G2 Energy Corp. — Management Reports 2020

Nov 26, 2020

G2 TECHNOLOGIES CORP. (FORMERLY GREEN 2 BLUE ENERGY CORP.) MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE PERIOD ENDED SEPTEMBER 30, 2020

This discussion and analysis of financial position and results of operations is prepared as at November 26, 2020 and should be read in conjunction with the audited consolidated financial statements for the year ended June 30, 2020 and unaudited interim financial statements for the period ended September 30, 2020, of G2 Technologies Corp.(formerly Green 2 Blue Energy Corp.)(“GTOO” or the “Company”). The audited consolidated financial statements and unaudited interim financial statements are presented in Canadian dollars and have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”). All references to dollar amounts are in Canadian dollars unless otherwise noted. Additional information relevant to the Company’s activities can be found on SEDAR at www.sedar.com.

CAUTIONARY STATEMENT ON FORWARD LOOKING INFORMATION

This MD&A contains statements which are, or may be deemed to be, "forward-looking information" which are prospective in nature. Often, but not always, forward-looking information can be identified by the use of forwardlooking words such as "plans", "expects" or "does not expect", "is expected", "scheduled", "estimates", "forecasts", "projects", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Such information in this MD&A includes, without limitation, statements regarding the Company's future plans and expectations relating to the Company's future operations and transactions.

Forward-looking information is not based on historical facts, but rather on then current expectations, beliefs, assumptions, estimates and forecasts about the business and the industry and markets in which the Company operates, including assumptions relating to the Company will be able to continue its progress as currently planned and will not have to make additional changes to any proposed business plan, that the Company will have access to capital if required, that all necessary approvals and arrangements will be obtained, renewed and/or finalized in a satisfactory manner in order to continue developing the Company's projects, and that the Company's equipment will operate at expected levels. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the Company's actual results, revenues, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Important risks that could cause the Company's actual results, revenues, performance or achievements to differ materially from the Company's expectations include, among other things:

• (i) risks related to the ability of the Company to obtain contractors, if required,

• (ii) that the Company will be able to generate sufficient cash flow to continue as a going concern,

• (iii) risks related to prior production activity

• (iv) risks related to availability of capital on satisfactory terms,

• (v) changes in the market prices of goods produced by the Company, which, in the past, have fluctuated widely and which could affect the profitability of the Company's operations and financial condition;

• (vi) risks related to governmental regulations, including taxation statutes;

Risks related to the Company includes political, economic, and regulatory instability and other risks found in the risk section of this report. Other than in accordance with its legal or regulatory obligations, the Company is not under any obligation and the Company expressly disclaims any intention or obligation to update or revise any forwardlooking statements, whether as a result of new information, future events or otherwise.

DESCRIPTION OF BUSINESS

G2 Technologies Corp. (formerly Green 2 Blue Energy Corp.)(the "Company" or "GTOO") was incorporated on October 9, 2014 in British Columbia under the Business Corporations Act. The Company was previously engaged in the business of mineral exploration and the acquisition of mineral property assets in Ontario through its subsidiary, Brigadier. The Company has since terminated all of its mineral property interests.

On January 16, 2017, the Company entered into a Share Exchange Agreement with G2BE Canada Inc. ("G2BEC"), a private British Columbia company incorporated on May 30, 2014 for a reverse-takeover transaction whereby the Company would acquire all of the issued and outstanding common shares in the capital of GTOO (the "Transaction").

Up until the disposition of all the Company’s operating subsidiaries on March 31, 2020, the Company was in the business of manufacturing, marketing, and distributing softwood pellets and shavings for consumer and industrial customers and arranging transactions between buyers and sellers of alternative energy products.

As at March 31, 2020, the Company sold all of its operating subsidiaries (see Key Business Events below on page 2) and is currently looking for other ventures to build value for its shareholders. Currently the Company is a shell company with no operations.

