10-Q: Greenway Technologies Faces Deepening Losses, Going Concern Doubt

Greenway Technologies, Inc. reports a significant increase in net loss and cash used in operations, alongside substantial accumulated and stockholders deficits, raising substantial doubt about its ability to continue as a going concern.

Summary

• Greenway Technologies, Inc. (GWTI) reported a net loss of $1,890,292 for the six months ended June 30, 2025, a significant increase from $706,863 for the same period in 2024.
• Net cash used in operating activities increased to $336,180 for the six months ended June 30, 2025, compared to $11,147 in the prior year period.
• The company's accumulated deficit reached $41,263,463 as of June 30, 2025, up from $39,373,172 at December 31, 2024.
• Total stockholders deficit increased to $14,100,742 as of June 30, 2025, from $13,006,449 at December 31, 2024.
• Working capital deficit also increased to $14,100,742 as of June 30, 2025.
• Cash on hand was $379,959 at June 30, 2025, a notable increase from $20,139 at December 31, 2024, primarily due to proceeds from stock sales.
• General and administrative expenses surged by $722,919 to $1,122,867 for the six months ended June 30, 2025, driven by increases in consulting fees, legal expenses, and commissions.
• Research and development expenses were $461,293 for the six months ended June 30, 2025, compared to $0 in the prior year period.
• The company received $1,310,000 in new customer deposits, recorded as a current liability.
• Multiple notes payable, including those to related parties and a convertible note, remain in default as of June 30, 2025.
• A summary judgment was granted against the company on July 9, 2025, for $335,234 plus 18% prejudgment interest to Tunstall Canyon, LLC, a related party.
• Management concluded that internal controls over financial reporting and disclosure controls and procedures were ineffective as of June 30, 2025, citing inadequate segregation of duties, lack of independent review, and insufficient independent directors on the Board and Audit Committee.

Sentiment

Score: 2

Explanation: The company faces severe financial distress, evidenced by rapidly increasing losses, significant deficits, and explicit going concern doubt. Multiple debt defaults and ineffective internal controls highlight profound operational and governance issues. While there's ongoing R&D and some capital raised, the overall financial health and operational stability are highly precarious, indicating a very negative outlook.

Positives

• Cash balance significantly increased to $379,959 at June 30, 2025, from $20,139 at December 31, 2024, primarily due to proceeds from stock sales.
• The company successfully raised $796,000 from private placement sales of common stock during the six months ended June 30, 2025.
• Received $1,310,000 in customer deposits, indicating potential future project activity.
• The company continues research and development on its proprietary Gas-to-Liquids (GTL) syngas conversion system, including the G-ReformerTM unit, which can produce diesel, jet fuels, high-value chemicals, and hydrogen.
• New U.S. Patent 10,633,594 B1 for syngas generation was issued on April 28, 2020, complementing existing intellectual property.
• Exclusive worldwide patent licensing agreement with the University of Texas at Arlington (UTA) for natural gas reforming technologies.
• Recent R&D indicates the technology can extract high-value chemicals (n-Hexane, n-Heptane, etc.) and alcohols (ethanol, methanol), which could improve economic return on investment.
• The G-Reformer technology is described as unique, modularly scalable, portable, and self-contained, offering advantages over legacy large-scale GTL solutions.
• G-Reformer based GTL plants are not considered refineries, potentially exempting them from certain stringent EPA air quality guidelines applicable to refineries.

