BOLD.P Bold Capital Enterprises Ltd

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MONTREAL, Jan. 4, 2024 /CNW/ - Bold Capital Enterprises Ltd. ("Bold") (TSXV: BOLD.P) is pleased to announce details concerning its proposed arm's-length acquisition (the "Transaction") of Stardust Solar Holdings Inc. ("Stardust"), a corporation formed under the laws of British Columbia.

Bold is a "capital pool company" under the policies of the TSX Venture Exchange (the "Exchange") and it is intended that the Transaction will constitute the "Qualifying Transaction" of Bold, as such term is defined in Exchange Policy 2.4 – Capital Pool Companies. The common shares of Bold are currently listed on the Exchange and Bold is a reporting issuer in the provinces of British Columbia, Alberta, Ontario and Québec. Bold was incorporated under the Canadian Business Corporations Act on May 16, 2018.

Stardust is a privately-held 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. As well, Stardust supports its franchisees with many services from corporate headquarters including marketing, sales, engineering, plan sets, customer service, and project management.  A revenuing generating business, selected financial information regarding Stardust will be provided in a subsequent press release, which is expected to be filed concurrently with the draft Exchange filing statement.

It is intended that Stardust and 14204344 Canada Inc., a wholly-owned subsidiary of Bold, will amalgamate and form one company under the provisions of the Business Corporations Act (British Columbia) (the "BCBCA").  In this regard, the parties have entered into an amalgamation agreement dated December 27, 2023 (the "Definitive Agreement") to give effect to the proposed Transaction whereby Bold, to be renamed "Stardust Solar Energy Inc." (the "Resulting Issuer"), will hold all of the issued and outstanding shares in the share capital of Stardust.

Pursuant to the Transaction, Bold will, among other things, consolidate its issued and outstanding common shares on the basis of 2.4876 common shares Bold for one common share of the Resulting Issuer (each a "Resulting Issuer Share"), and issue an aggregate of 51,304,0012 Resulting Issuer Shares to the Stardust shareholders, at a deemed issue price of $0.30 per Resulting Issuer Share, valuing Stardust at $15.4 million.  Upon completion of the Transaction, the shareholders of Stardust are expected to hold 51,304,012 Resulting Issuer Shares, representing 73% of the 70,304,012 issued and outstanding Resulting Issuer Shares on a non-diluted basis, and the current shareholders of Bold are expected to hold 19,000,000 Resulting Issuer Shares, representing 27% of the 70,304,012 issued and outstanding Resulting Issuer Shares on a non-diluted basis.

In addition, the Resulting Issuer is expected to have the following convertible securities issued and outstanding upon completion of the of Transaction: (i) 25,600 warrants to purchase 25,600 Resulting Issuer Shares, at a price of $0.25 per Resulting Issuer Share; (ii) 3,539,474 RSUs exchangeable for an aggregate of  3,539,474 Resulting Issuer Shares; and (iii) 625,155 options to purchase up to an aggregate of 625,155 Resulting Issuer Shares (125,155 post-consolidation Bold options at $0.24876 until April 2024 and 500,000 Resulting Issuer options at $0.40 for a period of three years following the closing of the proposed Transaction), such that the fully diluted number of Resulting Issuers is expected to be 74,494,241.

Certain of the Resulting Issuer Shares issued to the principals of Stardust who will become directors and management of the Resulting Issuer, will be subject to escrow in accordance with the policies of the TSX Venture Exchange (the "Exchange").  To the knowledge of the directors and executive officers of Bold and Stardust, the only persons who currently beneficially own, directly or indirectly, or exercise control or direction over more than 10% of the issued and outstanding Stardust shares are (i) Mr. Mark Tadros, CEO and founder of Stardust, and (ii) Victory Square Technologies Inc., a technology accelerator listed on the CSE.  Assuming completion of the Transaction, it is expected that Mr. Tadros will hold 16,039,613 Resulting Issuer Shares, representing approximately 22.8% of the issued and outstanding Resulting Issuer Shares, and Victory Square Technologies Inc. will hold 5,486,440 Resulting Issuer Shares, representing approximately 7.8% of the issued and outstanding Resulting Issuer Shares.