On October 25, 2020, the Company changed its name from Green 2 Blue Energy Corp. to G2 Technologies Corp. and change its ticker symbol to “GTOO”.

The Company's registered office is located at Suite 1105 -808 Nelson Street , Vancouver BC.

KEY BUSINESS EVENTS – PERIOD ENDED SEPTEMBER 30, 2020

• On July 6, 2020, the Company entered into an interim partnership agreement with a private firm based in Korea that includes an option to execute a definitive agreement upon mutual agreement of both parties to obtain the right to act as an authorized vendor for a number of Korean medical and bioscience companies that conduct research and manufacture products related to immunological diagnostics and blood monitoring.

• On July 15, 2020, the Company appointed Izy Capital Partners as lead advisor for its medical technologies venture.

Subsequent to September 30, 2020

• Appointment of senior management

On October 30, 2020, the Company appointed Mr. Kai Hensler to the board of directors. Mr. Hensler’s strong administrative experience was gained during ten years with the federal government serving at the German Air Force and German Foreign Affairs office. He is a former Air Force Staff Sergeant with the German Air Force and held a highly regarded position as Administrator of Classified Information with the German Foreign Affairs Office. Mr. Hensler studied Commerce and Business Administration through the College of Commerce in Mannheim, Germany, and the Defense Attache Course through the Military Counterintelligence Service School located in Germany. In the past 16 years, he has been a high-level sales executive and general manager for a boutique automotive facility located in Vancouver.

On November 9, 2020, the Company appointed Mr. Sam Wong to become the Company’s Chief Financial Officer. Mr. Wong is a Chartered Professional Accountant with over 10 years of financial management experience. Mr. Wong has held various executive roles in publicly traded junior mineral exploration companies, junior mining production companies, technologies startups etc. Mr. Wong articled at Deloitte LLP where he specialized in assurance and advisory services for publicly listed companies based in Canada, United States, and Latin America.

• Signing of Letter of Intent with Caltron Oil Pty Ltd.

On November 4, 2020, the Company signed a Letter of Intent dated October 30, 2020 (the “LOI”) with Caltron Oil Pty Ltd (“Caltron” or “COPL”) to pursue oil and gas acquisitions in the State of California.

The Company and Caltron have entered into the LOI, which sets out certain terms and conditions pursuant to which the proposed Transaction will be completed. The terms outlined in the LOI are subject to the parties successfully entering into a definitive agreement (the “Definitive Agreement”) in respect of the Transaction on or before December 31, 2020 or such other date as the Company and Caltron may mutually agree.

G2 is pleased to partner with Caltron whose management team has a proven track record in acquiring, developing and exploiting oil and gas assets in the State of California. Importantly G2 and Caltron are aligned in their strategic objectives for creating shareholder value. The intention of both companies is to focus on conventional oil and gas production assets onshore southern California with activities directed toward the acquisition, development and management of oil and gas fields with material upside.

Caltron has identified an initial portfolio of assets in the prolific Los Angeles Basin. The portfolio includes producing oil fields with associated proven reserves that are cash flow positive at current oil prices. It is the intention of G2, with Caltron’s support, to pursue the acquisition of these producing assets as its first transaction. Additional information will be provided concerning the assets after the Company has completed its due diligence.

As a result of this transaction G2 will develop on-the-ground operational capabilities and gain access to commercially aligned operational relationships in California, which will enable the identification, acquisition and enhancement of additional production opportunities in line with the Company’s investment strategy.

OVERALL PERFORMANCE

Results of Operations for the period ended September 30, 2020 and 2019

The following table sets forth selected annual information of the Company for the interim period September 30, 2020 and 2019 noted below. This financial information has been prepared using IFRS:

	2020		2019
Revenue	$	-	$	369,689
Cost of sales		-		(415,469)
Gross profit (loss)		-		(45,780)
Operating expenses
Consulting and management fees		(184,984)		(135,650)
General and administrative		(9,831)		(249,709)
Other operating expenses		(19,534)		(36,696)
Other income (expense)		(13,084)		111,142
Net loss for the year		(227,443)		(356,693)
Basic and diluted loss per share		(0.00)		(0.00)
Total current assets		74,548		496,690
Total assets		74,548		1,572,750
Total current liabilities		1,042,389		2,011,866
Total liabilities		1,408,899		2,298,901
Cash dividends		-		-

Revenue – revenue was $nil for the period ended September 30, 2020 compared to $369k in the previous fiscal year. As at March 31, 2020, the Company disposed all of its operating subsidiaries. As a result, there are no further revenue in the current fiscal year.

