What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-25 compared with 2025-03-27 · 909 added, 817 removed, 227 unchanged (88% of the section changed)

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following discussion and analysis of the financial condition and results of operations should be read together with our consolidated

financial statements for the year ended December 31, 2024, and the related notes thereto contained elsewhere in this Annual Report

on Form 10-K.

financial statements for the year ended December 31, 2025, and the related notes thereto contained elsewhere in this Annual Report on

the context otherwise requires, all references in this section to “we,” “us,” “our,” or the “Company”,

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consummation of the Business Combination.

Terms otherwise not defined herein, have the meaning

given to such terms in the Proxy Statement/Prospectus in the section titled “Certain Defined Terms” beginning on page iii

thereof, and such definitions are incorporated herein by reference.

Note Regarding Forward-Looking Statements

of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10-K, including information

with respect to plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties.

of many factors, including those factors described or referenced in this Annual Report under the heading “Risk Factors,”

our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the

following discussion and analysis.

You should carefully read the section titled “Risk Factors” in this Annual Report to gain

an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements.

also see the section titled “Cautionary Statement Regarding Forward-Looking Statements” in this Annual Report.

Overview and History

December 5, 2022, Stardust Power LLC was organized as a limited liability company in the State of Delaware.

On March 16, 2023, Legacy Stardust Power

was organized as a corporation in the State of Delaware with operations commencing on March 16, 2023.

The ownership interests of Stardust

Power LLC were subsequently transferred to Stardust Power Inc.

On July 8, 2024, former Stardust Power Inc.

was renamed Stardust Power

Operating Inc.

Power is a U.S.-based development stage battery grade lithium manufacturer designed to foster clean energy independence for America.

The Company is in the process of creating capacity to manufacture battery grade lithium products, primarily for the EV market, by developing a large-scale lithium refinery in the United States.

Stardust Power seeks to become a sustainable,

cost-effective supplier of battery grade lithium products, by its innovative approach in the development of a large central refinery

optimized for multiple inputs of lithium brine inputs in Oklahoma.

Power intends to source lithium brine feedstock from various suppliers and may make investments upstream to secure additional feedstock.

We seek to sell our products to EV manufacturers as our primary market, with potential applications in other areas such as battery manufacturers,

military, and OEMs.

of the key driving factors are the demand for battery grade lithium products, fueled largely by the demand and production of electric

vehicles and automotive OEMs and battery manufacturers seeking domestic supply options, leading to demand for minerals used in battery

cells, such as lithium, governmental incentives for American manufacturing and evolving geopolitical climate that is creating a national

security priority for the U.S.

Stardust Power is a U.S.-based development stage battery grade lithium

manufacturer designed to foster clean energy independence for the United States.

The Company is in the process of creating capacity to

manufacture battery grade lithium products, for a wide variety of applications, including energy storage systems, e-mobility, grid infrastructure,

and data centers, by developing a large-scale lithium refinery in the United States.

Stardust Power seeks to become a sustainable, cost-effective

supplier of battery grade lithium carbonate, by its innovative approach in the development of a large central refinery optimized for multiple

inputs of lithium chloride in Oklahoma.

Stardust Power intends to source

lithium chloride feedstock from various suppliers and may make investments upstream to secure additional feedstock.

We seek to sell our

products to EV manufacturers as our primary market, with potential applications in other areas such as battery manufacturers, the U.S.

military, and original equipment manufacturers (“ OEMs ”).

of the key driving factors are the demand for battery grade lithium products, fueled largely by the demand for energy storage

solutions, production of electric vehicles and automotive OEMs, and battery manufacturers seeking domestic supply options,

leading to demand for minerals used in battery cells, such as lithium, governmental incentives for American manufacturing and

evolving geopolitical climate that is creating a national security priority for the U.S.

February 2023, Stardust Power LLC received an illustrative incentive analysis for up to $257 million in performance-based incentives

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These incentives may change based on the actual financial metrics of the Company in the future, which may be lower or

Power believes that it is well poised to address these opportunities by emerging as a leading, fully integrated domestic lithium supplier,

and contribute to restoring American energy independence, thereby bridging the gap in the domestic supply of battery grade

lithium products.

Power believes that it is well positioned to address these opportunities by emerging as a leading, fully integrated domestic lithium supplier,

and contribute to restoring American energy independence, thereby bridging the gap in the domestic supply of battery grade lithium products.

and Sale Agreement for Site

January 10, 2024, Stardust Power entered into a purchase and sale agreement with the City of Muskogee to purchase the site in

Southside Industrial Park, Muskogee, Oklahoma for a total of $1,662,030.

On December 16, 2024, the agreement was finalized and the

title to the land was transferred in the Company’s name.

November 21, 2023, Legacy Stardust Power entered into the Business Combination Agreement GPAC II, First Merger Sub and Second Merger

On January 10, 2024, Stardust

Power entered into a purchase and sale agreement with the City of Muskogee to purchase a site in Southside Industrial Park, Muskogee,

Oklahoma to build the Facility (the “ Site ”) for a total of $1,662,030.

On December 16, 2024, the agreement was finalized

and the title to the land was transferred to the Company’s name.

November 21, 2023, Legacy Stardust Power entered into the Business Combination Agreement with GPAC II, First Merger Sub and Second

July 8, 2024, Legacy Stardust Power completed the Business Combination contemplated by the Business Combination Agreement.

GPAC II deregistered

as a Cayman Islands exempted company and domesticated in the State of Delaware as a Delaware corporation.

as a Cayman Islands exempted company and redomesticated in the State of Delaware as a Delaware corporation.

As per the Business Combination

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time of such merger being the “ First Effective Time ”).

Legacy Stardust Power then merged into Second Merger Sub, with Second

Merger Sub being the surviving entity.

Legacy Stardust Power then merged into Second Merger Sub, with

Second Merger Sub being the surviving entity.

Upon the completion of the Business Combination, GPAC II was renamed Stardust Power Inc.

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prior to the First Effective Time converted into the right to receive the number of shares of combined company (“ Newco ”)

common stock (“Newco Stock”) equal to the merger consideration divided by the number of shares of the Company fully diluted

stock (“per share consideration”).

outstanding option to purchase Legacy Stardust Power Common Stock (each a “Legacy Stardust Power Option”), whether vested

or unvested, automatically converted into an option to purchase a number of shares of Newco Stock equal to the number of shares of

Newco Stock subject to such Stardust Power Option immediately prior to the First Effective Time multiplied by the per share consideration.

common stock (“ Newco Stock ”) equal to the merger consideration divided by the number of shares of the Company

fully diluted stock (“per share consideration”).

outstanding option to purchase Legacy Stardust Power Common Stock (each a “ Legacy Stardust Power Option ”), whether

vested or unvested, automatically converted into an option to purchase a number of shares of Newco Stock equal to the number of shares

of Newco Stock subject to such Stardust Power Option immediately prior to the First Effective Time multiplied by the per share consideration.

share of Legacy Stardust Power Restricted Stock (as defined in the Business Combination Agreement) outstanding immediately prior

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Restricted Common Stock ”).

outstanding redeemable public warrants and private warrants of GPAC II representing the right to purchase one Class A ordinary

share were adjusted to represent the right to purchase one share of the Newco Stock.

outstanding redeemable public warrants and private warrants of GPAC II representing the right to purchase one Class A ordinary share

were adjusted to represent the right to purchase one share of the Newco Stock.

outstanding GPAC Class A (after redemptions) and Class B common shares were cancelled and converted into shares of the Newco Stock.

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Additionally,

the Combined Company issued one million shares of Newco Stock to the Sponsor as additional merger consideration that vest in the

event that prior to the eighth anniversary of the closing of the Business Combination.

Fifty percent of the Sponsor Earnout Shares

will vest when the volume-weighted average price (“VWAP”) of the Common Stock price equals or exceeds $12.00 per share

the Combined Company issued 100,000 shares of Newco Stock to the Sponsor as additional merger consideration that vest in the event

that prior to the eighth anniversary of the closing of the Business Combination.

Fifty percent of the Sponsor Earnout Shares will

vest when the volume-weighted average price (“ VWAP ”) of the Common Stock price equals or exceeds $120.00 per share

for a period of 20 trading days in a 30 trading day period, and the remaining fifty percent of the Sponsor Earnout Shares will vest

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Additionally,

the Combined Company will issue five million shares of Newco Stock to the holders of Legacy Stardust Power as additional merger consideration

the Combined Company will issue 500,000 shares of Newco Stock to the holders of Legacy Stardust Power as additional merger consideration

that vest in the event that prior to the eighth anniversary of the closing of the Business Combination, the volume-weighted average

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period or there is a change of control, or are otherwise forfeited.

prior to the closing of the Business Combination, the SAFE notes automatically converted into the 138,393 shares of Legacy Stardust

Power Common Stock.

prior to the closing of the Business Combination, the convertible notes automatically converted into 55,889 shares of Legacy Stardust

Power Common Stock.

Power issued 1,077,541 shares of Newco Common Stock in exchange for $10,075,002 of cash in accordance with the terms of

the PIPE Subscription Agreement in connection with the Business Combination.

prior to the closing of the Business Combination, the SAFE notes automatically converted into the 13,839 shares of Legacy

Stardust Power Common Stock.

prior to the closing of the Business Combination, the 2024 convertible notes automatically converted into 5,588 shares of Legacy

Stardust Power Common Stock.

Power issued 107,754 shares of Newco Common Stock in exchange for $10,075,002 of cash in accordance with the terms of the PIPE Subscription

Agreement in connection with the Business Combination.

Stock Purchase Agreements

October 7, 2024, the Company entered into the Purchase Agreement and the related Registration Rights Agreement with B.

Principal Capital II.

Upon the terms and subject to the satisfaction of the conditions set forth in the Purchase Agreement, the

Company will have the right, in its sole discretion, to sell up to $50,000,000 of newly issued shares of the Company’s Common

Riley Principal Capital II, subject to certain conditions and limitations contained in the Purchase Agreement, from time

to time during the term of the Purchase Agreement.

Sales of Common Stock pursuant to the Purchase Agreement, and the timing of any

sales, are solely at the option of the Company.

The purchase price of the shares of common stock will be determined by reference to

the VWAP of the Common Stock during the applicable purchase date, less a fixed 3% discount to such VWAP.

Upon executing the Purchase

Agreement and Registration Rights Agreement, the Company also issued 63,694 shares of Common Stock called Commitment Shares to B.

Riley Principal Capital II as a consideration for this agreement.

The Company issued 55,826 shares of Common Stock through December

31, 2024, aggregating to net proceeds of $260,927 under the Purchase Agreement.

December 31, 2024, the Company entered into binding term sheets with certain investors pursuant to which the Company has agreed to

sell, and the Investors have agreed to purchase, Company securities for an aggregate amount of $550,000 (the “Private

The proceeds of the Private Placement are expected to be used by the Company for capital expenditures, working

capital and general corporate purposes.

The Investors have agreed to purchase, and the Company has agreed to issue and sell, up to

$550,000 in shares of Common Stock at a price equal to 95% of the closing bid price of the Common Stock on the last trading day

prior to the closing date for the Private Placement.

In addition, each Investor will receive warrants representing the right,

exercisable within five years of the closing date, to purchase up to 50% of the shares of Common Stock purchased by such Investor in

the Private Placement, with each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50.

December 31, 2024, the Company received proceeds of $425,000 from one of the investors and has accounted for this as Advance from

PIPE investor for shares and warrants to be issued based on purchase agreement to be entered on the consolidated balance sheet as of

December 31, 2024.

to the year end, the Company consummated a public offering of an aggregate of (i) 4,792,000 shares of Common Stock and (ii) Common

Stock purchase warrants to purchase up to 4,792,000 shares of Common Stock (the “Common Warrant Shares”).

Each share of

Common Stock was sold at a public offering price of $1.20 and associated Common Warrant to purchase one share of Common Warrant

Share was sold with an exercise price of $1.30.

The Company received aggregate gross proceeds of approximately $5.75 million, before

deducting placement agent fees and other offering expenses.

The Company intends to use the proceeds of this offering primarily for

general corporate purposes and other business matters, as well to satisfy certain debts.

Further, on March 16, 2025, pursuant to the

Inducement Letter, the investor agreed to exercise, for cash, the Common Warrants to purchase an aggregate of 4,792,000 shares of

common stock at the exercise price of $0.62 per share in exchange for the Company’s agreement to issue to the investor a new

common stock purchase warrant, to purchase up to 9,584,000 shares of common stock (the “Inducement Warrants,” and the

shares issuable upon exercise of the Inducement Warrants, the “Inducement Warrant Shares”).

On August 4, 2024, the Company entered into the Primero

Agreement pursuant to which Primero agreed to provide certain engineering, design and consultancy professional services, including to

assist in procurement of major equipment, engage relevant third parties for construction and provide a FEL-3 report of the Company’s

Facility at Southside Industrial Park, in Muskogee, Oklahoma.

The total amount due pursuant to the Primero Agreement, assuming full performance,

is approximately $4.7 million, in the aggregate, subject to customary potential adjustments and is due for completion in the first half

Note and Convertible Equity Agreement Transactions

June 6, 2023, Legacy Stardust Power received $2,000,000 in cash from a single investor and funded a simple agreement for future equity

on August 15, 2023 (the “August 2023 SAFE Note”).

The funds were received from American Investor Group Direct LLC (“AIGD”),

an unrelated third party, through its entity which is currently being managed under the purview of an investment management agreement

between them and VCP (a related party) in consideration for which VCP is paid investment

management fees.

Additionally, the August 2023 SAFE note provides AIGD with certain rights of conversion upon an equity financing, or

cash repayment or other form of repayment upon a change in control or dissolution.

On November 18, 2023, Legacy Stardust Power amended

the August 2023 SAFE note (the “amended August 2023 SAFE”), which introduced a discount rate of 20% to (a) the lowest price

per share of preferred stock sold in the preferred stock purchase or (b) the listing price of the Combined Company Common Stock upon

consummation of a SPAC transaction or IPO.

On November 18, 2023, Legacy Stardust Power also entered into a second simple agreement for

future equity with AIGD for an aggregate amount of $3,000,000 (the “November 2023 SAFE note”) under the same terms and conditions

as the amended August 2023 SAFE note.

On February 23, 2024, Legacy Stardust Power entered into a third SAFE note with an individual for

an aggregate amount of $200,000 (the “February 2024 SAFE note”, and together with the August 2023 SAFE note and the November

2023 SAFE note, the “SAFE notes”).

The SAFE notes provided Legacy Stardust Power an option to call for additional preferred

stock up to $25,000,000 based on the contingent event of SAFE note conversion and notice issued by the Board, and achievement of certain

milestones, for up to 42 months following such conversion.

March 21, 2024, Legacy Stardust Power entered into a financing commitment and equity line of credit agreement with AIGD.

The agreement

replaced the above contingent commitment feature of the SAFE notes granting Legacy Stardust Power an option to drawdown up to an additional

$15,000,000 on terms similar to the SAFE notes prior to the First Effective Time.

On April 24, 2024, Legacy Stardust Power amended and

restated the August 2023 SAFE note and the November 2023 SAFE note.

