What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-13 compared with 2026-05-14 · 465 added, 437 removed, 228 unchanged (80% 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 unaudited condensed

consolidated financial statements for the three months ended March 31, 2026, and the related notes thereto contained elsewhere in this

Quarterly Report.

consolidated financial statements and the related notes thereto contained elsewhere in this Quarterly Report.

Overview and History

On July 8, 2024, Stardust Power

Operating Inc.

July 8, 2024, Stardust Power Operating Inc.

(f/k/a Stardust Power Inc.

prior to the consummation of the Business Combination, or “ Legacy Stardust Power ”)

consummated the business combination contemplated by the Business Combination Agreement, dated as of November 21, 2023 (as amended, the

“ Business Combination Agreement ”), by and among Global Partner Acquisition Corp.

II, a Cayman Islands exempted company

(“ GPAC II ”), Strike Merger Sub I, Inc., a Delaware corporation and direct wholly owned subsidiary of GPAC II (“ First

Merger Sub ”), Strike Merger Sub II, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of GPAC II

(“ Second Merger Sub ”), and Legacy Stardust Power (the “ Business Combination ”).

Pursuant to the Business

Combination Agreement, First Merger Sub merged into Legacy Stardust Power, with Legacy Stardust Power being the surviving corporation.

prior to the consummation of the Business Combination, or “ Legacy

Stardust Power ”) consummated the business combination contemplated by the Business Combination Agreement, dated as of November

21, 2023 (as amended, the “ Business Combination Agreement ”), by and among Global Partner Acquisition Corp.

Islands exempted company (“ GPAC II ”), Strike Merger Sub I, Inc., a Delaware corporation and direct wholly owned subsidiary

of GPAC II (“ First Merger Sub ”), Strike Merger Sub II, LLC, a Delaware limited liability company and a direct wholly

owned subsidiary of GPAC II (“ Second Merger Sub ”), and Legacy Stardust Power (the “ Business Combination ”).

Pursuant to the Business Combination Agreement, First Merger Sub merged into Legacy Stardust Power, with Legacy Stardust Power being

the surviving corporation.

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.

Unless the context otherwise requires, any reference in this Quarterly Report

on Form 10-Q to the “Company,” “we,” “us,” “our,” or “Stardust Power” refers

to Stardust Power Inc.

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

Unless the context otherwise requires, any reference

in this Quarterly Report on Form 10-Q to the “Company,” “we,” “us,” “our,” or “Stardust

Power” refers to Stardust Power Inc.

and its consolidated subsidiaries.

We are a U.S.-based development

stage battery grade lithium manufacturer designed to foster clean energy independence for the United States.

We are 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.

We seek to become

a sustainable, cost effective supplier of battery grade lithium carbonate, by our innovative approach in the development of a large central

refinery optimized for multiple inputs of lithium chloride in Oklahoma.

We intend to source lithium chloride

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

We seek to sell our products to electric

vehicle (“ EV ”) manufacturers as our primary market, with potential applications in other areas such as battery manufacturers,

are a U.S.-based development stage battery grade lithium manufacturer designed to foster clean energy independence for the United States.

We are 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

We seek to become a sustainable, cost effective supplier of battery grade lithium carbonate, by our innovative approach in the

development of a large central refinery optimized for multiple inputs of lithium chloride in Oklahoma.

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

We seek to sell our products to electric vehicle (“ 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 ”).

Some 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.

In February 2023, we received

an illustrative incentive analysis for up to $257 million in performance-based incentives from the State of Oklahoma and potential federal

incentives, which also included potential eligibility for further federal grants.

The state incentives were based on initial job creation,

equipment procurement, training and recruitment incentives, property tax exemptions, sales tax exemptions, and capital expenditure projections

submitted to the Oklahoma Department of Commerce in the first quarter of 2023 and could be subject to changes as we progress in setting

up our planned lithium refinery in Muskogee, Oklahoma (the “ Facility ”) and commercial production of battery grade lithium

in the future.

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

We believe that we are well positioned to address these opportunities by emerging as a leading, fully integrated domestic lithium supplier,

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, we received an illustrative incentive analysis for up to $257 million in performance-based incentives from the State of

Oklahoma and potential federal incentives, which also included potential eligibility for further federal grants.

The state incentives

were based on initial job creation, equipment procurement, training and recruitment incentives, property tax exemptions, sales tax exemptions,

and capital expenditure projections submitted to the Oklahoma Department of Commerce in the first quarter of 2023 and could be subject

to changes as we progress in setting up our planned lithium refinery in Muskogee, Oklahoma (the “ Facility ”) and commercial

production of battery grade lithium in the future.

These incentives may change based on the actual financial metrics of the Company in

the future, which may be lower or higher.

believe that we are 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.

Financing Activity

December 23, 2025, we 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, we 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 ”).

December 23, 2025, we 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

Simultaneously, we 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 “ 2025 Lind Warrant ”).

February 12, 2026, we entered into a Common Stock Purchase Agreement (the “ B.

Riley Purchase Agreement ”)

and a Registration Rights Agreement (the “ B.

Riley Purchase Agreement ”) and a Registration

Rights Agreement (the “ B.

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

Riley Purchase Agreement, the “ B.

Riley Purchase Agreement,

Riley Agreements ”) with B.

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Pursuant to the B.

Riley Agreements, we have the right, in our sole

discretion, to sell to B.

Riley Principal Capital II, from time to time during the 36-month investment period, up to $10,000,000 of newly issued shares

of our Common Stock (the “ Total Commitment ”), subject to an exchange cap and other conditions and

limitations set forth in the agreement.

to the quarter end, we entered into a Letter of Intent (the “ LOI ”) with a single institutional investor to

support project level financing for our Facility.

Under the terms of the LOI, the institutional investor has indicated its intent to invest up to $150 million at the project level,

with flexibility across equity, debt, and hybrid financing structures.

The agreement is non-binding and outlines a framework for a

potential investment, including the ability to support the financing through syndication and direct capital participation.