Negatives

• Net loss for the six months ended June 30, 2025, increased by 100.67% to $1,890,292 compared to $706,863 in the prior year period.
• Net cash used in operating activities increased by 291.59% to $336,180 for the six months ended June 30, 2025.
• Accumulated deficit grew to $41,263,463 and stockholders deficit to $14,100,742 as of June 30, 2025.
• Working capital deficit increased to $14,100,742.
• The company does not expect to generate sufficient revenues or positive cash flows from operations to meet current obligations, creating substantial doubt about its ability to continue as a going concern.
• All three notes payable ($525,000, $55,000, $67,500) are in default as of June 30, 2025.
• Notes payable to related parties totaling $2,805,774 are in default.
• A convertible note payable of $166,667 is in default, with an 18% default interest rate.
• General and administrative expenses increased significantly due to higher consulting fees, legal expenses, and commissions.
• A summary judgment was granted against the company for $335,234 plus 18% prejudgment interest to Tunstall Canyon, LLC, a related party, on July 9, 2025.
• The company has accrued liabilities of $1,672,074 to Ric Halden, Randy Moseley, and Tunstall Canyon related to ongoing legal proceedings.
• Accrued salary for Raymond Wright (President) is $1,598,438 and for Ransom Jones (CFO) is $849,667 as of June 30, 2025, presented as related party payables.
• The company has only three employees, two of whom have employment agreements with significant accrued salaries.
• The company's independent registered public accounting firm issued a going concern qualification in their report dated March 11, 2025.

Risks

• Substantial doubt exists about the company's ability to continue as a going concern due to recurring net losses and insufficient cash flow to meet obligations.
• Inability to raise additional debt or equity-based capital at favorable terms, or at all, could severely impact operations.
• Multiple notes payable and related party loans are in default, potentially leading to foreclosure or bankruptcy proceedings by secured creditors.
• Ineffective internal controls over financial reporting and disclosure controls, including inadequate segregation of duties and lack of independent review, increase the risk of material misstatements and fraud.
• Lack of a sufficient number of independent or qualified directors for the Board and a functioning Audit Committee poses a significant corporate governance risk.
• Ongoing legal proceedings, including a recent summary judgment against the company, could result in further financial liabilities and reputational damage.
• The company's economic models for GTL conversion rely on the arbitrage between oil and natural gas prices, making it vulnerable to fluctuations in commodity markets, as highlighted by the impact of COVID-19 on oil prices.
• Dependence on a small number of employees and consultants for core operations and financial reporting.
• The company's mining interests are not currently generating revenue, and their ultimate value is uncertain.
• Potential for future material weaknesses in internal control over financial reporting if remediation efforts are not successful or capital is not available to increase staff and training.

Future Outlook

Management's strategic plans for the year ended December 31, 2025, include executing business operations more fully and exploring and executing prospective strategic and partnership opportunities. The company intends to raise additional funds through public or private offerings to support ongoing operations and address its going concern issues, though the terms of such financings are uncertain. The company believes its G-Reformer technology is a major innovation in GTL, superior to legacy technologies, and aims to become a material direct and licensed producer of renewable GTL synthesized fuels and high-value chemicals, with a near-term focus on U.S. market opportunities. The company also plans to increase accounting and financial reporting staff and provide training as capital becomes available to remediate internal control deficiencies.

Management Comments

• We do not expect to generate sufficient revenues or positive cash flows from operations sufficiently to meet our current obligations.
• We may seek to raise debt or equity-based capital at favorable terms, though such terms are not certain.
• Managements strategic plans include executing business operations more fully during the year ended December 31, 2025, and exploring and executing prospective strategic and partnership opportunities.
• Our proprietary G-Reformer is a major innovation in gas reforming and GTL technology in general.
• Initial tests have demonstrated that our Company’s solution appears to be superior to legacy technologies, which are more costly, have a larger footprint, and cannot be easily deployed at field sites.
• Our technologies and processes will allow for multiple small-scale GTL plants to be built with substantially lower up-front and ongoing costs, resulting in more profitable results for oil and gas operators.
• Our initial ROI studies of the market for high purity chemicals we produce can provide incredibly rapid payback of investments.
• By making these chemicals in the USA, we reduce that dependency and keep the product, the jobs, and the profits in America.
• Because our G-Reformer based GTL plants are not considered refineries, they do not fall under any related current EPA air quality guidelines.
• We believe that U.S. guidelines such as the Petroleum and Natural Gas Regulatory Board Act, 2006, Oilfields (Regulation and Development) Act of 1948, and Oil Industry (Development) Act, 1974 are likely to continue to encourage GTL applications.
• We are exploring strategic options to partner or sell our interest in the Arizona Property, while we focus on our emerging GTL technology sales and marketing efforts.
• Management believes that the actions presently being taken to implement our business plan to generate revenues will provide us the opportunity to continue as a going concern.
• Management believes that the material weaknesses set forth above did not have a material effect on our financial results.