On May 1, 2024, Legacy Stardust Power amended and restated the February

2024 SAFE note.

These amendments clarified the conversion mechanism in connection with the Business Combination.

Immediately prior to

the First Effective Time, the cash received pursuant to the SAFE notes automatically converted into 138,393 shares of Stardust Power

Common Stock.

Stardust Power entered into a convertible equity agreement with AIGD on April 24, 2024, for $2,000,000 and additionally entered into separate

convertible equity agreements with other individuals for a total of $100,000 in April 2024, based on similar terms.

Immediately prior

to the First Effective Time, the cash received pursuant to the convertible equity agreements automatically converted into 55,889 shares

of Legacy Stardust Power Common Stock.

Notes with Related Parties

March 2023, Legacy Stardust Power issued unsecured notes to three related parties.

These notes payable provided Legacy Stardust Power

the ability to draw up to $1,000,000 in the aggregate in the following timing:

$160,000 until December 31, 2023, and $840,000 until December

As of December 31, 2024, the Company has repaid all the notes payable.

in QX Resources and IRIS Metals Limited

October 2023, Legacy Stardust Power purchased 13,949,579 ordinary shares (1.26% of the total equity) of QXR, for $200,000.

This investment in

the ordinary shares of QXR has been made for strategic purposes and specifically with an intention to gain access for conducting feasibility

studies for the production of lithium products from the lithium brine surface anomaly identified over the 102 square-kilometer Liberty

Lithium Brine Project in SaltFire Flat, California, for which QXR has a binding option to purchase agreement

and operating agreement to earn a 75% interest from IG Lithium LLC (the “Earn-in Venture”).

Legacy Stardust Power is not

a direct party to the Earn-in Venture and accordingly has no direct or indirect economic or controlling interest either in the Project

or in any of the associated rights originating from the Earn-in Venture held by QXR.

No formal off-take agreement has been executed as

of December 31, 2024.

Further, no material expenses have been incurred towards the feasibility studies during the year ended December

The Company neither has a controlling financial interest nor does it exercise significant influence over QXR.

the investment in QXR’s ordinary shares does not result in either the consolidation or application of equity method of accounting

for the Company.

December 2024 Stardust Power subscribed to and purchased 10,000,000 ordinary

shares (approximately 6% of the total equity) of IRIS Metals Limited (IRIS Metals), an Australian limited company whose ordinary shares

are listed on the Australian securities exchange (“ASX”) for $1.6 Million.

This investment in the ordinary shares if IRIS

Metals allows the Company to explore strategic partnership with, or investment in, IRIS Metals, including without limitation, a commercial

off take arrangement for battery grade lithium production, financing or other investments in IRIS Metals or its affiliates.

off take agreement has been executed as at December 31, 2024.

Further no material expenses have been incurred towards due diligence during

On October 7, 2024, the

Company entered into the Purchase Agreement (the “ Prior B.

Riley Purchase Agreement ”) and the related

Registration Rights Agreement (the “ Prior B.

Riley Registration Rights Agreement, ” and together with the Prior B.

Riley Purchase Agreement, the “ Prior B.

Riley Agreements ”) with B.

Riley Principal Capital II LLC (“ B.

Riley Principal Capital II ”).

Upon the terms and subject to the satisfaction of the conditions set forth in the Prior B.

Riley Purchase Agreement, the Company had the right, in its sole discretion, to sell up to $50,000,000 of newly issued shares of the

Company’s Common Stock to B.

Riley Principal Capital II, subject to certain conditions and limitations contained in the Prior

Riley Purchase Agreement, from time to time during the term of the Prior B.

Riley Purchase Agreement.

Sales of Common Stock

pursuant to the Prior B.

Riley Purchase Agreement, and the timing of any sales, were solely at the option of the Company.

purchase price of the shares of common stock were determined by reference to the VWAP of the Common Stock during the applicable

purchase date, less a fixed 3% discount to such VWAP.

Upon executing the Prior B.

Riley Purchase Agreement and Prior B.

Registration Rights Agreement, the Company also issued 6,369 shares of Common Stock called Commitment Shares to B.

Riley Principal

Capital II as a consideration for $500,000, subject to make-whole provisions, for this agreement.

The Company issued 638,048 and

55,826 shares of Common Stock, aggregating to net proceeds of $2,069,685 and $260,927 during the year ended December 31, 2025, and

December 31, 2024, respectively under the Prior B.

Riley Purchase Agreement.

On December 11, 2025, the Company entered into a letter

agreement with B.

Riley Principal Capital II, pursuant to which the parties mutually agreed to terminate the Prior B.

Riley Purchase

Agreement, as amended and the related Prior B.

Riley Registration Rights Agreement.

As part of the termination, the Company

agreed to satisfy the make-whole payment as per the terms of the Prior B.

Riley Agreements of $471,942, in three equal portions:

through the issuance of restricted common stock priced at $4.40 per share and subject to resale registration, (ii) in cash upon the

Company’s next equity or convertible financing, and (iii) in connection with a future equity line, at-the-market program, or

similar financing, or otherwise in cash if unpaid by September 30, 2026.

On December 15, 2025, the Company issued 35,753 shares of

common stock (“ Settlement Shares ”) to B.

Riley Principal Capital II and subsequent to the year ended December 31,

2025 paid $157,314 cash to satisfy its obligation as per the terms of the Prior B.

Riley Agreement.

Subsequent to the year ended

December 31, 2025, on February 12, 2026, the Company entered into a Common Stock Purchase Agreement (the “ B.

Riley Purchase

Agreement ”) and a related Registration Rights Agreement (the “ B.

Riley Registration Rights Agreement ”) with

Riley Principal Capital II, the selling stockholder.

Upon the terms and subject to the satisfaction of the conditions set forth in

Riley Purchase Agreement, the Company will have the right, in its sole discretion, to sell up to $10,000,000 of the Company’s

Common Stock, to B.

Riley Principal Capital II, subject to certain conditions and limitations contained in the B.

Riley Purchase Agreement,

from time to time during the term of the B.

Riley Purchase Agreement.

Sales of Common Stock pursuant to the B.

Riley Purchase Agreement,

and the timing of any sales, are solely at the option of the Company.

The Company is under no obligation to sell any securities to B.

Riley Principal Capital II under the B.

Riley Purchase Agreement.

As of the date of this filing, the Company has issued 29,067 shares of Common Stock aggregating to net proceeds of

December 31, 2024, the Company entered into binding term sheets with certain investors (the “ 2024 Investors ”) to

issue up to $550,000 in shares of Common Stock (the “ Private Placement ”) at a price equal to 95% of the closing

bid price of the Common Stock on the last trading day prior to the closing date for the Private Placement.

In addition, each 2024

Investor received warrants representing the right, exercisable within five years of the closing date, as defined in the term sheets,

to purchase up to 50% of the shares of Common Stock purchased by such Investor in the Private Placement, with each 10 warrants

exercisable for one share of Common Stock at an exercise price of $115.00.

On April 24, 2025, the Company issued 12,850 shares of

Common Stock and 64,251 Warrants to the 2024 Investors.

January 27, 2025, the Company consummated a public offering of 479,200 shares of Common Stock and accompanying warrants to purchase up

to 479,200 shares of Common Stock at a public offering price of $12.00 per share and warrant with an exercise price of $13.00 generating

aggregate gross proceeds of approximately $5,750,400 before offering expenses.

March 16, 2025, the Company entered into a letter agreement (the “ Inducement Letter ”) with a warrant holder (the “ Exercising

Holder ”) providing for the immediate cash exercise of outstanding warrants to purchase 479,200 shares of the Company’s

Common Stock at a reduced exercise price of $6.20 per share, generating aggregate gross proceeds of approximately $2,971,040 before related

In connection with such exercise, the Company issued new common stock purchase warrants (the “ Inducement Warrants ”)

to purchase up to 958,400 shares of common stock at an exercise price of $7.00 per share, subject to shareholder approval and Nasdaq

June 18, 2025, the Company consummated a public offering of 2,150,000 shares of Common Stock at a public offering price of $2.00 per

share, generating aggregate gross proceeds of approximately $4,300,000 before offering expenses.

On June 25, 2025, the Company

consummated the partial exercise of the over allotment of the public offering, of 110,000 shares of Common Stock at a public

offering price of $2.00 per share, generating additional aggregate gross proceeds of approximately $220,000 before offering

On October 30, 2025, the Company entered into a Warrant Exchange Agreement

(the “ Exchange Agreement ”) with the Exercising Holder.

Pursuant to the Exchange Agreement, the Exercising Holder agreed

to irrevocably exchange all of its warrants to purchase shares of Common Stock, originally issued on March 16, 2025, representing the

right to purchase an aggregate of 958,400 shares of Common Stock (the “ Warrant Shares ”), for newly issued shares of

common stock at an exchange ratio of 1.31 Warrant Shares for 1 share of Common Stock, resulting in the issuance to the Investor of 730,689

shares of Common Stock at closing.

On December 23, 2025,

the Company entered into a Securities Purchase Agreement (the “ Lind Securities Purchase Agreement ”) with Lind Global

Asset Management XIII LLC (“ Lind ”) providing for up to $15,000,000 in senior secured convertible debt financing.

Simultaneously,

the Company initially drew down gross proceeds of approximately $4,000,000 in exchange for issuance to Lind of a Senior Secured Convertible

Promissory Note in the amount of $4,800,000 (the “ 2025 Convertible Note ”) and a Common Stock Purchase Warrant, for

the purchase of approximately 411,245 shares (the “ Common Stock Purchase Warrant ”).

Supply Agreements

October 20, 2025, the Company entered into a non-binding letter agreement with Prairie Lithium Limited (“ Prairie ”),

an Australia-based company, for the supply of 6,000 metric tons per annum of lithium carbonate equivalent (“ LCE ”)

in the form of lithium chloride.

The initial contract term would span 6 years starting from the date on which first commercial shipment

is received by the Company, with the option for the Company to renew for two additional six-year terms.

October 31, 2025, the Company entered into a non-binding letter agreement with Mandrake Resources Limited (“ Mandrake ”),

an Australia-based company, for the supply of 7,500 metric tons per annum of LCE in the form of lithium chloride.

The initial contract term would span 12 years starting from the date on which first commercial shipment is received by the Company, with

the option for the Company to renew for an additional six-year term.

August 4, 2024, the Company entered into an engineering agreement (the “ Primero Agreement ”) with Primero USA, Inc.

(“ Primero ”) pursuant to which Primero agreed to provide certain engineering, design and consultancy professional services,

including to assist in procurement of major equipment, engage relevant third parties for construction and provide a FEL-3 report of the Company’s Lithium Facility at Southside Industrial Park in Muskogee, Oklahoma.

In August 2025, the Company announced the successful completion of the

FEL-3 report.

The report delivered an advanced design with key optimizations to improve efficiency, reduce costs, and strengthen overall

project economics.

According to the FEL-3 report, Phase 1 is planned at 25,000 metric tons per annum (“ mtpa ”) of battery-grade

lithium, with estimated capital expenditures of approximately $500 million, at a 90% probability of achievement.

This figure includes

owner’s cost, contingency, and escalation.

Construction is expected to take approximately 24 months from the start of major work

to mechanical completion.

The total amount due pursuant to the Primero Agreement, assuming full performance, is approximately $4.7 million,

in the aggregate, subject to customary potential adjustments which was paid in full as of the date of this filing.

in IRIS Metals Limited

December 2024 Stardust Power subscribed to and purchased 10,000,000 ordinary shares (approximately 6% of the total equity) of IRIS Metals

Limited (“ IRIS Metals ”), an Australian limited company whose ordinary shares are listed on the Australian securities

exchange (“ ASX ”) for $1,600,000.

This investment in the ordinary shares of IRIS Metals would have allowed the Company

to explore strategic partnership with, or investment in, IRIS Metals, including without limitation, a potential commercial off take arrangement

for battery grade lithium production, financing or other investments in IRIS Metals or its affiliates.

No formal off take agreement was

executed as of December 31, 2025.

IRIS Metals’ ordinary shares are listed on the Australian Securities Exchange (ASX) with a readily

determinable fair value, and changes in fair value are recognized in the consolidated statements of operations.

During the year ended

December 31, 2025, management determined that a strategic investment in IRIS Metals was no longer viable.

As a result, the Company sold

all its investment in IRIS Metals for total proceeds of $570,255.

The Company recognized a loss on sale of investments of $179,805 for

the year ended December 31, 2025.

The Company neither has a controlling financial interest nor does it exercise significant influence

over IRIS Metals.

Accordingly, the investment in IRIS Metals ordinary shares does not result in either the consolidation or application

of equity method of accounting for the Company.

The carrying amount of the shares sold was $750,060.

Following the sale, the Company no longer holds

any investment in IRIS Metals as of December 31, 2025.

The investment in these securities was initially recognized at cost and

subsequently measured at fair value.

As of December 31, 2025, the fair value of the investment was nil, compared to $1,461,715 as of December

The Company recognized a loss of $711,655 for the year ended December 31, 2025, due to the change in fair value of securities,

as reported in the consolidated statements of operations.

and licensing agreements

On January 28, 2025, the Company entered

into a non-binding letter agreement with Sumitomo, contemplating

a long-term commercial offtake agreement, pursuant to which Sumitomo would agree to acquire 20,000 metric tons of lithium carbonate per

year from the Company’s first line of production, with the potential to increase to 25,000 metric tons based on mutual agreement.

The initial contract term would span 10 years starting from the date of the first qualification of the Company’s lithium carbonate

for sale to any of Sumitomo’s customers, with an option for Sumitomo to renew for an additional five years under mutually agreed

terms, provided written notice is given to the Company at least twelve months prior to the end of the initial term.

On February 7, 2025, the Company executed an

exclusive license agreement with KMX.

Under the terms of the License Agreement, KMX agreed to irrevocably license to the Company the

use of KMX’s VMD Technology and associated processes and systems (including the KMX VMD Units) for the purpose of the

Company’s use of the technology in its refining and upstream operations.

Among other obligations set forth in the Agreement,

the Company shall be required to exclusively purchase all KMX VMD Units from KMX during the term of the Agreement on the terms and

conditions set forth therein.

The License Agreement grants the Company the exclusive right to sub license, use, market, sell and

operate KMX’s VMD Technology across the United States, Canada and select international markets.

The Company agreed to pay KMX

a royalty comprised of 500,000 shares of Common Stock (the “Royalty Shares”).

Short-term loans

In December 2024, the Company entered into a binding term sheet (“Term

Sheet”) with Endurance Antarctica Partners II, LLC (“Endurance”) a related party, providing for a loan (the “Loan”)

in the aggregate principal amount of $1,750,000, bearing interest at a rate of 15% per year, and maturing in March 2025 (the “Maturity

The Term Sheet contained customary representations and warranties and customary events of default.

Pursuant to the Term

Sheet, 5,500,000 shares of Company’s Common Stock, owned by Roshan Pujari, Chief Executive Officer of the Company, were pledged

as collateral.

