STARDUST SOLAR ENERGY INC. ANNOUNCES CLOSING OF QUALIFYING TRANSACTION

 TSX-V: SUN

/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR RELEASE PUBLICATION, DISTRIBUTION OR DISSEMINATION DIRECTLY, OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES./

VANCOUVER, BC, Sept. 25, 2024 /CNW/ - Stardust Solar Energy Inc. (formerly known as Bold Capital Enterprises Ltd.) (TSXV: SUN) (the "Company"), announces that it has completed its "Qualifying Transaction" in accordance with Policy 2.4 – Capital Pool Companies of the TSX Venture Exchange (the "Exchange") pursuant to which the Company acquired all of the issued and outstanding shares of Stardust Solar Holdings Inc. ("Stardust") in exchange for the issuance of common shares of the Company pursuant to an amalgamation (the "Transaction").

The Company's common shares are expected to begin trading on the Exchange on or about October 7, 2024, at the market open, under the symbol "SUN".

The Transaction

On December 27, 2023, the Company and Stardust entered into an amalgamation agreement (the "Amalgamation Agreement"), pursuant to which the parties agreed to complete a three-cornered amalgamation under the Business Corporations Act (British Columbia) whereby 1503269 B.C. Ltd. (formerly 14204344 Canada Inc.) ("Subco"), a wholly-owned subsidiary of the Company, amalgamated with Stardust, and the Company acquired all of the issued and outstanding Stardust common shares (the "Stardust Shares"). The shareholders of Stardust received post-Consolidation (as defined below) common shares of the Company (the "Common Shares") in exchange for their Stardust Shares, resulting in a reverse takeover of the Company by Stardust. The amalgamated corporation resulting from the amalgamation of Subco and Stardust is wholly-owned by the Company.

Prior to the completion of the Transaction, the Company consolidated its outstanding Common Shares on the basis of one (1) new Common Share for each 2.4876 old Common Shares (the "Consolidation"), such that, immediately prior to closing of the Transaction, the Company had 19,000,040 post-Consolidation Common Shares issued and outstanding. In connection with the completion of the Transaction, post-Consolidation Common Shares were issued to holders of Stardust Shares on the basis of one (1) post-Consolidation Common Shares for each one (1) Stardust Share (the "Exchange Ratio"), resulting in the issuance of an aggregate of 51,394,012 post-Consolidation Common Shares to the shareholders of Stardust. Outstanding Stardust options, warrants and restricted share units are exercisable for post-Consolidation Common Shares, with the number and exercise price adjusted to reflect the Exchange Ratio, in accordance with the terms of such options and warrants, as applicable.

Prior to the completion of the Transaction, the Company completed a name change from "Bold Capital Enterprises Ltd." to "Stardust Solar Energy Inc.". The Company will continue the business previously conducted by Stardust.

The Transaction is subject to final acceptance from the Exchange. Upon such final acceptance, the Exchange is expected to issue its final bulletin confirming the completion of the Qualifying Transaction and the listing of the Company as a Tier 2 Technology Issuer. The Company expects its shares to begin trading on the Exchange under the trading symbol "SUN" on or about October 7, 2024.

In connection with the completion of the Transaction, the Company will change the province in which the Company's registered office is situated from Quebec to British Columbia, as approved by the shareholders of the Company at the annual general and special meeting held on February 12, 2024 (the "AGSM"). In addition, upon completion of the Transaction, the Company's new omnibus incentive plan (the "Omnibus Plan") came into immediate effect, as approved by the shareholders of the Company at the AGSM. Under the Omnibus Plan, the aggregate number of Common Shares reserved for issuance pursuant to awards of options granted under the Omnibus Plan shall not exceed 10% of the Company's total issued and outstanding Common Shares from time to time. In respect of DSUs, RSUs or PSUs, the aggregate number of Common Shares reserved for issuance pursuant to awards other than for options granted under the Omnibus Plan shall not exceed 7,000,000 Common Shares. For additional details regarding the Omnibus Plan, please see the Filing Statement (as defined below) and the Company's management proxy circular dated January 15, 2024, which are available under the Company's SEDAR+ profile at www.sedarplus.ca.

