UMED Holdings, Inc. and JetTechRichard Halden dated February 1, 2017, filed as Exhibit 10.30 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030. |
| 10.31** | | Assignment Agreement dated December 27, 2010, between Melek Mining, Inc., 4HM Partners, LLC, dated October 2, 2011and UMED Holdings, Inc., filed as Exhibit 10.31 to the registrant’s Form 10-Q/A, amendment No. 1, on September 21, 2017, Commission File Number 000-55030. |
10.9*10.32** | | Consulting Agreement by and between the registrant and Chisos Equity Consultants, LLC, as amended on February 16, 2018, and March 19, 2018, filed as Exhibit 10.1 to the registrant’s Form 8-K, on March 21, 2018, Commission File Number 000-55030. |
| 10.33** | | Promissory Note in the amount of $100,000 dated November 13, 2017, executed by Greenway Technologies, Inc. payable to Wildcat Consulting Group LLC. |
| 10.34** | | Subordinated Convertible Promissory Note in the amount of $166,667 dated December 20, 2017, executed by Greenway Technologies, Inc. payable to Tunstall Canyon Group LLC. |
| 10.35** | | Warrant dated November 30, 2017 for 1,000,000 shares issued to MTG Holdings, LTD. |
| 10.36** | | Greer Family Trust Promissory Note and Settlement. filed at Exhibit 10.34 to the registrant’s Form 10K on April 5, 2018, Commission File Number 000-55030. |
| 10.37** | | Warrant dated January 8, 2018 for 4,000,000 shares issued to Kent Harer. |
| 10.38** | | Settlement agreement by and between Greenway Technologies, Inc. and Tonaquint, Inc. dated April 9, 2018. |
| 10.39** | | Employment agreement with Kevin BentleyJohn Olynick, as President, dated May 27, 201110, 2018. |
10.10*10.40** | | Employment agreement with Randy MoseleyRansom Jones, as Chief Financial Officer, Secretary and Treasurer, dated May 27, 201110, 2018. |
10.11*10.41** | Employment agreement | Consulting Agreement with Richard Halden dated May 27, 2011Gary L. Ragsdale, Ph.D., P.E. |
10.12*10.42** | | Consulting Agreement with John Olynick |
| 10.43** | | Consulting Agreement with Marl Zoellers |
| 10.44** | | Consulting Agreement with Paul Alfano dba Alfano Consulting Services |
| 10.45** | | Consulting Agreement with Peter Hauser |
| 10.46** | | Consulting Agreement with William Campbell |
| 10.47** | | Consulting Agreement with Ryan Turner |
| 10.48** | | Amendment on July 30, 2014 to that certain Employment agreementAgreement with Raymond Wright dated August 29, 2012 |
10.13*10.49** | Employment with Conrad Greer | Mabert LLC as Agent Loan Agreement dated August 29, 2012September 14, 2018 |
10.14*10.50** | | Mabert LLC as Agent Security Agreement dated September 14, 2018 |
| 10.51** | | Texas UCC-1 filed by Mabert LLC as Agent on October 11, 2018, ending October 10, 2023. |
| 10.52** | | Rule 11 Agreement, dated March 6, 2019, pursuant to a mutual settlement of all claims by Wildcat Consulting, LLC for the matters in Cause No. 2018-005801 and Cause No. 2018-006416-2, filed in the County Courts at Law in Tarrant County, TX on Sept 7, and September 27, 2018, respectively. |
| 10.53** | | Employment agreement with Jabez Capital Group LLC dated May 27, 2011Thomas Phillips, as Vice President of Operations, effective date April 1, 2019. |
10.15*10.54** | Mamaki of Hawaii, Inc. Promissory Note | Settlement Agreement executed on September 26, 2019 with Southwest Capital Funding, Ltd dated August 17, 2012 |
10.16* | Modification of Note and Lien betweenLtd. to resolve all conflicts related to loan guarantees provided for Mamaki of Hawaii, Inc., Hawaiian Beverages, Inc., Curtis Borman, and Southwest Capital Funding Ltd dated October1, 2012Lee Jenison. |
10.17*10.55** | Second Modification | Limited Liability Company Agreement of NoteOPM Green Energy, LLC, dated August 23, 2019, by and Lienamong Greenway Technologies, Inc., a Texas corporation, Mabert, LLC, a Texas limited liability company, Tom Phillips, an individual, and OPM Green Energy, LLC, a Texas corporation. |
| 10.56** | | Subscription Agreement dated August 23, 2019, by and between MamakiGreenway Technologies, Inc., a Texas corporation, and OPM Green Energy, LLC, a Texas limited liability company. |
| 10.57** | | Intellectual Property License dated August 23, 2019, by and between Greenway Technologies, Inc., a Texas corporation, and OPM Green Energy, LLC, a Texas limited liability company. |
| 10.58** | | Employment agreement with Ryan Turner for Business Development and Investor Relations, dated April 1, 2019. |
| 10.59** | | Agreed Order of Hawaii,Dismissal with Prejudice, dated February 25, 2020, pursuant to the mutual settlement of all claims by Wildcat Consulting, LLC for the matters in Cause No. 2018-005801 and Cause No. 2018-006416-2, filed in the County Courts at Law in Tarrant County, TX on Sept 7, and September 27, 2018, respectively. |
| 10.60** | | Agreed Order of Dismissal without Prejudice, dated November 19, 2019, pursuant to the mutual settlement of all claims by Chisos Equity Consultants, LLC for the matters in Cause No. 67-306723-19, filed in the County Courts at Law in Tarrant County, TX on March 13, 2019. |
| 10.61** | | Agreed Order of Dismissal without Prejudice, dated November 19, 2019, pursuant to the mutual settlement of all claims by Richard Halden for the matters in Cause No. 352-306721-19, filed in the County Courts at Law in Tarrant County, TX on March 13, 2019. |
| 10.62** | | Agreed Order of Dismissal without Prejudice, dated November 26, 2019, pursuant to the mutual settlement of all claims by Greenway Technologies, Inc. against Micheal R. Warner et al (the “Dissident Shareholders”) for the matters in Cause No. DC-19-04207, filed in the District Court in Dallas County, TX on March 26, 2019. |
| 10.63** | | Securities Purchase Agreement by and between Greenway Technologies, Inc. and Southwest Capital FundingPowerUp Lending Group, Ltd, dated December 20, 2012pursuant to that certain Convertible Promissory Note executed on January 24, 2020. |
10.18*10.64** | Mamaki of Hawaii, Inc. | Convertible Promissory Note by and between Greenway Technologies, Inc. and PowerUp Lending Group, Ltd., pursuant to Robert R. Romer dated August 17, 2012that certain Securities Purchase Agreement executed on January 24, 2020. |
10.19*10.65** | Rig Support Services, Inc. Addendum & Modification to | Securities Purchase Agreement by and between Greenway Technologies, Inc. and PowerUp Lending Group, Ltd., pursuant to that certain Convertible Promissory Note executed on February 12, 2020. |
21*10.66*** | List of Subsidiaries | Convertible Promissory Note by and between Greenway Technologies, Inc. and PowerUp Lending Group, Ltd., pursuant to that certain Securities Purchase Agreement executed on February 12, 2020. |
31.1*14.1*** | | Code of Ethics for Senior Financial Officers, filed as Exhibit 10.1 to the registrant’s registration statement on Form 10-12G on August 29, 2013, Commission File Number 000-55030. |
| 31.1* | | Certification of Kent Harer, President of Greenway Technologies, Inc., pursuant to Section 13a-1418 U.S.C. §1350, as adopted pursuant to §302 of CEOthe Sarbanes-Oxley Act of 2002. |
31.2*** | | Certification of Ransom Jones, Chief Financial Officer and Principal Accounting Officer of Greenway Technologies, Inc., pursuant to Section 13a-1418 U.S.C. §1350, as adopted pursuant to §302 of CFOthe Sarbanes-Oxley Act of 2002. |
32.1*** | | Certification of Kent Harer, President of Greenway Technologies, Inc., pursuant to Section 135018 U.S.C. §1350, as adopted pursuant to §906 of CEOthe Sarbanes-Oxley Act of 2002. |
32.2*** | | Certification of Ransom Jones, Chief Financial Officer and Principal Accounting Officer of Greenway Technologies, Inc., pursuant to Section 135018 U.S.C. §1350, as adopted pursuant to §906 of CFOthe Sarbanes-Oxley Act of 2002. |
101101.INS | | Inline XBRL Instance Document. |
| 101.SCH | | Inline XBRL Taxonomy Extension Schema. |
| 101.CAL | | Inline XBRL Taxonomy Extension Calculation Linkbase. |
| 101.LAB | | Inline XBRL Taxonomy Extension Labels Linkbase. |
| 101.PRE | | Inline XBRL Taxonomy Extension Presentation Linkbase. |
| 101.DEF | | Inline XBRL Taxonomy Extension Definition Linkbase. |
| 104 | | Cover Page Interactive data files pursuant to Rule 405 of Regulation S-TData File (embedded within the Inline XBRL document) |
* Filed in Form 10 filed on August 28, 2013.
herewith.** Filed in Form 10 filed on November 12, 2013Previously filed.
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 in Houston, Texas.
| | GREENWAY TECHNOLOGIES, INC. |
| UMED HOLDINGS, INC. | | |
| Date: | April 14, 2023 | | |
April 14, 2016 | By: | By | /s/ Kent Harer |
| | | Kent Harer, President |
| | | |
| | By | /s/ Ransom Jones |
| | | Ransom Jones, Chief Financial Officer and |
| | Interim Chief Executive | Principal Accounting Officer |
In accordance with
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Signature | | Title | | Date |
| | | | |
| /s/ Kent Harer | | | | |
| KENT HARER | | Director, President | | April 14, 20162023 |
| By: |
| | |
| /s/ Michael Wykrent | | | | |
| MICHAEL WYKRENT | | Director | | April 14, 2023 |
| | | | |
| /s/ Ransom Jones | | | | |
| RANSOM JONES | | Ransom JonesDirector | | April 14, 2023 |
| | Interim Chief Executive Officer | | |
| /s/ Paul Alfano | | | | |
| PAUL ALFANO | | Director | | April 14, 2016 | By: | /s/ Randy Moseley
2023 |
| | Randy Moseley | | |
| | Director, Chief Financial Officer and Principal Accounting Officer |
April 14, 2016 | By: | /s/ Richard Halden |
| | Richard Halden |
| | Director |
April 14, 2016 | By: | /s/ Craig Takacs
|
| | Craig Takacs |
| | Director |
April 14, 2016 | By: | /s/ Kevin Jones
|
| | Kevin Jones |
| | Director |
April 14, 2016 | By: | /s/ Raymond Wright
| | | | |
| RAYMOND WRIGHT | | Raymond Wright |
| Chairman, President of Greenway Innovative Energy, Inc. | | Director |
April 14, 2016 | By: | /s/ D. Patrick Six
|
| | D. Patrick Six |
| | Director2023 |
UMED Holdings,
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Greenway Technologies, Inc.
Financial Statements
Years Ended and Subsidiaries
December 31, 20152022 and 2014
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To Thethe Board of Directors and shareholders
Stockholders of
UMED Holdings, Greenway Technologies, Inc.
Fort Worth, Texas
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of UMED Holdings,Greenway Technologies, Inc. and its subsidiaries (the "Company")Company) as of December 31, 20152022 and 20142021, and the related consolidated statements of operations, stockholders'stockholders’ deficit, and cash flows for each of the years in the two-year period ended December 31, 20152022, and 2014.the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.
Explanatory Paragraph – Going Concern
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company had a net loss and net cash used in operating activities of $1,512,692 and $496,654, respectively, for the year ended December 31, 2022, and a working capital deficit and accumulated deficit of approximately $10,737,576 and $36,278,869, respectively, as of December 31, 2022. These consolidatedconditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans regarding these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company'sCompany’s management. Our responsibility is to express an opinion on these consolidatedthe Company’s financial statements based on our audits.
We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement.misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, included considerationwe are required to obtain an understanding of internal control over financial reporting, as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company'sCompany’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supportingregarding the amounts and disclosures in the consolidated financial statements. An auditOur audits also includes assessingincluded evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidatedpresentation of the financial statement presentation.statements. We believe that our audits provide a reasonable basis for myour opinion.
