GREENWAY TECHNOLOGIES, INC. & SUBSIDIARIES 10-K

Item 1A Risk Factors. Risks Related to our Business and Operations We may not be able to raise the additional capital necessary to execute our business strategy, which includes the production, sale and/or licensing of our proprietary GTL technology solutions to oil and gas operators in the United States and elsewhere. Our ability to successfully execute the production, sale, or licensing of our GTL technology may depend on our ability to raise additional debt or equity capital. Our ability to raise additional capital is uncertain and dependent on numerous factors beyond our control including, but not limited to, general economic conditions, regulatory factors, reduced retail sales, increased taxation, reductions in consumer confidence, changes in levels of consumer spending, changes in preferences in how consumers pay for goods and services, weak housing markets and availability or lack of availability of credit. If we are unable to obtain additional capital, or if the terms thereof are too costly, we may be unable to successfully execute our business strategy. Our limited operating history may not serve as an adequate basis to judge our future prospects and results of operations. We are a development-stage company and have a limited operating history upon which you can evaluate our business and prospects. We have yet to develop sufficient experience regarding actual revenues to be received from our GTL technology. You must consider the risks and uncertainties frequently encountered by early-stage companies in new and evolving markets. If we are unsuccessful in addressing these risks and uncertainties, our business, results of operations, and financial condition will be materially and adversely affected. The risks and difficulties we face include challenges in accurate financial planning as a result of limited historical data and the uncertainties resulting from a relatively limited period in which to implement and evaluate our business strategies as compared to older companies with longer operating histories. We have historically incurred losses. We are considered a pre-revenue or development stage company. We have incurred significant operating losses since inception. Due to the inherent risk of commercializing new technology, there can be no assurance that we will earn net income or generate positive cash flow in the future. We will require additional capital in order to fund our operations and we may not be able to source such capital on acceptable terms. Establishing revenues and achieving profitability will depend on our ability to fully develop, certify and commercialize our GTL Technology, including successfully marketing our GTL Technology to customers and complying with possible regulations. Much of our ability to establish revenues, achieve profitability and create positive cash flows from operations will depend on the completion of a third-party engineering certification and subsequent successful introduction of our proprietary GTL technology. Our prospective customers will not use our GTL technology unless they determine that the economic benefits provided by our GTL solution is greater than those available from competing technologies and providers. Even if the advantages derived from our proprietary GTL technology are well-established, prospective customers may elect not to use our GTL technology. In addition, as this is a new technology and GTL processing method, we may be required to undertake time-consuming and costly additional development activities and seek regulatory clearance or approval for such new GTL technology. Such costs are not known by us as of the date of this report. Lastly, the completion of the development and commercialization of our GTL technology remains subject to all the risks associated with the commercialization of any new GTL processing system with production based on innovative technologies, including unanticipated technical or other problems, manufacturing difficulties, and the possible insufficiency of the funds allocated for the completion of such development. - 5 - We may encounter substantial competition in our industry and a failure to compete effectively may adversely affect our ability to generate revenue. We expect that we will be required to continue to invest in product development and efficiency improvements to compete effectively in our markets. Our competitors could potentially develop a similar or more efficient GTL product or undertake more aggressive and costly marketing campaigns than ours, which may adversely affect our sales and marketing strategies and could have a material adverse effect on our business, results of operations, and financial condition. Important factors affecting our ability to compete successfully include: ● current and future direct sales and marketing efforts by small and large competitors; ● rapid and effective development of new, unique GTL techniques; and ● new and aggressive pricing methodologies If substantial competitors enter our targeted markets, such as licensing of smaller independent oil and gas operators or the creation of blend stock for existing large refinery operations, we may be unable to compete successfully against such competition. Our potential competitors may have greater human and financial resources than we do at any given