(TheNewswire)
Vancouver, B C - TheNewswire - April 3, 2023 - G2 Energy Corp. (CSE:GTOO ) ( FWB:UD9) (the"Company" or "G2") announcestoday that, further to the news releases dated January 20, 2023 andMarch 15, 2023 regarding an alleged default of the Debenture (definedbelow), the Company, as Guarantor, has entered into a reinstatement,renewal and release agreement (the " Agreement "),dated as of March 29, 2023 with its subsidiary G2 Energy TX1, Inc.(" G2 TX1 "), asMortgagor, and Cloudbreak Discover PLC (" Cloudbreak "), asMortgagee, pursuant to which, among other things, the Loan Documents(defined below) will be reinstated to the extent as if no default hadoccurred.
Cloudbreak is the holder of a debenture in theprincipal amount of $2,000,000.00 (the " Debenture ")executed by G2 TX1 and guaranteed by the Company. The Debenture issecured by a certain deed of trust, fixture filing, assignment ofas-extracted collateral, security agreement and financing statement(the " Deed ofTrust ") dated as of April 27, 2022 coveringthe real property located in Cochran County, Texas, improvementssituated thereon, and other property, as described in the Deed ofTrust (the " MortgagedProperty "). The Debenture is furthersecured by a security pledge agreement dated May 23, 3022 (the " SecurityPledge Agreement ") from G2 Energy HoldingUS Inc., as Pledgor, to Cloudbreak, as Lender. The Debenture, the Deedof Trust and the Security Pledge Agreement are collectively referredto as the " LoanDocuments ".
Cloudbreak alleged that there were a number of defaultsby the Company and G2 TX1 in respect of the Debenture and G2 and G2TX1 disputed certain of these claims. Despite G2's efforts tonegotiate a solution in January and February 2023, on February 17,2023, Cloudbreak accelerated the maturity of the Debenture anddemanded payment in full of all amounts owed thereunder, and alsocaused the substitute trustee of the Deed of Trust to post theMortgaged Property for foreclosure sale, which led to unnecessary andtime-consuming legal posturing. The parties have now resolved theirdifferences and entered into the Agreement.
Terms of the Agreement
Pursuant to the terms of the Agreement, Cloudbreak hasagreed to, among other things: (i) accept payment from the Company andG2 TX1 in the sums set forth below; (ii) reinstate the Loan Documentsto the same extent as if no default had occurred; (iii) withdrawal theforeclosure proceedings; and (ii) renegotiate (with the assistance ofa mediator) certain terms of the Loan Documents relating to workingcapital requirements and governing jurisdiction.
Furthermore, pursuant to the terms of the Agreement,the Company and G2 TX1 shall, subject to receipt of any requiredregulatory approvals, pay to Cloudbreak: (a) the sum of USD$61,332.10cash representing the past due Fourth Quarter End 2022 payment on theDebenture of USD$60,000.00 plus non-default interest in the amount ofUSD$1,332.10 cash through February 22, 2023; (b) part of Cloudbreak'sattorneys' fees in the amount of USD$20,000.00 cash; (c) the remainingpart of Cloudbreak's attorney's fees in the amount of USD$13,311.74 byway of transferring or issuing to Cloudbreak 907,000 common shares inthe capital of the Company (" Common Shares ");(d) the First Quarter End 2012 payment on the Debenture ofUSD$60,000.00 plus a USD$15,000 bonus by way of transferring orissuing to Cloudbreak 5,110,000 Common Shares; (e) 4,769,000 CommonShares transferred or issued to Cloudbreak in escrow by May 31, 2023;and (f) the Second Quarter 2023 payment on the Debenture of $60,000.00plus a USD$15,000 by way of transferring or issuing 5,110,000 CommonShares.
Additionally, the Company and G2 TX1 have agreed torelease, remise, acquit and forever discharge Cloudbreak andCloudbreak's employees, agents, representatives, consultants, attorneys, fiduciaries, servants, officers,directors, partners, predecessors, heirs, successors and assigns,subsidiary corporations, parent corporations, and elated corporatedivisions from all Released Matters (as defined in the Agreement).
Slawek Smulewicz commented: “ The Company and G2 TX1 are pleased to haveresolved these disagreements, and look forward to further building amutually-beneficial business relationship with Cloudbreak.”
Mortgaged Property Sales AgreementCompliance
The Company and G2 TX1 further announce that it hascured all claimed defaults under its agreements with the sellers ofthe Mortgaged Property, and look forward to further building amutually-beneficial business relationship with such parties.
On Behalf of the Board,
" SlawekSmulewicz "
Slawek Smulewicz
CEO
For further information, please contact
John Costigan
VP Corporate Development
O: +1 778 7754985
W: WWW.G2.ENERGY
About G2 Energy Corp.
G2 is a junior oil and gas producer listed on the CSEexchange. Its primary focus is to acquire and develop additionaloverlooked, low risk, high return opportunities in the oil and gassector. G2's strategy is to obtain a portfolio of risk-managedproduction and development opportunities onshore, U.S.A. In May 2022,G2 acquired the Masten Unit in the Permian Basin, Texas. The MastenUnit is the Company's first producing asset. G2 is targeting top tierprojects with operating netbacks and infrastructure facilities whichwill fast track overall oil and gas production growth.
The Canadian Securities Exchange hasneither approved nor disapproved the information containedherein.
Forward Looking StatementsCaution
Statements in this press releaseregarding the Company which are not historical facts are"forward-looking statements" that involve risks anduncertainties. Such information can generally be identified by the useof forwarding-looking wording such as "may","expect", "estimate", "anticipate","intend", "believe" and "continue" orthe negative thereof or similar variations. Since forward-lookingstatements address future events and conditions, by their very nature,they involve inherent risks and uncertainties. The Company providesforward-looking statements for the purpose of conveying informationabout current expectations and plans relating to the future, includingexpectations regarding the Company's ability to meet its outstandingobligations, and readers are cautioned that such statements may not beappropriate for other purposes. By its nature, this information issubject to inherent risks and uncertainties that may be general orspecific and which give rise to the possibility that expectations,forecasts, predictions, projections or conclusions may not prove to beaccurate, that assumptions may not be correct and that objectives,strategic goals and priorities may not be achieved. These risks anduncertainties include but are not limited to those identified andreported in the Company's public filings under the Company's SEDARprofile at www.sedar.com. The Company's ability to meet itsoutstanding obligations could differ materially from those currentlyanticipated due to factors such as: the performance of facilities andpipelines, commodity prices, price volatility, price differentials andthe actual prices received for the Company's products, royalty regimesand exchange rates, the availability of capital, labour and services,the creditworthiness of industry partners, G2's ability to acquireadditional assets, unexpectedincreases in operating costs, and risks associated with potentialfuture lawsuits and regulatory actions made against the Companyincluding but not limited to being found in default of the Company'sobligations to Cloudbreak under the Agreement. Although the Companyhas attempted to identify important factors that could cause actualactions, events or results to differ materially from those describedin forward-looking information, there may be other factors that causeactions, events or results not to be as anticipated, estimated orintended. There can be no assurance that such information will proveto be accurate as actual results and future events could differmaterially.
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