Cost of sales – cost of sales was $nil for the period ended September 30, 2020 compared to $415k in the previous fiscal year. As at March 31, 2020, the Company disposed all of its operating subsidiaries. As a result, there are no further revenue in the current fiscal year.

Consulting and management fees – these fees were $184k for the period ended September 30, 2020 compared to $135k in the previous fiscal year. The consulting fees were higher due to corporate development initiative related to medical technologies ($100k). The remaining fee was related to President’s consulting fees ($74k).

General and administrative expenses – general and administrative expenses were $10k in the current interim period ended September 30, 2020 compared to $249k in fiscal 2019. The key driver for the lower expenses were due to the disposition of operating subsidiaries on November 29, 2019 and March 31, 2020. The Company no longer had to pay overhead related the operations in Poland.

Other operating expenses – other operating expenses were $20k in the current interim period ended September 30, 2020 compared to $37k in fiscal 2019. The key driver for the lower expenses were due to the disposition of operating subsidiaries on November 29, 2019 and March 31, 2020. The Company no longer had to pay overhead related the operations in Poland.

Other income/expenses – other expense was $13k in the current interim period ended September 30, 2020. The balance are mainly made up of interest expense related to loan payable and convertible debenture. In the previous fiscal year interim period ended, there was a non-routine gain of $132k in settlement of lease liability. This did not occur in the current fiscal year.

Assets and liabilities – the total assets and liabilities were significantly lower in the current period ended September 30, 2020 when compared to fiscal 2019. This was mainly driven by the disposition of operating subsidiaries. The Company deconsolidated the assets and its liabilities from its operating subsidiaries in Poland.

Quarterly Information

Total Assets Working Capital (Deficiency) Revenue Gross Profit (Loss) Net Loss Earnings (Loss) Per Share Total Assets Working Capital (Deficiency) Revenue Gross Profit (loss) Net Loss Loss per Share	September 30, 2020 $ 74,548 (967,841) - - (227,443) (0.00) September 30, 2019 $ 1,572,750 (1,515,176) 369,689 (45,780) (355,693) (0.01)	June 30, 2020 $ 67,839 (751,985) - 142,057 (373,015) (0.00) June 30, 2019 $ 1,984,255 (1,412,811) 140,117 (131,324) (642,858) (0.01)	March 31, 2020 $ 207,741 (421,194) - (82,796) 25,309 0.00 March 31, 2019 $ 2,074,944 (1,396,214) 594,245 46,422 (476,466) (0.01)	December 31, 2019 $
				1,823,662 (1,677,310) 200,294 42,569 (37,716) (0.00) December 31, 2018 $
				2,170,140 (1,245,459) 490,018 121,304 (395,623) (0.01)

Total assets – the trend for the last eight comparative quarters for assets has been declining in nature. In the past fiscal year June 30, 2019, the assets fluctuated depending on the timing of debt or equity financing. In the current fiscal year, the downward trend was due to the use of cash and the assets significantly decreased as at March 31, 2020, when the Company disposed all of its operating subsidiaries in Poland. As at June 30, 2020, the Company further decreased its assets due to write off of GST receivables. As at September 30, 2020, the total assets remained consistent with June 30, 2020. The variance was driven by timing difference.