In
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
We did not identify any critical audit matters that need to be communicated.
| |
| |
| We have served as the Company’s auditor since 2019. | |
| Margate, Florida | |
| April 14, 2023 | |
ASSURANCE DIMENSIONS CERTIFIED PUBLIC ACCOUNTANTS & ASSOCIATES
also d/b/a McNAMARA and ASSOCIATES, PLLC
TAMPA BAY: 4920 W Cypress Street, Suite 102 | Tampa, FL 33607 | Office: 813.443.5048 | Fax: 813.443.5053
JACKSONVILLE: 4720 Salisbury Road, Suite 223 | Jacksonville, FL 32256 | Office: 888.410.2323 | Fax: 813.443.5053
ORLANDO: 1800 Pembrook Drive, Suite 300 | Orlando, FL 32810 | Office: 888.410.2323 | Fax: 813.443.5053
SOUTH FLORIDA: 2000 Banks Road, Suite 218 | Margate, FL 33063 | Office: 754.800.3400 | Fax: 813.443.5053
www.assurancedimensions.com
Greenway Technologies, Inc. and Subsidiaries
Consolidated Balance Sheets
| | | | | | | | | |
| | | December 31, 2022 | | | December 31, 2021 | |
| | | | | | | |
| Assets | | | | | | | | |
| | | | | | | | | |
| Current Assets | | | | | | | | |
| Cash | | $ | 24,595 | | | $ | 60,549 | |
| Prepaids and other | | | 2,947 | | | | 56 | |
| Total Current Assets | | | 27,542 | | | | 60,605 | |
| | | | | | | | | |
| Total Assets | | $ | 27,542 | | | $ | 60,605 | |
| | | | | | | | | |
| Liabilities and Stockholders’ Deficit | | | | | | | | |
| | | | | | | | | |
| Current Liabilities | | | | | | | | |
| Accounts payable and accrued expenses | | $ | 3,317,225 | | | $ | 3,215,942 | |
| Accounts payable and accrued expenses - related parties | | | 3,799,452 | | | | 3,091,538 | |
| Notes payable | | | 672,500 | | | | 660,000 | |
| Notes payable - related parties - net | | | 2,805,774 | | | | 2,745,264 | |
| Convertible note payable - net | | | 166,667 | | | | 166,667 | |
| Advances - related parties | | | 3,500 | | | | 68,014 | |
| Total Current Liabilities | | | 10,765,118 | | | | 9,947,425 | |
| | | | | | | | | |
| Commitments and Contingencies (Note 7) | | | - | | | | | |
| | | | | | | | | |
| Stockholders’ Deficit | | | | | | | | |
| Common stock - $0.0001 par value, 500,000,000 shares authorized 382,610,871 and 355,060,834 shares issued and outstanding, respectively | | | 38,262 | | | | 35,506 | |
| Additional paid-in capital | | | 25,498,031 | | | | 24,842,907 | |
| Common stock to be issued | | | 5,000 | | | | 17,189 | |
| Subscription receivable | | | - | | | | (16,245 | ) |
| Accumulated deficit | | | (36,278,869 | ) | | | (34,766,177 | ) |
| Total Stockholders’ Deficit | | | (10,737,576 | ) | | | (9,886,820 | ) |
| | | | | | | | | |
| Total Liabilities and Stockholders’ Deficit | | $ | 27,542 | | | $ | 60,605 | |
The accompanying notes are an integral part of these consolidated financial statements referred to above present fairly, in all material respects, the
Greenway Technologies, Inc. and Subsidiaries
Consolidated Statements of Operations
| | | | | | | | | |
| | | For the Year Ended December 31, | |
| | | 2022 | | | 2021 | |
| | | | | | | |
| Operating expenses | | | | | | | | |
| General and administrative expenses | | $ | 888,599 | | | $ | 962,901 | |
| Research and development | | | 54,275 | | | | 158,000 | |
| Total operating expenses | | | 942,874 | | | | 1,120,901 | |
| | | | | | | | | |
| Loss from operations | | | (942,874 | ) | | | (1,120,901 | ) |
| | | | | | | | | |
| Other income (expense) | | | | | | | | |
| Interest expense | | | (591,963 | ) | | | (588,273 | ) |
| Amortization of debt discount | | | (48,232 | ) | | | (35,202 | ) |
| Gain on debt settlement | | | 70,377 | | | | - | |
| Total other income (expense) - net | | | (569,818 | ) | | | (623,475 | ) |
| | | | | | | | | |
| Net loss | | $ | (1,512,692 | ) | | $ | (1,744,376 | ) |
| | | | | | | | | |
| Loss per share - basic and diluted | | $ | (0.00 | ) | | $ | (0.01 | ) |
| | | | | | | | | |
| Weighted average number of shares - basic and diluted | | | 371,601,679 | | | | 342,400,231 | |
The accompanying notes are an integral part of these consolidated financial positionstatements
Greenway Technologies, Inc. and Subsidiaries
Consolidated Statements of Changes in Stockholders’ Deficit
For the Year Ended December 31, 2022
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Additional | | | Common Stock | | | | | | | | | Total | |
| | | Common Stock | | | Paid-in | | | to be | | | Subscription | | | Accumulated | | | Stockholders’ | |
| | | Shares | | | Amount | | | Capital | | | Issued | | | Receivable | | | Deficit | | | Deficit | |
| | | | | | | | | | | | | | | | | | | | | | |
| December 31, 2021 | | | 355,060,834 | | | $ | 35,506 | | | $ | 24,842,907 | | | $ | 17,189 | | | $ | (16,245 | ) | | $ | (34,766,177 | ) | | $ | (9,886,820 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Stock issued as debt issue costs | | | 302,038 | | | | 30 | | | | 14,150 | | | | (12,189 | ) | | | - | | | | - | | | | 1,991 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Settlement of subscription receivable - warrants | | | - | | | | - | | | | - | | | | - | | | | 16,245 | | | | - | | | | 16,245 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Stock issued for cash | | | 20,667,999 | | | | 2,068 | | | | 480,132 | | | | - | | | | - | | | | - | | | | 482,200 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Stock issued to settle accrued liabilities | | | 6,200,000 | | | | 620 | | | | 154,380 | | | | - | | | | - | | | | - | | | | 155,000 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Stock issued for services | | | 380,000 | | | | 38 | | | | 6,462 | | | | - | | | | - | | | | - | | | | 6,500 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net loss | | | - | | | | - | | | | - | | | | - | | | | - | | | | (1,512,692 | ) | | | (1,512,692 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| December 31, 2022 | | | 382,610,871 | | | $ | 38,262 | | | $ | 25,498,031 | | | $ | 5,000 | | | $ | - | | | $ | (36,278,869 | ) | | $ | (10,737,576 | ) |
The accompanying notes are an integral part of these consolidated financial statements
Greenway Technologies, Inc. and Subsidiaries
Consolidated Statements of Changes in Stockholders’ Deficit
For the Year Ended December 31, 2021
| | | | | | | | | Additional | | | Common Stock | | | | | | | | | Total | |
| | | Common Stock | | | Paid-in | | | to be | | | Subscription | | | Accumulated | | | Stockholders’ | |
| | | Shares | | | Amount | | | Capital | | | Issued | | | Receivable | | | Deficit | | | Deficit | |
| | | | | | | | | | | | | | | | | | | | | | |
| December 31, 2020 | | | 335,268,075 | | | $ | 33,527 | | | $ | 24,123,925 | | | $ | 36,384 | | | $ | (16,245 | ) | | $ | (33,021,801 | ) | | $ | (8,844,210 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Stock issued as debt issue costs | | | 1,197,758 | | | | 119 | | | | 54,867 | | | | (24,195 | ) | | | - | | | | - | | | | 30,791 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Stock issued for cash | | | 18,112,501 | | | | 1,812 | | | | 649,688 | | | | 5,000 | | | | - | | | | - | | | | 656,500 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Stock issued for services | | | 482,500 | | | | 48 | | | | 14,427 | | | | - | | | | - | | | | - | | | | 14,475 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net loss | | | - | | | | - | | | | - | | | | - | | | | - | | | | (1,744,376 | ) | | | (1,744,376 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| December 31, 2021 | | | 355,060,834 | | | $ | 35,506 | | | $ | 24,842,907 | | | $ | 17,189 | | | $ | (16,245 | ) | | $ | (34,766,177 | ) | | $ | (9,886,820 | ) |
The accompanying notes are an integral part of these consolidated financial statements
Greenway Technologies, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
| | | | | | | | | |
| | | For the Year Ended December 31, | |
| | | 2022 | | | 2021 | |
| | | | | | | |
| Operating activities | | | | | | | | |
| Net loss | | $ | (1,512,692 | ) | | $ | (1,744,376 | ) |
| Adjustments to reconcile net loss to net cash used in operations | | | | | | | | |
| Amortization of debt discount | | | 48,232 | | | | 35,202 | |
| Stock issued for services | | | 6,500 | | | | 14,475 | |
| Gain on debt settlement | | | (70,377 | ) | | | - | |
| Changes in operating assets and liabilities | | | | | | | | |
| (Increase) decrease in | | | | | | | | |
| Prepaids and other | | | (2,891 | ) | | | 11,179 | |
| Increase (decrease) in | | | | | | | | |
| Accounts payable and accrued expenses | | | 326,660 | | | | 160,783 | |
| Accounts payable and accrued expenses - related parties | | | 707,914 | | | | 730,831 | |
| Net cash used in operating activities | | | (496,654 | ) | | | (791,906 | ) |
| | | | | | | | | |
| Financing activities | | | | | | | | |
| Proceeds from advances - related parties | | | 3,500 | | | | 354,327 | |
| Proceeds from issuance of note payable | | | 30,000 | | | | - | |
| Repayments on notes payable | | | (55,000 | ) | | | (60,000 | ) |
| Repayments on notes payable - related parties | | | - | | | | (100,000 | ) |
| Proceeds from stock issued for cash | | | 482,200 | | | | 656,500 | |
| Net cash provided by financing activities | | | 460,700 | | | | 850,827 | |
| | | | | | | | | |
| Net increase (decrease) in cash | | | (35,954 | ) | | | 58,921 | |
| | | | | | | | | |
| Cash - beginning of year | | | 60,549 | | | | 1,628 | |
| | | | | | | | | |
| Cash - end of year | | $ | 24,595 | | | $ | 60,549 | |
| | | | | | | | | |
| Supplemental disclosure of cash flow information | | | | | | | | |
| Cash paid for interest | | $ | 35,858 | | | $ | 49,046 | |
| Cash paid for income tax | | $ | - | | | $ | - | |
| | | | | | | | | |
| Supplemental disclosure of non-cash investing and financing activities | | | | | | | | |
| Stock issued as debt issue costs | | $ | 1,991 | | | $ | 30,791 | |
| Conversion of stockholder advances to notes payable - related parties | | $ | 51,769 | | | $ | 429,249 | |
| Stock issued in settlement of accrued liabilities | | $ | 155,000 | | | $ | - | |
| Settlement of subscription receivable - warrants | | $ | 16,245 | | | $ | - | |
| Shares issued for promissory note fees | | $ | - | | | $ | 54,986 | |
The accompanying notes are an integral part of these consolidated financial statements
GREENWAY TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2022 AND 2021
Note 1 - Organization and Nature of Operations
Organization and Nature of Operations
Greenway Technologies, Inc. (collectively, “we,” “us,” “our” or the “Company”), through its wholly owned subsidiary, Greenway Innovative Energy, Inc., is primarily engaged in the research, development and commercialization of a proprietary Gas-to-Liquids (GTL) syngas conversion system that can be economically scaled to meet individual natural gas field/resource requirements. The Company’s proprietary and patented technology has been realized in Greenway’s first generation commercial-scale G-ReformerTM unit (“G-Reformer”), a unique and critical component of the Company’s overall GTL technology solution. Greenway’s objective is to become a material direct and licensed producer of renewable GTL synthesized diesel and jet fuels, with a near term focus on U.S. market opportunities.
Both of the Company’s wholly-owned subsidiaries: Universal Media Corp and Logistix Technology Systems, Inc. are currently inactive.
Impact of COVID-19
The ongoing COVID-19 global and national health emergency has caused significant disruption in the international and United States economies and financial markets. In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic. The spread of COVID-19 has caused illness, quarantines, cancellation of events and travel, business and school shutdowns, reduction in business activity and financial transactions, labor shortages, supply chain interruptions and overall economic and financial market instability. The COVID-19 pandemic has the potential to significantly impact the Company’s supply chain, distribution centers, or logistics and other service providers.
In addition, a severe prolonged economic downturn could result in a variety of risks to the business, including weakened demand for products and services and a decreased ability to raise additional capital when needed on acceptable terms, if at all. As the situation continues to evolve, the Company aswill continue to closely monitor market conditions and respond accordingly.
The ultimate impact of December 31, 2015the COVID-19 pandemic on the Company’s operations is unknown and 2014will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the consolidatedduration of the COVID-19 outbreak, new information which may emerge concerning the severity of the COVID-19 pandemic, and any additional preventative and protective actions that governments, or the Company, may direct, which may result in an extended period of continued business disruption and reduced operations.
Any resulting financial impact cannot be reasonably estimated at this time but is anticipated to have a material adverse impact on our business, financial condition, and results of its operationsoperations.
GREENWAY TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2022 AND 2021
Liquidity, Going Concern and its cash flows for the years ended December 31, 2015 and 2014, in conformity with accounting principles generally accepted in the United States of America.
The financial statements for 2014 were restated to account for certain asset impairments, stock issued for services and embedded derivatives.
The accompanyingManagement’s Plans
These consolidated financial statements have been prepared assuming that the Company will continue ason a going concern. concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.