time, and there is significant competition for experienced personnel and financial capital in the oil and gas industry. Therefore, it can be difficult for smaller companies such as ours to attract the personnel and related investment for our various business activities needed to succeed. We cannot give any assurances that we will be able to successfully compete for such personnel and capital funds. Without adequate financial resources, our management cannot be certain that we will be able to compete successfully in our operations. Although the longevity of patents in the United States are limited in duration to 20 years, this should not affect the Company’s long-term ability to successfully monetize the intellectual property it owns. We own U.S. Patents No. 8,574,501 B1 (the “’501 Patent”), issued November 5, 2013, and U.S. Patents No. 8,795,597 B2 (the “597 Patent”), issued August 5, 2014, covering our GTL conversion technology for the purpose of converting natural gas to clean synthetic fuels in a small-plant and mobile application. On April 28, 2020, the Company was granted U.S. Patent 10,633,594 B1 (the “594 Patent”) for syngas generation for gas-to-liquid fuel conversion, and the Company was granted U.S. Patent 10,907,104 B1 (the “’104 Patent”), U.S. Patent 11,453,827 B1 (the “’827 Patent”),, and U.S. Patent 11,608,473 B1 (the “’473 Patent”) in 2021, 2022, and 2023, respectively, which extend the methods and details of generating syngas using the Company’s proprietary G-Reformer™ technology described in ‘594 Patent. The Company has several other pending patent applications, both domestic and international, related to various components and processes involving our proprietary GTL methods, which when granted, will further complement our existing portfolio of issued patents and pending patent applications The term of each patent under U.S. law is 20 years from the original filing date. Accordingly, the aforementioned granted patents will expire in the years of 2033 and 2038. These dates cannot be extended. However, any future applications claiming “improvements to the current art” made by us will receive new filing dates. As such, new technologies enhancing and/or building on what is protected in the aforementioned patents will have anticipated expiration dates on or after 2038. Still, there is no certainty that we will be able to make such improvements to our currently held patents, and they therefore may expire at their respective terms. Further, a patent’s term may be shortened if a patent is litigated, and there is no certainty that we will be able to successfully defend our patents should such litigation occur . Moreover, the patents may go abandoned prior to their respective terms should required maintenance fees not be paid to the USPTO. We are currently dependent on one equipment fabricator, the loss of which could adversely impact our operations. We contract our manufacturing production with a heavy equipment fabricator in Texas that has worked with us for several years and specializes in the type of base refractory equipment we use in our proprietary G-Reformer based GTL processes. Accordingly, they have developed certain manufacturing expertise specifically related to our equipment which may be hard to replicate with a new manufacturer if they go out-of-business or end manufacturing for us for any reason. While there are similar manufacturers elsewhere in the United States and overseas, they will take an unknown additional amount of time to gain the expertise necessary to produce our proprietary refractory equipment or may not be able to gain such expertise at all, limiting our production and related revenue capability. - 6 - We are dependent on a limited number of key executives, consultants, the loss of any of which could negatively impact our business. Our business is led by our Chairman of the Board of Directors, Raymond Wright, Acting President, Doug Cogan, Chief Executive Officer, Robert Kevin Jones, Executive Vice President - Sales and our Chief Financial Officer, Ransom Jones, all of whom are also members of our board of directors (our “ Board of Directors ”). We use outside consultants to support and perform the majority of the engineering and production work on our GTL technology. From time-to-time, we have also engaged consultants to provide financial reporting and governance support. If one or more of these senior executives, officers, or consultants are unable or unwilling to continue in their present positions, we may not be able to replace them easily or at all, and our business may be disrupted, along with our financial condition, such that our results of operations may be materially and adversely affected. In addition, if the competition for senior management and senior officers in our industry is intense, the pool of qualified candidates is limited, and we may not be able to retain the services of our senior executives, key personnel, or consultants or attract and retain high-quality personnel in the future. Such failure could materially and adversely affect our future growth and financial condition, and the loss of one or more of these key personnel could negatively impact our business and operations. If our research and development agreements with UTA are terminated, we may lose access to certain of the scientists that were instrumental in developing