In addition, the Company has agreed to issue to Endurance $3,500,000 in Common Stock as an Equity Kicker, with the price

of each share being determined based on terms per the earlier to occur of (i) the consummation of a private placement offering of Company

securities (in which case such issuance shall be on no less favorable terms than the terms of such private placement) and (ii) the Maturity/

Repayment Date, provided that the minimum number of shares of Common Stock shall be no less than 500,000 shares.

In addition, Endurance

will receive warrants representing the right, exercisable within five years of the closing date, up to 50% of Common Stock issued as Equity

Kicker, with each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 in accordance with the Private

Placement terms.

Subsequent to year end, the Company has fully repaid the principal amount and accrued interest.

The Company is yet to

issue the equity shares and warrants to Endurance as of the date of the issuance of the consolidated financial statements.

In December 2024, the Company entered into

binding term sheets (“Term Sheets”) with several lenders including DRE Chicago, LLC, a related party (collectively, the

“Lenders”), providing for loans (the “Loans”) in the aggregate principal amount of $1,800,000, bearing

interest at a rate of 15% per year, and maturing in March 2025 (the “Maturity Date”).

The proceeds of the Loans are

expected to be used by the Company for general corporate and working capital purposes.

The Term Sheets contained customary

representations and warranties and customary events of default.

Pursuant to the Term Sheets, an aggregate of approximately 3,400,000

January 28, 2025, the Company entered into a non-binding letter agreement with Sumitomo, contemplating a long-term commercial offtake

agreement, pursuant to which Sumitomo would agree to acquire 20,000 metric tons of lithium carbonate per year from the Company’s

first line of production, with the potential to increase to 25,000 metric tons based on mutual agreement.

The initial contract term would

span 10 years starting from the date of the first qualification of the Company’s lithium carbonate for sale to any of Sumitomo’s

customers, with an option for Sumitomo to renew for an additional five years under mutually agreed terms, provided written notice is

given to the Company at least twelve months prior to the end of the initial term.

February 7, 2025 (the “ License Agreement Effective Date ”), the Company executed an exclusive license agreement (the

“ License Agreement ”) with KMX.

Under the terms of the License Agreement, KMX agreed to irrevocably license to the

Company the use of KMX’s VMD Technology and associated processes and systems (including the KMX VMD Units) for use in the Company’s

refining and upstream operations.

Among other obligations set forth in the License Agreement, the Company shall be required to exclusively

purchase all KMX VMD Units from KMX during the term of the License Agreement on the terms and conditions set forth therein.

Agreement grants the Company the exclusive right to sub license, use, market, sell and operate KMX’s VMD Technology across the

United States, Canada and select international markets.

The Company agreed to pay KMX a royalty comprised of 50,000 shares of Common

Stock (the “ Royalty Shares ”).

On the License Agreement Effective Date, the Company received the contractual right

to access and purchase KMX VMD Units.

On April 24, 2025, the Company issued 50,000 shares of Common Stock to KMX, with a corresponding

debit recorded as other long-term asset, until the license meets the recognition criteria for an intangible asset.

In December 2024, the Company

entered into a binding term sheet (“ Endurance Term Sheet ”) with Endurance Antarctica Partners II, LLC (“ Endurance ”)

a related party, providing for a loan (the “ Endurance Loan ”) in the aggregate principal amount of $1,750,000, bearing

interest at a rate of 15% per year, and maturing in March 2025 (the “ Endurance Maturity Date ”).

The Endurance Term

Sheet contained customary representations and warranties and customary events of default.

Pursuant to the Endurance Term Sheet, 550,000

shares of Company’s Common Stock, owned by Roshan Pujari, Chief Executive Officer of the Company, were pledged as collateral.

In addition, the Company has agreed to issue to the Lenders an aggregate of $2,700,000 in Common Stock as an Equity Kicker, with the

price of each share being determined based on terms per the earlier to occur of (i) the consummation of a private placement offering

of Company securities (in which case such issuance shall be on no less favorable terms than the terms of such private placement) and

(ii) the Maturity/ Repayment Date, provided that the minimum number of shares of Common Stock issued to the Lenders shall be no less

than an aggregate of 360,000 shares.

In addition, the Lenders will receive warrants representing the right, exercisable within five

years of the closing date, up to 50% of Common Stock issued as Equity Kicker, with each whole warrant exercisable for one share of

Common Stock at an exercise price of $11.50 in accordance with the Private Placement terms.

Subsequent to year end, the Company has

fully repaid the principal amount and accrued interest.

The Company is yet to issue the equity shares and warrants to the Lenders as

of the date of the issuance of the consolidated financial statements.

addition, the Company agreed to issue to Endurance $3,500,000 in Common Stock as an Equity Kicker, as defined in the Endurance Term

Sheet with the price of each share being determined based on terms per the earlier to occur of (i) the consummation of a private placement

offering of Company securities (in which case such issuance shall be on no less favorable terms than the terms of such private placement)

and (ii) the Endurance Maturity/ Repayment Date, provided that the minimum number of shares of Common Stock shall be no less than 50,000

In addition, Endurance received warrants representing the right, exercisable within five years of the closing date, up to

50% of Common Stock issued as Equity Kicker, with 10 warrants exercisable for one share of Common Stock at an exercise price of $115.00

in accordance with the private placement terms.

During the year ended December 31, 2025, the Company has fully repaid the principal amount,

the accrued interest and issued the equity shares and warrants to Endurance.

December 2024, the Company entered into binding term sheets (“ Investor Term Sheets ”) with several lenders

including DRE Chicago, LLC, a related party (collectively, the “ Investors ”), providing for loans (the

“ Investor Loans ”) in the aggregate principal amount of $1,800,000, bearing interest at a rate of 15% per year,

and maturing in March 2025 (the “ Investor Maturity Date ”).

The proceeds of the Investor Loans are expected to be

used by the Company for general corporate and working capital purposes.

The Investor Term Sheets contained customary representations

and warranties and customary events of default.

Pursuant to the Term Sheets, an aggregate of approximately 340,000 shares of

Company’s Common Stock, owned by Roshan Pujari, Chief Executive Officer of the Company, were pledged as collateral.

addition, the Company agreed to issue to the Investors an aggregate of $2,700,000 in Common Stock as an Equity Kicker, as defined in

the Investor Term Sheet, with the price of each share being determined based on terms per the earlier to occur of (i) the

consummation of a private placement offering of Company securities (in which case such issuance shall be on no less favorable terms

than the terms of such private placement) and (ii) the Investor Maturity/ Repayment Date, provided that the minimum number of shares

of Common Stock issued to the Investors shall be no less than an aggregate of 36,000 shares.

In addition, the Investors received

warrants representing the right, exercisable within five years of the closing date, up to 50% of Common Stock issued as Equity

Kicker, with 10 warrants exercisable for one share of Common Stock at an exercise price of $115.00 in accordance with the private

placement terms.

During the year ended December 31, 2025, the Company fully repaid the principal amount, the accrued interest and

issued the equity shares and warrants to the Investors.

March 18, 2025, the Company received a notice (the “ MVPHS Notice ”) from the Nasdaq that the Company was not in compliance

with the continued listing standards set forth in Nasdaq Listing Rule 5450(b)(2)(C), as the Company’s market value of publicly

held shares closed below $15,000,000 for the previous 30 consecutive business days.

On September 26, 2025, the Company received notice

from Nasdaq that the Company had regained compliance with the continued listing standards set forth in Nasdaq Listing Rule 5450(b)(2)(C).

March 19, 2025, the Company received a subsequent notice (the “ Minimum Bid Price Notice ”) from the Nasdaq that the

Company was not in compliance with the continued listing standards set forth in Nasdaq Listing Rule 5450(a)(1), as the minimum bid price

of the Company’s Common Stock closed below $1.00 per share for the previous 30 consecutive business days.

On September 26, 2025,

the Company received notice from Nasdaq that the Company had regained compliance with the continued listing standards set forth in Nasdaq

Listing Rule 5450(a)(1).

April 3, 2025, the Company received a subsequent notice (the “ MVLS Notice ”) from the Nasdaq that the Company was not

in compliance with the continued listing standards set forth in Nasdaq Listing Rule 5450(b)(2)(A), as the market value of the Company’s

listed securities fell under $50 million for the previous 30 consecutive business days.

On October 1, 2025, the Company received a delisting

notice from the Nasdaq due to failure to regain compliance with the Nasdaq Listing Rule 5450(b)(2)(A).

October 8, 2025, the Company requested a hearing before a Nasdaq Hearings Panel (the “ Panel ”) to appeal the delisting

determination.

Subsequently, pursuant to an application made by the Company to transfer to the Nasdaq Capital Market and based on the

market value of the Company’s listed securities being above $35 million for a sustained period of time, on October 27, 2025, the

Company received notice from the Nasdaq that the application for the transfer to the Nasdaq Capital Market had been approved and consequently

the above-mentioned noncompliance was cured.

On September 3, 2025, the Company filed a certificate of amendment to the

Company’s Certificate of Incorporation with the Secretary of State of the State of Delaware to effectuate a 1-for-10 reverse stock

split (the “Reverse Stock Split”) of the outstanding shares of Common Stock.

The Company’s stockholders previously approved

the Reverse Stock Split at the Company’s annual meeting of stockholders held on June 9, 2025, and granted the board of directors

the authority to determine the exact split ratio and when to proceed with the Reverse Stock Split.

The Reverse Stock Split became effective

on September 8, 2025, and the Common Stock began trading on the Nasdaq on a Reverse Stock Split-adjusted basis on September 8, 2025, at

The Reverse Stock Split did not decrease the number of authorized shares of Common Stock and preferred stock or otherwise

affect the par value of the Common Stock.

No fractional shares were issued in connection with the Reverse Stock Split and any fractional

shares resulting from the Reverse Stock Split were rounded down to the nearest whole share.

Stockholders who were otherwise entitled to

receive fractional shares as a result of the Reverse Stock Split were paid cash in lieu thereof.

As a result of the Reverse Stock Split,

shares of Common Stock, outstanding warrants, stock options, and restricted stock units were proportionately decreased (and the respective

per share value and exercise prices, if applicable, were proportionately increased) (see Part II, Item 8, Note 2, Basis of Presentation

and Summary of Significant Accounting Policies in the notes to consolidated financial statements in this Annual Report).

Factors Affecting Our Performance

believe that our performance and future success depend on a number of factors that present significant opportunities for us but also

pose risks and challenges, including competition from other lithium brine and other brine producers, changes to existing federal and

state level incentive framework, changes in regulations, and other factors discussed under the section titled “Risk Factors”

in our Prospectus and this Annual Report.

We believe the factors described below are key to our success.

We believe that our performance and future success depend on a number of

factors that present significant opportunities for us but also pose risks and challenges, including competition from other lithium brine

and other brine producers, changes to existing federal and state level incentive framework, changes in regulations, and other factors

discussed under the section titled “Risk Factors” in this Annual Report.

In addition, we believe the factors described below

are key to our success.

Commercial Operations

are a development stage company, and have purchased the site in Southside Industrial Park, Muskogee, Oklahoma.

The critical issue analysis,

phase I ESA, geotechnical study, and readiness assessment of the site in Southside Industrial Park,

Muskogee, Oklahoma has been conducted, and we may be required to conduct other relevant studies.

Power is developing a large central refinery in a phased approach.

The first phase is the construction of a production line with up to

25,000 metric tpa.

The second phase is to add a second production line with up to 25,000 tpa, to create a total

capacity of up to 50,000 tpa.

technological innovation of Stardust Power’s planned refinery is the ability for the Facility to refine different sources of lithium

brine inputs.

The Facility is being designed to accept lithium brines, of a certain approved chemical composition.

It is Stardust Power’s

intention that the Facility will be able to dilute and pre-treat feedstock as necessary, to ensure that various lithium feedstock can

be blended, in order to produce a consistent feedstock.

Stardust Power’s strategy is to differentiate itself by screening for a

broader set of contaminants, in comparison to other lithium refineries.

success will depend on whether we can execute and expand our ecosystem of commercial arrangements with additional suppliers of brine

and executing agreements with them at favorable terms.

The availability of brine for the purpose of extracting lithium is still in a

nascent stage and we would require access to multiple sources as we start commercial production and grow our business.

Our management

team frequently evaluates current and future sources of supplies for reliability of supply and geographic locations for logistics and

cost efficiency.

We would also have to maintain technology arrangements with existing strategic affiliations on whose patented and

proprietary processes we depend on, as well as forging new technology affiliations as exploration, extraction and purification processes

evolve, to obtain raw materials required to manufacture high-quality lithium suitable for consumption by the EV industry, and other potential

These affiliations will enable us to refine and sell battery grade lithium at competitive prices, which in turn helps secure

the growth and profitability of our business operations in the long term.

The Company is a development stage company, and has purchased the Site.

We have completed a number of required site assessments and technical studies, including the critical issue analysis, Phase I ESA, geotechnical

study, FEL-1 study and FEL-3 study.

Additional studies may be required as the project progresses.

The project required evaluation

for certain federal, state, and local permits.

State permitting focuses on air emissions, wastewater, and stormwater permits.

permitting focuses on possible cultural, biological, and natural resources and threatened/endangered species impacts.

The key permitting

agency for the project at the state level is the Oklahoma Department of Environmental Quality (the “ DEQ ”).

Power has received from the DEQ the general permit for stormwater discharges from Construction Activities, approval of its stormwater

pollution prevention plan and air quality construction permit (“ Air Permit ”).

Under current design plans, Stardust

Power does not expect to require a waste water permit for the Facility since no waste water is expected to be discharged.

Stardust Power is developing a large central refinery in a phased approach.

The first phase is the construction of a production line with up to 25,000 metric tpa.

The second phase is to add a second production

line with up to 25,000 tpa, to create a total capacity of up to 50,000 tpa.

A technological innovation of Stardust Power’s planned refinery is

the ability for the Facility to refine different sources of lithium chloride inputs derived from lithium brines.

The Facility is being

designed to accept lithium chloride, of a certain approved chemical composition.

It is Stardust Power’s intention that the Facility

should be able to dilute and pre-treat feedstock as necessary, so that various lithium feedstock can be blended, in order to produce a

consistent feedstock.

Stardust Power’s strategy is to differentiate itself by screening for a broader set of contaminants, in comparison

to other lithium refineries.

Our success will depend on whether we can execute and expand our ecosystem

of commercial arrangements with additional suppliers of brine and execute agreements with them at favorable terms.

The availability of

brine for the purpose of extracting lithium is still in a nascent stage and we would require access to multiple sources as we start commercial

production and grow our business.

Our management team frequently evaluates current and future sources of supplies for reliability and

geographic locations for logistics and cost efficiency.

We would also have to maintain technology arrangements with existing strategic

affiliations on whose patented and proprietary processes we depend on, as well as forge new technology affiliations as exploration, extraction

and purification processes evolve, to obtain raw materials required to manufacture high-quality lithium suitable for consumption by the

EV industry, and other potential usages.

These affiliations should enable us to refine and sell BGLC at competitive prices,

which in turn helps secure the growth and profitability of our business operations in the long term.