As describedreflected in Note 2 of the accompanying consolidated financial statements, for the year ended December 31, 2022, the Company has minimal revenues, has incurred losses since inception, and has a negative working capital balancehad:
| ● | Net loss of $1,512,692; and |
| ● | Net cash used in operations was $496,654 |
Additionally, at December 31, 2015, which raises2022, the Company had:
| ● | Accumulated deficit of $36,278,869 |
| ● | Stockholders’ deficit of $10,737,576; and |
| ● | Working capital deficit of $10,737,576 |
The Company has cash on hand of $24,595 at December 31, 2022. The Company does not expect to generate sufficient revenues or positive cash flows from operations sufficiently to meet its current obligations. However, the Company may seek to raise debt or equity-based capital at favorable terms, though such terms are not certain.
These factors create substantial doubt about itsthe Company’s ability to continue as a going concern. Management's plans in regardconcern within the twelve-month period subsequent to this matterthe date that these financial statements are described in Note 2.issued. The consolidated financial statements do not include any adjustments that might result frombe necessary if the outcome of this uncertainty.
/s/ Patrick D. Heyn, CPA
Atlantis, Florida
April 14, 2016
UMED HOLDINGS, INC.
Consolidated Balance Sheet
| | | December 31, | | | December 31, | |
| | | 2015 | | | 2014 Restated | |
| Assets | | | | | | |
| Current Assets | | | | | | |
| Cash | | $ | 0 | | | $ | 77,504 | |
| Total Current Assets | | | 0 | | | | 77,504 | |
| | | | | | | | | |
| Fixed assets | | | | | | | | |
| Property & equipment | | | 4,015 | | | | 88,703 | |
| Less depreciation | | | 3,271 | | | | 14,061 | |
| | | | 744 | | | | 74,642 | |
| Other Assets | | | | | | | | |
| Mine properties, less impairment allowance of $100,000 in 2015 | | | 0 | | | | 0 | |
| Investments, less impairment allowance of $90,000 in 2015 | | | 0 | | | | 0 | |
| Assets related to discontinued operations | | | 0 | | | | 1,757,643 | |
| Total Other Assets | | | 0 | | | | 1,757.643 | |
| Total Assets | | $ | 744 | | | $ | 1,909,789 | |
| | | | | | | | | |
| Liabilities & Stockholders' Deficit | | | | | | | | |
| Current Liabilities | | | | | | | | |
| Accounts payable | | $ | 85,545 | | | $ | 34,986 | |
| Advances from stockholders | | | 102,214 | | | | 181,272 | |
| Accrued management fees | | | 1,793,617 | | | | 1,822,677 | |
| Accrued expenses | | | 229,763 | | | | 153,592 | |
| Convertible note payable, net of discounts of $0 and $110,800) | | | 0 | | | | 47,200 | |
| Derivative liability-warrants | | | 60,164 | | | | 239,789 | |
| Liabilities related to discontinued operations | | | 0 | | | | 1,860,518 | |
| Total Current Liabilities | | | 2,271,303 | | | | 4,340,034 | |
| Total Liabilities | | | 2,271,303 | | | | 4,340,034 | |
| Commitments and Contingencies | | | | | | | | |
| Stockholders' Deficit | | | | | | | | |
| Class B stock, 20,000,000 shares authorized, par value $0.0001, | | | | | | | | |
| 15,126,938 issued and outstanding at December 31, 2015 and | | | | | | | | |
| 15,738,894 at December 31, 2014 | | | 1,513 | | | | 1,574 | |
| Class A stock 300,000,000 shares authorized, par value $0.0001, | | | | | | | | |
| 183,882,132 and 145,559,835 issued and outstanding at | | | | | | | | |
| December 31, 2015 and December 31, 2014, respectively | | | 18,389 | | | | 14,557 | |
| Additional paid-in capital | | | 10,167,670 | | | | 5,983,053 | |
| Accumulated deficit | | | (12,458,131 | ) | | | (8,429,429 | ) |
| Total Stockholders' Deficit | | | (2,270,559 | ) | | | (2,430,245 | ) |
| Total Liabilities & Stockholders' Deficit | | $ | 744 | | | $ | 1,909,789 | |
See accompanying notesCompany is unable to continue as a going concern. Accordingly, the consolidated financial statements
have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.
Management’s strategic plans include the following:
| ● | Execute business operations more fully during the year ended December 31, 2023, |
| ● | Explore and execute prospective strategic and partnership opportunities |
UMED HOLDINGS,
GREENWAY TECHNOLOGIES, INC.
Statements of Operations
For the years ended December 31, 2015 and 2014
| | | | | | | |
| | | 2015 | | | 2014 Restated | |
| | | | | | | |
| Loss from continuing operations | | | | | | |
| General and administrative | | $ | 3,829,466 | | | $ | 2,241,076 | |
| Research and development | | | 766,726 | | | | 218,000 | |
| Depreciation | | | 396 | | | | 396 | |
| Total Expense | | | 4,596,588 | | | | 2,459,472 | |
| | | | | | | | | |
| | | | | | | | | |
| Operating loss | | | (4,596,588 | ) | | | (2,459,472 | ) |
| | | | | | | | | |
| Other income (expenses) | | | | | | | | |
| Debt forgiveness | | | 518,300 | | | | 0 | |
| Write off Logistix software | | | (73,500 | ) | | | 0 | |
| Impairment on investment assets | | | 0 | | | | (190,000 | ) |
| Gain (Loss) on change in fair value of derivatives | | | 139,397 | | | | (91,395 | ) |
| Interest expense | | | (218,105 | ) | | | (928,774 | ) |
| Total other expenses | | | 366,092 | | | | (1,210,169 | ) |
| | | | | | | | | |
| Operating loss from continuing operations | | | (4,230,496 | ) | | | (3,669,641 | ) |
Discontinued operations, net of tax (loss) from discontinued operations | | | (561,412 | ) | | | (714,834 | ) |
| Gain on disposal of discontinued operations | | | 763,206 | | | | 0 | |
| Total gain (loss) discontinued operations | | | 201,794 | | | | (714,834 | ) |
| | | | | | | | | |
| Loss before income taxes | | | (4,028,702 | ) | | | (4,384,475 | ) |
| | | | | | | | | |
| Provision for income taxes | | | 0 | | | | 0 | |
| | | | | | | | | |
| Net loss | | $ | (4,028,702 | ) | | $ | (4,384,475 | ) |
| | | | | | | | | |
| Basic loss per share; | | | | | | | | |
| Operating loss | | $ | (0.02 | ) | | $ | (0.03 | ) |
| Loss from discontinued operations | | $ | (0.00 | ) | | $ | (0.00 | ) |
| Net loss per share | | $ | (0.02 | ) | | $ | (0.03 | ) |
| | | | | | | | | |
| Weighted average shares | | | | | | | | |
| Outstanding; | | | | | | | | |
| Basic and diluted | | | 165,860,150 | | | | 138,442,759 | |
| | | | | | | | | |
See accompanying notes to consolidated financial statements
UMED Holdings, Inc.
Consolidated Statement of Stockholders' Deficit
For the years ended December 31, 2015 and 2014
| | | | | | Stock | | | | | | | | | | | | | | | | |
| | | Class B Number of Shares | | | Par Value $0.0001 Amount | | | Class A Number of Shares | | | Par Value $0.0001 Amount | | | Additional Paid-In- Capital | | | Accumulated Deficit | | | Total | |
Balance December 31, 2013 | | | 15,798,894 | | | $ | 1,580 | | | | 128,911,568 | | | $ | 12,892 | | | $ | 2,818,782 | | | $ | (4,044,954 | ) | | $ | (1,211,700 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Sale of common stock | | | | | | | | | | | 2,310,118 | | | | 231 | | | | 336,269 | | | | | | | | 336,500 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Conv of class B | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Stock to class A common | | | (60,000 | ) | | | (6 | ) | | | 600,000 | | | | 60 | | | | (54 | ) | | | | | | | - | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Conv shareholders' advances to common stock | | | | | | | | | | | 6,703,915 | | | | 670 | | | | 1,526,509 | | | | | | | | 1,527,179 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Shares issued for services | | | | | | | | | | | 7,034,234 | | | | 704 | | | | 1,301,547 | | | | | | | | 1,302,251 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net loss | | | | | | | | | | | | | | | | | | | | | | | (4,384,475 | ) | | | (4,384,475 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance December 31, 2014, Restated | | | 15,738,894 | | | $ | 1,574 | | | | 145,559,835 | | | $ | 14,557 | | | $ | 5,983,053 | | | $ | (8,429,429 | ) | | $ | (2,430,245 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Sale of common stock | | | | | | | | | | | 10,915,101 | | | | 1,091 | | | | 1,081,502 | | | | | | | | 1,082,593 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Class B common converted To class A common | | | (611,956 | ) | | | (61 | ) | | | 9,179,340 | | | | 918 | | | | (857 | ) | | | | | | | - | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Conv shareholders' advances to common stock | | | | | | | | | | | 1,817,746 | | | | 182 | | | | 314,335 | | | | | | | | 314,517 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Shares issued for services | | | | | | | | | | | 16,410,110 | | | | 1,641 | | | | 2,403,087 | | | | | | | | 2,404,728 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Warrants issued for services | | | | | | | | | | | | | | | | | | | 386,549 | | | | | | | | 386,549 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net loss | | | | | | | | | | | | | | | | | | | | | | | (4,028,702 | ) | | | (4,028,702 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| December 31, 2015 | | | 15,126,938 | | | $ | 1,513 | | | | 183,882,132 | | | $ | 18,389 | | | $ | 10,167,670 | | | $ | (12,458,131 | ) | | $ | (2,270,559 | ) |
See accompanying notes to consolidated financial statements
UMED HOLDINGS, INC.
Consolidated Statements of Cash Flows
For the years ended December 31, 2015 and 2014
| | | 2015 | | | 2014 Restated | |
| Cash Flows from Operating Activities | | | | | | |
| Net Loss from Operations | | $ | (4,230,496 | ) | | $ | (3,669,641 | ) |
| | | | | | | | | |
| Adjustments to reconcile net loss to net cash used in | | | | | | | | |
| operating activities: | | | | | | | | |
| Depreciation | | | 398 | | | | 395 | |
| Stock issued for services | | | 2,404,729 | | | | 1,302,251 | |
| Interest and amortization of debt discounts | | | 102,700 | | | | 64,836 | |
| Debt forgiveness | | | (518,300 | ) | | | 0 | |
| Impairment provision on assets | | | 0 | | | | 190,000 | |
| Warrants | | | 386,549 | | | | 0 | |
| Debt issue costs amortized | | | 0 | | | | 12,125 | |
| Write off of Logistix software | | | 73,500 | | | | 0 | |
| Gain (loss) change in fair value of derivatives | | | (139,397 | ) | | | 91,395 | |
| Changes in operating assets and liabilities: | | | | | | | | |
| Accounts payable | | | 50,559 | | | | (19,819 | ) |
| Accrued management fees | | | 489,241 | | | | 493,850 | |
| Derivative liability | | | 0 | | | | 239,789 | |
| Accrued expenses | | | 76,171 | | | | 22,092 | |
| | | | | | | | | |
| Net Cash Used in Operating Activities | | | (1,304,347 | ) | | | (1,272,727 | ) |
| | | | | | | | | |
| Cash Flows from Investing Activities | | | 0 | | | | 0 | |
| | | | | | | | | |
| Cash Flows from Financing Activities | | | | | | | | |
| Advances from shareholders converted to common stock | | | 314,517 | | | | 1,527,180 | |
| Advances from shareholders | | | (79,058 | ) | | | 54,869 | |
| Decrease in notes payable | | | 0 | | | | (30,000 | ) |
| Decrease in convertible note payable | | | (47,200 | ) | | | 47,200 | |
| Proceeds from sale of common stock | | | 1,082,593 | | | | 336,500 | |
| Net Cash Provided by Financing Activities | | | 1,270,852 | | | | 1,935,749 | |
Cash Used in Discontinued Operations | | | (44,009 | ) | | | (585,613 | ) |
| | | | | | | | | |
| Net (Decrease) Increase in Cash | | | (77,504 | ) | | | 77,409 | |
| Cash Beginning of Period | | | 77,504 | | | | 95 | |
| Cash End of Period | | $ | 0 | | | $ | 77,504 | |
| | | | | | | | | |
| Supplemental Disclosure of Cash Flow Information: | | | | | | | | |
| Cash Paid during the period for interest | | $ | 69,297 | | | $ | 49,009 | |
| Cash Paid during the period for taxes | | $ | 0 | | | $ | 0 | |
| Conversion of class B common stock to class A common stock | | $ | 918 | | | $ | 0 | |
The accompanying notes are an integral part of these financial statements
UMED COMPANY HOLDINGS, INC.
AND SUBSIDIARIESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DecemberDECEMBER 31, 2015
2022 AND 2021NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
UMED Holdings, Inc. ("UMED" or the "Company") was organized on March 13, 2002 under the laws of the State of Texas as Dynalyst Manufacturing Corporation. On August 18, 2009, in connection with a merger with Universal Media Corporation, a privately held Nevada company, the Company changed its name to Universal Media Corporation ("UMC"). The company changed its name to UMED Holdings, Inc. on March 23, 2011.