our technology. In order to safeguard against this possibility, on December 8, 2020, the Company announced an exclusive worldwide patent licensing agreement with The University of Texas at Arlington (UTA) for all patent applications currently filed with the Patent and Trademark Office relating to GWTI’s natural gas reforming technologies developed under its sponsored research agreements with UTA. To support our engineering efforts, we also continued our ongoing confidential Sponsored Research Agreement (“SRA”) with UTA which began in October 2009 and has continued in various forms through today, adding confidential Scope of Work addendums over this period to develop and enhance our patented GTL system with the goal of developing commercial GTL plants to convert natural gas into liquid fuels. We use UTA as an external research and development arm for the Company. If we or UTA terminated our relationship for some extenuating circumstances, we might lose access to the scientists most familiar with our unique technology. There is no assurance that we would be able to continue to improve the technology we have developed thus far, potentially slowing down our future commercialization and financing efforts. Our quarterly results may fluctuate substantially and if we fail to meet the expectations of our investors or analysts, our stock price could decline substantially. Our quarterly operating results may fluctuate, and if we fail to meet or exceed the expectations of securities analysts or investors, the trading price of our Common Stock could decline. Some of the important factors that could cause our revenue and operating results to fluctuate from quarter to quarter include: ● our limited operating history; ● the limited scope of our sales and marketing efforts; ● our ability to attract new customers, satisfy our customers’ requirements, and retain customers; ● general economic conditions; ● changes in our pricing capabilities; ● our ability to expand our business and operations by staying current with the evolving requirements of our target market; ● the effectiveness of our key personnel; ● our ability to protect our proprietary GTL Technology; ● new and enhanced products by us and our competitors; ● unanticipated delays or cost increases with respect to research and development; and ● extraordinary expenses such as litigation or other dispute-related settlement payments. - 7 - We may have difficulty in attracting and retaining outside independent directors to our Board of Directors as a result of their concerns relating to potentially increased personal exposure to lawsuits and shareholder claims by virtue of holding those positions. The directors and management of companies are increasingly concerned with the extent of their personal exposure to lawsuits and shareholder claims, as well as governmental and creditor claims that may be made against them, particularly in view of recent changes in securities laws imposing additional duties, obligations, and liabilities on management and directors. Due to these perceived risks, directors and management are also becoming increasingly concerned with the availability of directors’ and officers’ liability insurance to timely pay the costs incurred in defending such claims. We currently do not carry directors’ and officers’ liability insurance, since directors’ and officers’ liability insurance has recently become much more expensive and difficult to obtain. If we are unable to continue or provide liability insurance at affordable rates or at all, it may become increasingly more difficult to attract and retain qualified outside directors to serve on our board of directors. We may lose potential independent board members and management candidates to other companies that have greater directors’ and officers’ liability insurance to insure them from liability or to companies that have revenues or have received greater funding to date which can offer more lucrative compensation packages. The fees of directors are also rising in response to their increased duties, obligations and liabilities as well as increased exposure to such risks. As a company with limited operating history and resources, we will have a more difficult time attracting and retaining management and outside independent directors than a more established company due to these enhanced duties, obligations and liabilities. Our future success relies upon our proprietary GTL Technology. We may not have the resources to enforce our proprietary rights through litigation or otherwise. The loss of exclusive right to our GTL Technology could have a material adverse effect on our business, financial condition and results of operations. We believe that our GTL technology does not infringe upon the valid intellectual property rights of others. Even so, third parties may still assert infringement claims against us. If infringement claims are brought against us, we may not have the financial resources to defend against such claims or prevent an adverse judgment against us. In the event of an unfavorable ruling on any such claim, a license or similar agreement to utilize the intellectual property rights related to the GTL technology in question, which we rely on in the conduct of our business, may not be available to us on reasonable terms if terms are offered at all. Our ability to obtain field-related