Bold shareholder approval is not required with respect to the proposed Transaction because the Transaction does not constitute a "Non-Arm's Length Qualifying Transaction" pursuant to the policies of the Exchange. Nonetheless, shareholders of Bold will be asked to vote on certain matters that are accessory to the Transaction as described below under the heading "Annual and Special Meeting of Bold Shareholders".

Completion of the Transaction will be subject to certain conditions, including but not limited to: (a) completion of due diligence by the parties; (b) receipt of all necessary shareholder approvals of Stardust and Bold; (c) receipt of all required regulatory and third party approvals; (d) approval of the Transaction by the Exchange as Bold's "Qualifying Transaction"; and (e) closing of the Transaction on or before June 30, 2024, unless extended in writing by Bold and Stardust.

The parties have not contemplated any concurrent financing as it is currently expected that the Resulting Issuer will have sufficient working capital resources to meet its business objectives following the closing of the Transaction.  In addition, Bold has not paid any deposit, advance or loan to Stardust in connection with the signature of the Definitive Agreement, and there are no finder or broker fees payable under the Transaction.

Trading in the Bold Common Shares has been halted and is not expected to resume until the Transaction is completed or until the Exchange receives the requisite documentation to resume trading.

It is expected that upon completion of the Transaction, the Resulting Issuer will be listed as a Tier 2 Technology Issuer on the Exchange.

It is the intention of Bold and Stardust to establish and maintain a board of directors of the Resulting Issuer with a combination of appropriate skill sets that is compliance with all regulatory and corporate governance requirements, including any applicable independence requirements. Upon completion of the Transaction, the board of the Resulting Issuer is expected to be comprised of five individuals. The following are brief descriptions of the proposed initial management and directors of the Resulting Issuer.  A fifth independent director of the Resulting Issuer will be confirmed prior to the closing of the Transaction, with any such additional director nomination subject to the approval of the Exchange.

Mark Tadros, CEO and Director

Mark Tadros is an entrepreneur who studied Political Science at University of Concordia and earned a DEC in Economics from John Abbott College. At 29 years old he founded PDL (Pro Draft League) and became a pioneer in the world of fantasy sports, creating a virtual stock market of professional athletes. By 2015 he had scaled that company to be a globally recognized brand which was acquired by Victory Square. Eager to return to the entrepreneurial endeavour he launched iHazmat Regulatory in 2016, a dangerous goods transport education company with over 200+ corporate clients worldwide. Mark sold iHazmat to ICC Compliance Center in June 2021, for the purpose of allowing him to focus all his attention on Stardust Solar.

In 2017, he founded Stardust Solar Technologies Inc. a solar energy franchise business. Stardust Solar now has a network of over 2500+ trained/certified individuals and franchisees across North America. Mark learned about business by running his own, and now believes that anyone with the right vision and commitment can do the same. Through franchising, he plans to give thousands of aspiring entrepreneurs the chance to live their dreams of business ownership in the renewable energy sector.

Eamonn McHugh, COO and Director

Eamonn began practice in the electrical industry in 2009. He was certified as a Red Seal Electrician with the Ontario College of Trades in 2015, a PLC Programming Technician with George Brown College later in 2015, an Instrumentation & Controls Technician with the Ontario College of Trades in 2016, a Master Electrician with Technical Safety British Columbia in 2017, a Solar Photovoltaic Systems Electrician with Canadian Standards Association in 2018, and a Photovoltaic Associate with the North American Board of Certified Energy Practitioners in 2019.