UMED'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, UMED has acquired 1,440 acres of placer mining claims on Bureau of Land Management land in Mohave County, Arizona. See discussion in
Note 4. Due 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 of 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 October 2011, UMED has acquired a 49% interest in Jet Regulators, LP, an aircraft maintenance company located at Meacham Field in Fort Worth, Texas. See discussion in Notes 5 and 7. Due to reduced growth expectations and the Company not receiving any revenues from its ownership in Jet Tech described in Note 7, we recognized an impairment charge of $90,000 during the year ended December 31, 2014.
In May 2012, the Company acquired 80% of Mamaki Tea & Extract of Hawaii, Inc. (nka Mamaki of Hawaii, Inc.) which owns and operates Wood Valley Plantation a 25 acre Mamaki Tea plantation located in the Kau district of the Island of Hawaii and lies at the foot of Mauna Loa, the Earth's largest volcano. On December 31, 2012, the Company acquired the remaining 20% for 500,000 shares of restricted common stock and $127,800 of cash. Mamaki of Hawaii, Inc. was sold in October 2015 as discussed further in Notes 2, 3, 4, 5 and 13.
In August 2012, the Company acquired 100% of Greenway Innovative Energy, Inc., which owns patents and proprietary technology that is capable of converting natural gas to diesel and jet fuels.
NOTE 2 - BASIS OF PRESENTATION AND GOING CONCERN UNCERTAINTIES
Summary of Significant Accounting Policies
Principles of Consolidation
The accompanying consolidated financial statements include the financial statements of UMEDGreenway and its wholly-ownedwholly owned subsidiaries. The Company's investment in Jet Regulators is accounted for at cost due to its lack of significant influence. All significant inter-companyintercompany accounts and transactions wereare eliminated in consolidation.
The accompanying consolidated financial statements include the accounts of the following entities:
Name of Entity | % | | Entity | Incorporation | Relationship |
UMED Holdings, Inc. | | | Corporation | Texas | Parent |
Mamaki of Hawaii, Inc.* | 100 | % | Corporation | Nevada | Subsidiary |
Universal Media Corporation | 100 | % | Corporation | Wyoming | Subsidiary |
Greenway Innovative Energy, Inc. | 100 | % | Corporation | Nevada | Subsidiary |
Logistix Technology Systems, Inc. | 100 | % | Corporation | Texas | Subsidiary |
* Sold in October 2015
Going Concern Uncertainties
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying consolidated financial statements, the Company sustained a loss of $4 million for the year ended December 31, 2015 and has a deficit of $12.5 million at December 31, 2015. 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.
To meet these objectives, the Company continues to seek other sources of financing in order to support existing operations and expand the range and scope of its business. However, there are no assurances that any such financing can be obtained on acceptable terms and timely manner, if at all. The failure to obtain the necessary working capital would have a material adverse effect on the business prospects and, depending upon the shortfall, the Company may have to curtail or cease its operations.
The accompanying consolidated financial statements do not include any adjustment to the recorded assets or liabilities that might be necessary should the Company have to curtail operations or be unable to continue in existence.
NOTE 3 - RESTATEMENT
In preparing the financial statements for the year ended December 31, 2014, the Company (through procedures performed by its independent auditors) determined that it had failed to properly value shares issued for services and shareholder conversions and properly identify and value derivatives related to a convertible note with associated warrants. As the result of this error, we are restating our financial statements ("The Restatement") and associated disclosures to include the cost associated with the shares issued and the derivatives associated with the convertible note and warrants. The error resulted in the understatement of non-cash expenses and a corresponding understatement of net loss by $1,699,129, for the year ended December 31, 2014.
Also in this restatement, the Company has reclassified the accounts and operations related to Mamaki of Hawaii, Inc., a wholly-owned subsidiary, that was sold in 2015 as discontinued operations as discussed in Note 13.
Balance Sheet Accounts | | As Previously Stated | | | Reclassify Mamaki | | | Correction of Derivative and Stock Valuations | | | As Restated | |
| | | | | | | | | | | | | |
| Cash | | $ | 82.400 | | | $ | (4,896 | ) | | | | | $ | 77,504 | |
| Accounts receivable | | | 780 | | | | (780 | ) | | | | | | 0 | |
| Prepaid expenses | | | 32,700 | | | | (32,700 | ) | | | | | | 0 | |
| Land | | | 150,000 | | | | (150,000 | ) | | | | | | 0 | |
| Buildings | | | 871,842 | | | | (871,842 | ) | | | | | | 0 | |
| Equipment | | | 1,084,755 | | | | (996,052 | ) | | | | | | 88,703 | |
| Accumulated depreciation | | | (312,946 | ) | | | 298,885 | | | | | | | (14,061 | ) |
| Mine Properties | | | 100,000 | | | | | | | | (100,000 | ) | | | 0 | |
| Investments | | | 90,000 | | | | | | | | (90,000 | ) | | | 0 | |
| Debt issue costs | | | 55,427 | | | | | | | | (55,427 | ) | | | 0 | |
| Assets related to discontinued operations | | | 0 | | | | 1,757,643 | | | | | | | | 1,757,643 | |
| Total | | $ | 2,155,214 | | | $ | 0 | | | $ | (233,302 | ) | | $ | 1,909,789 | |
| | | | | | | | | | | | | | | | | |
| Accounts payable | | $ | 70,568 | | | $ | (35,582 | ) | | | | | | $ | 34,986 | |
| Advances from shareholders | | | 181,272 | | | | | | | | | | | | 181,272 | |
| Accrued expenses | | | 733,316 | | | | (579,725 | ) | | | | | | | 153,591 | |
| Convertible note payable, net | | | 136,801 | | | | | | | | (89,601 | ) | | | 47,200 | |
| Derivative liability | | | 0 | | | | | | | | 239,789 | | | | 239,789 | |
| Term notes | | | 1,245,211 | | | | (1,245,211 | ) | | | | | | | 0 | |
| Liabilities related to discontinued operations | | | 0 | | | | 1,860,518 | | | | | | | | 1,860,518 | |
| Total | | $ | 4,189,845 | | | $ | 0 | | | $ | 150,189 | | | $ | 4,340,034 | |
| | | | | | | | | | | | | | | | | |
| Class B common | | $ | 1,574 | | | $ | 0 | | | $ | 0 | | | $ | 1,574 | |
| Class A common | | | 14,557 | | | | 0 | | | | 0 | | | | 14,557 | |
| Additional paid-in-capital | | | 4,679,538 | | | | 0 | | | | 1,303,515 | | | | 5,983,53 | |
| Accumulated deficit | | | (6,730,300 | ) | | | 0 | | | | (1,699,129 | ) | | | (8,429,429 | ) |
| Total | | $ | 2,034,631 | ) | | $ | 0 | | | $ | (383,489 | ) | | | (2,418,120 | ) |
Statement of Operations | | As Previously Stated | | | Mamaki Reclassification | | | Correction of Derivative and Stock Valuations | | | As Restated | |
| | | | | | | | | | | | | |
| Sales | | $ | 24,581 | | | $ | (24,581 | ) | | 0 | | | $ | 0 | |
| Cost of sales | | | 54,696 | | | | (54,696 | ) | | 0 | | | | 0 | |
| Gross profit | | | (30,115 | ) | | | (30,115 | ) | | 0 | | | | 0 | |
| Expenses | | | | | | | | | | | | | | | |
| General and administrative | | | 2,092,746 | | | | (415,009 | ) | | | 563,339 | | | | 2,241,076 | |
| Research and development | | | 218,000 | | | | 0 | | | | 0 | | | | 218,000 | |
| Depreciation | | | 119,350 | | | | (118,954 | ) | | | 0 | | | | 396 | |
| | | | 2,430,096 | | | | (533,963 | ) | | | 563,339 | | | | 2,459,472 | |
Operating loss Other expenses | | | (2,460,211 | ) | | | (564,078 | ) | | | (563,339 | ) | | | (2,459,472 | ) |
| Impairment on investments | | | 0 | | | | 0 | | | | (190,000 | ) | | | (190,000 | ) |
| Loss on derivative | | | 0 | | | | 0 | | | | (91,395 | ) | | | (91,395 | ) |
| Interest expense | | | (225,135 | ) | | | (150,756 | ) | | | (842,270 | ) | | | (928,774 | ) |
| Operating loss from continuing operations | | | (2,685,346 | ) | | | (714,834 | ) | | | (1,687,004 | ) | | | (3,669,641 | ) |
| Loss from discontinued operations | | | 0 | | | | (714,834 | ) | | | 0 | | | | (714,834 | ) |
| | | | | | | | | | | | | | | | | |
| Loss before income taxes | | | (2,685,346 | ) | | | 0 | | | | (1,687,004 | ) | | | (4,384,475 | ) |
| Provision for income taxes | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
| Net loss | | $ | (2,685,346 | ) | | $ | (714,834 | ) | | | (1,687,004 | ) | | $ | (4,384,475 | ) |
| | | | | | | | | | | | | | | | | |
| Basic loss per share | | | | | | | | | | | | | | | | |
| Operating loss | | | | | | | | | | | | | | $ | (0.03 | ) |
| Loss from discontinued operations | | | | | | | | | | | | | | $ | (0.00 | ) |
| | | | | | | | | | | | | | | | | |
Statement of Cash Flows Accounts | | As Previously Stated | | | Mamaki Reclassification | | | Correction of Derivative and Stock Valuations | | | As Restated | |
| | | | | | | | | | | | | |
| Net loss from operations | | $ | (2,685,346 | ) | | $ | (714,834 | ) | | $ | (269,461 | ) | | $ | (3,669,641 | ) |
| | | | | | | | | | | | | | | | | |
| Depreciation | | | 119,350 | | | | (118,955 | ) | | | 0 | | | | 395 | |
| Interest and amortization of debt discounts | | | 0 | | | | | | | | 64,836 | | | | 64,836 | |
| Stock issued for services | | | 738,842 | | | | 0 | | | | 563,409 | | | | 1,302,251 | |
| Impairment provisions | | | 0 | | | | 0 | | | | 190,000 | | | | 19,000 | |
| Warrants | | | 89,568 | | | | 0 | | | | (89,568 | ) | | | 0 | |
| Debt issue costs amortized | | | 0 | | | | 0 | | | | 12,125 | | | | 12,125 | |
| Accounts receivable | | | 900 | | | | (900 | ) | | | 0 | | | | 0 | |
| Prepaid expenses | | | 21,149 | | | | (21,149 | ) | | | 0 | | | | 0 | |
| Accounts payable | | | (9,287 | ) | | | (10,532 | ) | | | 0 | | | | (19,819 | ) |
| Accrued management fees | | | 493,851 | | | | 0 | | | | 0 | | | | 493,851 | |
| Derivative liability | | | 0 | | | | 0 | | | | 239,789 | | | | 239,789 | |
| Accrued expenses | | | 262,332 | | | | (240,240 | ) | | | | | | | 22,092 | |
| Net Cash Provided by Operations | | | (968,641 | ) | | | 323,056 | | | | 1,081,812 | | | | (1,455,517 | ) |
| | | | | | | | | | | | | | | | | |
| Advances and conversions from shareholders | | | 729,029 | | | | 0 | | | | 798,151 | | | | 1,582,049 | |
| Proceeds from convertible note | | | 136,801 | | | | 0 | | | | (89,601 | ) | | | 47,200 | |
| Decrease in notes payable | | | (120,393 | ) | | | 90,393 | | | | 0 | | | | (30,000 | ) |
| Proceeds from sale of common stock | | | 336,500 | | | | 0 | | | | 0 | | | | 336,500 | |
| Net Cash Provided by Financing | | | 1,049,855 | | | | 90,393 | | | | 157,859 | | | | 1,935,749 | |
| | | | | | | | | | | | | | | | | |
| Cash used in discontinued operations | | | | | | | (402,823 | ) | | | | | | | (402,823 | ) |
| Net Increase in Cash | | $ | 81,214 | | | $ | (3,805 | ) | | | | | | $ | 77,409 | |
NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of significant accounting policies applied in the presentation of the consolidated financial statements are as follows:
Property & 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 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 as follows.
Impairment of Long-Lived Assets
Business Segments
The Company assessesuses the impairment of long-lived assets whenever events or changes in circumstances indicate that“management approach” to identify its reportable segments. The management approach requires companies to report segment financial information consistent with information used by management for making operating decisions and assessing performance as the carrying amount may not be recoverable, in accordance with ASC Topic 360, "Property, Plant and Equipment." An asset or asset group is considered impaired if its carrying amount exceedsbasis for identifying 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. Due 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 of 2010 and not having current resources for an appraisal, we recognized an impairment charge of $100,000 during the year ended December 31, 2014. The Company will continue to pay the annual renewal fees of $11,160 based on obtaining encouraging results from samples on surface material. Due to reduced growth expectations and the Company not receiving any revenues from its ownership in Jet Tech described in Note 7, we recognized an impairment charge of $90,000 during the year ended December 31, 2014.