operating hazards insurance may be constrained by our limited operational history. The oil and natural gas business involves a variety of operating risks, including the risk of fire, explosions, blow-outs, pipe failure, abnormal-pressure formations, and environmental hazards such as oil spills, natural gas leaks, ruptures or discharges of toxic gases. If any of these events should occur at our joint venture plant location, or at any future customer sites (none exist today), we could incur legal defense costs and could suffer substantial losses due to injury or loss of life, severe damage to or destruction of property, natural resources and equipment, pollution or other environmental damage, clean-up responsibilities, regulatory investigation and penalties, and suspension of operations. Such inability to defend ourselves or suffer catastrophic financial losses could cause us to cease operations and/or declare bankruptcy. Our GTL Technology is subject to the changing of applicable U.S. laws and regulations. Our business is particularly subject to federal and state laws and regulations with respect to the oil and gas and mining industries. Our success depends in part on our ability to anticipate, navigate and respond to any changes that might occur. Due to our currently limited financial resources, we might not be able to respond to unanticipated changes, should they occur and impact our operations, and therefore have to cease operations. - 8 - Acts of terrorism, responses to acts of terrorism and acts of war may impact our business and our ability to raise capital. Future acts of war or terrorism, national or international responses to such acts, and measures taken to prevent such acts may harm our ability to raise capital or our ability to operate, especially to the extent we depend upon activities conducted in foreign countries. In addition, the threat of future terrorist acts or acts of war may have effects on the general economy or on our business that are difficult to predict. We are not insured against damage or interruption of our business caused by terrorist acts or acts of war, and thus, our financial operations may be materially impacted by such events. We may fail to establish and maintain strategic relationships. We believe that establishing strategic industry partnerships and natural gas producer customer relationships will greatly benefit the growth of our business and the deployment of our GTL technology. To further such relationships, we have and will continue to seek out and enter into strategic alliances, joint ventures, and similar production relationships, including similar to those announced during the 2019 with INFRA Technologies, OPMGE and the ongoing relationship with UTA. Our affiliation with OPMGE was terminated. We continue to seek out and have discussions with potential gas producers on both a customer and financing basis. However, we may not be able to maintain our current or enter into new strategic partnerships on commercially reasonable terms, or at all, and may not be able to create financial or customer relationships with natural gas producers. Even if we enter new natural gas producer relationships, such financial partners and/or customers may not have sufficient production of location based natural gas to provide profitable revenues or otherwise prove advantageous to our business. Our inability to enter into such new relationships or strategic alliances could have a material and adverse effect on our business. Risks Relating to Our Common Stock We may need to raise additional capital. If we are unable to raise additional capital, our business may fail, or our operating results and our share price may be materially adversely affected. Because we have no record of profitable operations, we need to secure adequate funding on an ongoing basis. If we are unable to obtain adequate funding, we may not be able to successfully develop and market our GTL technology and our business will likely fail. We have no commitments for financing. To secure additional financing, we may need to borrow money or sell more securities, which may reduce the value of our outstanding securities. We may be unable to secure additional financing on favorable terms, or at all. Selling additional shares of Common Stock, either privately or publicly, would dilute the equity interests of our Shareholders. If we borrow money, we will have to pay interest and may also have to agree to restrictions that limit our operating flexibility. If we are unable to obtain adequate financing, we may have to curtail business operations, which would have a material negative effect on operating results and most likely result in a lower price per share of Common Stock. Also, as of the date of this filing, the shares authorized treasury shares are 500 million and there were 462,361,204 issued and outstanding. Thus, only an additional 37,638,796 treasury shares are available for sale. At the current share price, the ability to raise a significant amount of funds through the sale of treasury shares is limited. In order to address this situation, the Company has the ability to authorize additional treasury shares or execute a corporate restructuring. These actions may require a special shareholder meeting and a positive vote of the shareholders on these matters is not certain. - 9 - Issuance of