Stardust Solar plans $641K convertible debenture private placement

Stardust Solar Energy Inc. (TSXV: SUN) (OTCQB: SUNXF) announced a non-brokered private placement of up to 641 senior secured convertible debenture units at $1,000 per unit, seeking gross proceeds of up to $641,000. Plaza Capital is the lead investor in the offering.

Each debenture unit consists of one senior secured convertible debenture with a principal value of $1,000 and 8,548,889 common share purchase warrants. The debentures carry a 12% annual interest rate, paid monthly in cash, and mature 24 months after closing. In the event of default, the interest rate increases to 25% per annum.

Debenture holders may convert the principal into common shares at $0.075 per share at any time. The warrants allow holders to purchase one common share each at $0.10 for 24 months following closing. Both the conversion price and exercise price are subject to adjustment if the company issues shares or convertible securities at lower prices, with floor prices set at $0.05.

The debentures are secured by a general security agreement over the company's assets, guarantees from subsidiaries Stardust Solar Holdings Inc., Stardust Solar Franchise Inc., Stardust Solar Technologies Inc., and Stardust Solar Technologies USA, LLC, along with a pledge of shares held in those subsidiaries.

According to the press release, the company intends to use net proceeds for a solar project in Zambia, as well as for general, administrative, marketing, and working capital purposes. The offering requires regulatory approval, including from the TSX Venture Exchange, and all issued securities will be subject to a four-month-plus-one-day hold period. The offering has no minimum subscription requirement and may close in multiple tranches.

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