Discontinued Operations
On November 2, 2015, the Company consummated the sale of its wholly owned subsidiary, Mamaki of Hawaii, Inc. ("Mamaki") to Hawaiian Beverages, Inc. ("HBI"). Under the agreement, HBI acquired 100% of the common stock of Mamaki in exchange for seven hundred thousand dollars ($700,000) and the assumption of eighty-four thousand two hundred seventy-five thousand dollars ($84,275) of UMED debts. HBI has paid so far two hundred forty-five thousand five hundred dollars ($245,400) of the two hundred fifty thousand dollars ($250,000) due at closing and pay three installments of one hundred fifty thousand dollars ($150,000) on each of thirty, sixty and ninety-day from the closing date.Company’s reportable segments. The Company has not received any paymentidentified one single reportable operating segment. The Company manages its business on the $454,600basis of one operating and has determined that the account is doubtfulreportable segment and wrote it off, as of December 31, 2015, as a deductionderives revenues from the gain calculated on the sale.
The results of Mamaki are presented as a separate line item in the consolidated statements of operationsselling its product and the consolidated balance sheets entitled "Assets/Liabilities sold relating to discontinued operations" and "Assets/Liabilities related to discontinued operations". In accordance with EITF 87-24, "Allocation of Interest to Discontinued Operations", the Company elected to not allocate consolidated interest expense to discontinued operations where the debt is not directly attributable to or related to discontinued operations. All of the financial information in the consolidated financial statements and notes to the consolidated financial statements has been revised to reflect only the results of continued operations. (See Note 13).
Revenue Recognition
The Company has not, to date, generated significant revenues. The Company plans to recognize revenue in accordance with Accounting Standards Codification subtopic 605-10, Revenue Recognition ("ASC 605-10") which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. 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.
ASC 605-10 incorporates Accounting Standards Codification subtopic 605-25, Multiple-Element Arraignments ("ASC 605-25"). ASC 605-25 addresses accounting for arrangements that may involve the delivery or performance of multiple products, services and/or rights to use assets. The effect of implementing 605-25 on the Company's financial position and results of operations was not significant.
services.
Use of Estimates
The preparation of the
Preparing financial statements in conformity with accounting principles generally accepted in the United StatesU.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenuerevenues and expenses during the reported period. Actual results could differ materially from those estimates, and those estimates may be material.
Changes in estimates are recorded in the estimates.period in which they become known. The Company bases its estimates on historical experience and other assumptions, which include both quantitative and qualitative assessments that it believes to be reasonable under the circumstances.
Significant estimates during the years ended December 31, 2022 and 2021, respectively, include valuation of stock-based compensation, uncertain tax positions, and the valuation allowance on deferred tax assets.
GREENWAY TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2022 AND 2021
Fair Value of Financial Instruments
The Company accounts for financial instruments under Financial Accounting Standards Board (“FASB”) ASC 820, Fair Value Measurements. ASC 820 provides a framework for measuring fair value and requires disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, based on the Company’s principal or, in absence of a principal, most advantageous market for the specific asset or liability.
The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs, when determining fair value.
The three tiers are defined as follows:
| ● | Level 1 - Observable inputs that reflect quoted market prices (unadjusted) for identical assets or liabilities in active markets; |
| ● | Level 2 - Observable inputs other than quoted prices in active markets that are observable either directly or indirectly in the marketplace for identical or similar assets and liabilities; and |
| ● | Level 3 - Unobservable inputs that are supported by little or no market data, which require the Company to develop its own assumptions. |
The determination of fair value and the assessment of a measurement’s placement within the hierarchy requires judgment. Level 3 valuations often involve a higher degree of judgment and complexity. Level 3 valuations may require the use of various cost, market, or income valuation methodologies applied to unobservable management estimates and assumptions. Management’s assumptions could vary depending on the asset or liability valued and the valuation method used. Such assumptions could include estimates of prices, earnings, costs, actions of market participants, market factors, or the weighting of various valuation methods. The Company may also engage external advisors to assist us in determining fair value, as appropriate.
Although the Company believes that the recorded fair value of our financial instruments is appropriate, these fair values may not be indicative of net realizable value or reflective of future fair values.
The Company’s financial instruments, including cash, accounts payable and accrued expenses, accounts payable and accrued expenses – related parties, advances and various debt instruments are carried at historical cost. At December 31, 2022 and 2021, respectively, the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments.
ASC 825-10 “Financial Instruments” allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (“fair value option”). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding financial instruments.
GREENWAY TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2022 AND 2021
Equity Method Investment
On August 29, 2019, the Company entered into a Material Definitive Agreement related to the formation of OPMGE. The Company contributed a limited license to use its proprietary and patented GTL technology for no actual cost basis in exchange for 42.86% (300 of 700 currently owned member units) revenue interest in OPMGE, expected to be later reduced to a 30% interest upon the completion of certain expected third-party investments for the remaining 300 of 1,000 member units available. However, 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. Since the Wharton Plant is owned by Mabert, OPMGE was no longer a viable entity as of December 31, 2022 and 2021, respectively.
As of December 31, 2022 and 2021, respectively, there were no assets within OPMGE. Accordingly, the Company’s receivable with this entity is fully reserved for as of December 31, 2022 and 2021.
Cash and Cash Equivalent
TheEquivalents and Concentration of Credit Risk
For purposes of the statements of cash flows, the Company considers all highly liquid investments purchasedinstruments with an originala maturity of three months or less at the purchase date and money market accounts to be cash equivalents. There were
At December 31, 2022 and 2021, respectively, the Company did not have any cash equivalents.
The Company is exposed to credit risk on its cash and cash equivalents atin the event of default by the financial institutions to the extent account balances exceed the amount insured by the FDIC, which is $250,000. At December 31, 20152022 and 2014, respectively.2021, respectively, the Company did not have any cash in excess of the insured FDIC limit.
Segment Information
GREENWAY TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2022 AND 2021
Impairment of Long-lived Assets
Management evaluates the recoverability of the Company’s identifiable intangible assets and other long-lived assets when events or circumstances indicate a potential impairment exists, in accordance with the provisions of ASC 280, "Segment Reporting" requires360-10-35-15 “Impairment or Disposal of Long-Lived Assets.” Events and circumstances considered by the Company in determining whether the carrying value of identifiable intangible assets and other long-lived assets may not be recoverable include but are not limited to: significant changes in performance relative to expected operating results; significant changes in the use of the "management approach" model for segment reporting. The management approach modelassets; significant negative industry or economic trends; and changes in the Company’s business strategy. In determining if impairment exists, the Company estimates the undiscounted cash flows to be generated from the use and ultimate disposition of these assets.
If impairment is indicated based on a comparison of the way a company's management organizes segments withinassets’ carrying values and the companyundiscounted cash flows, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets.
Property and Equipment
Expenditures for making operating decisionsrepair and assessing performance. maintenance which do not materially extend the useful lives of property and equipment are charged to operations. When property and equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the respective accounts with the resulting gain or loss reflected in operations.
Management reviews the carrying value of its property and equipment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.
Derivative Liabilities
The Company determined that is had one operating segment, Mamakianalyzes all financial instruments with features of Hawaii, Inc.both liabilities and equity under FASB ASC Topic No. 480, (“ASC 480”), “Distinguishing Liabilities from Equity” and FASB ASC Topic No. 815, (“ASC 815”) “Derivatives and Hedging”. Derivative liabilities are adjusted to reflect fair value at each reporting period, with any increase or decrease in addition to its corporate activities, which the Company is presentingfair value recorded in the results of operations (other income/expense) as discontinued operations.
Mine Exploration and Development Costs
change in fair value of derivative liabilities. The Company
plansuses a binomial pricing model to
account for mine exploration costs in accordance with Accounting Standards Codification 932, Extractive Activities. All exploration expenditures are expensed as incurred. Mine development costs are capitalized until production, other than production incidental to the mine development process, commences and are amortized ondetermine fair value of these instruments.
Upon conversion or repayment of a units of production method based on the estimated proven and probable reserves. Mine development costs represent costs incurred in establishing access to mineral reserves and include costs associated with sinking or driving shafts and underground drifts, permanent excavations, roads and tunnels. The end of the development phase and the beginning of the production phase takes place when construction of the mine for economic extraction is substantially complete. Coal extracted during the development phase is incidental to the mine's production capacity and is not considered to shift the mine into the production phase. Amortization of capitalized mine development is computed based on the estimated life of the mine and commences when production, other than production incidental to the mine development process, begins. 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 of 2010 and not having current resources for an appraisal, we recognized an impairment charge of $100,000 during the year ended December 31, 2014. Through December 31, 2015, the Company had not incurred any mine development costs. During the year ended December 31, 2015, the Company incurred $9,166 in costs of obtaining surface samples. Through December 31, 2015, the Company had not incurred any mine development costs.
Mine Properties
The Company will account for mine properties in accordance with Accounting Standard Codification 930, Extractive Activities-Mining. Costs of acquiring mine properties are capitalized by project area upon purchase of the associated claims. Mine properties are periodically assessed for impairment of value and any diminution in value. The Company had 1,440 acres of placer mining claims at December 31, 2015, which were acquired in December 2010debt instrument in exchange for
5,066,000 shares of common stock,
valued at $100,000. Due towhere the embedded conversion option has been bifurcated and accounted for as a derivative liability (generally convertible debt and warrants), the Company
not producing any revenues from its BLM mining leases since its acquisitionrecords the shares of common stock at fair value, relieves all related debt, derivatives, and debt discounts, and recognizes a net gain or loss on debt extinguishment.
Equity instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815 are reclassified to liabilities at the fair value of the leases, achievinginstrument on the reclassification date.
At December 31, 2022 and 2021, respectively, the Company had no derivative liabilities.
GREENWAY TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2022 AND 2021
Debt Discount
For certain notes issued, the Company may provide the debt holder with an original issue discount. The original issue discount is recorded as a positiondebt discount, reducing the face amount of producing cash flow levelsthe note, and is amortized to fundinterest expense over the developmentlife of its BLM mining leasesthe debt, in Decemberthe Consolidated Statements of 2010Operations.
Debt Issue Cost
Debt issuance cost paid to lenders, or third parties are recorded as debt discounts and not having current resources for an appraisal, we recognized an impairment chargeamortized to interest expense over the life of $100,000 during the year ended December 31, 2014.
underlying debt instrument, in the Consolidated Statements of Operations.
Income Taxes
The Company accounts for income taxes in accordance with FASBtax using the asset and liability method prescribed by ASC 740, "Income Taxes," which requires that the Company recognize“Income Taxes”. Under this method, deferred tax assets and liabilities and assetsare determined based on the differencesdifference between the financial statement carrying amountsreporting and the tax bases of assets and liabilities using enacted tax rates that will be in effect in the yearsyear in which the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in netThe Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax liabilities. A valuation allowanceassets will not be realized. The effect on deferred taxes of a change in tax rates is recordedrecognized as income or loss in the period that includes the enactment date.
The Company follows the accounting guidance for uncertainty in income taxes using the provisions of ASC 740 “Income Taxes”. Using that guidance, tax positions initially need to be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. As of December 31, 2022 and December 31, 2021, respectively, the Company had no uncertain tax positions that somequalify for either recognition or all deferred tax assets will not be realized.
disclosure in the financial statements.
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,recognizes interest and penalties accounting in interim periods, disclosure and transition. Open tax-years subjectrelated to IRS examination include 2009 – 2014.
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 (5,112,953) have been excluded as a common stock equivalent in the diluted loss per share because their effect is 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 embeddeduncertain income tax positions in other contracts,expense. No interest 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 8 below for discussion regarding a warrant agreementpenalties related to a convertible note, which was repaid on July 22, 2015.
Original Issue Discount
For certain convertible debt issued,uncertain income tax positions were recorded during 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 proceeds received. The OID is amortized into interest expense pro-rata over the term of the Note.
Fair Value of Financial Instruments
The Company's financial instruments, as defined by Accounting Standard Codification subtopic 825-10, Financial Instrument ("ASC 825-10), include cash, accounts payable and convertible note payable. All instruments are accounted for on a historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value atyears ended December 31,
20152022 and
2014.2021, respectively.
FASB ASC 820 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. ASC 820 establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows:
Level 1: Observable inputs such as quoted prices in active markets;
Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
Level 3: Unobservable inputs in which there is little or no market data, which requires the reporting entity to develop its own assumptions
The Company's derivative was valued at level 3.
Stock Based Compensation
The Company follows Accounting Standards Codification subtopic 718-10, Compensation ("ASC 718-10") which requires that all share-based payments to both employees and non-employees be recognized in the income statement based on their fair values.
At December
GREENWAY TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2015, the Company did not have any issued or 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.
2022 AND 2021
Research and Development
The Company accounts for research and development costs in accordance with Accounting Standards CodificationASC subtopic 730-10, Research and Development (" (“ASC 730-10"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 $766,726$54,275 and $218,000 during$158,000 for the years ended December 31, 20152022 and 2014,2021, respectively.