Industry Context

Greenway Technologies operates in the Gas-to-Liquids (GTL) industry, focusing on proprietary syngas conversion systems. The GTL market converts natural gas into high-quality liquid products like fuels and chemicals, which are cleaner than crude oil-based alternatives. The company positions its G-Reformer technology as a disruptive innovation, offering scalability, transportability, and self-sustainment, differentiating itself from large-scale GTL operators like Shell and Sasol. Its modular approach aims to enable deployment at remote gas fields, addressing issues like gas flaring. The company also highlights the potential for producing high-purity chemicals, a market largely dominated by Chinese production from oil refineries, suggesting a strategic advantage in domestic production and purity. Regulatory trends, such as environmental regulations promoting cleaner fuels, are expected to support GTL applications. The company acknowledges the impact of global oil price fluctuations on GTL economics, noting that its models typically rely on WTI or Brent Crude prices between $30-60/bbl, a factor influenced by events like the COVID-19 pandemic.

Comparison to Industry Standards

• The company's G-Reformer technology is designed to be scaled to meet individual gas field production requirements on a distributed and mobile basis, contrasting with large refinery-size GTL plants operated by industry giants like Royal Dutch Shell and Sasol, which hold significant global market share.
• Unlike traditional GTL processes that rely on Steam Methane Reformation, the company's patented G-Reformer uses Fractional Thermal Oxidation (FTO), which it claims allows for smaller, portable, and self-contained GTL plants, a key differentiator from competitors who have largely been unsuccessful in scaling down Steam Methane Reformation.
• The company's GTL plants are stated not to be considered refineries, potentially exempting them from certain stringent EPA air quality guidelines that apply to traditional refineries, offering a regulatory advantage over conventional oil-based fuel production.
• The company identifies five small-scale GTL plant technologies proven and available for flared gas monetization in the U.S.: Greyrock (Flare to Fuels), Advantage Midstream (licensing Greyrock technology), EFT (Flare Buster), Primus GE, and GasTechno (Methanol in a Box). The company was not part of the GGFRP study that identified these, as it had not received 3rd party certification of its technology at the time of the report, indicating it is still in an earlier commercialization stage compared to these proven small-scale players.
• The company's focus on producing high-purity chemicals (e.g., n-Hexane, ethanol, methanol) from natural gas aims to compete with chemicals typically produced in China from crude oil, suggesting a potential for higher purity and domestic supply chain advantages over existing market sources.

Corporate Governance

Legal Proceedings

• A demand for mediation and potential arbitration by Gregory Sanders, a previous employee, was withdrawn on January 11, 2024, after the court denied his motions for summary judgment.
• A demand for payments was served on November 8, 2023, by Ric Halden, Randy Moseley, Tunstall Canyon Group, LLC, and Chisos Equity Consultants, LLC. The company had accrued liabilities of $1,672,074 to Ric Halden, Randy Moseley, and Tunstall Canyon as of June 30, 2025.
• The trial date for the Halden/Moseley/Tunstall Canyon case has been reset multiple times and is currently set for September 15, 2025.
• Tunstall Canyon, LLC was granted a summary judgment on July 9, 2025, for $335,234 plus 18% prejudgment interest from January 1, 2025, until the date of a Final Judgment. This amount is fully recorded as a liability.