Capital Raise

success of our refinery’s activities relating to producing battery grade lithium from brine and the success of our ability to obtain

success of our refinery’s activities relating to producing BGLC from brine and our ability to obtain

relevant permits in a timely manner require significant capital investment and financing to fund the initial investment in all aspects

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from larger companies, protection of proprietary technology of our strategic partners, and dependence on key individuals.

Our consolidated financial statements have been presented on the basis that the Company is a going concern, which contemplates the realization

of assets and the satisfaction of liabilities in the normal course of business.

The Company has not earned any revenue and has been operating

at a loss since inception.

Our consolidated financial statements have been presented on the basis that the Company is a going concern, which contemplates

the realization of assets and the satisfaction of liabilities in the normal course of business.

The Company has not earned any

revenue and has been operating at a loss since inception.

The Company has an accumulated deficit and stockholders’ deficit.

We believe that the cash on hand and

additional investments available through issuance of new Common Stock will be inadequate to satisfy the Company’s working capital

and capital expenditure requirements for at least the next twelve months.

These conditions raise substantial doubt about our ability

to continue as a going concern for one year from the issuance of these consolidated financial statements.

As a development

stage company, Stardust Power needs to raise additional capital to realize its business objectives.

Our long-term success and ability

to continue as a going concern is dependent upon our ability to successfully raise additional capital or financing, or successfully enter

into strategic partnerships.

Until commercial production is achieved from our planned operations, we will continue to incur operating

and investing net cash outflows associated with, among other things, maintaining and acquiring exploration properties and undertaking

ongoing exploration activities.

believe that the cash on hand and additional investments available through issuance of new Common Stock will be inadequate to

satisfy the Company’s working capital and capital expenditure requirements for at least the next twelve months.

conditions raise substantial doubt about our ability to continue as a going concern for one year from the issuance of these consolidated financial statements.

As a development stage company, Stardust Power needs to raise additional capital to realize its

business objectives.

Our long-term success and ability to continue as a going concern are dependent upon our ability to successfully

raise additional capital or financing or successfully enter into strategic partnerships.

Until commercial production is achieved

from our planned operations, we will continue to incur operating and investing net cash outflows associated with, among other

things, maintaining and acquiring exploration properties and undertaking ongoing exploration activities.

Operating History

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by companies in their early stages of operation.

As Legacy Stardust Power was incorporated on March 16, 2023, the period from March 16, 2023 (inception) to December 31, 2023,

is not comparable to the year ended December 31, 2024.

Business Metrics, Non-GAAP Measure

39 unchanged sentences

have not generated any revenue to date.

We expect to generate a significant portion of our future revenue from the sale of battery grade

lithium primarily to the EV market.

We expect that we will enter into long-term contracts (typically 10 years), driven by industry dynamics

of the EV industry, with a pricing structure at cap and ceiling, and sharing of variable price between customers and the Company.

We expect to generate a significant portion of our future revenue from the sale of BGLC primarily to the ESS and EV markets.

We expect to enter into long-term contracts (typically 10 years), driven

by industry dynamics, with a pricing structure at cap and ceiling, and sharing of variable price between

customers and the Company.

of Goods Sold

5 unchanged sentences

The length, tenure and pricing of these contracts will depend largely on

the type of supply and is expected to vary from supplier to supplier.

the type of supply and are expected to vary from supplier to supplier.

and administrative

and administrative expense consists of costs to maintain our daily operations and administer the business that are not directly

attributable to generating revenue or cost of goods or raw material.

These consist primarily of consulting services (including

advisory services for organization setup and administrative related services from contractors, consultants), professional services

such as accounting advisory, statutory auditor fees, technical consultants, and business consulting, as well as personnel related

expenses (including stock based compensation), legal and book-keeping services, insurance expenses (including director and

officer’s insurance), investor relations activities and marketing expenses.

We expect our general and administrative expenses

will increase in absolute dollars over time as we continue to invest in initially setting up our Facility, and subsequently in the

growth of our business recruit more employees, and incur costs associated with being a publicly traded company with respect to

compliance with the regulations of the SEC and the Nasdaq Global Market.

and administrative expense consists of costs to maintain our daily operations and administer the business that are not directly attributable

to generating revenue or cost of goods or raw material.

These consist primarily of consulting services (including advisory services for

organization setup and administrative related services from contractors, consultants), professional services such as accounting advisory,

statutory auditor fees, technical consultants, and business consulting, as well as personnel related expenses (including stock based

compensation), legal and book-keeping services, insurance expenses (including director and officer’s insurance), investor relations

activities and marketing expenses.

We expect our general and administrative expenses will increase in absolute dollars over time as we

continue to invest in setting up our Facility, hire additional employees, and subsequently invest in the growth of our business

and incur costs associated with being a publicly traded company with respect to compliance with the regulations of the SEC and Nasdaq.

Income (Expenses)

income is comprised of interest earned on promissory notes issued during the current year.

During the year ended December 31, 2024, the

Company issued promissory notes of $176,000 and $316,000 to IGX Minerals LLC and IG Lithium LLC respectively.

These notes carry an interest

rate of 6% with maturity date of February 28, 2025, and July 1, 2025, respectively.

The Company is in active discussion in negotiating the terms for repayment of the promissory note issued to IGX and

is evaluating multiple options including a possible strategic investment.

expense is comprised of interest payable on the Insurance Funding loans and short-term loans.

Company entered into a financing agreement of $510,000 for the purchase of a D&O insurance policy with AFCO Insurance Premium

The Company made a downpayment of $44,162, which was applied to the loan amount at the time of the loan agreement.

is payable in monthly installments of $44,162 per month for 11 months.

Payments include a stated interest rate of 8.46% and are

secured against a lien on the insurance policy.

issued a Term Sheet to Endurance in the aggregate principal amount of $1,750,000, bearing interest at a rate of 15% per year, and maturing

in March 2025.

issued Term Sheets to several lenders, providing for loans in the aggregate principal amount of $1,800,000, bearing interest

at a rate of 15% per year, and maturing in March 2025.

Interest expense also included

interest on a Legacy Stardust Power financing agreement of $80,800 for the purchase of an insurance policy with First Insurance Funding.

Payments include a stated interest rate of 8.25% and are secured against a lien on the insurance policy.

The debt was fully paid off as

of December 31, 2024.

charges are comprised of cost of issuance of short-term loans and the accretion

impact related to the Common Stock to be issued to lenders per the Equity Kicker related to these loans.

This also includes cost incurred

to enter into the Purchase Agreement with B Riley Principal Capital II and the change in fair value of the Company’s make-whole

provision related to the Common Stock Purchase Agreement.

Interest income is comprised

of interest earned on promissory notes.

During the year ended December 31, 2024, the Company issued promissory notes of $176,000 and

$316,000 to IGX and IG Lithium LLC (“ IGL ”) respectively.

These notes carried an interest rate of 6% with maturity

date of February 28, 2025, and July 1, 2025, respectively.

Interest expense is comprised

of interest payable on the Insurance Funding loans, short-term loans and interest charged by vendors on overdue invoices.

The Company entered into a financing agreement of $407,500 and $510,000

for the purchase of a director and officer’s insurance policy with AFCO Insurance Premium Finance in 2025 and 2024, respectively.

The Company made a downpayment of $70,256 and $44,162 for the loan taken in 2025 and 2024, respectively, which was applied to the loan

amount at the time of the loan agreement.

The debt is payable in monthly instalments of $35,125 and $44,162 per month for 10 and 11 months

and has a stated interest rate of 7.5% and 8.46% for the loan taken in 2025 and 2024 respectively.

The loans are secured against a lien

on the insurance policy.

The Company issued Term Sheets

to several lenders, providing for loans in the aggregate principal amount of $3,550,000, bearing interest at a rate of 15% per year, and

maturing in March 2025.

The debt was fully paid off as of December 31, 2025.

expense for the year ended December 31, 2024, included interest on a Legacy Stardust Power financing agreement of $80,800 for the purchase

of an insurance policy with First Insurance Funding.

Payments include a stated interest rate of 8.25% and are secured against a lien

on the insurance policy.

The debt was fully paid off as of December 31, 2024.

Finance charges are comprised of cost incurred to issuing shares and the change in fair value of the Company’s make-whole provision related

Riley Purchase Agreement.

In 2024, this also included the cost of issuance of short-term loans

and the accretion impact related to the Common Stock to be issued to lenders per the Equity Kicker, as defined in each relevant term sheet,

related to these loans.

Amortization of Debt Discount

Amortization of debt discount consists of amortization expense related

to the discount recorded in connection with the issuance of the 2025 Convertible Note in December 2025.

in fair value of investment in equity securities

in fair value of investment in equity securities relates to movements in fair value of investment in equity securities of strategic investments

such as the investment in QXR and IRIS Metals, that need to be recorded in the consolidated statements of operations for each reporting period, based

on readily available quoted prices for such investment.

such as the investment in QXR and IRIS Metals, that need to be recorded in the consolidated statements of operations for each reporting

period, based on readily available quoted prices for such investment.

in fair value of SAFE notes and 2024 convertible notes

Change in fair value of SAFE notes and convertible notes relates to movements

in fair value of SAFE notes and convertible notes that have been classified as liability instruments in the consolidated financial statements,

which need to be recorded in the consolidated statements of operations for each reporting period, based on third party valuations carried

out at period end.

Upon consummation of the Business Combination on July 8, 2024, the SAFE notes and convertible notes were converted

into Common Stock.

Change in fair value of

SAFE notes and 2024 convertible notes relates to movements in fair value of SAFE notes and 2024 convertible notes that have been

classified as liability instruments in the consolidated financial statements, which need to be recorded in the consolidated

statements of operations for each reporting period, based on third party valuations carried out at period end.

Upon consummation of

the Business Combination on July 8, 2024, the SAFE notes and 2024 convertible notes were converted into Common Stock and hence the balance was nil in the consolidated balance sheets as of December 31, 2025, and December 31, 2024.

in fair value of sponsor earnout shares

Change in fair value of sponsor earnout shares relates to movements in

fair value of earnout shares issued to the Sponsor which have been classified as liability instruments in the consolidated financial

statements, that need to be recorded in the consolidated statements of operations for each reporting period, based on third party valuations

carried out at period end.

in fair value of sponsor earnout shares relates to movements in fair value of earnout shares issued to the Sponsor at the closing of

the Business Combination, which have been classified as liability instruments in the consolidated financial statements, that need to

be recorded in the consolidated statements of operations for each reporting period, based on third party valuations carried out at

in fair value of warrant liability

in fair value of warrant liability relates to movements in fair value of

Public Warrants and Private Warrants which have been classified as liability instruments in the consolidated financial statements, that

need to be recorded in the consolidated statements of operations for each reporting period, based on fair value at period end.

in fair value of warrant liability relates to movements in fair value of Public Warrants and Private Warrants which have been classified

as liability instruments in the consolidated financial statements, that need to be recorded in the consolidated statements of operations

for each reporting period, based on fair value at period end.

for income taxes

2 unchanged sentences

for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities and changes in tax law.

on sale of investments in equity securities

on sale of investment in equity securities relates to realized loss on sale of investment in equity securities of IRIS Metals.

was made in response to evolving market conditions and liquidity needs.

on write off of promissory notes and deposit

Loss on write off of

promissory notes and deposit relates to write-off of a promissory note and deposit made in connection with a previously contemplated

strategic partnership with IGX, IGL and Usha Resources.

The likelihood of entering into definitive agreements with them had

diminished significantly during the year ended December 31, 2025, and based on an updated assessment these amounts were deemed

uncollectible.

Gain on extinguishment of liability

Gain on extinguishment of liability for

the year ended December 31, 2025, includes the gain recognized on the extinguishment of vendor payable balance.

of Operations

following table sets forth our consolidated statements of operations information for the period indicated:

from March 16, 2023 (inception) through

and administrative expenses

$ (17,972,828 )

$ (2,675,698 )

$ (15,297,130 )

income (expenses)

note issuance costs

transaction costs

in fair value of sponsor earnout shares

in fair value of warrant liability

in fair value of investment in equity securities

in fair value of convertible notes

in fair value of SAFE notes

other expenses

$ (5,781,035 )

$ (1,117,887 )

$ (4,663,148 )

$ (23,753,863 )

$ (3,793,585 )

$ (19,960,278 )

Stardust Power was incorporated on March 16, 2023, hence the period from

March 16, 2023 (inception) to December 31, 2023, is not comparable to the year ended December 31, 2024.

We have not earned any revenue since inception.

following table sets forth our consolidated statements of operations information for the periods indicated:

December 31, 2025

December 31, 2024

General and administrative expenses

Operating loss

Other income (expenses)

Interest income

Interest expense

Finance charge

Change in fair value of sponsor earnout shares

Change in fair value of warrant liability

Change in fair value of investment in equity securities

Change in fair value of convertible notes

Change in fair value of SAFE notes

Loss on write off of promissory note and deposit

Loss on sale of investment in equity securities

Gain on extinguishment of liability

Total other expenses

have not earned any revenue since inception.

of Goods Sold

1 unchanged sentence

and Administrative Expenses

and administrative expenses are primarily attributable to fees for professional consulting fees, mainly comprising formation and

organization structure, advisory marketing advisory services and other consulting, legal services and advisory services with respect

to the Company’s organization, fees for strategic investments evaluation and employee related compensation expenses

representing base salary, benefits and stock-based compensation expense.

and administrative expenses are primarily attributable to employee-related compensation expenses representing base salary, benefits

and stock-based compensation expense, fees for professional consulting fees, mainly comprising organization structure and marketing

advisory services, insurance costs, and other consulting and legal services with respect to the Company’s

organization.

The details of these expenses are as follows:

and consulting fees

and book-keeping services

and related taxes

Marketing and advertisement

the year ended December 31, 2024, general and administrative expenses increased

compared to the period from March 16, 2023 (inception) through December 31, 2023, primarily due to higher employee related costs driven

by an increase in stock based compensation expense and number of employees, increase in legal and professional services such as legal

fees, professional and consulting fees including stock based compensation expense for consultants, accounting advisory, statutory auditor

fees, technical consultants and business consulting and an increase in business development and other administrative expenses in line

with growth in operations.

The increase was partially offset by decrease in marketing and advertisement services with respect to the Company’s

organization incurred in comparative period.

December 31, 2025

December 31, 2024

Personnel and related taxes

Professional and consulting fees

For the year ended

December 31, 2025, general and administrative expenses decreased compared to the year ended December 31, 2024, primarily due to

lower professional and consulting fees and legal fees, as the prior year included significant one-time expenses incurred in

connection with the Business Combination as well as a reduction in stock-based compensation expense for consultants during the year

ended December 31, 2025.

This decrease was partially offset by higher personnel and related taxes resulting from an increase in

headcount and stock-based compensation expense for employees, an increase in insurance costs, and an increase in other general and

administrative expenses in line with the growth of the Company’s operations.