Stock-Based Compensation
The Company accounts for our stock-based compensation under ASC 718 “Compensation – Stock Compensation” using the fair value-based method. Under this method, compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. This guidance establishes standards for the accounting for transactions in which an entity exchanges it equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments.
The Company uses the fair value method for equity instruments granted to non-employees and use the Black-Scholes model for measuring the fair value of options.
The fair value of stock-based compensation is determined as of the date of the grant or the date at which the performance of the services is completed (measurement date) and is recognized over the vesting periods.
When determining fair value, the Company considers the following assumptions in the Black-Scholes model:
| ● | Exercise price, |
| ● | Expected dividends, |
| ● | Expected volatility, |
| ● | Risk-free interest rate; and |
| ● | Expected life of option |
Issuance
GREENWAY TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2022 AND 2021
Stock Warrants
In connection with certain financing, consulting and collaboration arrangements, the Company may issue warrants to purchase shares of Common Stock
its common stock. The
outstanding warrants are standalone instruments that are not puttable or mandatorily redeemable by the holder and are classified as equity awards. The Company measures the fair value of the awards using the Black-Scholes option pricing model as of the measurement date. Warrants issued in conjunction with the issuance of common stock
forare initially recorded at fair value as a reduction in additional paid-in capital of the common stock issued. All other
than cashwarrants are recorded at fair value as expense over the requisite service period or at the date of issuance if there is
recordednot a service period.
Basic and Diluted Earnings (Loss) per Share
Pursuant to ASC 260-10-45, basic loss per common share is computed by dividing net loss by the weighted average number of shares of common stock outstanding for the periods presented. Diluted loss per share is computed by dividing net loss by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period. Potentially dilutive common shares may consist of common stock issuable for stock options and warrants (using the treasury stock method), convertible notes and common stock issuable. These common stock equivalents may be dilutive in the future.
At December 31, 2022 and 2021, respectively, the Company at market values.
Impacthad the following common stock equivalents outstanding, which are potentially dilutive equity securities:Schedule Of Potentially Dilutive Equity Securities
| | | | | | | | | |
| | | December 31, 2022 | | | December 31, 2021 | |
| | | | | | | |
| Convertible debt | | | 3,689,400 | | | | 2,083,338 | |
| Warrants | | | - | | | | 3,000,000 | |
| Potentially dilutive equity securities | | | 3,689,400 | | | | 5,083,338 | |
Related Parties
Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company.
Related parties also include principal owners of Newthe Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests.
Recent Accounting Standards
Changes to accounting principles are established by the Financial Accounting Standards Board in the form of Accounting Standards Updates (“ASU’s”) to the FASB’s Codification. We consider the applicability and impact of all ASU’s on our consolidated financial position, results of operations, stockholders’ deficit, cash flows, or presentation thereof. Management does not believe that any other recentlyhas evaluated all recent accounting pronouncements as issued by the FASB in the form of Accounting Standards Updates (“ASU”) through the date these financial statements were available to be issued and found no recent accounting pronouncements issued, but not yet effective accounting pronouncements, ifwhen adopted, wouldwill have a material impact on the financial statements of the Company.
Reclassifications
Certain prior year amounts have been reclassified for consistency with the current year presentation.
The Company combined various accrued liabilities into one caption called accounts payable and accrued expenses.
The Company combined various accrued liabilities with related parties into one caption called accounts payable and accrued expenses – related parties.
The Company separately disclosed its notes payable and convertible notes payable.
The Company separately reflected amortization of debt discount from general and administrative expenses.
These reclassifications had no effect on the accompanying consolidated financial statements.results of operations, stockholders’ deficit, or cash flows.
GREENWAY TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2022 AND 2021
Note 3 – Notes Payable
Notes payable and related terms were as follows:
Schedule of Notes Payable and Related Terms
| | | | 1 | | | | 2 | | | | 3 | |
| Terms | | | Note Payable | | | | Note Payable | | | | Note Payable | |
| | | | | | | | | | | | | |
| Issuance date of note | | | September 2019 | | | | March 2019 | | | | May 2022 | |
| Maturity date | | | September 2022 | | | | March 2024 | | | | September 2022 | |
| Interest rate | | | 7.70 | % | | | N/A | | | | N/A | |
| Default interest rate | | | 18.00 | % | | | N/A | | | | N/A | |
| Collateral | | | Unsecured | | | | Unsecured | | | | Unsecured | |
| Original amount | | $ | 525,000 | | | $ | 300,000 | | | $ | 67,500 | |
| | | 1 | | | 2 | | | 3 | | | Total | | | In-Default | |
| | | | | | | | | | | | Total | | | In-Default | |
| | | | | | | | | | | | | | | | |
| Balance - December 31, 2020 | | $ | 525,000 | | | $ | 195,000 | | | $ | - | | | $ | 720,000 | | | $ | - | |
| Repayments | | | - | | | | (60,000 | ) | | | - | | | | (60,000 | ) | | | | |
| Balance - December 31, 2021 | | | 525,000 | | | | 135,000 | | | | - | | | | 660,000 | | | | - | |
| Beginning balance | | | 525,000 | | | | 135,000 | | | | - | | | | 660,000 | | | | - | |
| Proceeds | | | - | | | | - | | | | 67,500 | | | | 67,500 | | | | | |
| Debt discount | | | - | | | | - | | | | (37,500 | ) | | | (37,500 | ) | | | | |
| Amortization of debt discount (interest expense) | | | - | | | | - | | | | 37,500 | | | | 37,500 | | | | | |
| Repayments | | | - | | | | (55,000 | ) | | | - | | | | (55,000 | ) | | | | |
| Balance - December 31, 2022 | | $ | 525,000 | | | $ | 80,000 | | | $ | 67,500 | | | $ | 672,500 | | | $ | 592,500 | |
| Ending balance | | $ | 525,000 | | | $ | 80,000 | | | $ | 67,500 | | | $ | 672,500 | | | $ | 592,500 | |
| 1 | The Company executed a settlement agreement with a third party for $525,000 in 2019. This note requires semi-annual interest payments. At December 31, 2022, the note is in default. |
| 2 | The Company executed a settlement agreement with a third party for $300,000 in 2019. This note requires sixty (60) monthly installments of $5,000 each until paid in full. |
| 3 | The Company executed a note for $67,500 and received net proceeds of $30,000. The balance of $37,500 was an original issue discount amortized over the life of the note. At December 31, 2022, the note is in default. |
GREENWAY TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2022 AND 2021
Note 4 – Notes Payable – Related Parties
The Company executed a loan agreement for up to $5,000,000 in advances with a Company owned by a stockholder and who is the brother of the Company’s Chief Financial Officer as well as a member of the Board of Directors.
The Company also has executed various loans with other stockholders and members of the Board Directors.
The notes bear interest ranging from 10% - 18%. The notes all have initial one-year (1) dates to maturity and are automatically renewed for one-year (1) periods upon maturity. As a result, none of the notes payable - related parties are in default.
Typically, with each of these notes, the Company has issued shares of common stock, which have been recognized as a debt discount and amortized over the life of the note.
During 2022, the Company issued 103,538 shares of common stock under these arrangements and recoded a corresponding debt discount of $1,991.
During 2021, the Company issued 858,496 shares of common stock under these arrangements and recorded a corresponding debt discount of $30,791.
Notes payable – related parties consist of loans from various members of management and the Board of Directors, typically for use as working capital. Related terms were as follows:
Schedule of Notes Payable – Related Parties and Related Terms
| | | | | |
| Balance - December 31, 2020 | | $ | 2,411,605 | |
| Debt discount | | | (30,791 | ) |
| Amortization of debt discount (interest expense) | | | 35,202 | |
| Conversion of stockholder advances to notes payable - related parties | | | 74,920 | |
| Proceeds | | | 354,328 | |
| Repayments | | | (100,000 | ) |
| Balance - December 31, 2021 | | | 2,745,264 | |
| Beginning balance | | | 2,745,264 | |
| Conversion of stockholder advances to notes payable - related parties (see Note 6) | | | 51,769 | |
| Debt discount | | | (1,991 | ) |
| Amortization of debt discount (interest expense) | | | 10,732 | |
| Balance - December 31, 2022 | | $ | 2,805,774 | |
| Ending balance | | $ | 2,805,774 | |
GREENWAY TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2022 AND 2021
Note 5 – CONTRACT RECEIVABLE
In November 2015,Convertible Note Payable
Convertible note payable and related terms were as follows:
Schedule of Convertible note payable and Related terms
| | Convertible | |
| Terms | | Note Payable | |
| | | |
| Issuance dates of note | | | 2017 | |
| Maturity date | | | 2019 | |
| Interest rate | | | 4.50 | % |
| Default interest rate | | | 18.00 | % |
| Collateral | | | Unsecured | |
| Conversion rate | | $ | 0.08/share | |
| | | | | | In-Default | |
| | | | | | | |
| Balance - December 31, 2020 | | $ | 166,667 | | | $ | 166,667 | |
| No activity in 2021 | | | - | | | | | |
| Balance - December 31, 2021 | | | 166,667 | | | | 166,667 | |
| No activity in 2022 | | | - | | | | | |
| Balance - December 31, 2022 | | $ | 166,667 | | | $ | 166,667 | |
Note 6 – Advances – Related Parties
Advances – related parties and related terms were as follows:
Schedule of Advances – Related Parties and Related Terms
| | | Advances | |
| Terms | | Related Parties | |
| | | | |
| Issuance date of advances | | | Prior to 2018 | |
| Maturity date | | | Due on Demand | |
| Interest rate | | | 0 | % |
| Collateral | | | Unsecured | |
| | | | | |
| Balance - December 31, 2020 | | $ | 142,934 | |
| Conversion of stockholder advances to notes payable - related parties | | | (74,920 | ) |
| Balance - December 31, 2021 | | | 68,014 | |
| Proceeds | | | 3,500 | |
| Conversion of stockholder advances to notes payable - related parties (see Note 4) | | | (51,769 | ) |
| Subscription receivable - warrants | | | (16,245 | ) |
| Balance - December 31, 2022 | | $ | 3,500 | |
During 2022, in connection with a settlement, the Company completedreduced amounts owed to a stockholder for $16,245 with a corresponding reduction to a subscription receivable for warrants.
Note 7 – Commitments
Legal Matters
On October 19, 2019, the sale (entered into on October 1, 2015)Company was served with a lawsuit by Norman Reynolds, a previously engaged counsel by the Company. The suit was filed in Harris County District Court, Houston, Texas, asserting claims for unpaid fees of its wholly owned subsidiary, Mamaki$90,377. While fully reserved, Greenway vigorously disputes the total amount claimed. Greenway has asserted counterclaims based upon alleged conflicts of Hawaii, Inc., ("Mamaki") to Hawaiian Beverages, Inc. ("HBI"). Under the agreement, HBI acquired 100%interest, breaches of fiduciary duty and violations of the common stock of Mamaki in exchange for seven hundred thousand dollars ($700,000)Texas Deceptive Trade Practices Act (“DTPA”).
On November 17, 2021, Greenway and Mr. Reynolds settled the assumption of eighty-four thousand two hundred seventy- five thousand dollars ($84,275) of UMED debts. HBI paid two hundred forty-five thousand five hundred dollars ($245,400) at closing towards the first installment due of two hundred fifty thousand ($250,000), resulting in a receivable of $454,600 at December 31, 2015. The Company has not received any payment on the $454,600 and has determined that collection is doubtful and wrote the account off at December 31, 2015 as a reductionmatter agreeing to the gain calculated on the sale.
NOTE 6 – PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment, their estimated useful lives, and related accumulated depreciation at December 31, 2015 and 2014, respectively, are summarized as follows:
| | | Range of | | | | | | | |
| | | Lives in | | | | |
| | | Years | | | 2015 | | | 2014 | |
| Equipment | | | 5 | | | | 2,032 | | | | 13,220 | |
| Logistix software | | | 5 | | | | 0 | | | | 73,500 | |
| Furniture and fixtures | | | 5 | | | | 1,983 | | | | 1,983 | |
| | | | | | | | 4,015 | | | | 88,703 | |
| Less accumulate depreciation | | | | | | | (3,271 | ) | | | (14,061 | ) |
| | | | | | | $ | 744 | | | | 74,642 | |
| | | | | | | | | | | | | |
| Depreciation expense for the year ended | | | | | | $ | 396 | | | $ | 297 | |
cash payments from GWTI totaling $20,000. During the year ended December 31,
2015,2022, and upon settlement of the obligation, the Company
wrote-offrecorded a gain on legal settlement of $70,377.
On September 7, 2021, the balance of its Logistix softwareCompany was served with a demand for mediation and $11,188
of fully depreciated assets.