We and the investor have also agreed to proceed through customary due diligence and negotiation of definitive agreements.

to the quarter end, we entered into an At Market Issuance Sales Agreement (the “Sales Agreement”) with B.

Riley Agreements, we have the right, in our sole discretion, to sell to B.

Riley Principal Capital II, from time to

time during the 36-month investment period, up to $10,000,000 of newly issued shares of our Common Stock (the “ Total Commitment ”),

subject to an exchange cap and other conditions and limitations set forth in the agreement.

April 20, 2026, we entered into a Letter of Intent (the “ LOI ”) with a single institutional investor to support project

level financing for our Facility.

Under the terms of the LOI, the institutional investor has indicated its intent to invest up to $150

million at the project level, with flexibility across equity, debt, and hybrid financing structures.

The agreement is non-binding and

outlines a framework for a potential investment, including the ability to support the financing through syndication and direct capital

participation.

We and the investor have also agreed to proceed through customary due diligence and negotiation of definitive agreements, and any potential investment remains subject to satisfactory due diligence and the execution of definitive

documentation and is not committed capital for purposes of liquidity or going concern analysis.

May 8, 2026, we entered into an At Market Issuance Sales Agreement (the “ Sales Agreement ”) with B.

Riley Securities,

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Supply Agreements

On March 13, 2026, we entered into a non-binding letter agreement with

a strategic counterparty for the supply of 15,000 metric tons per annum of lithium carbonate equivalent 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 us, with the option

for us to renew for an additional six-year term.

During quarter ended March 31, 2026, we received our air quality construction

permit from the Oklahoma Department of Environmental Quality (“ ODEQ ”) for our lithium refinery in Muskogee, Oklahoma.

This key milestone represents the final significant permit required for construction and commissioning, positioning us to advance one

of the largest planned lithium refineries in the United States.

On September 3, 2025, we

filed a certificate of amendment to the our 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 our common stock, par value

$0.0001 (“ Common Stock ”).

Our stockholders previously approved the Reverse Stock Split at the Company’s annual

meeting of stockholders held on June 9, 2025 and granted our board of directors (the “ Board ”) 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 our Common Stock began trading on the Nasdaq on a Reverse Stock Split-adjusted basis on September 8, 2025 at market open.

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 I, Item 1, Note 2, Basis of Presentation and summary of significant

accounting policies in the notes to unaudited condensed consolidated financial statements in this Quarterly Report).

March 13, 2026, we entered into a non-binding letter agreement with a strategic counterparty for the supply of 15,000 metric tons per

annum of lithium carbonate equivalent 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 us, with the option for us to renew for an additional six-year term.

six months ended June 30, 2026, we received our air quality construction permit from the Oklahoma Department of Environmental Quality

(“ ODEQ ”) for our lithium refinery in Muskogee, Oklahoma.

This key milestone represents the final significant permit

required for construction and commissioning, positioning us to advance one of the largest planned lithium refineries in the United States.

September 3, 2025, we filed a certificate of amendment to our 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

our common stock, par value $0.0001 (“ Common Stock ”).

Our stockholders previously approved the Reverse Stock Split

at the Company’s annual meeting of stockholders held on June 9, 2025 and granted our board of directors (the “ Board ”)

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 our 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 I, Item 1, Note 2, Basis of

Presentation and summary of significant accounting policies in the notes to unaudited condensed consolidated financial statements in

this Quarterly Report).

Factors Affecting Our Performance

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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 Annual Report on Form 10-K and in this Quarterly Report.

We believe the factors described below are key to our

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

in our Form 10-K and in this Quarterly Report.

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

Commercial Operations

We are a development stage company, and we have purchased a site in Southside Industrial Park, Muskogee, Oklahoma to build the

Facility (the “ Site ”).

We have completed a number of required site assessments and technical studies, including

the critical issue analysis, Phase I ESA, geotechnical study, front-end loading (“ FEL ”) -1 study and FEL-3 study.

Additional studies may be required as the project progresses.

are a development stage company, and we have purchased a site in Southside Industrial Park, Muskogee, Oklahoma to build the Facility

(the “ Site ”).

We have completed a number of required site assessments and technical studies, including the critical

issue analysis, Phase I ESA, front-end loading (“ FEL ”) -1 study and FEL-3 study.

Additional studies

may be required as the project progresses.

project required evaluation for certain federal, state, and local permits.

State permitting focuses on air emissions, wastewater,

and stormwater permits.

Federal permitting focuses on possible cultural, biological, and natural resources and threatened/endangered

species impacts.

State permitting focuses on air emissions, wastewater, and

stormwater permits.

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

The key permitting agency for the project at the state level is the ODEQ.

We have received from the ODEQ 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, we do not expect to require

a waste water permit for the Facility since no waste water is expected to be discharged.

We are developing a large central refinery in a phased approach.

We have received from the ODEQ 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, we do not expect to require a waste water permit for the Facility

since no waste water is expected to be discharged.

are 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 tons per annum.

The second phase is to add a second production line with up to 25,000 tons per annum, to create a total capacity of up to 50,000

tons per annum.

technological innovation of our 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

It is our 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.

Our strategy is to differentiate

ourselves by screening for a broader set of contaminants, in comparison to other lithium refineries.

The second phase is to add a second production line with up to 25,000 tons per annum, to create a total capacity

of up to 50,000 tons per annum.

technological innovation of our 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.

is our 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.

Our strategy is to differentiate ourselves 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

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

Our unaudited condensed consolidated financial statements have been presented

on the basis that we are a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal

course of business.

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

We have 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 our 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 unaudited condensed consolidated

financial statements.

As a development stage company, we need to raise additional capital to realize our 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.

unaudited condensed consolidated financial statements have been presented on the basis that we are a going concern, which contemplates

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

We have not earned any revenue and have

been operating at a loss since inception.

We have 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 our 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 unaudited condensed consolidated financial statements.

As a development stage

company, we need to raise additional capital to realize our 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.

Business Metrics, Non-GAAP Measures

Business Metrics

we have yet to start the construction of our Facility and associated commercial production, we do not have financial information on key

business metrics.