Income (Expenses)

note issuance costs

note issuance costs of $Nil for the year ended December 31, 2024, and $466,302 for the period from March 16, 2023 (inception) through December

31, 2023, respectively, primarily represent $435,000 of capital advisory services fees paid to related party for sourcing the SAFE note

commitment from the investor and $31,302 of legal costs incurred towards setting up and executing the SAFE note agreements.

transaction costs

transaction costs of $Nil for the year ended December 31, 2024, and $450,113 for the period from March 16, 2023 (inception) through December

31, 2023, respectively, relate to costs that represent fees and expenses, primarily legal expenses associated with evaluation of potential

other SPAC merger opportunities that the Company ultimately did not execute, including $100,000 of fees paid to a related party.

income of $10,838 for the year ended December 31, 2024, and $Nil for the period from March 16, 2023 (inception) through December 31, 2023,

respectively, relate to interest earned on promissory notes issued during the current year ended December 31, 2024.

the year ended December 31, 2024, interest expenses increased compared to the period from March 16, 2023 (inception) through

December 31, 2023, primarily due to interest expense incurred on the financing agreement for

the Company’s purchase of directors and officers and other insurance policies.

Additionally, the Company entered into finance

agreements for short-term loans with various lenders during the year ended December 31, 2024, resulting in an increase in interest

expense of $42,626.

increase in finance charges of $7,579,713 during the year ended December

31, 2024, compared to the period from March 16, 2023 (inception) through December 31, 2023, is due to cost of issuance of short-term loans

and the accretion impact related to the common stock to be issued to lenders per the Equity Kicker related to these loans.

This also includes

cost incurred to enter into the common stock purchase agreement with B Riley Principal Capital II and the change in fair value of the

Company’s make-whole provision related to the common stock purchase agreement.

The Company did not have any similar financing arrangement

in the prior comparative period.

in fair value of investment in equity securities

decrease in the fair value of investment in equity securities of $322,134 during the year ended December 31, 2024, is due to change

in the fair value of investment in QXR and IRIS Metals based on readily available quoted prices for such investment.

increase in the fair value of investment of $18,556 during the period from March 16, 2023 (inception) through December 31, 2023, is

due to change in the fair value of investment in QXR.

in fair value of SAFE notes

increase in fair value of SAFE notes of $955,000 and $212,200 during the year ended December 31, 2024, and the period from March 16,

2023 (inception) through December 31, 2023, respectively, is due to changes in estimates related to inputs used in the valuation of SAFE notes, which have been classified as liability instruments,

based on third party valuations, prior to the conversion of the instruments into Common Stock.

The SAFE notes, which had previously been

classified as liability instruments, were converted to equity following the consummation of the Business Combination with GPAC II on July

The Company had not issued any such SAFE notes post business combination consummation.

in fair value of convertible notes

increase in fair value of convertible notes of $471,400 during the year ended December 31, 2024, compared to the period from March 16, 2023 (inception) through December

31, 2023, is due to changes in estimates related to inputs used in the valuation of convertible notes, which have been classified as liability

instruments, based on third party valuations.

The convertible notes, which had previously been classified as liability instruments, were

converted to equity following the consummation of the Business Combination with GPAC II on July 8, 2024.

The Company had not issued any

such convertible notes in the comparative period.

For the year ended December 31, 2025, interest income increased by $1,176 compared to the year ended December 31, 2024, primarily attributable

to interest earned in the current year for promissory notes issued during August 2024.

As of December 31, 2025, the Company

wrote off the promissory note balance including accrued interest as the notes were deemed unrecoverable.

For the year ended

December 31, 2025, interest expenses increased by $136,449 compared to the year ended December 31, 2024.

increase was primarily due to interest expense incurred on the financing agreement related to directors and officers and other

insurance policies, interest charged by vendors on outstanding overdue invoices , an

increase in interest expense on other short-term loans with various lenders and interest accretion related to convertible notes

issued during the year ended December 31, 2025.

The decrease in finance charges of $7,246,658 during the year ended December

31, 2025, compared to the year ended December 31, 2024, was due to cost of issuance of short-term loans and the accretion impact related

to the common stock to be issued to lenders per the Equity Kicker related to these loans incurred during the year ended December 31, 2024.

The prior year finance charges also included cost incurred to enter into the Prior B.

Riley Purchase Agreement with B Riley Principal

Capital II and the change in fair value of the Company’s make-whole provision related to the Prior B.

Riley Purchase Agreement.

in fair value of sponsor earnout shares

decrease in fair value of sponsor earnout shares by $4,076,200 for year

ended December 31, 2024, compared to the period from March 16, 2023 (inception) through December 31, 2023, relates to movements in fair

value of earnout shares issued to the Sponsor, at the closing of the Business Combination, which have been classified as liability

instruments in the consolidated financial statements, that need to be recorded in the consolidated statements of operations for each reporting

period, based on third party valuations carried out at period end.

The Company had not issued any such sponsor earnout shares in the comparative

decrease in change in fair value of sponsor earnout shares by $3,548,200 for year ended December 31, 2025, compared to the year

ended December 31, 2024, relates to movements in fair value of earnout shares issued to the Sponsor, primarily driven by decrease in quoted market price, which have been classified as liability instruments in the consolidated financial statements, that need to be recorded

in the consolidated statements of operations for each reporting period, based on third party valuations carried out at period

in fair value of warrant liability

The increase in fair value of warrants of $511,342 for the year ended December

31, 2024, compared to the period from March 16, 2023 (inception) through December 31, 2023, relates to movements in fair value of Public

and Private Warrants which have been classified as liability instruments in the consolidated financial statements, that need to be recorded

in the consolidated statements of operations for each reporting period, based on fair value at period end.

The Company had not issued

any such warrants in the comparative period.

Other income of $21,970 for the year ended December 31, 2024, relates to insurance refund received.

the year ended December 31, 2024, and for the period from March 16, 2023

(inception) through December 31, 2023, the tax expense is $Nil, due to net losses incurred during these periods.

We do not carry any deferred

tax assets on the consolidated balance sheets as at December 31, 2024 and December 31, 2023, primarily due to net operating loss carry

forwards resulting from incurred net operating losses and full valuations allowance of those losses, as our ability to realize future

tax benefits related to these assets is largely dependent upon operational profitability, which is uncertain.

As a result of this uncertainty,

we have established a full valuation allowance, and have not recognized a net provision or benefit for income taxes in the periods reported.

the year ended December 31, 2024, the Company incurred a net loss of $23,753,863 and for the period from March 16, 2023 (inception) through

December 31, 2023, the Company incurred a net loss of $3,793,585.

Since the Company is yet to start commercial production of battery

grade lithium, the operating expenses are expected to increase, as the Company starts to recruit more personnel to perform general operational

tasks and set up the Facility and executed supply agreements.

increase in change in fair value of warrants by $1,920,543 for the year ended December 31, 2025, compared to the year ended December

31, 2024, relates to movements in fair value of Public and Private Warrants, primarily driven by decrease in quoted market price, which have been classified as liability instruments in

the consolidated financial statements, that need to be recorded in the consolidated statements of operations for each reporting

period, based on fair value at period end.

in fair value of investment in equity securities

the year ended December 31, 2025, the fair value of investment in equity securities decreased by $386,854, compared to the year ended December 31, 2024,

primarily due to fluctuations in the fair value of investments in QXR and IRIS Metals, based on readily available quoted market prices

for these investments.

in fair value of 2024 convertible notes

For the year ended December 31, 2025, the Company did not recognize any

change in the fair value of 2024 convertible notes, compared to a loss of $471,400 in the year ended December 31, 2024.

The 2024 convertible

notes, which had previously been classified as liability instruments, were converted to equity following the consummation of the Business

As of December 31, 2025, the Company has not issued any such convertible notes post Business Combination consummation.

in fair value of SAFE notes

For the year ended December 31, 2025, the Company did not recognize any

change in the fair value of SAFE notes, compared to a loss of $955,000 in the year ended December 31, 2024.

The SAFE notes, which had

previously been classified as liability instruments, were converted to equity following the consummation of the Business Combination.

As of December 31, 2025, the Company has not issued any such SAFE notes post Business Combination consummation.

on write off of promissory notes and deposit

For the year ended December 31, 2025, the Company recorded a loss of $564,844

related to the write off of a promissory notes and deposit associated with a previously contemplated strategic partnership with IGX, IGL

and Usha Resources.

The arrangement was assessed as uncollectible during the year ended December 31, 2025.

Accordingly, the full balance was written off and recognized as a non-operating loss.

No such write off was

noted in the year ended December 31, 2024.

on sale of investments in equity securities

the year ended December 31, 2025, the Company recorded a loss of $179,805 in connection with the sale of investment in equity securities.

These securities were originally acquired as part of a broader investment strategy but were sold during the year in response to evolving

market conditions and liquidity needs.

The loss reflects the decline in market value relative to the carrying amount at the time of sale.

Gain on extinguishment of liability

For the year ended December 31, 2025, the Company recorded an income of $383,950 which represents the credit received against a vendor payable balance.

The other income of

$21,970 was recorded during the year ended December 31, 2024, which relates to insurance refund received.

For the years ended December 31, 2025, and December 31, 2024, the tax expense

was nil, due to net losses incurred during these years.

We do not carry any deferred tax assets on the consolidated balance sheets as

of December 31, 2025 and December 31, 2024, primarily due to net operating loss carry forwards resulting from incurred net operating losses

and full valuations allowance of those losses, as our ability to realize future tax benefits related to these assets is largely dependent

upon operational profitability, which is uncertain.

As a result of this uncertainty, we have established a full valuation allowance, and

have not recognized a net provision or benefit for income taxes in the periods reported.

For the years ended

December 31, 2025, and December 31, 2024, the Company incurred a net loss of $15,723,636 and $23,753,863, respectively.

Company has yet to start commercial production of battery grade lithium, the operating expenses are expected to increase, as the

Company starts to recruit more personnel to perform general operational tasks and set up the Facility and execute supply

and Capital Resources

have devoted substantial efforts and financial resources to raising capital and organizing and staffing the Company, and as a

result, have incurred significant operating losses.

As of December 31, 2024, and December 31, 2023, we had an accumulated deficit of

$52,618,948 and $3,793,585 respectively.

have not earned any revenue and have been operating at a loss since inception.

We have an accumulated deficit and stockholders’

We have not earned any revenue and have been operating at a loss since

In addition, we

have devoted substantial efforts and financial resources to raising capital and organizing and staffing the Company, and as a result,

have incurred significant operating losses.

We had an accumulated deficit of $68,342,584

and $52,618,948 as of December 31, 2025, and December 31, 2024, respectively.

primary requirements for liquidity and capital are investment in new facilities, new technologies, working capital and general corporate

Specifically, in this regard, the total refinery cost, which includes all direct and indirect costs and contingencies needed to

build the refinery, has been estimated at $1,165 million.

We intend to finance our project cost through a mix of debt, equity and potential

government grants.

We expect our operational expenditures to increase for the foreseeable future in connection with ongoing and future

Specifically, in this regard, the refinery cost, which includes all direct and indirect costs and contingencies needed to build

phase 1 of the refinery (25,000 metric tons per annum of battery grade lithium carbonate), has been estimated at approximately $500 million

following completion of the FEL-3 study.

We intend to finance our project cost through a mix of debt, equity and potential government

We expect our operational expenditures to increase for the foreseeable future in connection with ongoing and future activities.

Specifically, expenditures will increase as we:

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in research and development activities to advance the development of our technologies;

additional expenses associated with transitioning to, and operating as, a public company.

current and ongoing liquidity requirements will depend on many factors, including:

our launch cadence, the timing and extent of spending

to support additional development efforts, the introduction of new and enhanced offerings, the continuing market adoption of our offerings,

the timing and extent of additional capital expenditures to invest in the development of our Facility.

we may, in the future, enter into arrangements to acquire or invest in complementary businesses, business offerings and technologies.

However, we do not have agreements or commitments to enter into any such acquisitions or investments at this time.

additional expenses associated with operating as, a public company.

Our current and ongoing liquidity requirements will depend on many factors,

our launch cadence, the timing and extent of spending to support additional development efforts, the introduction of new and

enhanced offerings, the expected market adoption of our offerings, and the timing and extent of additional capital expenditures to invest

in the development of our Facility.

In addition, we may, in the future, enter into arrangements to acquire or invest in complementary

businesses, business offerings and technologies.

However, we do not have agreements or commitments to enter into any such acquisitions

or investments at this time.

of Liquidity and Going Concern

have funded our operations with proceeds from sales of Legacy Stardust Power Common Stock, promissory notes, SAFE notes, debt

financing, equity financing and convertible equity agreements.

To continue as a going concern, we anticipate funding our near-term

operations through the sale of equity securities, promissory notes, debt financing or from other capital sources.

If adequate funds

are not available, we may be required to curtail, delay, or eliminate some or all of our planned activities, or raise additional

financing to continue to fund operations, and may not be able to continue as a going concern.

consolidated financial statements have been presented on the basis that it is a going concern, which contemplates the realization of

assets and the satisfaction of liabilities in the normal course of business.

The Company is a development stage entity having no revenues,

has incurred net loss since inception of $ 52,618,948 and has stockholders’ deficit of $19,385,784 as at December 31, 2024.

Company expects to continue to incur significant costs in pursuit of its operating and investment plans.

These costs exceed the Company’s

existing cash balance and net working capital.

As discussed above:

October 2024, the Company entered into the Common Stock Purchase Agreement and the related

Registration Rights Agreement with B.

Riley Principal Capital II.

Upon the terms and subject

to the satisfaction of the conditions set forth in the Purchase Agreement, the Company will

have the right, in its sole discretion, to sell up to $50,000,000 of newly issued shares

We have historically funded our operations with proceeds from sales of

Legacy Stardust Power Common Stock, promissory notes, SAFE notes, debt financing, equity financing and convertible equity agreements.

discussed above:

On October 7, 2024, the Company entered into the Prior B.

Purchase Agreement and a related Prior B.

Riley Registration Rights Agreement with B.

Riley Principal Capital II to sell up to

$50,000,000 of the Company’s Common Stock to B.

Riley Principal Capital II, subject to certain

conditions and limitations contained in the Purchase Agreement, from time to time during

the term of the Purchase Agreement.

December 2024, the Company issued Term Sheets with various lenders and received cash proceeds

of $3,550,000.

December 2024, the Company entered into binding term sheets with certain investors pursuant

to which the Company has agreed to sell, and the Investors have agreed to purchase, Company

securities for an aggregate amount of $550,000.

The Company and each Investor have agreed

to enter into a securities purchase agreement (the “Purchase Agreement”) for

the Private Placement as soon as practicable.

to the year end, the Company consummated a public offering and received aggregate gross proceeds

from the Offering of approximately $5.75 million, before deducting placement agent fees and

other offering expenses.

Further, on March 16, 2025, pursuant to the Inducement Letter, the Company

received aggregate gross proceeds of $3.0 million from exercise of warrants, before deducting fees and other expenses.

believe that the cash on hand, and additional investments available through issuance of new Common Stock, will be inadequate to satisfy

the Company’s working capital and capital expenditure requirements for at least the next twelve months.

The ability of the Company

to continue as a going concern is dependent upon management’s plan to raise additional capital from the issuance of equity or receive

additional borrowings to fund the Company’s operating and investing activities over the next year.