NOTE 7 – INVESTMENTS
Investments consistedpotential arbitration by Gregory Sanders, a previous employee of the
following atCompany. The demand claims Mr. Sanders had an employment agreement with the Company entitling him to certain compensation payments under the contract. No conclusion was met during mediation which occurred in the fourth quarter of 2021 or as of December 31,
20152022. Greenway is confident in its defenses and
2014;counterclaims and intends to vigorously defend its interests and prosecute its claims.
| | | | 2015 | | | | 2014 Restated | |
| | | | | | | | | |
Jet Tech LLC In October 2011, the Company acquired a 49% interest in JetTech LLC which is an aerospace maintenance operation located at Meacham Airport in Fort Worth, Texas -The Company has impaired the investment at December 31, 2015 and 2014, respectively, | | $ | 0 | | | $ | 0 | |
| | | | | | | | | |
| TOTAL INVESTMENTS | | $ | 0 | | | $ | 0 | |
NOTE
GREENWAY TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2022 AND 2021
Note 8 – CONVERTIBLE PROMISSORY NOTE
On September 18, 2014,Stockholders’ Deficit
The Company has one (1) class of stock:
Common Stock
| - | 500,000,000 shares authorized |
| - | $0.0001 par value |
| - | Voting at 1 vote per share |
Equity Transactions for the Year Ended December 31, 2022
Stock Issued as Debt Issue Costs
The Company issued a $158,000 convertible promissory note bearing interest at 10.0% per annum to an accredited investor, payable July 23, 2015, in monthly installments of $31,600 plus accrued interest beginning 6 months after the date of this promissory note. The note was paid in full on July 22, 2015. 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 did result in a derivative. The Company evaluated the terms of the convertible note and concluded that there was a beneficial conversion feature since the convertible note was convertible into302,038 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 $158,000 based on its then intrinsic value. The discount related to the beneficial conversion feature ($78,463) and the warrants ($79,537) is being amortized over the term of the debt (10 months). For the year ended December 30, 2015, the Company recognized $51,001of interest expense related to the amortization of the discount as the note was paid in full on July 22,2015.
In connection with the issuance of
notes payable – related parties. The fair value of these shares was $1,991 ($0.01 - $0.06/share), based upon the
$158,000 note discussed above,quoted closing trading price.
Stock Issued for Cash
The Company issued 20,667,999 shares of common stock for $482,200 ($0.02 - $0.03/share). Of the Company recorded debt issue cost and discount as follows:
| | 10.4% cash – which is equivalent to $16,500, and |
| | Warrants – having a fair value of $107,212 and recorded on the balance sheet at $60,164 and $239,789 as of
December 31, 2015 and 2014, respectively, which was computed as follows;
|
| | Commitment Date | |
Expected dividends | | | 0% | |
Expected volatility | | | 189% | |
Expected term: conversion feature | | 3.75years | |
Risk free interest rate | | | 1.75% | |
The debt issue coststotal shares issued for cash, $5,000 were capitalized and amortized through July 22, 2015, when the note was repaid.
Amortization of debt issue costs for the year ended December 31, 2015 was $55,427. Net debt issue costsissuable at December 31, 2015 was $0, as the note had been repaid.
The original issue discount pertains to discount taken by lender against the total convertible note2021.
Stock Issued for Settlement of $158,000, resulting in a disbursement of $144,000 to the company.
The original issue discount of $14,000 was amortized $5,900 and $8,100 in the years ended December 31, 2015 and 2014, respectively, as the note was paid in full in July 2015.
NOTE 9 – ACCRUED EXPENSES
Accrued expenses consisted of the following at December 31, 2015 and 2014;
| | | 2015 | | | 2014 Restated | |
| | | | | | | |
| Accrued consulting fees | | $ | 229,000 | | | $ | 144,500 | |
| Bank overdraft | | | 763 | | | | 0 | |
| Accrued interest expense | | | 0 | | | | 9,091 | |
| Total accrued expenses | | $ | 229,763 | | | $ | 153,591 | |
NOTE 10– CAPITAL STRUCTURE
Liabilities
The Company is authorized to issue 300,000,000issued 6,200,000 shares of class A common stock with a parin settlement of accrued liabilities totaling $155,000 ($0.03/share). The fair value of $.0001 per share and 20,000,000these shares of class B stockwas based upon the quoted closing trading price. In connection with a par value of $.0001 per share. Each common stock share has one voting right and the right to dividends, if and when declared by the Board of Directors.
Class A Common Stock
At December 31, 2015,this settlement, there were 183,882,132 shares of class A common stock issued and outstanding.
During the period from July 1, through September 30, 2105, thewas no gain or loss on settlement.
Stock Issued for Services
The Company issued 5,921,992380,000 shares of restricted class A common stock to eighteen individuals through private placements for cash of $450,910 at average of $0.076 per share.
During the period from July 1, 2015 through September 30, 2015, the Company issued 9,179,340 shares of class A stock for 611,956 class B shares on terms set by the Company's predecessor, Dynalyst Manufacturing Corporation.
During the period from July 1, 2015 through September 30, 2015, the Company issued 1,600,000 shares of restricted class A common stock for consulting services at a value of $244,5000 based on value of the services provided, at average of $0.153 per share.
During the period from July 1, 2015 through September 30, 2015, the Company issued 1,235,110 shares of restricted class A common stock for legal and management services at a value of $140,713 based on value of the services provided, at average of $0.114 per share.
During the period from April 1, 2015 through June 30, 2015, the Company issued 1,726,080 shares of restricted class A common stock valued at $293,434 for conversion of advances from shareholders at an average of $0.17 per share.
During the period from April 1, 2015 through June 30, 2015, the Company issued 4,150,732 shares of restricted class A common stock to twelve individuals through private placements for cash of $508,500 at average of $0.1225 per share.
During the period from April 1, 2015 through June 30, 2015, the Company issued a total of 13,125,000 shares of restricted class A common stock to its former CEO, its President and Chief Financial Officer per their employment agreements. The shares were valued at $0.15 per share based on market value.
During the period from April 1, 2015 through June 30, 2015, the Company issued 250,000 shares of restricted class A common stock to its former CEO as set out in his separation agreement. The shares were valued at $0.138 per share based on market value.
During the period from April 1, 2015 through June 30, 2015, the Company issued 200,000 shares of restricted class A common stock for consulting services at a value of $34,000at an average of $0.17 per share.
During the period from January 1, 2015 through March 31, 2015, the Company issued 91,666 shares of restricted class A common stock valued at $21,083 for conversion of advances from shareholders at an average of $0.23 per share.
During the period from January 1, 2015 through March 31, 2015, the Company issued 842,377 shares of restricted class A common stock to seven individuals through private placements for cash of $122,950 at $0.146 per share.
During the period from October 1 through December 31, 2014, the Company issued 1,633,142 shares of restricted class A common stock valued at $351,126 for the conversion of shareholder advances at an average of $0.215 per share.
During the period from October 1 through December 31, 2014, the Company issued 1,000,000 shares of restricted class A common stock to six investors for cash consideration of $127,500.
During the period from October 1 through December 31, 2014, the Company issued 225,000 shares of restricted class A common stock for consulting services valued at $48,375, at an average of $0.215 per share.
During the period from July 1, 2014 through September 30, 2014, the Company issued 1,118,000 shares of restricted class A common stock for conversion of $335,400 in advances from shareholder, or $0.30 per share.
During the period from July 1, 2104 through September 30, 2104, the Company issued 3,770,182 shares of restricted class A common stock for services rendered.rendered, having a fair value of $6,500 ($0.01 - $0.025/share). The fair value of these shares were valued at $583,727, or $0.18 per share.
Duringwas based upon the
period from July 1, 2104 through September 30, 2014, thequoted closing trading price.
Stock to be Issued
The Company entered into subscription agreements with individuals and sold 550,000250,000 shares of restricted class A common stock for $67,000 cash, or $0.122 per share.
During$5,000 ($0.02/share). These shares were issued in January 2023.
Equity Transactions for the period from April 1, 2014 through June 30, 2014, theYear Ended December 31, 2021
Stock Issued as Debt Issue Costs
The Company issued 2,216,2331,197,758 shares of restricted class A common stock valued at $613,762in connection with the issuance of notes payable – related parties. The fair value of these shares was $54,986 ($0.046/share), based upon the quoted closing trading price.
Stock Issued for conversion of advances from shareholder, or $0.277 per share.
During the period from April 1, 2104 through June 30, 2104, theCash
The Company issued 1,645,00018,112,501 shares of restricted class Acommon stock for $656,500 ($0.03 - $0.05/share).
Stock Issued for Services
The Company issued 482,500 shares of common stock for services rendered. The shares were valued at $385,050, or $0.234 per share.
During the period from April 1, 2104 through June 30, 2014, the Company entered into subscription agreements with individuals and sold 490,888 shares of restricted class A common stock for $107,000 cash, or $0.218 per share.
During the period from January 1, 2014 through March 31, 2014, the Company issued 1,736,540 shares of restricted class A common stock valued at $185,677 for conversion of advances from shareholder at an average of $0.107.
During the period from January 1, 2014 through March 31, 2014, the Company issued 634,652 shares of restricted class A common stock for services rendered. The shares were valued at $78,500, or $0.124 per share.
During the period from January 1, 2014 through March 31, 2014, the Company issued 100,000 shares of restricted class A common stock for services rendered. The shares were valued at $10,000, or $0.10 per share.
During the period from January 1, 2014 through March 31, 2014, the Company entered into subscription agreement with an individual and sold 269,230 shares of restricted class A common stock for $35,000 cash, or $0.13 per share.
During the period from January 1, 2014 through March 31, 2014, the Company issued 600,000 shares of restricted class A common stock for the conversion of 60,000 shares of class B common stock at the conversion rate of 10 shares of restricted class common stock for each share of class B common stock.
During the period from January 1, 2014 through March 31, 2014, the Company issued 500,000 shares of restricted class A common stock for legal services rendered. The shares were valued at $75,000, or $0.15 per share.
During the period from January 1, 2014 through March 31, 2014, the Company issued 160,000 shares of restricted class A common stock for services rendered. The shares were valued at $21,600, or $0.135 per share.
Class B Stock
At December 31, 2015, there were 15,126,938 shares of class B stock issued and outstanding. Each class B share is convertible, at the option of the shareholder, into common stock onrendered, having a one for one basis.
During the period from July 1, 2015 through September 30, 2015, the Company issued 9,179,340 shares of class A stock for 611,956 class B shares on terms set by the Company's predecessor, Dynalyst Manufacturing Corporation.
Stock options, warrants and other rights
At December 31, 2015, the Company has not adopted any employee stock option plans.
On October 1, 2015, the Company issued 4,000,000 warrants for legal work. The warrants are exercisable for $.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%.
NOTE 11 - RELATED PARTY TRANSACTIONS
Shareholders have made advances to the Company in the amounts of $383,878 and $715,070 during the years ended December 31, 2015 and 2014, respectively. The shareholders have elected to convert advances of $314,517 and $1,527,179 to shares of class A, common stock at an averagefair value of $0.173 and $0.228 per share and received repayments of $79,058 and $0 during the years ended December 31, 2015 and 2014, respectively.
In April 2015, the Company's then Chief Executive Officer resigned and in his settlement agreement gave up claims to receive deferred compensation, which amounted to $518,300 and treated as debt forgiveness, as discussed in Note 14 below.
In May 2015, the Company issued 13,125,000 shares of restricted class A common stock to its former CEO, its President and Chief Financial Officer per their employment agreements.$14,475 ($0.03/share). The shares were valued at an average of $0.15 per share based on market value.
In July 2015, the Company issued a total of 9,179,340 shares of restricted class A common stock to its President and Chief Financial Officer for the conversion of 611,956 shares of class B stock at the rate of fifteen shares of restricted common stock for each share of Class B stock, on terms set by the Company's predecessor, Dynalyst Manufacturing Corporation.
NOTE 12 – INCOME TAXES
At December 31, 2015 and 2014, the Company had approximately $4.9 million and $3.5 million, respectively, of net operating losses ("NOL") carry forwards for federal and state income tax purposes. These losses are available for future years and expire through 2033. Utilizationfair value of these
losses may be severely or completely limited ifshares was based upon the
Company undergoes an ownership change pursuant to Internal Revenue Code Section 382. quoted closing trading price.