additional Common Stock in exchange for services or to repay debt would dilute Shareholders’ proportionate ownership and voting rights and could have a negative impact on the market price of our Common Stock. Our Board of Directors has previously and may continue to issue shares of our Common Stock to pay for debt or services rendered, without further approval by our Shareholders, based upon such factors as our Board of Directors may deem relevant in its sole discretion. It is likely that we will issue additional securities to pay for services and reduce debt in the future. Such issuances may lower the market price of our stock and decrease our ability to raise additional equity funding for working or investment capital as may be needed at a later time. Even though our shares of Common Stock are publicly traded, an investor’s shares may not be “free-trading” and investors may be unable to sell their shares of Common Stock at or above their purchase price, which may result in substantial losses to the investor. Investors should understand that their shares of our Common Stock are not “free-trading” merely because we are a publicly traded company. Shares bought from the Company or received for services rendered or in conjunction with the issuance of debt require different holding periods, thereby creating a potential lack of liquidity and inability to sell such shares timely for any investor. In order for our shares of Common Stock to become “free-trading,” the offer and sale of shares of our Common Stock must either be registered pursuant to a registration statement under the Securities Act of 1933, as amended (the “ Securities Act ”), or be entitled to an exemption from registration under federal and state securities laws, after being held for statutory mandated periods. In addition, an investor has no assurance that our stock price will rise after purchase or receipt in any manner, as our stock has shown significant volatility over the life of the Company. The following factors may add to the volatility in the price of our Common Stock in the future: (i) actual or anticipated variations in our quarterly or annual operating results; (ii) government regulations; (iii) announcements of significant acquisitions, strategic partnerships or joint ventures; (iv) our capital commitments; (v) additional dilutive stock issuances, and (vi) additions or departures of key personnel. Many of these factors are beyond our control and may decrease the market price of our Common Stock, regardless of our operating performance. We cannot make any predictions or projections as to what the prevailing market price for our Common Stock will be at any time, including as to whether our Common Stock will sustain the current market price, or as to what effect the sale of shares of Common Stock or the availability of shares of Common Stock for sale at any time will have on the prevailing market price. Due to the fact that the Company did not timely file its Form 10-K for the fiscal year ended December 31, 2023 and its Form 10-Q for the quarterly period ended March 31, 2024, it was removed from the OTCQB marketplace, operated by the OTC Markets Group, Inc. (the “OTCMG” and placed on OTCMG “Pink Market,”which limits the ability of broker-dealers to sell our securities and the ability of Shareholders to easily sell their securities in the secondary market. All of the Company’s filings with the SEC are now current and the stock is now trading on its historical marketplace, the OTCQB. Companies trading on the OTCQB must: (i) be reporting issuers under Section 12 of the Exchange Act of 1934, as amended (the “ Exchange Act ”); (ii) must be current in their reports under Section 13 of the Exchange Act; and must pay an annual fee to OTCQB, to maintain electronic price quotation privileges on the OTCQB. Because we failed to remain current in our Exchange Act reporting requirements, we were removed from the OTCQB and forced to be traded on the Pink Sheets, which requires a more challenging stock purchasing and selling process. The OTCQB is recognized by the SEC as an established public market. This platform enables companies to provide current public information that investors use to analyze, value and trade a security. The OTC Pink Sheets is a lower and more speculative tier of the marketplaces for the trading of over-the-counter stocks. Companies traded on OTC Pink are not held to any particular disclosure requirements or financial standards, and due to the wide variety of companies listed on OTC Pink Market, including dark companies, delinquent companies and worse, they recommend only sophisticated investors with a high-risk tolerance should consider it. Pink Sheet Market shares generally trade thinly and infrequently making it hard to buy or sell when the investor wants to complete a transaction. In addition, trading in OTC Pink Sheet companies requires more paperwork because due the speculative nature of such stocks, the U.S. Congress prohibited broker-dealers from effecting transactions in penny stocks unless they comply with the requirements of Section 15(h) of the Exchange Act and the rules promulgated thereunder. - 10 - These SEC rules provide, among other things, that a broker-dealer must: (i) approve the customer for the specific penny stock transaction and receive from the customer a written agreement to the