These consolidated

financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification

of liabilities that might be necessary should the Company be unable to continue as a going concern.

Riley Principal Capital II.

During the year ended December 31, 2025, the

Company issued 638,048 shares of common stock pursuant to the Prior B.

Riley Purchase Agreement, aggregating to net proceeds of

This Prior B.

Riley Purchase Agreement was subsequently terminated as discussed above.

January 27, 2025, the Company consummated a public offering of 479,200 shares of Common Stock and accompanying warrants to purchase

up to 479,200 shares of Common Stock at a public offering price of $12.00 per share and warrant with an exercise price of $13.00,

generating aggregate gross proceeds of approximately $5,750,400 before offering expenses

On March 16, 2025, the Company entered into the Inducement Letter with

the Exercising Holder providing for the immediate cash exercise of outstanding warrants to purchase 479,200 shares of Common Stock at

a reduced exercise price of $6.20 per share, generating aggregate gross proceeds of approximately $2,971,040, before related expenses,

on March 18, 2025.

In connection with such exercise, the Company agreed to issue Inducement Warrants to purchase up to 958,400 shares

of common stock at an exercise price of $7.00 per share.

On October 30, 2025, the Exercising Holder and the Company entered into the Exchange

Agreement and agreed to exchange the 958,400 outstanding Inducement Warrants for 730,689 shares of Common Stock, with no other payment

or any other additional consideration from the investor.

June 18, 2025, the Company consummated a public offering of 2,150,000 shares of Common Stock at a public offering price of $2.00

per share, generating aggregate gross proceeds of approximately $4,300,000 before offering expenses.

On June 25, 2025, the Company

consummated the partial exercise of over allotment of the public offering, of 110,000 shares of Common Stock at a public offering

price of $2.00 per share, generating additional aggregate gross proceeds of approximately $220,000 before offering expenses.

On December 23, 2025, the Company entered into the Lind Securities Purchase

Agreement with Lind providing for up to $15,000,000 in senior secured convertible debt financing.

Simultaneously, the Company initially

drew down gross proceeds of approximately $4,000,000 in exchange for issuance to Lind of a Senior Secured Convertible Promissory Note

in the amount of $4,800,000 and a Common Stock Purchase Warrant, for the purchase of approximately 411,245 shares.

After deducting a commitment

fee of $100,000 and other transaction-related costs, the Company received net cash proceeds of approximately $3,792,500.

Subsequent to year end, on February 12, 2026,

the Company entered into the B.

Riley Purchase Agreement and the related B.

Riley Registration Rights Agreement.

Upon the terms and

subject to the satisfaction of the conditions set forth in the B.

Riley Purchase Agreement, the Company will have the right, in its

sole discretion, to sell up to $10,000,000 of Common Stock to B.

Riley Principal Capital II, subject to certain conditions and

limitations contained in the B.

Riley Purchase Agreement, from time to time during the term of the B.

Riley Purchase Agreement.

Sales of Common Stock pursuant to the B.

Riley Purchase Agreement, and the timing of any sales, are solely at the option of the

The Company is under no obligation to sell any securities to B.

Riley Principal Capital II under the B.

Riley Purchase

As of the date of this filing, the Company has issued 29,067 shares of Common Stock aggregating to net proceeds of

Our management has concluded that there is substantial doubt about our ability

to continue as a going concern.

The Company is a development stage entity has no revenues, has an accumulated deficit of approximately

$68,342,584 as of December 31, 2025, and negative operating cash flow of approximately $8,275,679 for the year ended December 31, 2025.

Our management expects that operating losses and negative cash flows may continue to increase from the December 31, 2025 levels, as we

are not generating any revenue as yet and owing to additional costs towards capital expenditure and other expenses related to the development

of the Facility.

As of the date of this filing, we believe that the cash on hand, and potential additional liquidity available through the issuance of Common Stock will be inadequate

to satisfy the Company’s working capital and capital expenditure requirements for at least the next twelve months.

of the Company to continue as a going concern is dependent upon management’s plan to raise additional capital from the issuance

of equity or additional borrowings to fund the Company’s operating and investing activities.

There can be no assurance that we

will be successful in our plans described elsewhere in this filing or in attracting future debt, equity financings or strategic

and collaborative ventures with third parties on acceptable terms, or at all.

If adequate funds are not available, we may be required

to curtail, delay, or eliminate some or all of our planned activities, or raise additional financing to continue to fund operations,

and may not be able to continue as a going concern.

consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and

classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

In addition, no

assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to

3 unchanged sentences

a material adverse effect on the business, operations and financial performance of the Company.

March 2023, Legacy Stardust Power issued unsecured notes to three related parties.

The notes payable provided the Company the ability

to draw up to $1 million in aggregate in the following timing:

$160,000 until December 31, 2023, and $840,000 until December 31, 2025.

These loan facilities accrue interest, compounding semi-annually, at the long-term semi-annual Federal rate, as established by the Internal

Revenue Service, which effectively was 3.71% for the period from March 2023, when the notes were drawn.

of December 31, 2023, Legacy Stardust Power utilized the entirety of the available facilities, and $160,000 was payable by December 31,

2023, and $840,000 was payable by December 31, 2025.

As of December 31, 2024, and December 31, 2023, the Company has repaid all of the

notes payable.

funding borrowing

November 19, 2023, Legacy Stardust Power borrowed $80,800 from First Insurance Funding to finance its insurance

The total of premium, taxes and fees aggregated to $101,000, of which an initial down payment of $20,200 was paid by Stardust

Power, and the balance financed through First Insurance Funding.

The loan has an annual percentage rate of 8.25% and is payable in 10

installments through September 21, 2024.

As at December 31, 2024, the loan was fully repaid.

July 18, 2024, the Company entered into a financing agreement of $510,000 for the purchase of an insurance policy with AFCO

Insurance Premium Finance.

The Company made a downpayment of $44,162, which was applied to the loan amount at the time of the loan

The debt is payable in monthly installments of $44,162 per month for eleven months.

Payments include a stated interest

rate of 8.46% and are secured against a lien on the insurance policy.

notes and convertible notes

June 6, 2023, Legacy Stardust Power received $2,000,000 in cash from a single investor and funded the August 2023 SAFE note on August

The funds were received from an unrelated third party, through its entity which is currently being managed under the purview

of an investment management agreement between them and VIKASA Capital Advisors, LLC (a related party) in consideration for which VIKASA

Capital Advisors, LLC is paid investment management fees.

November 18, 2023, Legacy Stardust Power amended the August 2023 SAFE note (the “amended August 2023 SAFE note”), which introduced

a discount rate of 20% to (a) the lowest price per share of preferred stock sold in the preferred stock purchase, or (b) the listing

price of the Combined Company Common Stock upon consummation of a SPAC transaction or IPO.

On November 18, 2023, Legacy Stardust Power

also entered into the November 2023 SAFE note for an aggregate amount of $3 million with the same investor under the same terms and conditions

as the amended August 2023 SAFE note.

November 19, 2023, Legacy Stardust Power borrowed $80,800 from First Insurance Funding to finance its insurance policies.

of premium, taxes and fees aggregated to $101,000, of which an initial down payment of $20,200 was paid by Stardust Power, and the

balance financed through First Insurance Funding.

The loan had an annual percentage rate of 8.25% and was payable in 10 instalments

through September 21, 2024.

As at December 31, 2024 and December 31, 2025, the loan was fully repaid.

On July 18, 2024, the Company entered into a financing agreement of $510,000

for the purchase of an insurance policy with AFCO Insurance Premium Finance.

The Company made a downpayment of $44,162, which was applied

to the loan amount at the time of the loan agreement.

The debt was payable in monthly instalments of $44,162 per month for 11 months.

Payments included a stated interest rate of 8.46% and was secured against a lien on the insurance policy.

As at December 31, 2025, the

loan was fully repaid.

August 5, 2025, the Company entered into a financing agreement of $407,500 with AFCO Insurance Premium Finance to fund the purchase of

an insurance policy.

The Company made a down payment of $70,256 at the inception of the agreement, and the remaining balance was financed

through AFCO.

The loan is payable in 10 monthly instalments of $35,125 each, beginning on September 8, 2025, and includes interest at

a stated annual rate of 7.5%.

The loan is secured by a lien on the related insurance policy.

As of December 31, 2025, the carrying amount

was $205,403.

SAFE notes and 2024 convertible

On June 6, 2023, Legacy Stardust

Power received $2,000,000 in cash from a single investor and funded the August 2023 SAFE note on August 15, 2023.

The funds were received

from an unrelated third party, through its entity which is currently being managed under the purview of an investment management agreement

between them and VIKASA Capital Advisors, LLC (a related party) in consideration for which VIKASA Capital Advisors, LLC is paid investment

management fees.

On November 18, 2023, Legacy

Stardust Power amended the August 2023 SAFE note (the “ amended August 2023 SAFE note ”), which introduced a discount

rate of 20% to (a) the lowest price per share of preferred stock sold in the preferred stock purchase, or (b) the listing price of the

Combined Company Common Stock upon consummation of a SPAC transaction or IPO.

On November 18, 2023, Legacy Stardust Power also entered

into the November 2023 SAFE note for an aggregate amount of $3 million with the same investor under the same terms and conditions as

the amended August 2023 SAFE note.

Each of the SAFE notes converted, immediately prior to the First Effective Time, into Legacy Stardust

4 unchanged sentences

Effective Time on similar terms to the other SAFE notes.

SAFE notes are classified as liabilities based on evaluating characteristics of the instruments and are presented at fair value as non-current

liabilities in the Company’s consolidated balance sheet.

SAFE notes provided Legacy Stardust Power an option to call for additional preferred stock up to 25,000,000 based on the contingent event

of SAFE note conversion and notice issued by the Stardust Power board of directors (the “Board”), and achievement of certain

milestones, for up to 42 months following such conversion.

This feature was determined to be an embedded feature and is valued as part

of the liability value associated with the instrument as a whole.

Additionally, the SAFE notes provided the investor certain rights upon

an equity financing, change in control or dissolution as described in Note 6 of the consolidated financial statements

of the Company.

The estimated fair value of the SAFE notes considered the timing of issuance and whether there were changes in the various

scenarios since issuance.

As of December 31, 2023, the fair value of the SAFE notes was $5,212,200 and were classified as a non-current

The SAFE notes had no interest rate or maturity date, description of dividend and participation rights.

The liquidation preference

of the SAFE notes was junior to other outstanding indebtedness and creditor claims, on par with payments for other SAFE notes and/or

preferred equity, and senior to payments for other equity of the Company that were not SAFE notes and/or pari preferred equity.

March 21, 2024, Legacy Stardust Power entered into a financing commitment and equity line of credit agreement with AIGD.

The agreement

replaced the above contingent commitment feature of the SAFE notes with granting Legacy Stardust Power an option to drawdown up an additional

$15,000,000 on terms similar to existing SAFE notes prior to the First Effective Time.

On April 24, 2024, Legacy Stardust Power amended

and restated the August 2023 SAFE note and the November 2023 SAFE note.

On May 1, 2024, Legacy Stardust Power amended and restated the

February 2024 SAFE note.

SAFE notes were classified as liabilities based on evaluating characteristics of the instruments and were presented at fair value as

non-current liabilities in the Company’s consolidated balance sheet.

The SAFE notes provided Legacy

Stardust Power an option to call for additional preferred stock up to 25,000,000 based on the contingent event of SAFE note conversion

and notice issued by the Stardust Power board of directors (the “ Board ”), and achievement of certain milestones, for

up to 42 months following such conversion.

This feature was determined to be an embedded feature and was valued as part of the liability

value associated with the instrument as a whole.

Additionally, the SAFE notes provided the investor certain rights upon an equity financing,

change in control or dissolution as described in Note 11 of the consolidated financial statements of the Company.

The estimated fair value

of the SAFE notes considered the timing of issuance and whether there were changes in the various scenarios since issuance.

notes had no interest rate or maturity date, description of dividend and participation rights.

The liquidation preference of the SAFE

notes was junior to other outstanding indebtedness and creditor claims, on par with payments for other SAFE notes and/or preferred equity,

and senior to payments for other equity of the Company that were not SAFE notes and/or pari preferred equity.

On March 21, 2024, Legacy Stardust

Power entered into a financing commitment and equity line of credit agreement with American Investor Group Direct LLC (“ AIGD ”).

The agreement replaced the above contingent commitment feature of the SAFE notes with granting Legacy Stardust Power an option to drawdown

up an additional $15,000,000 on terms similar to existing SAFE notes prior to the First Effective Time.

On April 24, 2024, Legacy Stardust

Power amended and restated the August 2024 SAFE note and the November 2024 SAFE note.

On May 1, 2024, Legacy Stardust Power amended and

restated the February 2024 SAFE note.

These amendments clarified the conversion mechanism in connection with the Business Combination.

In accordance

with the terms of the convertible equity agreements, immediately prior to the First Effective Time, the cash received pursuant to the

SAFE note agreements automatically converted into 636,916 shares of Combined Company Common Stock.

In accordance with the terms of the convertible equity agreements, immediately prior to the First Effective Time, the cash received pursuant

to the SAFE note agreements automatically converted into 63,692 shares of Combined Company Common Stock.

April 24, 2024, Legacy Stardust Power entered into a convertible equity agreement for $2,000,000 with AIGD.

5 unchanged sentences

shares of Combined Company Common Stock.

Short-term loans

In December 2024, the Company entered into a

binding Term Sheet (“Term Sheet”) with Endurance Antarctica Partners II, LLC (“Endurance”), a related party,

providing for a loan (the “Loan”) in the aggregate principal amount of $1,750,000, bearing interest at a rate of 15% per

year, and maturing in March 2025 (the “Maturity Date”).

The Term Sheet contained customary representations and

warranties and customary events of default.

Pursuant to the Term Sheet, 5,500,000 shares of Company’s Common Stock, owned by

Roshan Pujari, Chief Executive Officer of the Company, were pledged as collateral.

In addition, the Company has agreed to issue to

Endurance $3,500,000 in Common Stock as an Equity Kicker, with the price of each share being determined based on terms per the

earlier to occur of (i) the consummation of a private placement offering of Company securities (in which case such issuance shall be

on no less favorable terms than the terms of such private placement) and (ii) the Maturity/ Repayment Date, provided that the

minimum number of shares of Common Stock shall be no less than 500,000 shares.

In addition, Endurance will receive warrants

representing the right, exercisable within five years of the closing date, of up to 50% of Common Stock issued as Equity Kicker,

with each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 in accordance with the Private

Placement terms.

Subsequent to year end, the Company has fully repaid the principal amount and accrued interest.

The Company is yet

to issue the equity shares and warrants to Endurance as of the date of the issuance of the consolidated financial statements.

In December 2024, the Company entered into

binding Term Sheets (“Term Sheets”) with several lenders including DRE Chicago, LLC, a related party (collectively, the

“Lenders”), providing for loans (the “Loans”) in the aggregate principal amount of $1,800,000, bearing

interest at a rate of 15% per year, and maturing in March 2025 (the “Maturity Date”).

The proceeds of the Loans are

expected to be used by the Company for general corporate and working capital purposes.