The provision for income taxes for continuing operations consists of the following components
GREENWAY TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2022 AND 2021
Note 9 – Warrants
Warrant activity for the years ended December 31, 20152022 and 2014:
| | 2015 | | 2014 | |
| | | | | |
| Current | | $ | - | | | $ | - | |
| Deferred | | | - | | | | - | |
| Total tax provision for (benefit from) income taxes | | $ | - | | | $ | - | |
A comparison2021 is summarized as follows:Schedule of the provision for incomeWarrant Activity
| | | | | | | | | Weighted | | | | |
| | | | | | | | | Average | | | | |
| | | | | | Weighted | | | Remaining | | | Aggregate | |
| | | Number of | | | Average | | | Contractual | | | Intrinsic | |
| | | Warrants | | | Exercise Price | | | Term (Years) | | | Value | |
| Outstanding - December 31, 2020 | | | 7,000,000 | | | $ | 0.10 | | | | 1.75 | | | $ | - | |
| Vested and Exercisable - December 31, 2020 | | | 7,000,000 | | | $ | 0.10 | | | | 1.75 | | | $ | - | |
| Granted | | | - | | | $ | - | | | | - | | | | - | |
| Exercised | | | - | | | $ | - | | | | - | | | | - | |
| Cancelled/Forfeited | | | (4,000,000 | ) | | $ | 0.15 | | | | - | | | | - | |
| Outstanding - December 31, 2021 | | | 3,000,000 | | | $ | 0.03 | | | | 0.75 | | | $ | - | |
| Vested and Exercisable - December 31, 2021 | | | 3,000,000 | | | $ | 0.03 | | | | 0.75 | | | $ | - | |
| Unvested - December 31, 2021 | | | - | | | $ | - | | | | - | | | $ | - | |
| Granted | | | - | | | $ | - | | | | - | | | | | |
| Exercised | | | - | | | $ | - | | | | - | | | | | |
| Cancelled/Forfeited | | | (3,000,000 | ) | | $ | 0.03 | | | | - | | | | | |
| Outstanding - December 31, 2022 | | | - | | | $ | - | | | | - | | | $ | - | |
| Vested and Exercisable - December 31, 2022 | | | - | | | $ | - | | | | - | | | $ | - | |
| Unvested and non-exercisable - December 31, 2022 | | | - | | | $ | - | | | | - | | | $ | - | |
Note 10 – Income Taxes
The Company’s tax expense atdiffers from the federal statutory“expected” tax expense for the period (computed by applying the corporate tax rate of 34% for the years ended December21% to loss before taxes), are approximately as follows:
Schedule of Components of Income Tax Expense Benefit
| | | | | | | | | |
| | | December 31, 2022 | | | December 31, 2021 | |
| Federal income tax benefit - 21% | | $ | (311,000 | ) | | $ | (366,000 | ) |
| Non-deductible items | | | (15,000 | ) | | | - | |
| Subtotal | | | (326,000 | ) | | | (366,000 | ) |
| Change in valuation allowance | | | 326,000 | | | | 366,000 | |
| Income tax benefit | | $ | - | | | $ | - | |
GREENWAY TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2015 and 2014 the Company's effective rate is as follows:
| | | 2015 | | | 2014 | |
| | | | | | | |
| Federal statutory rate | | | (34.0 | ) % | | | (34.0 | ) % |
| State tax, net of federal benefit | | | (0.0 | ) | | | (0.0 | ) |
| Permanent differences and other including surtax exemption | | | 0.0 | | | | 0.0 | |
| Valuation allowance | | | 34.0 | | | | 34.0 | |
| Effective tax rate | | | 0.0 | % | | | 0.0 | % |
2022 AND 2021
The nettax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities included in the financial statements consist of the following amounts at December 31, 20152022 and December 31, 2014:
| | | 2015 | | | 2014 Restated | |
| Deferred tax assets | | | | | | |
| Net operating loss carry forwards | | $ | 4,028,702 | | | $ | 4,384,475 | |
| Deferred compensation | | | 2,409,213 | | | | 1,966,523 | |
| Stock based compensation | | | 4,898,968 | | | | 1,887,431 | |
| Other | | | 1,121,248 | | | | 191,000 | |
| Total | | | 12,458,131 | | | | 8,429,429 | |
| Less valuation allowance | | | (12,458,131 | ) | | | (8,429,429 | ) |
| Deferred tax asset | | | - | | | | - | |
| Deferred tax liabilities | | | | | | | | |
| Depreciation and amortization | | $ | - | | | $ | - | |
| Net long-term deferred tax asset | | $ | - | | | $ | - | |
The change2021 are approximately as follows:Schedule of Deferred Tax Assets and Liabilities
| | | | | | | | | |
| | | December 31, 2022 | | | December 31, 2021 | |
| | | | | | | |
| Deferred Tax Assets | | | | | | | | |
| Amortization of debt discount | | $ | (10,000 | ) | | $ | - | |
| Share based payments | | | (6,000 | ) | | | - | |
| Other | | | (1,184,000 | ) | | | 1,184,000 | |
| Net operating loss carryforwards | | | 4,910,000 | | | | 5,785,000 | |
| Total deferred tax assets | | | 3,710,000 | | | | 6,969,000 | |
| Less: valuation allowance | | | (3,710,000 | ) | | | (6,969,000 | ) |
| Net deferred tax asset recorded | | $ | - | | | $ | - | |
Deferred tax assets and liabilities are computed by applying the federal and state income tax rates in effect to the valuation allowance was $4,028,702gross amounts of temporary differences and $4,384,475 for the years ended December 31, 2015 and 2014, respectively. The Company has recorded a 100% valuation allowance related toother tax attributes, such as net operating loss carryforwards. In assessing if the deferred tax asset forassets will be realized, the loss from operations, interest expense, interest income and other income subsequent to the change in ownership, which amounted to $12,458,131 and $8,429,429 at December 31, 2015 and 2014, respectively.
Company considers whether it is more likely than not that some or all of these deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the
periodsperiod in which
thosethese deductible temporary differences
become deductible. Management considersreverse.
During the scheduled reversalyear ended December 31, 2022 the valuation allowance decreased by approximately $3,259,000. The total valuation allowance results from the Company’s estimate of its uncertainty in being unable to recover its net deferred tax liabilities, historical taxable income including availableassets.
At December 31, 2022, the Company has federal net operating loss carry forwardscarryforwards, which are available to offset future taxable income, of approximately $23,380,000. The Company is in the process of analyzing their NOL and has not determined if the Company has had any change of control issues that could limit the future use of these NOL’s.
NOL carryforwards that were generated after 2017 of approximately $23,380,000 may only be used to offset 80% of taxable income and projectedare carried forward indefinitely.
These carryforwards may be subject to an annual limitation under Section 382 and 383 of the Internal Revenue Code of 1986, and similar state provisions if the Company experienced one or more ownership changes which would limit the amount of NOL and tax credit carryforwards that can be utilized to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Section 382 and 383, results from transactions increasing ownership of certain stockholders or public groups in making this assessment.
NOTE 13 – DISCONTINUED OPERATIONS
In November 2015, the
Company completed the sale (entered into on October 1, 2015) of its wholly owned subsidiary, Mamaki of Hawaii, Inc., ("Mamaki") to Hawaiian Beverages, Inc. ("HBI"). Under the agreement, HBI acquired 100%stock of the
common stock of Mamaki in exchange for seven hundred thousand dollars ($700,000) and the assumption of eighty-four thousand two hundred seventy- five thousand dollars ($84,275) of UMED debts. HBI paid two hundred forty-five thousand five hundred dollars ($245,400) at closing towards the first installment due of two hundred fifty thousand ($250,000) and with three installments of one hundred fifty thousand dollars ($150,000) on each due thirty, sixty and ninety days from the closing date.corporation by more than 50 percentage points over a three- year period. The Company has not
receivedcompleted an IRC Section 382/383 analysis. If a change in ownership were to have occurred, NOL and tax credit carryforwards could be eliminated or restricted.
If eliminated, the related asset would be removed from the deferred tax asset schedule with a corresponding reduction in the valuation allowance. Due to the existence of the valuation allowance, limitations created by future ownership changes, if any, payment onwill not impact the $454,600Company’s effective tax rate.
The Company files corporate income tax returns in the United States and has determined thatTexas jurisdictions. Due to the collectionCompany’s net operating loss posture, all tax years are open and subject to income tax examination by tax authorities. The Company’s policy is doubtfulto recognize interest expense and wrote the receivable off atpenalties related to income tax matters as tax expense. At December 31, 2015 against2022 and 2021, respectively, there were no unrecognized tax benefits, and there are no significant accruals for interest related to unrecognized tax benefits or tax penalties.
As of December 31, 2022, the gain calculated onCompany had not filed any corporate tax returns since the sale.
The following is a summary of the calculation of the gain from the sale of Mamaki of Hawaii, Inc.:
| | | | |
| Mamaki of Hawaii historical operations | | $ | 2,008,794 | |
| Contract receivable from Hawaiian Beverages | | | 700,000 | |
| UMED note payable assumed by Hawaiian Beverages | | | 64,697 | |
| Write off Mamaki of Hawaii Intercompany receivable | | | (777,255 | ) |
| Write off UMED investment in Mamaki of Hawaii stock | | | (778,430 | ) |
| Write off contract receivable | | | (454,600 | ) |
| Gain from discontinued operations for 2015 | | $ | 763,206 | |
The following statements of the discontinued operations (Mamaki of Hawaii, Inc.) for the nine months ended September 30, 2015 (date Hawaiian Beverages took over the operations of Mamaki) and year ended December 31, 2014:
| | | 2015 | | | 2014 | |
| Sales | | $ | 47,275 | | | $ | 24,581 | |
| Cost of sales | | | 8,407 | | | | 54,696 | |
| Gross profit | | | 38,868 | | | | (30,115 | ) |
| | | | | | | | | |
| Operating Expenses: | | | | | | | | |
| General and administrative expenses | | | 395,824 | | | | 415,009 | |
| Depreciation | | | 89,218 | | | | 118,954 | |
| Total Operating Expenses | | | 485,042 | | | | 533,963 | |
| Operating Loss | | | (446,174 | ) | | | (564,078 | ) |
| | | | | | | | | |
| Other Income (Expense) | | | | | | | | |
| Interest expense | | | (115,238 | ) | | | (150,756 | ) |
| | | | | | | | | |
| Loss from discontinued operations | | $ | (561,412 | ) | | $ | (714,834 | ) |
| Loss per share – discontinued operations | | $ | (0.00 | ) | | $ | (0.00 | ) |
| | | | | | | | | |
Assets and liabilities retained relating2016. The Company’s failure to
discontinued operations (Mamaki of Hawaii, Inc.) consisted of the following atfile penalties are immaterial.
Note 11 – Subsequent Events
Subsequent to December 31, 2014;
| | | 12/31/2014 | |
| | | | |
| Current assets relating to discontinued operations: | | | |
| Cash | | $ | 5,153 | |
| Accounts receivable | | | 780 | |
| Prepaid expenses and deposits | | | 32,700 | |
| Property, plant and equipment, net | | | 1,719,009 | |
| Total assets related to discontinued operations | | $ | 1,757,643 | |
| | | | | |
| Current liabilities relating to discontinued operations: | | | | |
| Bank overdrafts | | $ | 4,896 | |
| Notes payable | | | 1,245,211 | |
| Accounts payable | | | 35,582 | |
| Accrued interest payable | | | 36,450 | |
| Accrued expenses | | | 538,380 | |
| Total liabilities related to discontinued operations | | $ | 1,860,518 | |
NOTE 14 – COMMITMENTS
Employment Agreements
In May 2011,2022, the Company
entered into employment agreements with its chief executive officer, president and chief financial officer. reflects the following:Stock Issued for Cash
The Agreements are for a term of 5 years with compensation of $180,000 the first year, $240,000 the second year, $300,000 the third year, $350,000 the four2th year and the fifth year at a salary commensurate with those in similar industries. The employment agreements also provide for the officers to receive 1,250,000Company issued 7,000,000 shares of restricted common stock annually for each year of the employment agreement. During the years ended December 31, 2015 and 2014, with consent of management, the Company accrued a total of $405,000 and $360,000, respectively, as management fees in accordance with the terms of these agreements. On April 8, 2015, the Company's chief executive officer resigned and relinquished his claim to receive $518,300 of deferred compensation, which the Company treated as debt forgiveness.
In August 2012, the Company entered into employment agreements with the president and chairman of the board of Greenway Innovative Energy, Inc. for a term of 5 years with compensation of $90,000 per year. In June of 2014, the president's employment agreement was amended to increase his annual pay to $180,000. 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 years ended December 31, 2015 and 2014, respectively, the Company accrued $191,250 and $168,700 towards the employment agreements.
Leases
In July 2015, the Company reduced its office lease space from 3,500 to 1,800 square feet on a month-to-month basis at $3,200 per month. In October 2015, the Company signed a new two-year lease for new office space of approximately 1,800 square feet at the rate of $2,417 for the first twelve months and $2,495 for the second twelve months. During the years ended December 31, 2015 and 2014, the Company expensed $55,836 and $76,800, respectively, in rent expense.
$140,000 ($0.02/share).The Company is obligated to pay approximately $11,800 in annual maintenance fees on its mining leases, in addition to 10% royalties based on production.
Legal
From time to time, the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary courseissued 1,333,333 shares of
business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. common stock for $20,000 ($0.015/share).Stock Issued for Services
The Company currently is not aware of any such legal proceedings that we believe will have, individually or in the aggregate, a material adverse effect on its business, financial condition or operating results.
NOTE 15-SUBSEQUESNT EVENTS
During the period form January 1, 2015 through March 24, 2015, the Company issued 3,500,0022,000,000 shares of restricted class A common stock to four individualsits Chief Financial Officer for $245,000 cash.
Duringservices rendered, having a fair value of $20,000 ($0.01/share). The fair value of these shares was based upon the
period form January 1, 2015 through March 24, 2015, the Company issued 400,000 shares of restricted class A common stock services rendered. The shares were valued at $36,000, or $0.09 per share.quoted closing trading price.
During the period form January 1, 2015 through March 24, 2015, the Company issued 664,285 shares of restricted class A common stock for conversion of $53,145 of advances from shareholder.