transaction; (ii) furnish the customer a disclosure document describing the risks of investing in penny stocks; (iii) disclose to the customer the current market quotation, if any, for the penny stock; and (iv) disclose to the customer the amount of compensation the firm and its broker will receive for the trade. In addition, after executing the sale, a broker-dealer must send to its customer monthly account statements showing the market value of each penny stock held in the customer’s account. With the added inconvenience and cost for brokers, various large brokerage firms, including Merrill Lynch, Capital One, Fidelity, E-Trade and even the new Robinhood, among others, have simply stopped providing brokerage services for Pink Sheet stocks for new customers. Accordingly, the Pink Sheet Market’s trading is very thin. Volatility in the share price for our Common Stock may subject us to securities litigation. There is a limited market for the sale of shares of our Common Stock. The market for our Common Stock is characterized by significant price volatility when compared to seasoned issuers, and we expect that our Common Stock share prices will be more volatile than a seasoned issuer for the indefinite future. In the past, plaintiffs have often initiated securities class action litigation against a company following periods of volatility in the market price of its securities. In the future, we may be the target of similar litigation. Securities litigation could result in substantial costs and liabilities and could divert management’s attention and resources away from our daily operations, negatively impacting our financial results. We do not intend to pay dividends on shares of our Common Stock. We have not paid any cash dividends on shares of our Common Stock since our inception, and we do not anticipate that we will pay any cash dividends in the near future. Earnings, if any, that we may realize will be retained in the business for further development and expansion. Furthermore, our ability to pay dividends may be restricted under our debt agreements. Our substantial level of indebtedness could adversely affect our financial condition. We have a substantial amount of indebtedness, a significant amount which are interest-bearing notes payable. As of December 31, 2025, we had $14,131,536 total liabilities, all of which is current. For more details on our indebtedness, please see Notes 3, 4 and 5 of our Consolidated Financial Statements. Our substantial level of indebtedness could have important consequences, including the following: ● We must use a substantial portion of our cash flow from operations to pay interest, which reduces funds available to use for other purposes, such as working capital, capital expenditures, and other general corporate purposes; ● Our ability to refinance such indebtedness or to obtain additional financing for working capital, capital expenditures, acquisitions, or general corporate purposes may be impacted; and ● Our leverage may be greater than that of some of our competitors, which may put us at a competitive disadvantage and reduce our flexibility in responding to current and changing industry and financial market conditions. Our ability to meet expenses and to make future principal and interest payments in respect of our debt, depends on, among other things, our future operating performance, competitive developments and financial market conditions. We are not able to control many of these factors. If industry and economic conditions deteriorate, our ability to raise debt or equity capital and/or cash flow may be insufficient to allow us to pay principal and interest on our debt and meet our other obligations, which could cause us to default on these obligations. In particular, the Mabert loans maintain a UCC-1 security interest in all the collateral of the Company, including to our G-Reformer, technology and intellectual property (our patents, patents pending and licensed patents). If Mabert exercises its rights and remedies due to defaults under our secured loan agreements, our business, financial condition, and results of operations will be materially adversely affected. - 11 - The market for penny stocks has suffered in recent years from patterns of fraud and abuse. Stockholders should be aware that, according to SEC Release No. 34-29093, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include: ● Control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; ● Manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; ● Boiler room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced salespersons; ● Excessive and undisclosed bid-ask differential and markups by selling broker-dealers; and ● The wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequential investor losses. Management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the penny stock market, the Company’s management will strive to prevent the described patterns from being established with respect to our securities, as the occurrence of these patterns or practices could increase the volatility of the price per share of our Common Stock and/or diminish stockholders ability to trade our Common Stock. Failure to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 could have a material adverse effect on our business and stock price. Section 404 of the Sarbanes-Oxley Act requires us to