Working capital deficiency – working capital for fiscal 2019 was in an increasing trend as the Company began operating in Poland. The working capital deficiency was consistent at around $1.4 million to $1.6 million throughout the majority of fiscal 2019 and 2020. This changed on March 31, 2020 as the operating subsidiaries in Poland were disposed. This

significantly improved the working capital deficiency as material amount of liabilities were deconsolidated as a result of the disposition. Working capital deficiency worsen as at June 30, 2020 and September 30, 2020 as the Company took out a loan to pay for corporate expenditure for corporate development and public company management.

Revenue and gross margin – revenue fluctuated on quarter to quarter basis over the fiscal year 2019 and 2020. On average, the Company does approximately $300-400k in sales on a quarterly basis. The differences from quarter to quarter were mainly driven by timing differences. The trend over the last two fiscal 2019 and 2020 has been a declining one due to challenging economic environment. The fluctuating cost and thin margin resulted the business decision to dispose the operating subsidiaries in Poland. As a result, there are no revenues since March 31, 2020.

Net loss – net loss in a quarterly basis typically fluctuate in nature as revenue and costs are not consistent throughout the year. On an average basis, the average loss per quarter in fiscal 2019 was approximately $500k. This was relatively consistent through first quarter of 2020. Cost cutting initiatives began in the rest of fiscal 2020 to lower the overall burn rate corporate wide; this ultimately led to the decision of disposing the operating subsidiaries in Poland. As a result, the net loss for the March 31, 2020 quarter was lower due to a non-cash gain on the disposition of operating subsidiaries. Net loss for three months ended June 30, 2020 was higher as there is no further revenue to fund the general overhead costs of the Company. Net loss for the three months ended September 30, 2020 was lower than previous quarter (June 30, 2020) as it continues to cut cost.

Capital Resources

The Company manages its capital to maintain its ability to continue as a going concern and to provide returns to shareholders and benefits to other stakeholders. The capital structure of the Company consists of equity comprised of issued share capital, and reserves.

The Company manages its capital structure and makes adjustments to it in light of economic conditions. The Company, upon approval from its board of directors, will balance its overall capital structure through new equity issuances or by undertaking other activities as deemed appropriate under the specific circumstances.

The Company is not subject to externally imposed capital requirements and the Company’s overall strategy with respect to capital risk management remains unchanged as at September 30, 2020.

Liquidity and Capital Resources

		Three months ended	Sept. 30,
		2020	2019
Cash used in operating	$	(52,512) $	(125,306)
Cash used in investing		-	(9,000)
Cash flow from financing		51,000	135,031
Effect of foreign exchange on cash		-	452
Net change in cash		(1,512)	1,177
Cash–beginning of the period		3,503	6,174
Cash –end ofthe period		1,991	7,351

Operating Activities : Cash used in operating was $53k in the current period ended September 30, 2020 when compared with $125k in fiscal 2019. The lower cash used was mainly due to the disposition of operating subsidiaries in Poland on November 29, 2019 and March 31, 2020.

Investing Activities : Cash used in investing was $nil in the current period ended September 30, 2020 when compared with $9k in previous fiscal year. The $9k was used to buy equipment in the operating subsidiary in Poland. In the current fiscal year, the Company no longer own that operating subsidiary.

Financing Activities : Cash flow from financing was $51k in the current period ended September 30, 2020 when compared to $135k in the previous fiscal year. This amount was lower in the current fiscal year because the Company no longer need to fund its operating subsidiary, which was sold on March 31, 2020.

These unaudited interim consolidated financial statements have been prepared on a going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. As at September 30, 2020, the Company had a negative cash flow from operations, had an accumulated deficit of $13,438,235 (June 30, 2020 - $13,210,802). Furthermore, the Company incurred a net loss of $227,433 during the period ended September 30, 2020 (2019 - $356,693). Management believes that the proceeds from additional equity and debt financing

activities that it is currently pursuing would provide the Company with sufficient working capital to satisfy its liabilities and commitments as they become due for the foreseeable future. However, there can be no assurances that sufficient equity or debt can be raised on a timely basis or on terms that are acceptable to the Company. These factors indicate the existence of a material uncertainty that casts significant doubt on the ability of the Company to continue as a going concern. These consolidated financial statements do not reflect any adjustments that may be necessary if the Company is unable to continue as a going concern.