However, based on our experience and industry knowledge, we expect the following would be key business metrics:

We do not currently present any non-GAAP financial measures.

However, based on our experience and industry knowledge,

we expect the following would be key business metrics:

Material Cost/ton :

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As this may be obtained from various sources,

the weighted average cost will be calculated to arrive at the raw material cost per ton and reflects our ability

to procure high-quality raw materials at an appropriate price.

The weighted average method also helps in calculating the gross margin

on a per-ton basis.

the weighted average cost will be calculated to arrive at the raw material cost per ton and reflects our ability to procure high-quality

raw materials at an appropriate price.

The weighted average method also helps in calculating the gross margin on a per-ton basis.

The technology implemented and the efficiency of the operations are also reflected in the gross margin per ton.

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The computation of the selling price may be based on the output sold per long-term contract, which is expected to have a floor

and a cap, as well as the spot price on the date of placing a purchase order by the customer, with us and the customer sharing

the difference between the floor and spot price.

and a cap, as well as the spot price on the date of placing a purchase order by the customer, with us and the customer sharing the

difference between the floor and spot price.

This reflects the Capex incurred on a per-ton basis.

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Timely maintenance is also the key to running any efficient operations.

since we are yet to generate revenue, non-GAAP measures such as EBITDA and EBITDA margins, cannot be captured currently, but will be

stated once we have commenced commercial production and selling of battery grade lithium to our intended customers.

since we are yet to generate revenue, we do not currently utilize non-GAAP financial measures such as EBITDA or EBITDA margin.

extent we introduce any non-GAAP financial measures in future periods, we will provide the disclosures required by Item 10(e) of Regulation

S-K, including a reconciliation to the most directly comparable financial measure calculated in accordance with U.S.

and Macroeconomic Conditions

business and financial condition has been, and we believe will continue to be, impacted by adverse and uncertain macroeconomic conditions

and events, including higher inflation, higher interest rates, supply chain and logistics challenges, banking crises, fluctuations

or volatility in capital markets, foreign exchange rate volatility, government shutdowns, changes in monetary policy, changes in trade policies,

and events, including higher inflation, higher interest rates, supply chain and logistics challenges, banking crises, fluctuations or

volatility in capital markets, foreign exchange rate volatility, government shutdowns, changes in monetary policy, changes in trade policies,

including tariffs and other trade restrictions or the threat of such actions, and rising geopolitical instability, including the conflicts

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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 carbonate primarily

to the energy storage system 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 us.

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

lithium carbonate primarily to the energy storage system 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 us.

of Goods Sold

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income is comprised of interest earned on promissory notes.

During the year ended December 31, 2024, we issued promissory notes

of $176,000 and $316,000 to IGX Minerals LLC and IG Lithium LLC, respectively.

These notes carried an interest rate of 6% with maturity

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

expense is comprised of interest payable on the Insurance Funding loans, short-term loans, interest charged by vendors on overdue

invoices and amortization expense related to the expense incurred and discount recorded in connection with the issuance of

the 2025 Convertible Note in December 2025.

We 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.

We 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 loans

taken in 2025 and 2024, respectively.

The loans are secured against a lien on the insurance policy.

We 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.

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

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

and $316,000 to IGX Minerals LLC and IG Lithium LLC, respectively.

These notes carried an interest rate of 6% with maturity dates of

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

expense is currently comprised primarily of amortization of debt discount and issuance costs associated with the 2025 Convertible Note

issued in December 2025 (see Note 8).

Interest expense has also historically included interest on insurance premium financing with AFCO

Insurance Premium Finance and on promissory notes issued under various Term Sheets, including notes with related parties (see Note 11).

Both the insurance premium financing and the Term Sheet notes were fully repaid during fiscal year 2025 and no longer contribute to interest

expense in the current period.

Interest expense may also include interest charged by vendors on overdue invoices, when applicable.

charges are comprised of costs incurred to enter into the B.

Riley Purchase Agreement, issuing shares

and the change in fair value of our make-whole provision related to the B.

Riley Purchase Agreement, issuing shares and the change in fair value of

our make-whole provision related to the B.

Riley Purchase Agreement.

in fair value of sponsor earnout shares

in fair value of sponsor earnout shares relates to movements in fair value of earnout shares issued to the to Global Partner Sponsor II, LLC (“ Sponsor ”) at the closing of

the Business Combination, which have been classified as liability instruments in the condensed consolidated financial statements,

that need to be recorded in the unaudited condensed consolidated statement 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 Global Partner Sponsor

II, LLC (“ Sponsor ”) at the closing of the Business Combination, which have been classified as liability instruments

in the unaudited condensed consolidated financial statements.

The earnout liability is remeasured at each reporting period based on third

party valuations carried out at period end.

As at June 30, 2026 and December 31, 2025, we did not identify any indicators that

a change in the fair value of the Sponsor Earnout Shares last measured as of March 31, 2025, would be material, and accordingly did not

perform an updated Monte Carlo valuation as of either date.

in fair value of warrant liability

in fair value of warrant liability relates to movements in fair value of Public Warrants and Private Warrants (as defined in Note 6

of the Notes to Condensed Consolidated Financial Statements) which have been classified as liability instruments in the condensed consolidated financial statements, that need to be recorded in the unaudited condensed consolidated statement of

of the Notes to Condensed Consolidated Financial Statements) which have been classified as liability instruments in the unaudited

condensed consolidated financial statements, that need to be recorded in the unaudited condensed consolidated statement of

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

Change in fair value of investment in equity securities

Change 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 QX Resources Limited (“ QXR ”)

and IRIS Metals Limited (“ Iris Metals ”), that need to be recorded in the unaudited condensed consolidated statements

of operations for each reporting period, based on readily available quoted prices for such investment.

Gain on extinguishment of liability

extinguishment of liability represents the gain recognized on the extinguishment of vendor

payable balance.