evaluate annually the effectiveness of our internal controls over financial reporting as of the end of each fiscal year and to include a management report assessing the effectiveness of our internal controls over financial reporting in our annual report. If we fail to maintain the adequacy of our internal controls, we may not be able to ensure that we can conclude, on an ongoing basis, that we have effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act. While we continue to dedicate resources and management time to ensuring that we have effective controls over financial reporting, failure to achieve and maintain an effective internal control environment could have a material adverse effect on the market’s perception of our business and the price of our Common Stock. Item 1B. Securities and Exchange Commission - Staff Comments. The Company received a letter dated November 15, 2021, from the Securities and Exchange Commission (“SEC”) asking for the Company for comments on disclosures made in the Form 10-K for the Year Ended December 31, 2020 and in the Form 10-Q for the Period Ended June 30, 2021. The inquiry pertained to disclosures under Items 307 and 308 of Regulation S-K. Item 307 of Regulation S-K addresses “Disclosure Controls and Procedures” and Item 308 of Regulation S-K addresses “Internal Control Over Financial Reporting.” The Company responded to the inquiry. In a letter to the Company from the Securities and Exchange Commission dated February 2, 2022, the SEC stated, “We have completed our review of your filings.” This action closed the matter. The Company received a letter dated August 7, 2023 from the SEC stating that disclosure was not adequate for the Form 10-K for the Fiscal Year Ended December 31, 2022 and the Form 10-Q for the Quarterly Period Ended March 31, 2023. The SEC comments related to Evaluation of Disclosure Controls and Procedures under Items 307 and of Regulation S-X. In particular, the SEC suggested that it should be concluded that Disclosure Controls and Procedures are ineffective. The SEC requested the Company to provide this disclosure in future filings and the Company has complied with the SEC’s request. The Company issued a letter dated September 3, 2023 to the SEC stating its intention to provide adequate disclosure in future filings. The SEC accepted the letter on September 13, 2023. Item 1C. Cybersecurity Risk Management and Strategy Cybersecurity Risk Management and Strategy The Company recognizes the importance of maintaining the security and integrity of its information systems and data. The Company’s operations are currently limited in scale and are primarily focused on research, development, and administrative activities. As such, the Company’s information technology environment consists primarily of standard, commercially available systems and cloud-based applications used for accounting, communication, and general business operations. The Company has implemented basic cybersecurity measures designed to protect its information systems and data, including: 1. use of third-party hosted platforms with embedded security features 2. password protection and access controls 3. periodic monitoring of system access and activity 4. reliance on reputable service providers for financial systems and data storage The Company does not currently maintain a formal, enterprise-wide cybersecurity risk management program; however, management periodically assesses risks related to cybersecurity and implements measures it believes are appropriate given the Company’s size, operations, and risk profile. To date, the Company has no t experienced any material cybersecurity incidents that have materially affected, or are reasonably likely to materially affect, its business strategy, results of operations, or financial condition. - 12 - Cybersecurity Governance Responsibility for oversight of cybersecurity risk resides with management, primarily the Chief Financial Officer , who oversees the Company’s information systems and related risks. Due to the Company’s limited personnel, cybersecurity responsibilities are not segregated across multiple roles . Management is responsible for: 1. identifying and evaluating cybersecurity risks 2. monitoring access to key systems 3. coordinating with third-party service providers 4. responding to any identified cybersecurity issues The Board of Directors has general oversight responsibility for risk management, including cybersecurity risk. The Board is informed of material risks, including cybersecurity-related matters, through periodic communications with management. Given the Company’s current size and operations, cybersecurity risk is not managed through a separate committee but is considered as part of the Company’s overall risk management process Cybersecurity Incident Reporting The Company has not identified any cybersecurity incidents that have materially affected, or are reasonably likely to materially affect, the Company’s business strategy, results of operations, or financial condition. Item 2. Properties. Our principal office is 1521 North Cooper St., Suite 205, Arlington, Texas 76011, leased at a rate of $981.00 per month. We believe these facilities are adequate for at least the next 12 months. We expect that we could relocate to other suitable facilities at comparable rates, should we need more or less space.