Concurrent Financings

Subscription Receipt Financing

On September 12, 2024, Stardust completed a private placement of 130,000 subscription receipts (the "Stardust Subscription Receipts") at a price of $0.30 per subscription receipt for gross proceeds of $39,000.  On September 17, 2024, Each Stardust Subscription Receipt converted into one Stardust Share and one Stardust warrant, upon the satisfaction of certain conditions. Such Stardust Shares and warrants were subsequently exchanged for equivalent securities of the Company upon completion of the Transaction, in accordance with the terms of the Amalgamation Agreement. Each warrant underlying the Stardust Subscription Receipts is exercisable into one Common Share at a price of $0.40 per share for a period of 24 months from the date of issuance.

Convertible Loans

On August 22, 2024, Stardust entered into convertible loan agreements with certain lenders (the "Lenders"), pursuant to which Stardust borrowed an aggregate of $260,000 (the "Convertible Loans"). The maturity date of the Convertible Loans is two years from the date of issuance. The Convertible Loans bear interest at a rate of 12% per annum, which shall become due and payable on the maturity date, unless an event of default occurs.

If an event of default occurs and is not remedied within the applicable cure period, the applicable Lender may demand that Stardust immediately repay the applicable Convertible Loan, which shall become immediately due and payable.  Subject, however, to the applicable Lender's discretionary right to waive any breach by Stardust of the terms of the applicable Convertible Loan.

The Lenders have the option to convert the Convertible Loans, at any time before the maturity date, into units of the Company (the "Units") at a price of $0.40 per Unit. Each Unit will consist of one Common Share and one common share purchase warrant of the Company. Each warrant will entitle the holder to acquire one Common Share for a period of two years from the date of issuance at an exercise price of $0.40 per share.

Mark Tadros, Chief Executive Officer, Chairman and a Director of the Company, subscribed for Convertible Loans in the principal amount of $80,000. Mr. Tadros is a "related party" of the Company within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transaction ("MI 61-101"). As a result, the private placement of Convertible Loans is considered to be a "related party transaction" as such term is defined in MI 61-101. The participation of Mr. Tadros in the private placement of Convertible Loans is exempt from formal valuation and minority shareholder approval requirements pursuant to exemptions contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101.

Secured Loan

On September 11, 2024, Stardust entered into a secured, non-convertible loan agreement with an arm's length party (the "Secured Lender"), pursuant to which Stardust will borrow $448,000 from the Secured Lender (the "Secured Loan"). The maturity date of the Secured Loan will be two years from the date of issuance. In connection with the Secured Loan, Stardust shall grant the Secured Lender first priority charge on all of Stardust's present and after-acquired personal property.

The Secured Loan shall bear interest at a rate of 24% per annum. Interest-only payments shall be due and payable on the first day of each month. The principal amount of the Secured Loan shall become due and payable on the maturity date, unless an event of default occurs.

If an event of default occurs and is not remedied within the applicable cure period, the Secured Lender may demand that Stardust immediately repay the Secured Loan, which shall become immediately due and payable.  Subject, however, to the Secured Lender's discretionary right to waive any breach by Stardust of the terms of the Secured Loan.

The Secured Loan is subject to an original issue discount of $48,000 (equal to 10.7% of the Secured Loan). Furthermore, Stardust must pay the Secured Lender a closing fee of $12,320, equal to 2.75% of the Secured Loan. Stardust must also pay the costs and expenses related the Secured Loan, including the Secured Lender's legal fees of up to $10,000 (exclusive of all taxes, disbursements and other miscellaneous costs).

BDC Loan

On August 21, 2024, Stardust Solar Technologies Inc., a wholly-owned subsidiary of Stardust, obtained an unsecured, non-convertible loan in the principal amount of $100,000 from Business Development Canada (the "BDC Loan"). The maturity date of the BDC Loan is five years from the date of issuance. The BDC Loan bears floating interest at a rate of 11.97% per annum. For the first six (6) months of the term, interest-only payments will occur on a monthly basis (no principal payments). Following the first six (6) months of the term, applicable interest and principal payments will occur on a monthly basis.