R elated Party Transactions

During the period ended September 30, 2020 and 2019, the Company was engaged in the following related party transactions:

• a) As at September 30, 2020, the Company owed $227,664 (June 30, 2020 - $482,375) to the President of the Company and a company, Blue Amber Enterprise Ltd.( “Blue Amber”), controlled by the President of the Company. During the period ended September 30, 2020, Blue Amber assigned $330,000 of its balanced owed to an unrelated 3[rd] party.

The amount owing is unsecured, non-interest bearing, due on demand and is included in Due to related parties.

• b) As at September 30, 2020, the Company owed $nil (June 30, 2020 - $63,351) to a Director of the parent Company. The amount owing is unsecured, non-interest bearing, due on demand and is included in Due to related parties.

• c) During the period ended September 30, 2020, the Company recorded management fees of $74,812 (2019 - $65,148) to the President of the Company and a company (Blue Amber Enterprise Ltd.) controlled by the President of the Company.

• d) During the period ended September 30, 2020, the Company recorded consulting fees of $nil (2019 - $12,000) to a Director of the Company.

Contractual Obligations and Commitments

The Company had no significant commitments or contractual obligations with any parties related to executive compensation, consulting arrangements, or other matters other than disclosed below and disclosed in Note 5 (lease) in the financial statements for period ended September 30, 2020.

On April 1, 2020, the Company entered into a consulting agreement with ECMB Capital Partners Inc. (“ECMB”). Under the terms of the consulting agreement, ECMB will provide advisory services including identifying and negotiating development opportunities for the Company and support for ongoing advancement of the Company. The consulting agreement provides for a monthly retainer of $4,000 payable in cash or equity, calculated each three months with the first payment due on signing and a finder’s fee up to 10% of the value of a transaction brought to the Company.

Contingencies

Civil Claim against the Company

On July 22, 2019, the Company served with a notice of civil claim, filed on July 11, 2019 with the Supreme Court of British Columbia, by Plaintiffs under the Class Proceedings Act, RSBC 1996, c 50, naming Green 2 Blue Energy Corp. as a defendant along with 86 additional defendants, in connection with allegations of the inappropriate use of the exemption from prospectus requirements contained in Section 2.12 of National Instrument 45-106 Prospectus Exemptions, and the disclosure records of the Company in respect of distributions of securities to consultants using such exemption. Honourable Madam Justice Adair has been assigned as the Judicial Management Judge in the above noted matter under the Class Proceedings Act. As of the date of this report, no legal decision has been made.

The Company also had a regulatory hearing submission before the B.C. Securities Commission (“BCSC”) in respect of the allegation of misuse of the exemption from prospectus requirements contained in section 2.12 of National Instrument 45-106 and connected agreements with consultants of the Company. As at September 30, 2020, and the date of this report, no decision has been received.

Off Balance Sheet Arrangements

As at September 30, 2020 and the date of this report, the Company does not have any, and during the periods presented we did not have any, off-balance sheet arrangements, other than the contractual obligations and commitments described above.

Proposed Transactions

The Company does not have any proposed transactions as at September 30, 2020 and the date of the report, other than as disclosed elsewhere in this document.

Outstanding Share Data

As at September 30, 2020 and the date of this report, the Company had no preferred shares issued and outstanding.

As at September 30, 2020 and the date of this report, the Company had 100,580,327 common shares issued and outstanding.

As at September 30, 2020 and the date of this report, the Company had 4,257,380 warrants exercisable and outstanding (exercise price of $0.10, with an expiry date of January 23, 2021).

As at September 30, 2020, the Company had 7,815,000 stock options outstanding. On October 7, 2020, the Company cancelled all the stock options outstanding. As at the date of this report, the Company has no stock options outstanding.