Eamonn joined Mark Tadros and Evan Kraemer at Stardust Solar Technologies with an in-depth understanding of the renewable energy industry in 2019. As Chief Operating Officer, Eamonn is responsible for developing and driving operations across all departments, ensuring company objectives are achieved effectively, and maintaining continual customer and stakeholder satisfaction.

Young Bann, Director

Mr. Bann is CEO of Purpose ESG Holdings in Vancouver. Mr. Bann has 30 years of management and business development experience. In the first 15 years, Mr. Bann developed a career in global management consulting firms, such as Booz.Allen & Hamilton, Accenture, and IBM. Mr. Bann was appointed as a lead consultant for Samsung Electronics Mobile Phone Business Division to contribute it to become global #1 brand in competitive global markets. During the second 15 years, Mr. Bann furthered his career as a business leader for both global and Korean conglomerates. He served as a corporate executive in General Electric, and CEO of Hyundai Materials, an affiliated company of Hyundai Motor Group. He worked for General Electric Power Business Division to win back #1 market share for its Gas Turbine fleets in North Asia by winning $265M of orders from global clients during severe market downturn. Mr. Bann received a MBA from the University of Chicago.

Ezra Auerbach, Director

Co-Founder of NABCEP and over 30 years of experience in off grid and residential energy storage.  Ezra has worked in the solar industry since the mid 1980s, over that time he developed a diverse skill set which he offers his clients as a renewable energy consultant.

Vitaly Melnikov, Chief Financial Officer and Corporate Secretary

Seasoned corporate finance executive, CPA and MBA offering over 20 years of Canadian and international financial leadership experience building, leading, and advising corporations through complex finance restructurings, international expansion, and capital markets transactions. Highly skilled in collaborating with all members of the organization to achieve business and financial objectives. Accomplished in structuring and negotiating transactions and favorable terms with private and institutional investors. Excellent financial leader with a track record of contributions streamlining financial processes, enhancing productivity levels and internal controls.

Evan Kraemer, Chief Technology Officer

Evan studied Geography at the University of Regina completing his BA in 2010. He continued his studies at the University of Regina earning a Master's degree in Interdisciplinary through the Faculty of Engineering and Applied Science along with Geography and Environmental Science through May 2015. His thesis on climate change affecting water resources and crop evapotranspiration provided the basis for his interest in Solar PV. 

Evan joined Mark at iHazmat in 2016 as Chief Regulatory Officer and was integral part of that company's success. His main role at iHazmat was delivering training courses for the dangerous goods transport industry in Canada and the USA. 

He then Joined Mark at Stardust Solar as Chief Technology Officer leading the development of their accredited solar training material. Evan's role includes continuing education of all employees and franchisees ensuring they all stay up-to-date with the ever-changing technologies used in Solar PV Systems. He also heads their solar PV system design team, creating plan sets used for installation projects across Canada. 

Sponsorship of a Qualifying Transaction is required by the Exchange unless the Transaction qualifies for an exemption from the sponsorship requirement. Bold intends to apply for a waiver from the sponsorship requirement in connection with the Transaction and will provide further details in due course.

Bold also wishes to announce that it has filed a notice of meeting and record date in connection with its annual and special meeting (the "Meeting") of shareholders to be held on February 12, 2024.  At the Meeting, Bold shareholders will be asked:

1. to receive the annual consolidated financial statements of Bold for the fiscal years ended December 31, 2021 and December 31, 2022, and the external auditors' reports thereon;
2. to elect the incumbent directors of Bold;
3. to re-appoint Mallette LLP as the external auditor of Bold;
4. conditional on and effective upon the completion of the Transaction, to elect the directors of the Resulting Issuer (please see below);
5. conditional on and effective upon the completion of the Transaction, to approve Bold's new omnibus equity incentive plan;
6. conditional on and effective upon the completion of the Transaction, to approve an amendment to Bold's articles to change the corporate name from "Bold Capital Enterprises Ltd." to "Stardust Solar Energy Inc." or such other name as may be determined by the board of directors of the Resulting Issuer;
7. conditional on and effective upon the completion of the Transaction, to approve an amendment to Bold's articles to change the province in which the corporation's registered office is situated from Quebec to British Columbia; and
8. conditional on and effective upon the completion of the Qualifying Transaction, to approve an amendment to Bold's articles so as to consolidate the issued and outstanding common shares of the Corporation on the basis of 2.4876 common shares of Bold for every common share of the Resulting Issuer.