Outstanding Share Capital and Escrow

As a result of the Transaction, there are an aggregate of 70,394,052 post-Consolidation Common Shares issued and outstanding, of which the previous shareholders of the Company hold approximately 27% and former shareholders of Stardust hold approximately 73%, respectively.

Stardust shareholders representing an aggregate of 49,774,661 post-Consolidation Common Shares and 3,539,474 restricted share units are subject to Tier 2 Value Escrow Agreements.

Management and Director Changes

Upon completion of the Transaction, all directors and officers of the Company have resigned and were replaced by the following nominees of Stardust: (i) Mark Tadros – Chief Executive Officer, Chairman and Director; (ii) Eamonn McHugh – Chief Operating Officer and Director; (iii) Vitaly Melnikov – Chief Financial Officer, Corporate Secretary and Director; (iv) Evan Kraemer – Chief Technology Officer; (v) Young Bann – Director; and (vi) Ohad David – Director.

Change of Auditor

In connection with the completion of the Transaction, Mallette LLP will resign as auditor of the Company and Davidson & Company LLP, auditor of Stardust, will be appointed as auditor of the Company. In the opinion of the Company, no "reportable event" (as such term is defined in National Instrument 51-102 – Continuous Disclosure Obligations ("NI 51-102")) has occurred. The Company is relying on section 4.11(3)(a) of NI 51-102 for an exemption from the change of auditor requirements within section 4.11 of NI 51-102.

SinuSafe Update

The Company, through its Israeli legal counsel, appeared before the Israeli court at the pre-hearing held on September 17, 2024 and which was scheduled to consider certain matters pertaining to the Company's proceedings against SinuSafe Medical Ltd. ("SinuSafe") in respect of the $350,000 secured loan (plus accrued and unpaid interest) payable to the Company. The Company is pleased that it is finally making positive progress in Israel with respect to recovering the amounts loaned to SinuSafe and it will continue to engage with its Israeli legal counsel to pursue its rights under the secured loan.  The Company will provide such further updates regarding the status of its claims against SinuSafe as may be appropriate.

Additional Information

For additional information concerning the Transaction and the foregoing matters, please refer to the Company's news releases dated January 4, 2024 and August 14, 2024, and the Company's filing statement dated August 13, 2024 (the "Filing Statement") which is available under the Company's SEDAR+ profile at www.sedarplus.ca.

About the Company

Stardust is a British Columbia based company that is a franchisor of renewable energy installation services, including solar panels (PV), energy storage systems, and electric vehicle supply equipment. Stardust lends its brand and business management services to entrepreneurs looking to enter the industry of renewable energies. Stardust franchisees install and maintain clean energy systems for residential and commercial purposes. As a franchisor, Stardust supplies its franchisees with the following products: solar PV equipment, energy storage equipment, and electric vehicle supply equipment. In addition, Stardust supports its franchisees with many services from corporate headquarters including marketing, sales, engineering, plan sets, customer service, and project management.

ON BEHALF OF THE BOARD OF DIRECTORS OF STARDUST SOLAR ENERGY INC.

Mark Tadros
Chief Executive Officer, Chairman and Director

Website: www.stardustsolar.com 

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Investors are cautioned that, except as disclosed in the Filing Statement prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of the Company should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the Transaction and has neither approved nor disapproved the contents of this press release.

This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

The information in this news release includes certain information and statements about management's view of future events, expectations, plans and prospects that constitute forward looking statements, including statements relating to the final acceptance by the Exchange, the issuance of a final bulletin by the Exchange, the business plans of the Company, the SinuSafe proceedings and the recovery of any amounts loaned to SinuSafe. These statements are based upon assumptions that are subject to significant risks and uncertainties. Because of these risks and uncertainties and as a result of a variety of factors, the actual results, expectations, achievements or performance may differ materially from those anticipated and indicated by these forward looking statements. Any number of factors could cause actual results to differ materially from these forward–looking statements as well as future results. Although the Company believes that the expectations reflected in forward looking statements are reasonable, it can give no assurances that the expectations of any forward looking statements will prove to be correct. Except as required by law, the Company disclaims any intention and assumes no obligation to update or revise any forward looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward looking statements or otherwise.

SOURCE Stardust Solar Energy Inc.

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