A Lower Mainland company that billed itself as a green energy company before pivoting to oil production faces a BC Securities Commission (BCSC) hearing in the New Year for allegedly misleading investors.
In April 2018, Green 2 Blue Energy Corp., which later changed its name to G2 Energy Corp. (CSE:GTOO, FKN:UD9), issued a news release announcing it had raised $4 million through a non-brokered private placement.
At the time, the company was focused on wood pellet production in Poland, and the company said the capital raise was intended to complete facility upgrades, buy equipment and for general working capital, the BCSC says in its notice of hearing.
The company has since pivoted from biomass to oil production in the Permian Basin of Texas.
“The company did not disclose its intention to immediately spend approximately $3.7 million of the funds on consulting fees,” the BCSC says.
“Five days after the first news release, Green 2 Blue, whose shares trade on the Canadian Securities Exchange, issued another news release announcing it had raised approximately $4.3 million in the private placement. It did not disclose that it would only retain approximately $560,000 – 13 per cent – of the amount raised, because it had spent the rest on consulting fees.
“The BCSC alleges that Green 2 Blue made statements to investors in the news releases that it knew, or ought to have reasonably known, were misrepresentations and violated the Securities Act.”
The BCSC’s allegations have not yet been proven. The company's directors must appear before the BCSC on February. 7, 2023, if they wish to be heard before a hearing is scheduled, the notice of hearing states.
The BCSC names three Green 2 Blue directors in its notice of hearing -- CEO Slawomir Smulewicz of West Vancouver; CFO Michael Louis Young of Vancouver; and director Glenn Albert Little of Langley.
Though the BCSC names Slawomir Smulewicz as the CEO of Green 2 Blue Energy Corp., the company itself listed Slawek Smulewicz as the CEO of Green 2 Blue, and G2 Energy also currently names Slawek Smulewicz as CEO.
The company has not filed any financial reports since May 2022, when it filed interim financial statements.
At the time, the company reported no revenue and a net loss of $1 million for the nine-month period ending March 31, 2022. The company spent $473,658 on consulting and management fees over the nine-month period ending March 31, 2022, $276,996 on professional fees, $147,325 on general administrative fees.
In October, the company announced it would be delayed in filing annual financial statements, owing to “a change of business to an oil and gas company.”