Capital Management

The Company manages its capital to maintain its ability to continue as a going concern and to provide returns to shareholders and benefits to other stakeholders. The capital structure of the Company consists of equity comprised of issued share capital, and reserves.

The Company manages its capital structure and makes adjustments to it in light of economic conditions. The Company, upon approval from its board of directors, will balance its overall capital structure through new equity issuances or by undertaking other activities as deemed appropriate under the specific circumstances.

The Company is not subject to externally imposed capital requirements and the Company’s overall strategy with respect to capital risk management remains unchanged as at September 30, 2020.

Significant Accounting Policies

Please refer to unaudited interim financial statements for the period ended September 30, 2020 and audited consolidated financial statements for the year ended June 30, 2020 which were filed on SEDAR.

Risk and uncertainties

COVID-19

Subsequent to current period, there was a global outbreak of COVID-19 (coronavirus), which has had a significant impact on businesses through the restrictions put in place by the Canadian, provincial and municipal governments regarding travel, business operations and isolation/quarantine orders. At this time, the extent of the impact the COVID-19 outbreak may have on the Company is unknown as this will depend on future developments that are highly uncertain and that cannot be predicted with confidence. These uncertainties arise from the inability to predict the ultimate geographic spread of the disease, and the duration of the outbreak, including the duration of travel restrictions, business closures or disruptions, and quarantine/isolation measures that are currently, or may be put, in place by Canada and other countries to fight the virus. These uncertainties have increased the risk of the Company's abilities to raise equity and debt in the capital markets.

The Company does not intend to pay dividends for the foreseeable future.

The Company has never declared or paid any cash dividends on the Company's common shares and does not intend to pay any cash dividends in the foreseeable future. The Company anticipates that it will retain all of its future earnings for use in the development of its business and for general corporate purposes. Any determination to pay dividends in the future will be at the discretion of the Company's board of directors. In addition, from time to time the Company may enter into agreements that restrict its ability to pay dividends.

The price of the Company's common shares may be volatile.

The trading price of the Company's common shares has been and may continue to be subject to material fluctuations and may increase or decrease in response to a number of events and factors, including: - changes in the market price of hospitality management systems and number of market competitors offering same or similar products; - current events affecting the economic situation and exchange rates in Canada, the United States, and internationally; - changes in financial estimates and recommendations by securities analysts; - acquisitions and financings; - quarterly variations in operating results; - the operating and share price performance of other companies that investors may deem comparable; - the issuance of additional equity securities by the Company or the perception that such issuance may occur; and - purchases or sales of blocks of the Company's common shares. Part of this volatility may also be attributable to the current state of the stock market, in which wide price swings are common. This volatility may adversely affect the price of the Company's common shares regardless of the Company's operating performance and could cause the market price of the Company's common shares to decline.

The Company may issue additional equity securities which may reduce the Company's earnings per share.

The Company has in the past issued and may continue to issue equity securities to finance its activities, including in order to finance working capital requirements, capital expenditures and acquisitions. If the Company issues additional common shares, your percentage ownership of the Company will decrease, and you may experience dilution in the Company's earnings per share. Moreover, as the Company's intention to issue any additional equity securities becomes publicly known, the common share price may be materially and adversely affected.

Holders of the Company's common shares may experience dilution when outstanding options and warrants are exercised, or as a result of additional securities offerings.

There are a number of outstanding options and warrants pursuant to which additional common shares of the Company may be issued in the future. Exercise of such options and warrants may result in dilution to the Company shareholders. In addition, if the Company raises additional funds through the sale of equity securities, shareholders may have their investment further diluted.

The Company is currently a shell company seeking opportunities for its shareholders

As at March 31, 2020, the Company had disposed of its operating subsidiaries. The Company is seeking new opportunities for its shareholders. There is no guarantee the Company will identify or close any opportunity that is identified. As the Company has no operating subsidiaries it has no means of generating income and accordingly will need to raise additional capital.