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 QX Resources Limited (“ QXR ”) and IRIS Metals Limited (“ Iris Metals ”),

that need to be recorded in the unaudited condensed consolidated statements of operations for each reporting period, based on readily

available quoted prices for such investment.

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 note and deposit

on write-off of promissory note and deposit relates to the write-off of a promissory note and deposit made in connection with a

previously contemplated strategic partnership with IGX and Usha Resources.

The likelihood of entering into definitive agreements

with them had diminished significantly during the quarter, and based on an updated assessment, these amounts were deemed

uncollectible.

Loss on extinguishment of liability, net

on extinguishment of liability represents the loss recognized on the extinguishment of the 2025 Convertible Note balance due to

payment of installment through issuance of shares, partially offset by gain on extinguishment of vendor payable balance.

for income taxes

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

Three Months Ended

Six Months Ended

and administrative expenses

Operating Loss

Other income (expenses)

Other incomes (expenses)

Interest income

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Finance charge

Change in fair value of earnout shares

Change in fair value of sponsor earn out shares

Change in fair value of warrant Liability

Change in fair value of investment in equity

Gain on extinguishment of liability

other income (expenses)

Change in fair value of investment in equity securities

Loss on sale of investment in equity securities

Loss on write-off of promissory note and deposit

Loss on extinguishment of liability, net

Total other income (expenses)

$ (3,902,894 )

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$ (9,137,586 )

$ (7,514,138 )

$ (1,623,448 )

have not earned any revenue since inception.

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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 marketing advisory services, insurance costs,

and other consulting and legal services.

stock-based compensation expense, fees for professional and consulting fees, mainly comprising marketing advisory services, insurance

costs, and other consulting and, legal services.

The details of these expenses are as follows:

Three months ended

Six months ended

Payroll and related taxes

Professional and consulting fees

$ (1,763,747 )

the three months ended March 31, 2026, general and administrative expenses decreased compared to the three months ended March 31,

2025, primarily due to a decrease in employee related costs primarily driven by lower stock based compensation expense, a decrease

in professional and consulting fees driven by decrease in stock based compensation expense for consultants and technical consultants

and a decrease in accounting advisory, statutory auditor fees, and business consulting fees, as well as a decrease in legal and

insurance fees.

In addition, the decrease in other expenses during the three months ended March 31, 2026, compared to the three

months ended March 31, 2025, was primarily due to expenses incurred for the ground-breaking event in the prior year period,

partially offset by an increase in other administrative expenses associated with our expanded operations.

the three months ended June 30, 2026, general and administrative expenses increased compared to the three months ended June 30,

2025, primarily due to an increase in Professional and consulting fees mainly driven by reversal of stock-based compensation of a

consultant due to forfeiture during the three months ended June 30, 2025, which did not occur in the current quarter.

was partially offset by lower employee-related costs driven by a decrease in stock-based compensation expense of employees, a

decrease in legal fees due to the appointment of in-house general counsel and reduced SEC filings during the three months ended June

For the six months

ended June 30, 2026, general and administrative expenses decreased compared to the six months ended June 30, 2025, primarily due to

lower employee related costs driven by a decrease in stock-based compensation expense of employees, a decrease in legal fees due to

appointment of in house general counsel and a decrease in legal services for SEC filings during six months ended June 30, 2026.

decrease was partially offset by an increase in professional and consulting fees primarily driven by reversal of stock-based

compensation of a consultant due to forfeiture during the six months ended June 30, 2025.

Income (Expenses)

the three months ended March 31, 2026, we did not recognize any interest income, compared to $7,279 for the same period in

The decrease of $7,279 is attributable to interest income earned in the prior year period on promissory notes issued in August

These promissory notes, including accrued interest, were written off in fiscal year 2025 as the notes were deemed

unrecoverable.

the three months ended March 31, 2026, interest expenses increased by $257,765 compared to three months ended March 31, 2025 primarily

due to interest accretion related to convertible notes issued in December 2025, interest charged by vendors on outstanding overdue invoices,

partially offset by decreases in interest expense incurred on the financing agreement for our purchase of directors’ and

officers’ and other insurance policies and interest expense on other short-term loans with various lenders.

increase in finance charges of $28,765 for the three months ended March 31, 2026, compared to the three months ended March 31,

2025, was due to the cost incurred to enter into the B.

Riley Purchase Agreement and increase in cost of the issuance of shares

Riley Purchase Agreement, partially offset by a change in fair value of our make-whole provision

related to the Common Stock Purchase Agreement entered into on October 7, 2024 with B.

For the three and six months

ended June 30, 2026, interest income was de minimis, compared to interest income of $4,731 and $12,010 for the same periods in 2025, respectively.

The decrease is attributable to interest income earned in the prior year period on promissory notes issued in fiscal year 2024.

promissory notes, including accrued interest, were written off in fiscal year 2025 as the notes were deemed unrecoverable.

For the three and six months

ended June 30, 2026, interest expenses increased by $273,623 and $531,388, respectively, compared to the three and six months ended June

The increase was primarily due to interest accretion related to convertible notes issued

in December 2025, interest charged by vendors on outstanding overdue invoices, partially offset by decreases in interest expense incurred

on the financing agreement for our purchase of directors’ and officers’ and other insurance policies and interest expense

on other short-term loans with various lenders.

The increase in finance charges

of $66,036 and $94,800 for the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025, was

due to the cost incurred to enter into the B.

Riley Purchase Agreement and increase in cost of the issuance of shares under the B.

Purchase Agreement, partially offset by a change in fair value of our make-whole provision related to the Prior B.

Riley Agreements entered

into on October 7, 2024 with B.

Riley Principal Capital II.

in fair value of sponsor earnout shares

decrease in income from the change in fair value of earnout shares by $528,000 for the three months ended March 31, 2026, compared

to the three months ended March 31, 2025, was related to movements in fair value of earnout shares issued to the Sponsor, primarily

driven by a decrease in quoted market price, which have been classified as liability instruments in the condensed consolidated

financial statements.