Related Party Transactions

• Accounts payable and accrued expenses related parties totaled $5,192,116 as of June 30, 2025.
• Notes payable related parties totaled $2,805,774 as of June 30, 2025, consisting of loans from a company owned by a stockholder (who is also the CFO's brother and a Board member) and other shareholders/management/Board members. These loans are secured by company assets and are in default.
• Accrued interest for Notes Payable-Related Parties was $2,427,414 as of June 30, 2025.
• Raymond Wright, President and Chairman of the Board, has an employment agreement with an annual pay of $180,000, with $90,000 accrued for the six months ended June 30, 2025. Total accrued salary for Mr. Wright was $1,598,438 as of June 30, 2025.
• Ransom Jones, Chief Financial Officer, Secretary, and Board member, has an employment agreement with a base salary of $120,000 per year and a bonus of at least $35,000 per year. $95,000 was accrued for the six months ended June 30, 2025. Total accrued salary for Mr. Jones was $849,667 as of June 30, 2025.
• Advances from related parties had a balance of $0 as of June 30, 2025, but included proceeds of $7,016 and conversion of $35,930 to common stock in 2024.
• Ric Halden and Randy Moseley, former founders, officers, and directors, are plaintiffs in ongoing legal proceedings, with accrued liabilities of $1,672,074 to them and Tunstall Canyon (believed to be majority-owned by Ric Halden).

Stakeholder Impact

• **Shareholders**: Significant dilution from recent stock issuances (23.5 million shares for $796,000), increasing accumulated deficit, and substantial doubt about going concern status pose high risks to shareholder value. The stock is highly speculative.
• **Creditors**: Multiple notes payable and related party loans are in default, indicating a high risk of non-payment or restructuring. Secured creditors (like Mabert LLC) have the right to foreclose on company assets.
• **Employees**: Only three employees, two with significant accrued salaries that are part of related party payables, indicating potential payment delays or uncertainty regarding compensation.
• **Customers**: The company received $1.31 million in customer deposits, indicating a commitment to future projects, but the company's going concern issues could impact its ability to deliver on these projects.
• **Suppliers**: Increased accounts payable and accrued expenses suggest potential delays in payments to suppliers, which could strain relationships.
• **Management/Board**: The Board and management face significant challenges in addressing financial distress, legal proceedings, and internal control deficiencies, with their compensation also being accrued as related party payables.

Next Steps

• Execute business operations more fully during the year ended December 31, 2025.
• Explore and execute prospective strategic and partnership opportunities.
• Raise additional debt or equity-based capital to fund ongoing operations and meet obligations.
• Remediate identified material weaknesses in internal control over financial reporting, including increasing accounting and financial reporting staff and providing training, as capital becomes available.
• Continue with the legal proceedings involving Ric Halden, Randy Moseley, Tunstall Canyon, and Chisos, with a new trial date set for September 15, 2025.
• Pay annual lease maintenance fees of approximately $14,400 for the Arizona Property by August 31, 2025.
• Evaluate the potential impact of new accounting pronouncements (ASU 2024-04 and ASU 2024-03/2025-01) on financial statements and disclosures.

Key Dates

Recommendation

The company is in a dire financial state, explicitly stating 'substantial doubt' about its ability to continue as a going concern. It has incurred significant and increasing net losses, a large accumulated deficit, and a growing working capital deficit. Multiple debt obligations, including those to related parties, are in default. Furthermore, management has identified material weaknesses in internal controls over financial reporting and disclosure, including inadequate segregation of duties and a non-functioning audit committee, which raises serious concerns about financial integrity and oversight. While the company has innovative GTL technology and has raised some capital, its current financial and operational instability, coupled with ongoing legal liabilities, presents an extremely high risk profile. The lack of a clear path to profitability and the pervasive financial and governance issues make this a highly speculative and unfavorable investment.

Keywords

Gas-to-Liquids, GTL, Syngas, G-Reformer, Natural Gas Conversion, Renewable Fuels, Diesel, Jet Fuel, Chemicals, Hydrogen, Energy Technology, SEC Filing, 10-Q, Financial Performance, Going Concern, Liquidity, Debt Default, Internal Controls, Corporate Governance, Legal Proceedings, Private Placement