The Term Sheets contained customary

representations and warranties and customary events of default.

Pursuant to the Term Sheets, an aggregate of approximately 3,400,000

shares of Company’s Common Stock, owned by Roshan Pujari, Chief Executive Officer of the Company, were pledged as collateral.

In addition, the Company has agreed to issue to the Lenders an aggregate of $2,700,000 in Common Stock as an Equity Kicker, with the

price of each share being determined based on terms per the earlier to occur of (i) the consummation of a private placement offering

of Company securities (in which case such issuance shall be on no less favorable terms than the terms of such private placement) and

(ii) the Maturity/ Repayment Date, provided that the minimum number of shares of Common Stock issued to the Lenders shall be no less

than an aggregate of 360,000 shares.

In addition, the Lenders will receive warrants representing the right, exercisable within five

years of the closing date, of up to 50% of Common Stock issued as Equity Kicker, with each whole warrant exercisable for one share

of Common Stock at an exercise price of $11.50 in accordance with the Private Placement terms.

Subsequent to year end, the Company

has fully repaid the principal amount and accrued interest.

The Company is yet to issue the equity shares and warrants to the

Lenders as of the date of the issuance of the consolidated financial statements.

December 2024, the Company entered into a binding Term Sheet (“ Endurance Term Sheet ”) with Endurance Antarctica Partners

II, LLC (“ Endurance ”), a related party, providing for a loan (the “ Endurance Loan ”) in the aggregate

principal amount of $1,750,000, bearing interest at a rate of 15% per year, and maturing in March 2025 (the “ Endurance Maturity

The Endurance Term Sheet contained customary representations and warranties and customary events of default.

to the Endurance Term Sheet, 550,000 shares of Company’s Common Stock, owned by Roshan Pujari, Chief Executive Officer of the Company,

were pledged as collateral.

In addition, the Company agreed to issue to Endurance $3,500,000 in Common Stock as an Equity Kicker, as

defined in the Endurance Term Sheet with the price of each share being determined based on terms per the earlier to occur of (i) the

consummation of a private placement offering of Company securities (in which case such issuance shall be on no less favorable terms than

the terms of such private placement) and (ii) the Endurance Maturity/ Repayment Date, provided that the minimum number of shares of Common

Stock shall be no less than 50,000 shares.

In addition, Endurance received warrants representing the right, exercisable within five

years of the closing date, of up to 50% of Common Stock issued as Equity Kicker, with 10 warrants exercisable for one share of Common

Stock at an exercise price of $115.00 in accordance with the private placement terms.

During the year ended December 31, 2025, the Company

has fully repaid the principal amount, the accrued interest and issued the equity shares and warrants to Endurance.

In December 2024, the

Company entered into binding Term Sheets (“ Investor Term Sheets ”) with several lenders including DRE Chicago,

LLC, a related party (collectively, the “ Investors ”), providing for loans (the “ Investor

Loans ”) in the aggregate principal amount of $1,800,000, bearing interest at a rate of 15% per year, and maturing in March

2025 (the “ Investor Maturity Date ”).

The proceeds of the Investor Loans are expected to be used by the Company

for general corporate and working capital purposes.

The Investor Term Sheets contained customary representations and warranties and

customary events of default.

Pursuant to the Investor Term Sheets, an aggregate of approximately 340,000 shares of Company’s

Common Stock, owned by Roshan Pujari, Chief Executive Officer of the Company, were pledged as collateral.

In addition, the Company

agreed to issue to the Investors an aggregate of $2,700,000 in Common Stock as an Equity Kicker, as defined in the Investor Term Sheet

with the price of each share being determined based on terms per the earlier to occur of (i) the consummation of a private placement

offering of Company securities (in which case such issuance shall be on no less favorable terms than the terms of such private

placement) and (ii) the Investor Maturity/ Repayment Date, provided that the minimum number of shares of Common Stock issued to the

Investors shall be no less than an aggregate of 36,000 shares.

In addition, the Investors received warrants representing the right,

exercisable within five years of the closing date, of up to 50% of Common Stock issued as Equity Kicker, with 10 warrants

exercisable for one share of Common Stock at an exercise price of $115.00 in accordance with the private placement terms.

year ended December 31, 2025, the Company has fully repaid the principal amount, the accrued interest and issued the equity shares

and warrants to the Investors.

following table summarizes our cash flows for the periods presented:

March 16, 2023

December 31, 2025

cash used in operating activities

$ (9,719,714 )

$ (2,983,206 )

$ (6,736,508 )

cash used in investing activities

cash provided by financing activities

change in cash

$ (1,631,074 )

December 31, 2024

Net cash used in operating activities

Net cash used in investing activities

Net cash provided by financing activities

Net change in cash

Flows Used in Operating Activities

the year December 31, 2024, net cash used in operating activities was $9,719,714, consisting of a $23,753,863 net loss,

adjusted for $15,515,723 non-cash charge for change in fair value of SAFE notes, convertible notes, investments, warrant

liability, earnout shares, stock based compensation, finance charges and depreciation and a $1,481,574 net change in operating

assets and liabilities, primarily driven by decrease of $1,433,575 in accounts payable and other current liabilities which

represent the various costs that are expected to be incurred as we set up operations during this period, and an increase of $47,999 in prepaid expenses.

the period March 16, 2023 (inception) to December 31, 2023, net cash used in operating activities was $2,983,206, consisting of a $3,793,585 net loss, adjusted for $718,488 non-cash charge for change in fair value of SAFE notes, investments, charge

for SAFE note issuance costs, stock based compensation, and depreciation and $91,891 net change in operating assets and

liabilities, primarily driven by $518,388 in accounts payable and other current liabilities, due to related

parties and other current liabilities which primarily represent the various costs that are expected to be incurred as we set up

operations during this period partially offset by $426,497 prepaid expenses.

For the year December 31, 2025, net cash used in operating activities was

$8,275,679, consisting of a $15,723,636 net loss, adjusted for $7,157,527 in non-cash charge for change in fair value of investments,

common stock issued for the make whole provision, warrant liability and earnout shares, stock based compensation, amortization of the

2025 convertible note issuance costs, gain on extinguishment of liability due to credit received from vendor, loss on sale of IRIS Metals

investment, loss on write off of promissory notes and deposit, and depreciation and a $290,430 net change in operating assets and liabilities,

primarily driven by increase in accounts payable and other current liabilities which represent the various costs that are expected to

be incurred as we ramped up operations during this period, and an increase in prepaid expenses.

For the year December 31, 2024, net cash used in operating activities was

$9,719,714, consisting of a $23,753,863 net loss, adjusted for $15,515,723 non-cash charge for change in fair value of SAFE notes, 2024

convertible notes, investments, warrant liability, earnout shares, stock based compensation, finance charges and depreciation and a $1,481,574

net change in operating assets and liabilities, primarily driven by decrease of $1,433,575 in accounts payable and other current liabilities

which represent the various costs that are expected to be incurred as we set up operations during this period, and an increase of $47,999

in prepaid expenses.

Flows Used in Investing Activities

the year ended December 31, 2025, net cash used in investing activities was $3,400,462, primarily representing $3,949,608 on account

of capital project costs related to construction of the refinery, $1,623,946 for land purchase, $1,600,000 on investment

in equity securities of IRIS Metals, $50,000 investments in other long-term

assets, $492,000 used in the promissory notes issued and $15,237 used for the purchase of computer and equipment.

For the period March

16, 2023 (inception) to December 31, 2023, net cash used in investing activities was $301,974, primarily representing $100,000 on account

of capital project costs related to acquisition of land, $200,000 in investment of equity security in QXR, and $1,974 used for the purchase

of computer and equipment.

Flows from Financing Activities

the year ended December 31, 2024, net cash provided by financing activities was $14,151,827 related primarily to proceeds from closing of the Business Combination including issuance

of PIPE shares of $11,639,088, cash received from issuance of convertible notes of $2,100,000, proceeds from short-term loans from several

investors of $2,060,000, proceeds from short-term loan from related parties of $2,000,000, exercise of warrants of $1,561,655, proceeds

from PIPE of $425,000, proceeds from issuance of common stock of $260,927 and SAFE notes of $200,000, partially offset by deferred

Business Combination transaction costs of $4,167,323, repayment of sponsor promissory notes of $1,562,834, and repayment of short-term

loans of $324,415.

For the period March 16, 2023

(inception) to December 31, 2023, net cash provided by financing activities was $4,557,004, related primarily to $5,000,000 proceeds from

SAFE notes issuance, $1,000,000 proceeds from issuance of notes payable to related parties, $72,967 proceeds from short-term loan and

$14,850 proceeds from early exercise of stock option awards, partially offset by payment of SAFE notes issuance cost to related parties

of $435,000, repayment of notes payable to related parties of $1,000,000 and payment of deferred transaction costs of $95,900.

Additionally,

during the period, we drew down and repaid our notes payable to related parties.

of capital project costs incurred for FEL-3 study related to construction of the refinery, $16,619 for land purchase, and $4,490

used for the purchase of computer and equipment.

The increase was partially offset by cash proceeds from the sale of IRIS Metals

investment by $570,255.

For the year ended December

31, 2024, net cash used in investing activities was $4,791,363, primarily representing $1,010,180 on account of capital project costs

related to construction of the refinery, $1,623,946 for land purchase, $1,600,000 on investment in equity securities of IRIS Metals,

$50,000 investments in other long-term assets, $492,000 used in the promissory notes issued and $15,237 used for the purchase of computer

and equipment.

Flows Provided by Financing Activities

For the year ended December 31, 2025, net cash provided by financing activities

was $14,243,718 related primarily to gross proceeds from consummation of public offerings of $10,270,400, cash received from issuance

of 2025 convertible notes of $3,792,500, gross proceeds from a warrant inducement transaction of $2,971,040, proceeds from PIPE of $125,000,

proceeds from short term loan of $337,244 and common stock issuance proceeds of $2,133,697 partially offset by repayment of short-term

loans of $3,940,393, payment of transaction costs associated with public offering and warrant inducement of $1,343,832 and warrant exchange

of $75,000 and payment of deferred transaction cost of $25,000.

the year ended December 31, 2024, net cash provided by financing activities was $14,151,827 related primarily to proceeds from

closing of the Business Combination including issuance of PIPE shares of $11,639,088, cash received from issuance of 2024

convertible notes of $2,100,000, proceeds from short-term loans from several investors of $2,060,000, proceeds from short-term loan

from related parties of $2,000,000, exercise of warrants of $1,561,655, proceeds from PIPE of $425,000, proceeds from issuance of

common stock of $260,927 and SAFE notes of $200,000, partially offset by deferred Business Combination transaction costs of

$4,167,323, repayment of sponsor promissory notes of $1,562,834, and repayment of short-term loans of $324,415 .

and Capital Expenditure Requirements

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Our intended capital requirements depend on many factors

including the capital expenditures required to set up our Facility, and undertake all activities necessary to start commercial production,

including the capital expenditure required to set up our Facility, and undertake all activities necessary to start commercial production,

prices of capital equipment, and preliminary costs.

9 unchanged sentences

and Contractual Obligations

have entered into an engineering agreement with Primero USA, Inc.

for $4,724,690 to provide a FEL-3 report.

As at December 31, 2024,

the total performance pending to be performed and billed by Primero is $1,855,911.

See Note 4 to our consolidated financial

statements included elsewhere in this Annual Report for additional details regarding other contractual obligations and commitments.

While the Company has not entered into any other binding commitments, other strategic partnerships are being evaluated which could

lead to future contractual obligations.

Company entered into an engineering agreement with Primero USA, Inc.

for $4,724,690 to provide a FEL-3 report which was fully paid off subsequent to year end by funds generated through financing discussed previously.

See Note 4 to our

consolidated financial statements included elsewhere in this Annual Report for additional details regarding other contractual

obligations and commitments as at December 31, 2025.

While the Company has not entered into any other binding commitments, other strategic partnerships are

being evaluated which could lead to future contractual obligations.

of Critical Accounting Estimates

believe that the following accounting policies and estimates involve a high degree of judgment and complexity.

Accordingly, these

are the policies we believe are the most critical to aid in fully understanding and evaluating our consolidated financial condition

and results of our operations.

See Note 2 to our consolidated financial statements appearing elsewhere in this Annual Report on Form

10-K for a description of our other significant accounting policies.

The preparation of our consolidated financial statements in

conformity with U.S.

GAAP requires us to make estimates and judgments that affect the amounts reported in those consolidated

financial statements and accompanying notes.

Although we believe that the estimates, we use are reasonable, due to the inherent

uncertainty involved in making those estimates, actual results reported in future periods could differ from those

Accordingly, these are

the policies we believe are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results

of our operations.

See Note 2 to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K for a description

of our other significant accounting policies.

The preparation of our consolidated financial statements in conformity with U.S.

GAAP requires

us to make estimates and judgments that affect the amounts reported in those consolidated financial statements and accompanying notes.

Although we believe that the estimates, we use are reasonable, due to the inherent uncertainty involved in making those estimates, actual

results reported in future periods could differ from those estimates.

Transaction Costs

accordance with ‘Codification of Staff Accounting Bulletins – Topic 5:

In accordance with ‘Codification

of Staff Accounting Bulletins – Topic 5:

Miscellaneous Accounting A.

Expenses of Offering’

(“SAB Topic 5”), public offering related costs, including legal fees and advisory and consulting fees, are deferred until

consummation/completion of the proposed public offering.

Legacy Stardust Power has deferred $1,005,109 of related costs incurred towards

proposed public offering which are presented within current assets in the consolidated balance sheet as at December 31, 2023.

the year ended December 31, 2024, the Company deferred $6,496,114 of related costs incurred towards the public offering.

the consummation of the Business Combination, costs allocated to equity-classified instruments amounting to $7,501,223 were recorded

as a reduction to additional paid-in capital.

Company has deferred $116,121 of costs incurred towards potential follow-on offerings which is presented within current assets in the

consolidated balance sheet as at December 31, 2024.

If the offering is terminated, the deferred

offering costs will be expensed.

taxes are recorded in accordance with Accounting Standard Codification (“ASC”) 740, “Income Taxes”

(“ASC 740”), which provides for deferred taxes using an asset and liability approach.

We recognize deferred tax assets

and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements

or tax returns.

Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax

basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

Valuation allowances are provided, if based upon the weight of available evidence, it is more likely than not that some or all of

the deferred tax assets will not be realized.

Expenses of Offering’ (“ SAB Topic 5 ”),

public offering related costs, including legal fees and advisory and consulting fees, are deferred until consummation/completion of the

proposed public offering.

The Company has deferred $1,005,109 of related costs incurred towards the proposed public offering which was

presented within current assets in the consolidated balance sheets as at December 31, 2023.

During the year ended December 31, 2024,

the Company deferred $6,496,114 of related costs incurred towards the public offering.

After the consummation of the Business Combination,

costs allocated to equity-classified instruments amounting to $7,501,223 were recorded as a reduction to additional paid-in capital.

The Company deferred $116,121 of related costs incurred towards the proposed public offering which are presented within current assets

in the consolidated balance sheet as at December 31, 2024.