The fair value adjustment is recorded in the unaudited condensed consolidated statement of operations for

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

decrease in income from the change in fair value of earnout shares by $528,000 for the six months ended June 30, 2026, compared to

the six months ended June 30, 2025, was related to movements in fair value of earnout shares issued to the Sponsor, primarily driven

by a decrease in quoted market price, which have been classified as liability instruments in the unaudited condensed

consolidated financial statements.

The fair value adjustment is recorded in the unaudited condensed consolidated statement of

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

in fair value of warrant liability

decrease in income from change in fair value of warrant liability by $2,366,748 for the three months ended March 31, 2026, compared

to the three months ended March 31, 2025, was related to movements in fair value of Public and Private Warrants, which have been

classified as liability instruments in the condensed consolidated financial statements, primarily driven by a decrease in quoted

market price, that

need to be recorded in the unaudited condensed consolidated statements of operations for each reporting period, based on fair value

at period end.

The increase in income by

$79,274 for the three months ended June 30, 2026, and decrease in income by $2,287,474 for the six months ended June 30, 2026 from change

in fair value of warrant liability, compared to the three and six months ended June 30, 2025, respectively, was related to movements in

fair value of Public and Private Warrants, which have been classified as liability instruments in the unaudited condensed consolidated

financial statements.

in fair value of investment in equity securities

the three months ended March 31, 2026, the fair value of investment in equity securities decreased by $5,154, compared to

three months ended March 31, 2025, 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.

Gain on extinguishment of liability

For the three months ended March 31, 2026, we recognized gain on extinguishment of liability of $4,972

which represents the credit received against a vendor payable balance, with no comparable gain for the same period in 2025.

the three months ended March 31, 2026 and 2025, the tax expense was nil, due to net losses incurred during these periods.

carry any deferred tax assets on the unaudited condensed consolidated balance sheet as at March 31, 2026 and the audited condensed

consolidated balance sheet as at December 31, 2025, primarily due to net operating loss carry forwards resulting from

historically 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 three

months ended March 31, 2026 and March 31, 2025, we incurred a net loss of $5,234,692 and $3,809,700, respectively.

Since we have yet

to start commercial production of battery grade lithium, our operating expenses are expected to increase as we continue to

recruit more personnel to perform general operational tasks and set up the Facility and execute supply agreements.

For the three and six

months ended June 30, 2026, the change in fair value of investment in equity securities increased by $724,716 and $719,562,

respectively, compared to the three and six months ended June 30, 2025, 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.

on sale of investments in equity securities

the three and six months ended June 30, 2025, the Company recorded a loss of $95,178 in connection with the sale of investment in equity

These securities were originally acquired as part of a broader investment strategy but were sold during the quarter ended

June 30, 2026 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.

The Company did not sell any investment in equity securities during the three and six months

ended June 30, 2026.

on write-off of promissory note and deposit

During the three and six months ended

June 30, 2025, the Company recorded a loss of $182,481 and $50,000 related to the write-off of a promissory note and deposit associated

with a previously contemplated strategic partnership with IGX and Usha Resources, respectively.

The arrangement was terminated during

the quarter, and based on an updated assessment these amounts were deemed uncollectible.

Accordingly, the full balance was written off

and recognized as a non-operating loss.

No such write off was noted during the three and six months ended June 30, 2026.

Loss on extinguishment of liability, net

For the three and six

months ended June 30, 2026, we recognized a loss on extinguishment of liability of $127,381 and $122,409, respectively, on

settlement of the 2025 Convertible Note monthly installment through issuance of Repayment Shares.

The loss reflects the difference

between the installment amount and the fair value of the Repayment Shares as of the date of issuance.

This is partially offset by

credit received against a vendor payable balance.

For the three and six months ended June 30, 2025, there was no loss or gain

recognized on extinguishment of liability.

the three and six months ended June 30, 2026, and 2025 the tax expense is nil, due to net losses incurred during these periods.

not carry any deferred tax assets on the unaudited condensed consolidated balance sheet as at June 30, 2026 and the audited condensed

consolidated balance sheet as at December 31, 2025, primarily due to net operating loss carry forwards resulting from historically 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 three and six months ended June 30, 2026, we incurred a net loss of $3,902,894 and $9,137,586 respectively, and for the three

and six months ended June 30, 2025, we incurred a net loss of $3,704,438 and $ 7,514,138 respectively.

Since we have yet to start commercial

production of battery-grade lithium, our operating expenses are expected to increase as we continue to recruit more personnel to perform

general operational tasks, setting up the Facility and execute supply agreements.

and Capital Resources

1 unchanged sentence

have incurred significant operating losses.

As of March 31, 2026 and December 31, 2025, we had an accumulated deficit of $73,577,276

As of June 30, 2026, and December 31, 2025, we had an accumulated deficit of $77,480,170

and $68,342,584, respectively.

1 unchanged sentence

We have an accumulated deficit and stockholders’

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 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 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.

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

corporate needs.

Specifically, in this regard, the total 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 grants.

We expect our operational expenditures to increase for the foreseeable future in

connection with ongoing and future activities.

Specifically, expenditures will increase as we:

3 unchanged sentences

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 expected market adoption of

our offerings, and the timing and extent of additional capital expenditures to build and 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

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 build and 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.

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, simple agreements for future equity 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.

have funded our operations with proceeds from sales of Legacy Stardust Power Common Stock, promissory notes, simple agreements for future

equity 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.

unaudited condensed consolidated financial statements have been presented on the basis that we are a going concern, which contemplates

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

We are a development stage entity

with no revenues, and have incurred net loss since inception of $73,577,276 and stockholders’ deficit of $7,867,665 as at March

We are a development stage entity with

no revenues, and have accumulated deficit of $77,480,170 and stockholders’ deficit of $8,240,860 as at June 30, 2026.

We expect to continue to incur significant costs in pursuit of its operating and investment plans.

These costs exceed

our existing cash balance and net working capital.

These costs exceed our existing cash

balance and net working capital.

discussed above:

December 23, 2025, we entered into the Lind Securities Purchase Agreement with Lind providing for up to $15,000,000 in senior secured

convertible debt financing.

Simultaneously, we 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, we received

net cash proceeds of approximately $3,792,500.

December 23, 2025, we entered into the Lind Securities Purchase Agreement with Lind providing for up to $15,000,000 in senior

secured convertible debt financing.

Simultaneously, we initially drew down gross proceeds of approximately $4,000,000 in exchange

for the issuance to Lind of a Senior Secured Convertible Promissory Note in the amount of $4,800,000 and a 2025 Lind Warrant, for

the purchase of approximately 411,245 shares.

After deducting a commitment fee of $100,000 and other transaction-related costs, we

received net cash proceeds of approximately $3,792,500.

February 12, 2026, we entered into the B.

17 unchanged sentences

As of the date of this filing, we

have issued 465,120 shares of Common Stock aggregating to net proceeds of $1,220,015.

to the quarter end, we entered into an At Market Issuance Sales Agreement (the “Sales

Agreement”) with B.

Riley Securities, Inc.

have issued 505,866 shares of Common Stock aggregating to net proceeds of $1,310,904 under this arrangement.

May 8, 2026, we entered into an At Market Issuance Sales Agreement (the “ Sales Agreement ”) with B.

Riley Securities,

(the “ Agent ”).

to the terms of the Sales Agreement, we may sell from time to time through the Agent,

shares of our Common Stock, par value $0.0001 per share, having an aggregate offering price

of up to $5,000,000 (the “Shares”).

We intend to use this facility to raise capital

We believe that the cash

on hand, and additional investments available through issuance of new Common Stock, will be inadequate to satisfy our working capital

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

Our ability 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 our operating

and investing activities over the next year.

The accompanying unaudited condensed 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

if we are unable to continue as a going concern.

Pursuant to the terms of the Sales Agreement, we may sell from time to time through the Agent,

shares of our Common Stock, par value $0.0001 per share, having an aggregate offering price of up to $5,000,000 (the “ Shares ”).

We intend to use this facility to raise capital as needed.

As of the date of this filing, we have issued 2,159,867 shares of Common

Stock aggregating to net proceeds of $3,112,021 under this arrangement.

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

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

Our ability to continue as a going concern

is dependent upon management’s plan to raise additional capital from the issuance of equity or to obtain additional borrowings to

fund our operating and investing activities over the next year.

The accompanying unaudited condensed 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 if we are unable to continue as a going concern.

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

5 unchanged sentences

August 5, 2025, we entered into a financing agreement of $407,500 for the purchase of an insurance policy with AFCO Insurance Premium

The debt is payable in monthly instalments through June 2026 and bears an interest rate of 7.5%.

The carrying amount of $103,848

and $205,403 is included as Short-term Loan on the accompanying unaudited condensed consolidated balance sheet as on March

31, 2026, and audited consolidated balance sheet as on December 31, 2025, respectively.

December 2024, we entered into a binding Term Sheet (the “ 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 ”).

We agreed to issue to

Endurance $3,500,000 in Common Stock as an Equity Kicker.

addition, Endurance received warrants of up to 50% of

Common Stock issued as an 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.

As of December 31, 2025, we have fully repaid the principal

amount of $1,750,000 along with the accrued interest of $70,000 and issued 97,765 shares of Common Stock and 488,826 warrants to

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

including DRE Chicago, LLC, a related party (“DRE Chicago” and collectively with the other lenders, 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

We agreed to issue to the

Investors an aggregate of $2,700,000 in Common Stock as an Equity Kicker In addition, the Investors received warrants of up to 50% of Common Stock issued as an 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.

As of December

31, 2025, we have fully repaid the principal amount of $1,800,000 along with the accrued interest of $67,146 and issued 75,418

shares of Common Stock and 377,092 warrants to the Investors.

The debt is payable in monthly installments through June 2026 and bears an interest rate of 7.5%.

As at June 30, 2026, the loan

was fully repaid.

The carrying amount of Nil and $205,403 is included as Short-term Loan on the accompanying unaudited condensed consolidated

balance sheet as on June 30, 2026, and audited consolidated balance sheet as on December 31, 2025, respectively.

Subsequent to three months

ended June 30, 2026, we entered into a financing agreement of $493,532 for the purchase of an insurance policy with AFCO Insurance Premium

We made a downpayment of $172,736, which was applied to the loan amount at the time of the loan agreement.

The debt is payable

in 7 monthly installments of $47,189 per month and bears an interest rate of 6.99%.

short-term loans

Our short-term loans with

Endurance Antarctica Partners II, LLC and under the Term Sheets (including DRE Chicago LLC, a related party) are described in Note 11,

Related Party Transactions, included elsewhere in this quarterly report and described in greater detail in Note 7 to our Form 10-K.

arrangements were fully repaid, together with accrued interest, as of December 31, 2025, and carried no balance as of June 30, 2026.

Company recognized interest expense of $103,938 towards other short-term loans on the accompanying unaudited condensed consolidated statements

of operations for the six months ended June 30, 2025.

following table summarizes our cash flows for the periods presented:

June 30, 2026

June 30, 2025

Net cash used in operating activities

$ (2,065,302 )

$ (2,875,187 )

Net cash used in investing activities

Net cash (used in)

provided by financing activities

Net cash provided by financing activities

Net change in cash

$ (2,244,587 )

$ (2,920,148 )

Flows Used in Operating Activities

For the three months ended March

31, 2026, net cash used in operating activities was $2,065,302, consisting of a $5,234,692 net loss, adjusted for an aggregate of $ 2,655,796

in non-cash charges for stock based compensation, change in fair value of investments, amortization of the 2025 convertible note issuance

costs, warrant liability, Common Stock issued for make-whole obligation, non-cash marketing expense for proposed stock issuance to vendor

and depreciation and a $513,594 net change in operating assets and liabilities, primarily driven by an increase of $497,373 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 a decrease of $16,221 in prepaid expenses and other assets.

the three months ended March 31, 2025, net cash used in operating activities was $2,875,187, consisting of a $3,809,700 net loss,

adjusted for an aggregate of $915,041 in non-cash charges for stock based compensation, change in fair value of investments, warrant

liability, Sponsor earnout shares, the Common Stock make-whole obligation, and depreciation and a $19,472 net change in operating

assets and liabilities, primarily driven by a decrease of $69,462 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, partially offset by an increase of

$88,934 in prepaid expenses and other assets.

For the six months ended June 30, 2026, net cash used in operating

activities was $4,002,652 consisting of a $9,137,586 net loss, adjusted for an aggregate of $3,968,080 in non-cash charges for stock based

compensation, non-cash marketing expense for stock issued to vendor, amortization of 2025 Convertible Note discount and issuance costs,

change in fair value of investments, warrant liability, common stock issued for make-whole obligation, loss on extinguishment of debt,

deferred transaction cost expenses, and depreciation and a $1,166,854 net positive change in operating assets and liabilities, primarily

driven by a decrease of $12,701 in prepaid expense and other assets and by an increase of $1,169,963 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, partially offset

by decrease of $15,810 in operating lease right-of-use asset and liability.

the six months ended June 30, 2025, net cash used in operating activities was $4,490,450 consisting of a $7,514,138 net loss,

adjusted for $2,983,759 non-cash charge for stock based compensation, change in fair value of investments, warrant liability,

sponsor earnout shares, common stock make-whole obligation, loss on sale of investments, loss on write off of deferred transaction

cost, promissory note and deposits and depreciation and a $39,929 net change in operating assets and liabilities, primarily driven

by a decrease of $239,723 in prepaid expenses and other assets partially offset by a decrease of $199,794 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

Flows Used in Investing Activities

the three months ended March 31, 2026, and March 31, 2025, net cash used in investing activities was $174,836 and $960,332, respectively,

primarily representing capital project costs related to construction of the refinery.

the six months ended June 30, 2026, net cash used in investing activities was $194,312, primarily representing $175,644 on account of

capital project costs related to construction of the refinery and $18,668 on account of purchase of computer, equipment and furniture.

the six months ended June 30, 2025, net cash used in investing activities was $2,217,068, primarily representing $2,278,760 on account

of capital project costs related to construction of the refinery offset partially by $78,311 proceeds from sale of investments in equity

Flows from Financing Activities

the three months ended March 31, 2026, net cash used in financing activities was $4,449 and related primarily to Common Stock issuance

proceeds of $97,106 offset by repayment of insurance funding borrowing of $101,555.

the three months ended March 31, 2025, net cash provided by financing activities was $4,511,080, and related primarily due to gross

proceeds from the consummation of a public offering in January 2025 of $5,750,400, warrant Inducement gross proceeds of $2,971,040

in March 2025, an advance from PIPE investors of $125,000, and Common Stock issuance proceeds of $16,414, partially offset by the

repayment of short-term loans of $3,677,914, payment of transaction costs associated with public offering and warrant inducement of

$648,860, and deferred transaction costs payment of $25,000.

the six months ended June 30, 2026, net cash provided by financing activities was $1,257,077 related primarily to gross proceeds from

common stock issuance proceeds of $1,512,480 partially offset by repayment of short-term loan of $205,403 and payment of deferred transaction

costs of $50,000.

the six months ended June 30, 2025, net cash provided by financing activities was $8,401,694 related primarily to gross proceeds from

consummation of a public offering of $10,270,400, Warrant Inducement gross proceeds of $2,971,040, advance from PIPE investors of $125,000,

common stock issuance proceeds of $122,551 partially offset by repayment of short-term loans of $3,808,552, payment of transaction costs

associated with public offering and warrant inducement of $1,252,152, and deferred transaction costs payment of $25,000.

and Capital Expenditure Requirements

We have not earned any revenue

and have been operating at a loss since inception.

We have an accumulated deficit and stockholders’ deficit.

These conditions raise

substantial doubt about our ability to continue to finance operations over the next twelve months and is dependent upon management’s

plan to raise additional capital from issuance of equity or receive additional borrowings to fund our operating and investing activities

over the next one year.

Our intended capital requirements depend on many factors 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.

In the future, it will depend on our expansion of acquiring new assets/sites to have access and potential ownership of raw material.

may in the future enter into arrangements to acquire or invest in complementary businesses, services and technologies, including intellectual

property rights.

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

We have an accumulated deficit and stockholders’

These conditions raise substantial doubt about our ability to continue to finance operations over the next twelve months and

is dependent upon management’s plan to raise additional capital from issuance of equity or receive additional borrowings to fund

our operating and investing activities over the next one year.

Our intended capital requirements depend on many factors 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.

In the future, it will depend on our expansion of acquiring new assets/sites to have access

and potential ownership of raw material.

We may in the future enter into arrangements to acquire or invest in complementary businesses,

services and technologies, including intellectual property rights.

We may be required to seek additional equity or debt financing.

If additional financing is required from outside sources,

over and above what we are intending to raise currently, we may not be able to raise it on acceptable terms or at all.

If we are unable

to raise additional capital when desired, our business, results of operations and financial condition would be materially and adversely

affected, and we may not be able to continue our intended operations as a going concern.

additional financing is required from outside sources, over and above what we are intending to raise currently, we may not be able to

raise it on acceptable terms or at all.

If we are unable to raise additional capital when desired, our business, results of operations

and financial condition would be materially and adversely affected, and we may not be able to continue our intended operations as a going

and Contractual Obligations

Note 3 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report for additional details

regarding other contractual obligations and commitments as at March 31, 2026.

While we have not entered into any other binding

commitments, other strategic partnerships are being evaluated which could lead to future contractual obligations.

regarding other contractual obligations and commitments as at June 30, 2026.

While we have not entered into any other binding commitments,

other strategic partnerships are being evaluated which could lead to future contractual obligations.

of Critical Accounting Estimates

11 unchanged sentences

due to the inherent uncertainty involved in making those estimates, actual results reported in future periods could differ from those

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 unaudited condensed 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.

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 unaudited condensed 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.

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.

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regarding recent accounting pronouncements.

We report segment information

in the same way management internally organizes the business in assessing performance and making decisions regarding allocation of resources

in accordance with ASC Topic 280, “ Segment Reporting .” We have a single reportable operating segment which operates

as a single business platform.

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 accessed.

Our CODM is the Chief Executive Officer,

who reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance.

We have a single, common management team and our cash flows are reported and reviewed on a total-company basis.

report segment information in the same way management internally organizes the business in assessing performance and making decisions

regarding allocation of resources in accordance with ASC Topic 280, “ Segment Reporting .” We have a single reportable

operating segment which operates as a single business platform.

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 accessed.

Our CODM is the Chief Executive Officer, who reviews financial information presented on a consolidated basis for purposes of allocating

resources and evaluating financial performance.

We have a single, common management team and our cash flows are reported and reviewed

on a total-company basis.

Party Transactions

On September 18, 2024, we entered

into a consulting agreement in the amount of $500,000 with DRE Chicago, whose principal is Paramita Das.

Das was previously our Chief

Strategy Officer and Senior Advisor to our CEO.

Additionally, as discussed above, in December 2024, we entered into a binding term sheet

with DRE Chicago 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, we 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, to receive up to 50% of Common Stock issued as an 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.

As of December 31, 2025,

we have repaid the principal amount of $250,000 along with accrued interest of $9,166 and issued 10,474 shares of Common Stock and 52,374

warrants to DRE Chicago.

Das terminated her employment with us in November 2025 and is no longer considered a related party as of

March 31, 2026.

As discussed above, in December

2024, we entered into the Endurance Term Sheet with Endurance to provide for the Endurance Loan.

In addition, we 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, to receive up to 50% of Common Stock issued as an 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.

As of December 31, 2025, we have

repaid the principal amount of $1,750,000 along with accrued interest of $70,000 and issued 97,765 shares of Common Stock and 488,826

warrants to Endurance.

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 our initial public offering (the “ Private Warrants ”).

At closing of the Business Combination, we acquired the net

liabilities for GPAC II including the Private Warrants.

Each 10 Private Warrant entitles the holder to purchase one share of Common Stock

at $115.0 per share.

At March 31, 2026, there were 5,566,667 Private Warrants outstanding.

As at March 31, 2026, the fair value of Private

Warrants amounted to $912,377.

We valued our Private Warrants based on the closing price of the Public Warrants since they are similar

We previously entered into

a consulting agreement and loan arrangement with DRE Chicago LLC (“ DRE Chicago ”), whose principal, Paramita Das, was

our former Chief Strategy Officer and Senior Advisor to the Chief Executive Officer as described in our Form 10-K.

We recognized interest

expense of $7,187 during the six months ended June 30, 2025.

The loan was fully repaid, together with accrued interest, as of December

31, 2025, and 52,374 warrants, remain outstanding.

DRE Chicago’s loan was entered into as part of a larger $1,800,000 Term Sheets

facility with several lenders, which was fully repaid, together with accrued interest, as of December 31, 2025.

Das terminated her

employment with us in November 2025 and is no longer considered a related party as of June 30, 2026.

We previously entered into a loan arrangement with Endurance Antarctica

Partners II, LLC (“ Endurance ”), an affiliate of a director at the time and a shareholder, as described in our Form

We recognized interest expense of $51,042 during the six months ended June 30, 2025.

The loan was fully repaid, together with accrued

interest, as of December 31, 2025, and 488,826 warrants, remain outstanding.

As of the date of this quarterly report, the Endurance-affiliated

individual is no longer a member of our board of directors.

We previously entered into unsecured notes payable with three related

These notes payable provided us the ability to draw up to $1,000,000, in aggregate.

In June 2025, we drew $250,000 from Energy

Transition Investors LLC, and subsequently repaid the drawn amount by quarter ended June 30, 2025.

We had accrued interest of $422 during

the three months ended June 30, 2025 on the drawn amount and subsequently paid the interest in January 2026.

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 our initial public offering (the “Private Warrants”).

At closing of the Business Combination,

we acquired the net liabilities for GPAC II including the Private Warrants.

Each 10 Private Warrant entitles the holder to purchase one

share of Common Stock at $115.00 per share.

At June 30, 2026, there were 5,566,667 Private Warrants outstanding.

As at June 30, 2026,

the fair value of Private Warrants amounted to $617,900.

We valued our Private Warrants based on the closing price of the Public Warrants

since they are similar instruments.

Earnout Shares

part of the closing of the Business Combination, we issued 100,000 shares to the Sponsor.

These shares are subject to vesting

(or forfeiture) based on achieving certain trading price thresholds following the closing (“ Sponsor Earnout Shares ”).

Fifty percent of the Sponsor Earnout Shares will vest when the 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 when the VWAP of the 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.

Sponsor Earnout Shares will be forfeited if vesting does not occur prior to the eighth anniversary of the Closing Date.

the fair value of expected earnout consideration at each reporting period using the Monte Carlo Method, which is consistent with the

initial measurement of the expected earnout consideration.

As at March 31, 2026, the fair value of Sponsor Earnout Shares amounted to

These shares are subject to vesting (or forfeiture)

based on achieving certain trading price thresholds following the closing (“Sponsor Earnout Shares”).

Fifty percent of the

Sponsor Earnout Shares will vest when the 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 when the VWAP of the 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.

Unvested Sponsor Earnout Shares will be forfeited if

vesting does not occur prior to the eighth anniversary of the Closing Date.

We assess the fair value of expected earnout consideration at each reporting period using the Monte Carlo Method, which is consistent with the initial

measurement of the expected earnout consideration.

As at June 30, 2026 and December 31, 2025, we did not identify any indicators that

a change in the fair value of the Sponsor Earnout Shares last measured at $4,700 as of March 31, 2025, would be material, and accordingly

did not perform an updated Monte Carlo valuation as of either date.

Note 16 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report for additional details

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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-Q

Item 2. Management’s Discussion and Analysis