As indicated above, Bold will be seeking approval from shareholders and the Exchange for the adoption and implementation of a new omnibus equity incentive plan (the "Omnibus Plan"). Bold will be including the full text of the Omnibus Plan in the circular that will be sent to obtain shareholder's approval at the upcoming Meeting. Once approved, the Omnibus Plan will replace the corporation's current stock option plan that was last approved in 2021 and which is now a simple fixed plan (the "Previous Plan").  The board of directors determined that it is desirable to have a wide range of incentive awards, including stock options ("Options"), restricted share units ("RSUs"), performance share units ("PSUs"), and deferred share units ("DSUs") (collectively, the "Awards") to attract, retain and motivate employees, directors, executive officers and consultants of the corporation and the Resulting Issuer in anticipation of the proposed Transaction.  The aggregate number of Resulting Issuer Reserved for issuance pursuant to Awards of Options granted under the Omnibus Plan (including the predecessor options currently outstanding under the Previous Plan) shall not exceed 10% of the Resulting Issuer's total issued and outstanding shares from time to time. In respect of DSUs, RSUs or PSUs, the aggregate number of Resulting Issuer Shares reserved for issuance pursuant to Awards other than for Options granted under the Omnibus Plan shall not exceed 7,000,000 Resulting Issuer Shares.  The Definitive Agreement provides for the granting of an aggregate of 500,000 Options of the Resulting Issuer to the current board of directors of Bold immediately prior to the completion of the Transaction.

The Meeting materials will be posted on SEDAR+ shortly.

This press release contains statements that constitute "forward-looking information" ("forward-looking information") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking information and are based on expectations, estimates and projections as at the date of this news release. Any statement that discusses predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "anticipate", "believe", "continue", "estimate", "expect", "intend", "projected" or variations of such words and phrases or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking information.

More particularly and without limitation, this press release contains forward-looking statements concerning the Transaction (including the structure, terms and timing thereof), the continued business of Stardust, the issuance of additional news releases describing the Transaction, the name of the Resulting Issuer, the trading of the Bold Common Shares on the Exchange, the completion of due diligence, and the holding of shareholder meetings in connection with the Transaction. In disclosing the forward-looking information contained in this press release, Bold has made certain assumptions, including that: all parties will complete satisfactory due diligence of the other parties; all applicable shareholder and regulatory approvals for the Transaction will be received; and the Transaction will be completed on mutually acceptable terms and within a customary timeframe for transactions of this nature. Although Bold believes that the expectations reflected in such forward-looking information are reasonable, it can give no assurance that the expectations of any forward-looking information will prove to be correct. Known and unknown risks, uncertainties and other factors may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking information. Such factors include but are not limited to: availability of financing; delay or failure to receive board, shareholder or regulatory approvals; and general business, economic, competitive, political and social uncertainties. There can be no certainty that the Transaction will be completed on the terms set out in the Definitive Agreement or at all. Accordingly, readers should not place undue reliance on the forward-looking information contained in this press release. Except as required by law, Bold disclaims any intention and assumes no obligation to update or revise any forward-looking information to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward-looking information or otherwise.

Completion of the Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and, if applicable pursuant to Exchange requirements, majority of the minority shareholder approval. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be 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 a capital pool company should be considered highly speculative.

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

Neither the 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 news release.

The securities have not been and will not be registered under the United States Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

SOURCE Bold Capital Enterprises Ltd.