The Company consummated the public offering on January 27, 2025.

consummation of the public offering, costs allocated to equity-classified instruments amounting to $86,121 were recorded as a reduction

to additional paid-in capital.

The remaining deferred costs of $30,000 attributable to a separate proposed offering was expensed as the

transaction did not materialize during the year ended December 31, 2025.

The Company deferred $25,000 of related costs incurred during

the year ended December 31, 2025, towards the Purchase Agreement entered by the Company subsequent to year end with B.

Riley Principal

Capital II which are presented within current assets in the consolidated balance sheet as at December 31, 2025.

taxes are recorded in accordance with Accounting Standard Codification (“ ASC ”) 740, “Income Taxes” (“ ASC

740 ”), which provides for deferred taxes using an asset and liability approach.

We recognize deferred tax assets and liabilities

for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns.

tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities

using enacted tax rates in effect for the year in which the differences are expected to reverse.

Valuation allowances are provided, if

based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

We account for uncertain tax positions in accordance with the provisions of ASC 740.

When uncertain tax positions exist, we recognize the tax benefit of tax positions to the extent that the benefit would more likely

than not be realized assuming examination by the taxing authority.

The determination as to whether the tax benefit will more likely

than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and

circumstances.

We recognize any interest and penalties accrued related to unrecognized tax benefits as income tax

When uncertain tax positions exist, we recognize

the tax benefit of tax positions to the extent that the benefit would more likely than not be realized assuming examination by the taxing

The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of

the tax position as well as consideration of the available facts and circumstances.

We recognize any interest and penalties accrued related

to unrecognized tax benefits as income tax expense.

Share Liability, SAFE Notes, and 2024 Convertible Notes

account for the earnout share liability, SAFE notes, and convertible notes in accordance with the guidance in ASC 480, “Distinguishing

Liabilities from Equity” and ASC 815-40, “Derivatives and Hedging,” whereby it is accounted for as a liability which

requires initial and subsequent measurements at fair value.

This liability is subject to re-measurement at each balance sheet date until

a triggering event, equity financing, change in control or dissolution occurs, and any change in fair value is recognized in the Company’s

consolidated statements of operations.

The fair value estimate includes significant inputs not observable in market,

which represents a Level 3 measurement within the fair value hierarchy.

The valuation uses probabilities considering pay-offs under various

scenarios as follows:

(i) an equity financing where the SAFE notes and convertible note will convert into certain preferred stock;

a change in control where the SAFE note and convertible note holders will have an option to receive a portion of the cash and other assets

equal to the purchase amount;

(iii) a dissolution event where the SAFE notes and convertible note holders will be entitled to the purchase

amount subject to liquidation priority and (iv) achievement of Combined Company Common Stock price targets, where the earnout share liability

will convert into certain number of shares of Common Stock.

The value of the instrument is likely to vary significantly based on the

probability of each of the conversion scenarios that occurs, and management will reassess such probability at each reporting period.

These probabilities will ultimately be factored into the valuation of the instrument and will require third party valuation experts to

assist in the determination of this value.

The changes in value of the instrument could impact the consolidated financial

statements materially and therefore constitute a critical estimate.

We account for the earnout share liability, SAFE notes, and 2024 convertible

notes in accordance with the guidance in ASC 480, “Distinguishing Liabilities from Equity” and ASC 815-40, “Derivatives

and Hedging,” whereby it is accounted for as a liability which requires initial and subsequent measurements at fair value.

liability is subject to re-measurement at each balance sheet date until a triggering event, equity financing, change in control or dissolution

occurs, and any change in fair value is recognized in the Company’s consolidated statements of operations.

The fair value estimate

includes significant inputs not observable in market, which represents a Level 3 measurement within the fair value hierarchy.

The valuation

uses probabilities considering pay-offs under various scenarios as follows:

(i) an equity financing where the SAFE notes and 2024 convertible

notes will convert into certain preferred stock;

(ii) a change in control where the SAFE note and 2024 convertible note holders will have

an option to receive a portion of the cash and other assets equal to the purchase amount;

(iii) a dissolution event where the SAFE notes

and 2024 convertible note holders will be entitled to the purchase amount subject to liquidation priority and (iv) achievement of Combined

Company Common Stock price targets, where the earnout share liability will convert into certain number of shares of Common Stock.

value of the instrument is likely to vary significantly based on the probability of each of the conversion scenarios that occurs, and

management will reassess such probability at each reporting period.

These probabilities will ultimately be factored into the valuation

of the instrument and will require third party valuation experts to assist in the determination of this value.

The changes in value of

the instrument could impact the consolidated financial statements materially and therefore constitute a critical estimate.

The balance of the SAFE Notes, and 2024 Convertible Notes as at December 31, 2025, were nil.

Value of Common Stock

21 unchanged sentences

all scenarios, a discount for lack of marketability (“ DLOM ”) was applied to arrive at a fair value of common shares.

accounts for the lack of marketability of shares that are not publicly traded.

A DLOM accounts for the lack of marketability of shares that are not publicly traded.

of these approaches and methodologies involves the use of estimates, judgment and assumptions that are complex and subjective, such as

8 unchanged sentences

Accounting Pronouncements

Note 2 to our consolidated financial statements included elsewhere in this Annual report for additional details regarding

recent accounting pronouncements.

Note 2 to our consolidated financial statements included elsewhere in this Annual report for additional details regarding recent accounting

pronouncements.

Company reports segment information in the same way management internally organizes the business in assessing performance and making

2 unchanged sentences

In reaching this conclusion, management considered

the definition of the Chief Operating Decision Maker (“CODM”), how the business is defined by the CODM, the nature of the

information provided to the CODM, how the CODM uses such information to make operating decisions, and how resources and performance are

The Company has a single, common management team and our cash flows are reported and reviewed with no distinct cash flows.

the definition of the Chief Operating Decision Maker (“ CODM ”), how the business is defined by the CODM, the nature

of the information provided to the CODM, how the CODM uses such information to make operating decisions, and how resources and performance

are accessed.

The Company’s CODM is its Chief Executive Officer, who reviews financial information presented on a consolidated

basis for purposes of allocating resources and evaluating financial performance.

The Company has a single, common management team and

our cash flows are reported and reviewed on a total-company basis.

Party Transactions

Stardust Power entered into a service agreement with VCP, an affiliate of Roshen Pujari, on March 16, 2023, for services associated

with setting up a lithium refinery.

VCP provides formation and organization structure advisory, capital market advisory, marketing

advisory services and other consulting and advisory services with respect to the Company’s organization.

Under the service

agreement and subsequent amendments, VCP can be compensated for advisory services up to a total of $1,050,000.

March 16, 2023, Legacy Stardust Power entered into a consulting agreement with 7636 Holdings LLC, which was subsequently amended on April

The agreement primarily provides compensation for strategic, business, financial, operations and industry advisory services

to the Company’s planned development of a lithium refinery operation.

the period from March 16, 2023 (inception) to December 31, 2023, Legacy Stardust Power incurred total consulting expenses of $980,000

to VCP, $180,806 to 7636 Holdings LLC and $171,213 to VIKASA Capital LLC.

Other expenses that were incurred on behalf of Legacy Stardust

Power was $44,186, in aggregate, including $34,318 by VIKASA Capital LLC and $9,868 by VCP, respectively.

As of December 31, 2023, no amounts were due to related parties of the Company.

the period from March 16, 2023 (inception) through December 31, 2023, Legacy Stardust Power entered into notes payable agreements for

$1,000,000 with related parties, including $750,000 with Energy Transition Investors LLC, $160,000 with VIKASA Clean Energy I LP and

$90,000 with Roshan Pujari.

VIKASA Capital LLC facilitated the initial funding of the notes obtained on behalf of the related parties.

The same notes were repaid during the year ended December 31, 2023.

On September 18, 2024,

the Company entered into a consulting agreement in the amount of $500,000 with DRE Chicago LLC, whose principal is Paramita Das.

September 18, 2024, the Company entered into a consulting agreement in the amount of $500,000 with DRE Chicago LLC, whose principal

is Paramita Das.

Das was onboarded as the Chief Strategy Officer and Senior Advisor to CEO of the Company.

Additionally, as discussed above, in

December 2024, the Company entered into a binding term sheet with DRE Chicago LLC and other lenders, providing for loan in the

principal amount of $250,000 to DRE Chicago, bearing interest at a rate of 15% per year, and maturing in March 2025 (the

“Maturity Date”).

In addition, the Company has agreed to issue to DRE Chicago an aggregate of $375,000 in Common Stock

as an Equity Kicker.

In addition, DRE Chicago will receive warrants representing the right, exercisable within five years of the

closing date, of up to 50% of Common Stock issued as Equity Kicker, with each whole warrant exercisable for one share of Common

Additionally, as

discussed above, in December 2024, the Company entered into a binding term sheet with DRE Chicago LLC and other Investors, providing

for loan in the principal amount of $250,000 to DRE Chicago, bearing interest at a rate of 15% per year, and maturing in March 2025

(the “ Maturity Date ”).

In addition, the Company agreed to issue to DRE Chicago an aggregate of $375,000 in Common

Stock as an Equity Kicker.

In addition, DRE Chicago received warrants representing the right, exercisable within five years of

the closing date, of up to 50% of Common Stock issued as Equity Kicker, with each 10 warrants exercisable for one share of Common

Stock at an exercise price of $115.00 in accordance with the private placement terms.

Subsequent to year end, the Company has fully

repaid the principal amount and the accrued interest.

The Company is yet to issue the equity shares and warrants to DRE Chicago as

of the date of the issuance of the consolidated financial statements.

As discussed above, in

December 2024, the Company entered into a binding term sheet with Endurance Antarctica Partners II, LLC (“Endurance”),

an affiliate of a director at the time and a shareholder, providing for a loan (the “Loan”) in the aggregate principal

amount of $1,750,000, bearing interest at a rate of 15% per year, and maturing on March 2025 (the “Maturity Date”).

addition, the Company has agreed to issue to Endurance $3,500,000 in Common Stock as an Equity Kicker.

In addition, Endurance will

receive warrants representing the right, exercisable within five years of the closing date, of up to 50% of Common Stock issued as

Equity Kicker, with each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 in accordance with

the Private Placement terms.

Subsequent to year end, the Company has fully repaid the principal amount and the accrued interest.

Company is yet to issue the equity shares and warrants to Endurance as of the date of the issuance of the consolidated financial

The Sponsor purchased from GPAC II an aggregate of

5,566,667 warrants at a price of $1.50 per warrant in a private placement that occurred simultaneously with the completion of the Company’s

initial public offering (the “Private Warrants”).

At the closing of the Business Combination, Stardust Power acquired the

net liabilities for GPAC II including the Private Warrants.

Each Private Warrant entitles the holder to purchase one share of Common

Stock at $11.50 per share.

At December 31, 2024 there were 5,566,667 Private Warrants outstanding.

As at December 31, 2024, the fair

value of Private Warrants amounted to $1,308,166.

The Company valued its Private Warrants based on the closing price of the Public Warrants

since they are similar instruments.

Related Party Loans

closing of the Business Combination, the Company acquired the liabilities for GPAC II including the sponsor working capital loan amounting

to $4,127,189.

As part of the closing of the Business Combination, the Sponsor forgave a portion of the loan amounting to $2,564,355.

The Company repaid the balance of $1,562,834 on closing.

During the year ended December 31, 2025, the

Company has fully repaid the principal amount, the accrued interest and issued the equity shares and warrants to DRE Chicago.

Das terminated her employment with the Company in November 2025 and is no longer considered a related party as of December 31,

discussed above, in December 2024, the Company entered into a binding term sheet (“ Endurance Term Sheet ”) with

Endurance Antarctica Partners II, LLC (“ Endurance ”), an affiliate of a director at the time and a shareholder,

providing for a loan (the “ Endurance Loan ”) in the aggregate principal amount of $1,750,000, bearing interest at

a rate of 15% per year, and maturing on March 2025 (the “ Endurance Maturity Date ”).

In addition, the Company

agreed to issue to Endurance $3,500,000 in Common Stock as an Equity Kicker.

In addition, Endurance received warrants representing

the right, exercisable within five years of the closing date, of up to 50% of Common Stock issued as Equity Kicker, with each 10

warrants exercisable for one share of Common Stock at an exercise price of $115.00 in accordance with the private placement terms.

During the year ended December 31, 2025, the Company fully repaid the principal amount, the accrued interest and issued the equity

shares and warrants to Endurance.

March 2023, the Company entered into unsecured notes payable with three related parties.

These notes payable provided the Company

the ability to draw up to $1,000,000, in aggregate:

$160,000 until December 31, 2023, and $840,000 until December 31, 2025.

loan facilities accrue interest, compounding semi-annually, at the long-term semi-annual Applicable Federal Rate, as established by

the Internal Revenue Service, which effectively was 4.71% as of December 31, 2025.

In June 2025, the Company drew $250,000 from

Energy Transition Investors LLC, and repaid the amount in full during the same month.

The Company has accrued interest of $422

during the year ended December 31, 2025, on the drawn amount.

Sponsor purchased from GPAC II an aggregate of 5,566,667 warrants at a price of $1.50 per warrant in a private placement that occurred

simultaneously with the completion of the Company’s initial public offering (the “ Private Warrants ”).

closing of the Business Combination, Stardust Power acquired the net liabilities for GPAC II including the Private Warrants.

Warrant entitles the holder to purchase one share of Common Stock at $115.0 per share.

At December 31, 2025 there were 5,566,667 Private

Warrants outstanding.

As at December 31, 2025, the fair value of Private Warrants amounted to $556,110.

The Company valued its Private

Warrants based on the closing price of the Public Warrants since they are similar instruments.

Earnout Shares

2 unchanged sentences

(or forfeiture) based on achieving certain trading price thresholds following the closing (“ Sponsor Earnout Shares ”).

percent of the Sponsor Earnout Shares will vest when the VWAP of the Combined Company Common Stock price equals or exceeds $12.00 per

share for a period of 20 trading days in a 30 trading day period, and the remaining fifty percent of the Sponsor Earnout Shares will

vest when the VWAP of the Combined Company Common Stock price equals or exceeds $14.00 per share for a period of 20 trading days in a

30 trading day period.

Fifty percent of the Sponsor Earnout Shares will vest when the VWAP of the Combined Company Common Stock price equals or exceeds$120.00

per share for a period of 20 trading days in a 30 trading day period, and the remaining fifty percent of the Sponsor Earnout Shares will

vest when the VWAP of the Combined Company Common Stock price equals or exceeds $140.00 per share for a period of 20 trading days in

a 30 trading day period.

Upon the occurrence of a change in control, any remaining unvested Sponsor Earnout Shares become vested.

3 unchanged sentences

initial measurement of the expected earnout consideration.

As at December 31, 2024, the fair value of Sponsor Earnout Shares amounted

Note 19 to our consolidated financial statements included elsewhere in this report for additional details regarding

subsequent events.

As of December 31, 2025, the fair value of Sponsor Earnout Shares amounted

Note 19 to our consolidated financial statements included elsewhere in this report for additional details regarding subsequent events.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis