Stardust Power Inc. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Index to the Consolidated Financial Statements Page Report of Independent Registered Public Accounting Firm — PCAOB ID: 2983 F-1 Consolidated Balance Sheets as of December 31, 2024 and December 31, 2023 F-2 Consolidated Statements of Operations for the year ended December 31, 2024 and for the period from March 16, 2023 (inception) to December 31, 2023 F-3 Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the year ended December 31, 2024 and for the period from March 16, 2023 (inception) to December 31, 2023 F-4 Consolidated Statements of Cash Flows for the year ended December 31, 2024 and for the period from March 16, 2023 (inception) to December 31, 2023 F-5 Notes to the Consolidated Financial Statements F-6 87 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Stardust Power Inc. and Subsidiaries Opinion on the consolidated financial statements We have audited the accompanying consolidated balance sheets of Stardust Power Inc. and Subsidiaries (the Company) as of December 31, 2024 and 2023 and the related consolidated statements of operations, stockholders’ deficit and cash flows for each of the years ended December 31, 2024 and for the period from March 16, 2023 (inception) through December 31, 2023 and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and December 31, 2023, and the results of its operations and its cash flows for each of the year ended December 31, 2024 and for the period from March 16, 2023 (inception) through December 31, 2023, in conformity with accounting principles generally accepted in the United States of America. Substantial doubt about the company’s ability to continue as a going concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has incurred losses during the year, has an accumulated deficit and stockholders’ deficit. The 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. The ability of the Company to continue as a going concern is dependent upon management’s plan to raise additional capital from issuance of equity or receive additional borrowings to fund the Company’s operating and investing activities over the next year. These conditions raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ KNAV CPA LLP KNAV CPA LLP We have served as the Company’s auditor since 2023. Atlanta, Georgia March 27, 2025 PCAOB ID - 2983 F- 1 Stardust Power Inc. and Subsidiaries CONSOLIDATED BALANCE SHEETS (all amounts in USD, except number of shares) As of December 31, 2024 2023 ASSETS Current assets Cash $ 912,574 $ 1,271,824 Prepaid expenses and other current assets 606,331 426,497 Deferred transaction costs 116,121 1,005,109 Promissory notes 502,838 - Total current assets $ 2,137,864 $ 2,703,430 Property and equipment, net 1,755,947 1,968 Capital project costs 3,320,403 100,000 Investment in equity securities 1,496,422 218,556 Other long-term assets 312,501 - Total assets $ 9,023,137 $ 3,023,954 LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) Current liabilities Accounts payable $ 10,264,117 $ 1,256,792 Accrued liabilities and other current liabilities 4,722,687 208,107 Current portion of early exercised shares option liability 1,814 2,990 Short-term loans from related parties (Note-16) 5,875,000 - Short-term loans 4,133,552 72,967 Total current liabilities $ 24,997,170 $ 1,540,856 SAFE notes - 5,212,200 Warrant liability 2,451,237 - Advance from PIPE investor 425,000 - Earnout liability 532,700 - Early exercised shares option liability 2,814 5,660 Total liabilities $ 28,408,921 $ 6,758,716 Commitments and contingencies (Note 4) - - Stockholders’ equity (deficit) Preferred stock, $ 0.0001 par value, 100,000,000 and Nil shares authorized, Nil shares issued and outstanding as at December 31, 2024 and December 31, 2023 - - Common stock, $ 0.0001 par value, 700,000,000 and 69,033,000 shares authorized, 47,736,279 and 41,499,772 shares issued and outstanding as at December 31, 2024 and December 31, 2023, respectively 4,603 4,023 Additional paid-in capital 33,228,561 54,800 Accumulated deficit ( 52,618,948 ) ( 3,793,585 ) Total stockholders’ deficit $ ( 19,385,784 ) $ ( 3,734,762 ) Total liabilities and stockholders’ deficit $ 9,023,137 $ 3,023,954 The accompanying notes are an integral part of these consolidated financial statements. F- 2 Stardust Power Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF OPERATIONS (all amounts in USD, except number of shares) Year ended December 31, 2024 Period from March 16, 2023 (inception) through December 31, 2023 Revenue $ - $ - General and administrative expenses 17,972,828 1 2,675,698 1 Operating Loss ( 17,972,828 ) ( 2,675,698 ) Other income (expenses) SAFE note issuance costs - 2 ( 466,302 ) 2 Other transaction costs - 3 ( 450,113 ) 3 Interest income 10,838 - Interest expense ( 50,454 ) 4 ( 7,828 ) 4 Finance charge ( 7,579,713 ) 5 - Change in fair value of sponsor earnout shares 4,076,200 - Change in fair value of warrant liability ( 511,342 ) - Change in fair value of investment in equity securities ( 322,134 ) 18,556 Change in fair value of convertible notes ( 471,400 ) - Change in fair value of SAFE notes ( 955,000 ) ( 212,200 ) Other income 21,970 - Total other expenses ( 5,781,035 ) ( 1,117,887 ) Net loss $ ( 23,753,863 ) $ ( 3,793,585 ) Net loss per share Basic $ ( 0.55 ) $ ( 0.09 ) Diluted $ ( 0.55 ) $ ( 0.09 ) Weighted average common shares outstanding Basic 42,821,940 40,396,516 Diluted 42,821,940 40,396,516 (1) Includes related party amounts of $ 143,057 and $ 797,019 for the year ended December 31, 2024, and from March 16, 2023 (inception) to December 31, 2023, respectively. (2) Includes related party amounts of $ Nil and $ 435,000 for the year ended December 31, 2024, and from March 16, 2023 (inception) to December 31, 2023, respectively. (3) Includes related party amounts of $ Nil and $ 100,000 for the year ended December 31, 2024, and from March 16, 2023 (inception) to December 31, 2023, respectively. (4) Includes related party amounts of $ 20,937 and $ 7,111 for the year ended December 31, 2024, and from March 16, 2023 (inception) to December 31, 2023, respectively. (5) Includes related party amounts of $ 3,875,000 and $ Nil for the year ended December 31, 2024, and from March 16, 2023 (inception) to December 31, 2023, respectively. The accompanying notes are an integral part of these consolidated financial statements. F- 3 Stardust Power Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) (all amounts in USD, except number of shares) For the period from March 16, 2023 (inception) through December 31, 2023 Common Stock Additional paid-in Accumulated Total Stockholder’s Shares Amount capital Deficit Deficit Balance as at March 16, 2023 (inception) - $ - $ - $ - $ - Issuance of common stock 9,000,000 90 - - 90 Retroactive application of recapitalization 32,420,154 4,052 ( 4,052 ) - - Balance as at March 16, 2023 (inception) 41,420,154 4,142 ( 4,052 ) - 90 Stock based compensation - - 58,536 - 58,536 Transfer from early exercised stock option liability on vesting - - 200 - 200 Issuance of common stock related to early exercised stock options 2,278,108 - - - - Repurchase of unvested early exercised common stock ( 920,448 ) - - - - Repurchase of common stock ( 1,278,042 ) ( 119 ) 116 - ( 3 ) Net loss - - - ( 3,793,585 ) ( 3,793,585 ) Balance as at December 31, 2023 41,499,772 4,023 54,800 ( 3,793,585 ) ( 3,734,762 ) For the year ended December 31, 2024 Common Stock Additional paid-in Accumulated Total Stockholder’s Shares Amount capital Deficit Deficit Balance as at December 31, 2023 9,017,300 $ 87 $ 58,736 $ ( 3,793,585 ) $ ( 3,734,762 ) Retroactive application of recapitalization 32,482,472 3,936 ( 3,936 ) - - Balance as at December 31, 2023 41,499,772 4,023 54,800 ( 3,793,585 ) ( 3,734,762 ) Balance 41,499,772 4,023 54,800 ( 3,793,585 ) ( 3,734,762 ) Net loss - - - ( 23,753,863 ) ( 23,753,863 ) Stock based compensation (Note 8) - - 9,750,511 - 9,750,511 Issuance of common stock 55,826 6 268,992 - 268,998 Synthetic at-the-market (“ATM”) commitment fee 63,694 6 499,994 - 500,000 Transfer from early exercised stock liability on vesting - 30 2,325 - 2,355 Repurchase of unvested early exercise stock options ( 255,686 ) - - - - Shares issued upon exercise of common stock warrants 135,796 13 1,626,606 - 1,626,619 Shares issued upon conversion of SAFE notes 636,916 64 6,367,136 - 6,367,200 Shares issued upon conversion of convertible notes 257,216 26 2,571,374 - 2,571,400 Issuance of common stock upon the reverse capitalization including PIPE financing, net of transaction costs 5,342,745 435 ( 5,483,454 ) - ( 5,483,019 ) Transaction costs - - ( 7,501,223 ) - ( 7,501,223 ) Merger Earnout shares (Note 3) - - 25,071,500 ( 25,071,500 ) - Balance as at December 31, 2024 47,736,279 4,603 33,228,561 ( 52,618,948 ) ( 19,385,784 ) Balance 47,736,279 4,603 33,228,561 ( 52,618,948 ) ( 19,385,784 The accompanying notes are an integral part of these consolidated financial statements. F- 4 Stardust Power Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS (all amounts in USD, except number of shares) Year ended December 31, 2024 Period from March 16, 2023 (inception) through December 31, 2023 Cash flows from operating activities: Net loss $ ( 23,753,863 ) $ ( 3,793,585 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Stock based compensation 9,750,511 58,536 Finance charges 6,807,702 - Synthetic ATM commitment fee 500,000 - Loss from change in fair value of common stock make-whole obligation 272,011 - Change in fair value of investment in equity securities 322,134 ( 18,556 ) Change in fair value of SAFE notes 955,000 212,200 Change in fair value of warrant liability 511,342 - Change in fair value of convertible notes 471,400 - Change in fair value of sponsor earnout shares ( 4,076,200 ) - Depreciation expense 1,823 6 SAFE notes issuance costs - 466,302 Changes in operating assets and liabilities: Prepaid expenses and other assets ( 47,999 ) ( 426,497 ) Accounts payable ( 3,389,540 ) 310,281 Accrued liabilities and other current liabilities 1,955,965 208,107 Net cash used in operating activities $ ( 9,719,714 ) $ ( 2,983,206 ) Cash flows from investing activities: Capital project costs ( 1,010,180 ) - Land acquisition costs ( 1,623,946 ) ( 100,000 ) Investment in equity securities ( 1,600,000 ) ( 200,000 ) Investment in other long-term assets ( 50,000 ) - Purchase of property and equipment ( 15,237 ) ( 1,974 ) Promissory notes issued ( 492,000 ) - Net cash used in investing activities $ ( 4,791,363 ) $ ( 301,974 ) Cash flows from financing activities: Proceeds from stock issuance, net of repurchases 260,927 87 Payment of equity issuance costs ( 32,601 ) - Proceeds from early exercise of stock option awards - 14,850 Proceeds from investor for issuance of SAFE notes 200,000 5,000,000 Proceeds from issuance of notes payable to related parties 2,000,000 1,000,000 Repayment of notes payable to related parties - ( 1,000,000 ) Proceeds from exercise of warrants 1,561,655 - Proceeds from issuance of convertible notes 2,100,000 - Deferred transaction costs paid ( 4,167,323 ) ( 95,900 ) Payment of issuance costs for SAFE notes to related parties - ( 435,000 ) Proceeds from short-term loan 2,060,000 80,800 Repayment of short-term loan ( 324,415 ) ( 7,833 ) Proceeds from advance received from PIPE investor 425,000 - Proceeds from of business combination and issuance of PIPE shares 11,639,088 - Repayment of sponsor promissory notes ( 1,562,834 ) - Repurchase of unvested shares ( 7,670 ) - Net cash provided by financing activities $ 14,151,827 $ 4,557,004 Net (decrease)/ increase in cash $ ( 359,250 ) $ 1,271,824 Cash at the beginning of the period 1,271,824 - Cash at the end of the period $ 912,574 $ 1,271,824 Supplemental disclosure for cash flow information: Interest paid $ 16,055 $ 7,667 Taxes paid 3,173 - Supplemental disclosure of non-cash investing and financing activities: Unpaid deferred transaction costs $ 3,354,121 $ 909,209 Unpaid amount for repurchase of unvested shares - 6,003 Conversion of legacy SAFE notes 64 - Conversion of legacy convertible notes 26 - Sponsor earnout share liability 4,076,200 - Issuance of common stock to Sponsor 400 - Net liabilities assumed upon closing of business combination 14,638,215 - Issuance of common stock to non-redeeming shareholders 13 - Unpaid SAFE note issuance costs - 31,302 Unpaid capital project costs 2,310,223 - Unpaid land purchase costs 16,619 - Commitment and other fees for synthetic ATM 500,000 - Unpaid finance charge related to common stock issuance to lenders 567,031 - Finance charge related to Equity Kicker 6,200,000 - The accompanying notes are an integral part of these consolidated financial statements. F- 5 Stardust Power Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 – DESCRIPTION OF THE COMPANY Nature of Business Stardust Power Inc. (the “Company”, “Stardust Power”) formerly known as Global Partner Acquisition Corp II, a Delaware corporation, is an American developer of battery grade lithium products, designed to foster energy independence in the United States. While the Company has not earned any revenue yet, the Company is in the process of developing a strategically central, lithium refinery capable of producing up to 50,000 metric tpa of battery grade lithium. Business Combination On November 21, 2023, Stardust Power Operating Inc. entered into a business combination agreement (the “Business Combination Agreement”) with Global Partner Acquisition Corp II (“GPAC II”), a Cayman Islands exempted company incorporated on November 3, 2020, Strike Merger Sub I, Inc. (“First Merger Sub”), a Delaware corporation and direct wholly owned subsidiary of GPAC II, and Strike Merger Sub II LLC (“Second Merger Sub”), a Delaware limited liability company and direct wholly owned subsidiary of GPAC II. On July 8, 2024, former Stardust Power Inc. was renamed Stardust Power Operating Inc. On July 8, 2024 (the “Closing Date”), Legacy Stardust Power completed the business combination contemplated by the Business Combination Agreement (the “Business Combination”). GPAC II deregistered as a Cayman Islands exempted company and domesticated in the State of Delaware as a Delaware corporation. As per the Business Combination Agreement, First Merger Sub merged into Legacy Stardust Power, with Legacy Stardust Power being the surviving corporation (the effective 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. Upon the completion of the Business Combination, GPAC II was renamed Stardust Power Inc. The common stock (the “Common Stock”) and warrants of the Company are currently listed on the Nasdaq Global Market (“Nasdaq”) under the symbol “SDST” and “SDSTW”, respectively. As per the Business Combination Agreement: ● Each share of common stock of Legacy Stardust Power (“Legacy Stardust Power Common Stock”) issued and outstanding immediately 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”). ● Each 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 Legacy Stardust Power Option immediately prior to the First Effective Time multiplied by the per share consideration. ● Each share of Legacy Stardust Power Restricted Stock (as defined in the Business Combination Agreement) outstanding immediately prior to the First Effective Time converted into a number of shares of Newco Stock equal to the number of shares of Legacy Stardust Power Common Stock subject to such Stardust Power Restricted Stock multiplied by the per share consideration (the “Exchanged Company Restricted Common Stock”). ● All 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. ● All outstanding GPAC Class A (after redemptions) and Class B common shares were cancelled and converted into shares of the Newco Stock. F- 6 Stardust Power Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ● As consideration for certain Class A ordinary shareholders entering into non-redemption agreements (“NRAs”) agreeing not to redeem or to reverse any redemption demands previously submitted, the Company issued 127,777 ordinary shares of Stardust Power at a price per share of approximately $ 10.00 per share at closing of the Business Combination. ● 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 VWAP of the 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 Common Stock price equals or exceeds $14.00 per share for a period of 20 trading days in a 30 trading day period, or are otherwise forfeited. Upon the occurrence of a change in control, any remaining unvested Sponsor Earnout Shares become vested. ● Additionally, the Combined Company will issue five million 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 price of Company Common Stock is greater than or equal to $ 12.00 per share for a period of 20 trading days in any 30 -trading-day period or there is a change of control, or are otherwise forfeited. ● Immediately prior to the closing of the Business Combination, the SAFE notes automatically converted into the 138,393 shares of Legacy Stardust Power Common Stock. ● Immediately prior to the closing of the Business Combination, the convertible notes automatically converted into 55,889 shares of Legacy Stardust Power Common Stock. ● Stardust Power issued 1,077,541 shares of Common Stock in exchange for $ 10,075,002 of cash in accordance with the terms of the PIPE Subscription Agreement (“PIPE”) in connection with the Business Combination. The Business Combination was accounted for as a reverse recapitalization. Under this method of accounting, GPAC II has been treated as the acquired company for financial statement reporting purposes (refer to Note 3). NOTE 2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). The consolidated balance sheet as of December 31, 2023, included herein was derived from the audited consolidated financial statements of Legacy Stardust Power as of that date. The consolidated financial statements include the accounts of Stardust Power Inc. and its wholly owned subsidiaries, Stardust Power LLC and Strike Merger Sub II, LLC. All material intercompany balances have been eliminated upon consolidation. These consolidated financial statements are presented in U.S. dollars. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. Those estimates and assumptions include, but are not limited to, useful life of assets, realization of deferred tax assets, and fair valuation of stock-based compensation, common shares purchase agreement, warrants, simple agreement for future equity notes (each a “SAFE note”), convertible notes and sponsor earnout shares. The Company evaluates estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ from these estimates, and those differences could be material to the consolidated financial statements. F- 7 Stardust Power Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Emerging Growth Company Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934 (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when an accounting standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. Going Concern The Company’s 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 and has incurred a net loss of $ 23,753,863 for the year ended December 31, 2024. The Company has an accumulated deficit of $ 52,618,948 and stockholders’ deficit of $ 19,385,784 as of December 31, 2024. The 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. These conditions raise substantial doubt about its ability to continue as a going concern. As of December 31, 2024, the Company has $ 912,574 of unrestricted cash. Upon completion of the Business Combination, the Company’s consolidated cash balance increased due to the PIPE investments of $ 10,075,002 , and $ 1,564,086 of trust account proceeds, net of redemptions and related fees. The combined company is also required to make various payments including SPAC transaction costs incurred upon the close of the Business Combination (Refer to Note 3). On October 7, 2024, the Company entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) and a related Registration Rights Agreement (the “Registration Rights Agreement”) 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 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 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. Sales of Common Stock pursuant to the Purchase Agreement, and the timing of any sales, are solely at the option of the Company. During the year ended December 31, 2024, the Company issued 55,826 common stock aggregating to net proceeds of $ 260,927 (Refer to Note 6). In December 2024, the Company entered into binding Term Sheets (“Term Sheets”) with various lenders and received cash proceeds of $ 3,550,000 (Refer to Note 7). On 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 Placement”). 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 Company common stock, par value $ 0.0001 per share (“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 (the “Warrants”). As of 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. F- 8 Stardust Power Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Subsequent to the year end, the Company consummated a public offering (the “Offering”) of an aggregate of (i) 4,792,000 shares (the “Shares”) of common stock, par value $ 0.0001 per share (the “Common Stock”) and (ii) Common Stock purchase warrants (“Common Warrants”) to purchase up to 4,792,000 shares of Common Stock (the “Common Warrant Shares”). Each Share was sold at a public offering price of $ 1.20 and associated Common Warrant to purchase one (1) Common Warrant Share was sold with an exercise price of $ 1.30 . The Company received aggregate gross proceeds from the Offering of approximately $ 5,750,400 , before deducting placement agent fees and other offering expenses. The Company intends to use the proceeds of the 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”). As of the date on which these consolidated financial statements were available to be issued, 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. The ability of the Company to continue as a going concern is dependent upon management’s plan to raise additional capital from 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. Summary of Significant Accounting Policies Significant Risks and Uncertainties Including Business and Credit Concentrations The Company is a newly incorporated company and has yet to construct its facility and commence production. As a result, the Company has a limited operating history upon which to evaluate the business and future prospects, which subjects it to a number of risks and uncertainties, including the ability to plan for and predict future growth. Since the Company’s founding, and acquisition of the land for the establishment of the facility, the Company has made significant progress towards site due diligence, engineering and techno-economic analysis for assessing suitability of the land and location. The refinery designs, brine extraction and transportation process of the facility, process configurations, and control system of the facility are representative of an industrial-scale battery-grade lithium production facility. The Company expects that it will need to raise additional capital to support its development and commercialization activities. Significant risks and uncertainties to the Company’s operations include failing to secure additional funding and the threat of other companies developing and bringing to market similar technology at an earlier time than the Company. The Company’s cash balance is held at one financial institution. As such, as at December 31, 2024, cash held with the financial institution exceeded federally insured limits. As at December 31, 2024, the company had a promissory note receivable of $ 502,838 from two borrowers representing 23.5 % of total current assets. These Notes carry an interest rate of 6 % per annum. The borrower’s financial condition and repayment ability are monitored regularly to mitigate credit risk. F- 9 Stardust Power Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Deferred Transaction Costs 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. The Company has deferred $ 1,005,109 of related costs incurred towards the proposed public offering which are 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. As disclosed in the “Going Concern” note above, subsequent to the year end, the Company consummated a public offering. The 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. Capital Project Costs and Property and Equipment, net The Company had an exclusive option purchase agreement with the City of Muskogee, Oklahoma for 66 acres of undeveloped tract (excluding wetlands and creeks). The option was scheduled to end on the earlier of February 29, 2024, the date the property is purchased, or the termination of the agreement by either party. The agreement allowed for two three-month extensions, provided that the Company is performing due diligence and pursuing permits and approvals. Non-refundable option payments of $ 25,000 and $ 75,000 were made on June 8, 2023, and October 10, 2023, respectively. The Company capitalized these payments as capital project costs as at December 31, 2023, because these payments would be credited against the full purchase price of the land upon acquisition. On January 10, 2024, the Company entered into an agreement to exercise the option and purchase the land for an additional amount of $ 1,562,030 . On May 2, 2024, and July 30, 2024, the Company paid the first and second non-refundable extension payment of $ 33,333 and $ 33,333 , respectively. On December 16, 2024, title to the land was transferred in the Company’s name and the Company paid the remaining balance of $ 1,497,949 , including transfer expenses of $ 2,585 . The Company capitalized an additional $ 75,950 as land for costs incurred for obtaining permits and title. In addition to the above, the Company capitalized $ 3,320,403 towards capital project costs related to front-end loading and environmental studies done for setting up the refinery during the year ended December 31, 2024. The construction of the Facility is still in progress and hence no depreciation is charged on capital project costs. Property and equipment, net is stated at cost less accumulated depreciation and accumulated impairment loss. The Company depreciates computer and equipment using the straight-line method over the estimated economic useful lives of the asset, which are generally three to five years . Land is a non-depreciable asset and is stated at cost. Impairment of Long-Lived Assets The Company evaluates long-lived assets for possible impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets to be held and used is measured by a comparison of the carrying amount of the asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount exceeds the fair value of the asset. Fair value is estimated at the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. F- 10 Stardust Power Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Fair Value of Measurement ASC 820, “Fair Value Measurement”, defines fair value as the amount at which an instrument could be exchanged in an orderly transaction between market participants at the measurement date (the exit price). ASC 820 establishes a fair value hierarchy based on the inputs used to measure fair value. The fair value hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from independent sources. Unobservable inputs reflect management’s assumptions that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. There are three fair value hierarchies based upon the level of inputs that are significant to fair value measurement: ● Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical unrestricted assets or liabilities. ● Level 2 – Observable inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data by correlation or other means. ● Level 3 – Prices or valuation techniques requiring inputs that are both significant to the fair value measurement and unobservable. The categorization of a financial instrument within the fair value hierarchy is based upon the lowest level of input that is significant to its fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgements and consider factors specific to the asset or liability. The Company’s financial assets and liabilities are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis. The carrying amounts of certain financial assets and liabilities, including cash, other current assets, accounts payable and short-term loans approximate fair value because of the short maturity and liquidity of those instruments. Income Taxes The Company records income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s consolidated financial statements or tax returns. Deferred tax assets and liabilities are measured using the tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. The Company nets the deferred tax assets and deferred tax liabilities from temporary differences arising from a particular tax-paying component of the Company within the same tax jurisdiction and presents the net asset or liability as long term. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statements of operations in the period that includes the enactment date. Valuation allowances are provided when necessary to reduce deferred tax assets to the amount expected to be realized. The Company recognizes tax benefits from uncertain tax positions if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. Although the Company believes that it has adequately reserved for uncertain tax positions, the Company can provide no assurance that the final tax outcome of these matters will not be materially different. The Company makes adjustment to these reserves when facts and circumstances change, such as the closing of a tax audit or the refinement of an estimate. To the extent that the final outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made and could have a material impact on our financial condition and results of operations. The Company elects to record interest accrued and penalties related to unrecognized tax benefits in the consolidated statements of operations as a component of provision for income taxes. Investments in Equity Securities Investments in equity securities with readily determinable fair values are accounted in accordance with ASC 321, Investment in Equity Securities. These investments are recorded at cost and subsequently measured at fair value with changes in fair value recognized in the Company’s consolidated statements of operations. F- 11 Stardust Power Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SAFE notes SAFE notes represent instruments that provide a form of financing to the Company and possess characteristics of both a debt and equity instrument. The Company accounts for the SAFE note in accordance with the guidance in ASC 480, “Distinguishing Liabilities from Equity” and ASC 815-40, “Derivatives and Hedging”. For the SAFE notes outstanding as of December 31, 2023, the Company first assessed whether the instrument meets the definition of a liability under ASC 480. The SAFE note includes terms that would affect the conversion of the note into shares based on the next round of financing. Since the instrument neither represents, nor is it indexed to an obligation to repurchase its own shares, the instrument does not represent any conditional obligation to settle the fixed monetary amount of the debt in a variable number of shares, the instrument is not a liability under ASC 480. The Company then assessed whether the instrument represents either an equity, derivative or a liability instrument per the guidance under ASC 815-40 and noted that due to the contingent settlement essentially representing a repayment of a fixed monetary amount, it would neither represent an instrument indexed to its own equity nor would it meet the definition of a derivative. Therefore, the note would be 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 will convert into preferred stock; (ii) a SPAC transaction or an initial public offering where the SAFE notes will convert into common stock (iii) a change in control where the SAFE notes holders will have an option to receive a portion of the cash and other assets equal to the purchase amount and (iv) dissolution event where the SAFE notes holders will be entitled to the purchase amount subject to liquidation priority. Issuance cost incurred during the period March 16, 2023 (inception) to December 31, 2023, were expensed as incurred and presented separately in the consolidated statements of operations. Warrant Liabilities The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity (“ASC 480”), and ASC 815, Derivatives and Hedging (“ASC 815”). Management’s assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether they meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period-end date while the warrants are outstanding. Issued or modified warrants that meet all of the criteria for equity classification are recorded as a component of additional paid-in capital at the time of issuance. Issued or modified warrants that do not meet all the criteria for equity classification are recorded as a liability at their initial fair value on the date of issuance and subject to remeasurement each balance sheet date with changes in the estimated fair value of the warrants to be recognized as an unrealized gain or loss in the consolidated statements of operations. Cost associated with issuing the warrants accounted for as liabilities are charged to consolidated statements of operations when warrants are issued. Short-term loans The Company accounts for short-term loans, as a single liability measured at amortized cost. The carrying value of the liability equals the proceeds received from the issuance of the loan agreements, accrued premium less debt issuance costs. See “Note 7 – Short-term loans” for additional information. F- 12 Stardust Power Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Leases At the inception of a contract, the Company performs an assessment whether the contract is, or contains, a lease. The assessment is based on whether: (1) the contract involves the use of a distinct identified asset, (2) the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the term of the contract, and (3) the Company the right to direct the use of the asset. Leases are classified as either finance leases or operating leases. A lease is classified as a finance lease if any one of the following criteria are met: (1) the lease transfers ownership of the asset by the end of the lease term, (2) the lease contains an option to purchase the asset that is reasonably certain to be exercised, (3) the lease term is for a major part of the remaining useful life of the asset, (4) the present value of the lease payments equals or exceeds substantially all of the fair value of the asset, or (5) the leased asset is so specialized that the asset will have little to no value at the end of the lease term. A lease is classified as an operating lease if it does not meet any one of the above criteria. Operating and finance leases are recorded as right-of-use (ROU) assets and lease liabilities on the Company’s consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating and finance lease ROU assets and liabilities are initially recognized based on the present value of lease payments over the lease term. In determining the present value of lease payments, the Company uses the implicit interest rate if readily determinable. When the implicit interest rate is not readily determinable, the Company uses its incremental borrowing rate, which is based on its collateralized borrowing capabilities over a similar term of the lease payments. When using the incremental borrowing rate, the Company utilizes the consolidated group incremental borrowing rate. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. The Company has elected the practical expedient to account for lease and non-lease components as a single lease component. The Company has also elected not to record right of use assets and associated lease liabilities on the consolidated balance sheet for leases that have a term, including any reasonably assured renewal terms, of 12 months or less at the lease commencement date. The lease payments are recognized for these short-term leases in the consolidated statements of operations on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred. The Company has entered into a lease agreement with Tower Lake LLC, for office space. The Company has not recognized any ROU asset and lease liability pursuant to this lease as it is a short-term lease. The Company recorded rent expense of $ 31,242 and $ 24,425 for the year ended December 31, 2024, and for the period from March 16, 2023 (inception) through December 31, 2023, respectively in the consolidated statements of operations. General and Administrative Expenses General and administrative expenses primarily include compensation for employees, consultants, and advisors, legal and professional service fees, utilities, travel and other general overhead costs to support the Company’s operations. Advertising Costs Advertising costs are expensed as incurred and are included in general and administrative expenses, in accordance with ASC 720-35, “Other Expenses – Advertising Cost”. Other Transaction Costs Other transaction costs consist of $ Nil and $ 450,113 for the year ended December 31, 2024, and for the period from March 16, 2023 (inception) through December 31, 2023, respectively, and relate to costs that represent fees and expenses associated with evaluation of potential other merger opportunities that the Company ultimately did not execute. Organizational Costs In accordance with ASC 720, “Other Expenses”, organizational costs, including accounting fees, legal and professional fees, and costs of incorporation, are expensed as incurred. The Company has incurred $ 75,136 of set-up costs expensed in the consolidated statement of operations for the period from March 16, 2023 (inception) through December 31, 2023, representing pre-incorporation expenses for legal and professional consulting services related to start-up activities. Stock-Based Compensation The Company accounts for stock options, restricted share awards (“RSAs”), restricted stock units (“RSUs”), performance stock units (“PSUs”), to employees, consultants and other advisors, and directors based on their estimated fair value on the date of grant. The fair value of the Company’s stock options is measured based on the grant-date fair value which is calculated using a Black-Scholes option pricing model. The Company evaluates the assumptions used to value option awards upon each grant of stock options. At the election of the grantees, the stock options granted by the Company are early exercisable at any time from the date of grant but are subject to a repurchase right, under which the Company may buy back any unvested shares in the event of an employee’s termination prior to full vesting at lower of original exercise price or fair market value as on the date the Company delivers the Repurchase Notice. The consideration received for an early exercise of an unvested option is considered as deposit of the exercise price and the related amount is recorded as a liability. The liabilities are reclassified into common stock and additional paid-in capital as the awards vest. The shares are included in common stock on the consolidated statements of stockholders’ equity (deficit) as at December 31, 2024 and 2023, and are not included in the calculation of basic net loss per share attributable to common stockholders for the year ended December 31, 2024, and for the period from March 16, 2023 (inception) through December 31, 2023. However, the early exercised shares are included in calculation of diluted net loss per share attributable to common stockholders for the year ended December 31, 2024, and for the period ended December 31, 2023, to the extent they are not anti-dilutive. F- 13 Stardust Power Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The fair value of RSUs awarded is based on the closing price of the Company’s common stock, as reported on Nasdaq on the date of grant. The fair value and derived service period of PSUs with market-based conditions is estimated using the Monte Carlo valuation model. The Company evaluates the assumptions used to value PSU awards upon each grant of PSUs. Stock-based compensation expense associated with service and market-based conditions for RSUs will be recognized over the longer of the expected achievement period for the service condition and market condition. Stock-based compensation expense associated with PSUs is recognized over the longer of the expected achievement period for the performance condition and the service condition The Company generally recognizes stock-based compensation expense for RSUs with only service condition on a straight-line basis over the vesting term and RSUs /PSUs with service and market-based conditions, respectively, on graded vesting method over the vesting term. The Company accounts for forfeitures as they occur. Net Loss per Share The Company adopted ASC 260, “Earnings per Share” , at its inception. Basic net loss per share is calculated by dividing the net loss by the weighted average number of Common Stock outstanding for the period. Diluted loss per share is calculated by dividing the Company’s net loss available to common stockholders by the diluted weighted average number of shares outstanding for the period. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted as at the first of the year for any potentially dilutive debt or equity. Potential common shares from unvested restricted stock options, earnouts and common stock warrants are computed using the treasury stock method. Contingently issuable shares are included in basic EPS only when there is no circumstance under which those shares would not be issued. Recent accounting pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”), under its ASC or other standard setting bodies, and adopted by the Company as of the specified effective date. Recently adopted accounting pronouncements In November 2023, the FASB issued Accounting Standard Update (“ASU”) 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures (ASU 2023-07). ASU 2023-07 improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The guidance is effective for public business entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years, beginning after December 15, 2024. Early application is permitted. The guidance is to be applied retrospectively to all prior periods presented in the consolidated financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. The Company adopted the standard for the year ended December 31, 2024, with disclosures included in Note 15 – Segment Reporting. Recently Issued Accounting Pronouncements Not Yet Adopted With the exception of those listed below, the Company has reviewed the accounting pronouncements issued during the year ended December 31, 2024, and concluded they were either not applicable or not expected to have a material impact on the Company’s consolidated financial statements. In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses , which is referred to as ASU 2024-03. ASU 2024-03 requires public entities to disclose detailed information about specific types of expenses included within the expense captions presented on the face of the income statement. While ASU 2024-03 does not alter the presentation of expense captions on the face of the income statement, it introduces requirements for disaggregating certain expense captions into specified categories within the footnotes to the consolidated financial statements. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact that ASU 2024-03 will have on its consolidated financial statements and accompanying footnotes. In December 2023, FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual consolidated financial statements that have not yet been issued or made available for issuance. This ASU will likely result in the required additional disclosures being included in our consolidated financial statements, once adopted. F- 14 Stardust Power Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 3 – REVERSE RECAPITALIZATION As mentioned above in Note 1, the Business Combination was closed on July 8, 2024, and has been accounted for a reverse recapitalization because Legacy Stardust Power has been determined to be the accounting acquirer pursuant to ASC 805, “ Accounting for Business Combinations ” , based on the evaluation of the following facts and circumstances: ● Stardust Power shareholders who controlled Legacy Stardust Power prior to the Business Combination, retained the majority voting interest in the Combined Company immediately after the Business Combination; ● Legacy Stardust Power has the ability to elect a majority of the members of the Combined Company’s governing body; ● Legacy Stardust Power’s senior management makes up the senior management of the Combined Company; ● The Combined Company assumed Stardust Power’s name. Therefore, as there was no change in control, the Business Combination was accounted for as a common control transaction with respect to Legacy Stardust Power along with a reverse recapitalization of the Company. Under the Business Combination, while GPAC II was the legal acquirer, it has been treated as the “acquired” company for financial reporting purposes. Accordingly, the Business Combination was treated as the equivalent of Legacy Stardust Power issuing stock for the net assets of GPAC II, accompanied by a recapitalization. The net assets of GPAC II have been stated at historical cost, with no goodwill or other intangible assets recorded. Immediately following the Business Combination, there were 47,736,650 shares of Common Stock outstanding with a par value of $ 0.0001 per share. The above includes 1,000,000 Sponsor Earnout Shares which were also issued at closing. While the Earnout Shares are legally issued and restricted, they are not considered outstanding for accounting purposes until resolution of the earnout contingency. Additionally, there were 5,566,667 Private Placement Warrants (defined below) and 4,999,929 of the Company’s detachable redeemable warrants and distributable redeemable warrants (the “ Public Warrants”) outstanding representing a right to purchase 10,566,596 Newco Stock. Immediately prior to the closing of the Business Combination, the total number of Legacy Stardust Power ordinary shares issued and outstanding was 9,017,300 . Further, as consideration for certain Class A ordinary shareholders entering into NRAs agreeing not to redeem or to reverse any redemption demands previously submitted, the Company issued 127,777 Class A ordinary shares of Stardust Power. The shares are fully vested, nonforfeitable equity instruments. Pursuant to the Business Combination Agreement, the former owners of Legacy Stardust Power were granted and will have the ability to earn, in the aggregate, an additional 5,000,000 shares of Common Stock (“Merger Earnout Shares”) if the daily volume weighted average price of the Common Stock is greater than or equal to $ 12.00 for any 20 trading days within a 30 trading day period (or a change of control of the Company occurs), during the period commencing on the Closing Date and ending on the eighth anniversary of the Closing Date. There are no service conditions or any requirement for the participants to provide goods or services in order to vest in the Merger Earnout Shares. Accordingly, we determined that the Merger Earnout Shares are not within the scope of ASC 718. Further, since the Merger Earnout Shares represent a freestanding equity-linked financial instrument, we evaluated the requirements of ASC 480 and concluded that the Merger Earnout Shares should not be classified as a liability and instead is a financial instrument within the scope of ASC 815. The Merger Earnout Share arrangement contains two exercise contingencies – the daily volume weighted average stock price and a change of control neither of which is based on an observable market or an observable index other than one based on the Company’s stock. Further, with respect to settlement provisions, we noted that no provisions impact the fixed number of shares to be issued upon settlement, except for adjustments for standard anti-dilutive provisions. Furthermore, the equity classification conditions in ASC 815-40-25 are also met. Therefore, in accordance with ASC 815-40, the Earnout Shares are indexed to the Common Stock and are accordingly classified as equity. As the merger is accounted for as a reverse recapitalization, the fair value of the Earnout Share arrangement as of the merger date, amounting to $ 25,071,500 has been accounted for as an equity transaction (as a deemed dividend) as of the closing date of the merger. The Earnout Shares were valued using the following assumptions under the Monte Carlo Model that assumes optimal exercise of the Company’s redemption option at the earliest possible date: SCHEDULE OF ASSUMPTIONS UNDER THE MONTE CARLO MODEL Market price of public stock $ 9.74 Expected term (years) 8 years Volatility 60.00 % Risk-free interest rate 4.25 % Dividend rate 0.00 % F- 15 Stardust Power Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The number of shares of Common Stock issued and outstanding immediately following the consummation of the Business Combination were: SCHEDULE OF COMMON STOCK ISSUED AND OUTSTANDING Stardust Power rollover equity (1)(2) 42,393,905 GPAC II public shareholders (3)(4) 137,427 Sponsor (5)(6) 4,000,000 PIPE (7) 1,077,541 Non-redemption shares (8) 127,777 Total Shares issued and Outstanding 47,736,650 (1) Includes eight shareholders, whose shares are not subject to lock-up or transfer restrictions. (2) Includes (i) 894,132 shares of Combined Company Common Stock issued in exchange for shares of Legacy Stardust Power Common Stock with the conversion of the SAFE notes and convertible equity agreements and (ii) 41,499,772 shares of Combined Company Common Stock issued in accordance with the Business Combination Agreement underlying the Exchanged Company Restricted Common Stock. (3) Excludes 4,999,929 Public Warrants that converted automatically into a whole warrant exercisable for one share of Common Stock. (4) Reflects the reclassification of $ 1,564,086 of cash held in trust account, after reversal of redemptions of 2,877 shares at $ 11.38 per share, post June 30, 2024, resulting in a net increase of $ 1,564,086 , net of redemptions, in cash. (5) Excludes 5,566,667 Private Placements Warrants that converted automatically into a whole warrant exercisable for one share of Common Stock. (6) Includes 1,000,000 Sponsor Earnout Shares (as defined in the Business Combination Agreement). While the Earnout Shares are legally issued, they are subject to forfeiture based on vesting conditions not being met. (See Note 17). (7) Reflects the receipt of $ 10,075,002 of PIPE proceeds resulting in issuance of 1,077,541 shares with the corresponding impact of $ 108 in Combined Company Common Stock and the balance impact being booked to additional paid-in capital. (8) Includes 127,777 shares of Combined Company Common Stock issued to GPAC II shareholders entering into NRAs. Upon the closing of the Business Combination and the PIPE financing, the Company received net cash proceeds of $ 9,154,761 . The following table reconciles the elements of the Business Combination to the consolidated statements of cash flows and the consolidated statements of stockholders’ deficit for the year ended December 31, 2024: SCHEDULE OF ELEMENTS OF BUSINESS COMBINATION Recapitalization Cash proceeds from GPAC II, net of redemptions 1,564,086 Cash proceeds from PIPE financing $ 10,075,002 Less: Cash payment of assumed liabilities of GPAC II ( 921,493 ) Less: Settlement of sponsor promissory notes $ ( 1,562,834 ) Net cash proceeds upon closing of the Business Combination and PIPE financing 9,154,761 Less: Non-cash net liabilities assumed from GPAC II ( 14,638,215 ) Net charge to additional paid-in-capital as a result of the Business Combination reported in stockholder’s (deficit) ( 5,483,454 ) Legacy Stardust Power incurred $ 7,501,223 as transaction costs related to the Business Combination. Refer Note 2 Deferred Transaction Costs for details. F- 16 Stardust Power Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Sponsor Earnout Shares As part of the closing of the Business Combination, the Company issued 1,000,000 shares to Global Partner Sponsor II, LLC (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 $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 Common Stock price equals or exceeds $14.00 per share for a period of 20 trading days in a 30 trading day period. There are no service conditions or any requirement for the participants to provide goods or services in order to vest in the Sponsor Earnout Shares. Accordingly, we determined that the Sponsor Earnout Shares are not within the scope of ASC 718. The accounting for the Sponsor Earnout Shares was evaluated under ASC Topic 480, “Distinguishing Liabilities from Equity”, and ASC Subtopic 815-40, “Derivatives and Hedging — Contracts in Entity’s Own Equity”, to determine if the Sponsor Earnout Shares should be classified as a liability or within equity. As part of the analysis, it was determined that the Sponsor Earnout Shares subject to vesting are freestanding from other shares of Combined Company Common Stock held by the Sponsor and do not meet the criteria in ASC 815-40 to be considered indexed to the Combined Company Common Stock, due to the settlement provisions including a change in control component which could impact the number of the Sponsor Earnout Shares are ultimately settled for, which is not an input to a fixed-for-fixed option pricing model. As a result, the Sponsor Earnout Shares will be classified as a liability. Subsequent changes in the fair value of the Sponsor Earnout shares will be reflected in the consolidated statements of operations. 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. The Company assesses 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 December 31, 2024, the fair value of Sponsor Earnout Shares amounted to $ 532,700 . The Sponsor Earnout Shares were valued using the following assumptions under the Monte Carlo Model that assumes optimal exercise of the Company’s redemption option at the earliest possible date: SCHEDULE OF ASSUMPTIONS UNDER THE MONTE CARLO MODEL December 31, 2024 Market price of public stock $ 3.58 Expected term (years) 7.52 years Volatility 65.00 % Risk-free interest rate 4.50 % Dividend rate 0.00 % NOTE 4 – COMMITMENTS AND CONTINGENCIES Certain conditions may exist as at the date the consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. The Company monitors the arrangements that are subject to guarantees in order to identify if the obligor who is responsible for making the payments fails to do so. If the Company determines it is probable that a loss has occurred, then any such estimable loss would be recognized under those guarantees. The methodology used to estimate potential loss related to guarantees considers the guarantee amount and a variety of factors, which include, depending on the counterparty, the latest financial position of the counterparty, actual defaults, historical defaults, and other economic conditions. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows. F- 17 Stardust Power Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS On March 13, 2024, Legacy Stardust Power and IGX, entered into an exclusive letter of intent (the “IGX LOI”) to potentially acquire interests in certain mining claims (the “IGX Claims”). The contemplated transaction is subject to the entering into of a definitive agreement, due diligence by the Company, and other factors. In connection with the entering into the non-binding IGX LOI, the Company has paid a non-refundable payment of $ 30,000 in connection with obtaining a binding exclusivity right. Further, Stardust Power has agreed to binding provisions relating to (i) a right of first refusal in favor of Stardust Power and (ii) the delivery of a form promissory note in favor of IGX. On August 19, 2024, Legacy Stardust Power entered into a promissory note arrangement with IGX (the “IGX Note”) for $ 176,000 to allow the Company to potentially be able to enter into related agreements and partnerships with IGX. The IGX Note carries an interest rate of 6 % with a maturity date of February 28, 2025 . The IGX Note is secured by a letter of intent for possible acquisition, including through a potential joint venture, of IGX’s mining claims. The payment is made solely for the payment of all 2024 Bureau of Land Management fees and county land maintenance fees, notice of intent and associated filing fees for the claims owned by IGX. If the Company acquires an interest in any of the IGX Claims, the balance of the promissory note shall be credited as part of the Company’s investment and IGX shall not be required to repay the note. The promissory note including interest amounting to $ 179,877 is outstanding as on December 31, 2024, and presented as Promissory notes issued under current assets on the consolidated balance sheet. The Company is in active discussion in negotiating the terms for repayment and is evaluating multiple options including a possible strategic investment. On March 15, 2024, Legacy Stardust Power and Usha Resources Ltd. (“Usha Resources”) entered into a non-binding Letter of Intent (the “Jackpot LOI”), except for certain binding terms such as those relating to the exclusivity period until June 30, 2025, as extended, to acquire an interest in Usha Resources’ lithium brine project, situated in the United States. Usha Resources is an established lithium developer with multiple projects in development. The Jackpot Lake Lithium Brine Project is a flagship asset of Usha Resources and is a lithium brine asset located in the United States, comprising of 8,714 acres of property. The project is currently engaged in its maiden drill program. The Jackpot LOI provides Stardust Power with the exclusive option to agree to acquire up to 90% of the interests held by Usha Resources in the Jackpot Lake project, based on an indicative earn-in schedule. As part of a definitive agreement, Stardust Power would be required to invest into the development of the Jackpot Lake project. The Company has made a non-refundable payment of $ 25,000 upon execution of the Jackpot LOI in connection with securing exclusivity and a further $ 50,000 payment (the “Second Payment”) was made by the Company on May 14, 2024; provided that the Second Payment shall be non-refundable except if Usha Resources breaches the terms of the Jackpot LOI at which point Usha Resources shall refund the Second Payment together with all out-of-pocket expenses (including the fees and expenses of legal counsel, accountants and other advisors hereof) incurred by the Company. The Second Payment of $ 50,000 is presented as Other long-term assets on the consolidated balance sheet as on December 31, 2024. On October 10, 2023, Legacy Stardust Power entered into a non-binding (except for the confidentiality provision) letter of intent with QX Resources Limited, an Australian limited liability company (“QXR”), to negotiate an agreement to work together collaboratively and in good faith to assess the lithium brines contained in QXR’s Liberty Lithium Brine Project (the “Project”). QXR is earning into 75% of the Project situated in Inyo County, California, by way of an earn-in agreement with IG Lithium LLC (“IGL”) and QXR intends to use either evaporation or direct extraction technology to produce a concentrated lithium product or other lithium products. On August 16, 2024, the Company entered into a promissory note arrangement with IGL (the “IGL Note”) for $ 316,000 to allow the Company to enter into related agreements and future partnerships with IGL on the Project. The IGL Note carries an interest rate of 6 % with a maturity date of July 1, 2025 . The IGL Note is secured by first priority in all rights, title, interest, claims and demands of IGL related to the Project and other assets of IGL. The promissory note including interest amounting to $ 322,961 is outstanding as on December 31, 2024, and presented as Promissory notes issued under current assets on the consolidated balance sheet. On 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 Front End Loading-3 report of the Company’s Muskogee Lithium facility at Southside Industrial Park, in Muskogee, Oklahoma. The total amount due pursuant to the Primero Agreement, assuming full performance, is approximately $ 4,724,690 in the aggregate, subject to customary potential adjustments. As at December 31, 2024, the total performance pending to be performed and billed by Primero is $ 1,855,911 . Legal proceedings We are also subject to certain routine legal and regulatory proceedings, as well as demands and claims that arise in the normal course of our business. We make a provision for a liability relating to legal matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impact of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. In our opinion, resolution of any pending claims (either individually or in the aggregate) is not expected to have a material adverse impact on our consolidated results of operations, cash flows or financial position, nor is it possible to provide an estimated amount of any such loss. However, depending on the nature and timing of any such dispute, an unfavorable resolution of a matter could materially affect our future financial position, results of operations, or cash flows, or all in a particular period. F- 18 Stardust Power Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 5 – BALANCE SHEET COMPONENTS SCHEDULE OF BALANCE SHEET COMPONENTS Prepaid expenses and other current assets December 31, 2024 December 31, 2023 Prepaid expenses $ 358,331 $ 424,124 Deposit 246,235 - Other current assets 1,765 2,373 Total $ 606,331 $ 426,497 Property and equipment, net December 31, 2024 December 31, 2023 Land $ 1,740,565 $ - Computer and equipment 17,211 1,974 Property and equipment, gross 1,757,776 1,974 Accumulated depreciation ( 1,829 ) ( 6 ) Total $ 1,755,947 $ 1,968 Depreciation expense was $ 1,823 and $ 6 for the year ended December 31, 2024, and for the period from March 16, 2023 (inception) through December 31, 2023, respectively. Other long-term assets December 31, 2024 December 31, 2023 Non-current portion of prepaid expense $ 262,501 $ - Long-term deposit 50,000 - Total $ 312,501 $ - Accounts payable December 31, 2024 December 31, 2023 Vendors $ 10,259,060 $ 1,256,792 Due to employees 5,057 - Total $ 10,264,117 $ 1,256,792 Accrued liabilities and other current liabilities December 31, 2024 December 31, 2023 Accrued expenses $ 1,787,985 $ 151,284 Capital market advisory fees 1,500,000 - Personnel related liabilities 1,400,141 56,823 Accrued interest 34,561 - Total $ 4,722,687 $ 208,107 F- 19 Stardust Power Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 6 – COMMON STOCK On July 8, 2024, the Common Stock and warrants began trading on Nasdaq under the ticker symbols “SDST” and “SDSTW”, respectively. Each share of Common Stock is entitled to one vote. The holders of Common Stock are also entitled to receive dividends whenever funds are legally available and when declared by the board of directors (the “Board”), subject to prior rights of the convertible preferred stockholders. Shares of Common Stock issued and outstanding on the consolidated balance sheet and consolidated statement of stockholders’ deficit includes shares related to restricted stock that are subject to repurchase. The Company is authorized to issue 700,000,000 and 100,000,000 shares, par value of $ 0.0001 per share, of Common Stock and Preferred stock, respectively. At December 31, 2024, the Company had 47,736,279 shares of Common Stock issued and outstanding. Not reflected in the shares issued and outstanding as of December 31, 2024, is approximately 618,626 shares of Common Stock related to restricted stock units that vested in 2024 but have not yet been settled and issued. As of December 31, 2023, the Company had 41,499,772 shares of common stock, par value $ 0.0001 , issued and outstanding. Common Stock Purchase Agreement On October 7, 2024, the Company entered into a Common Stock Purchase Agreement and a Registration Rights Agreement (collectively referred to as the “Purchase Agreement”) with B. Riley Principal Capital II, LLC. Pursuant to the Purchase Agreement, the Company has the right, in its sole discretion, to sell to B. Riley Principal Capital II, LLC up to the lesser of (i) $ 50.0 million of newly issued shares of the Company’s common stock, and (ii) the Exchange Cap (as defined below) (subject to certain conditions and limitations), from time to time during the 36-month term of the Purchase Agreement. Under the applicable NASDAQ rules, the Company may not issue to B. Riley Principal Capital II, LLC under the Purchase Agreement more than 9,569,701 shares of common stock, which number of shares is equal to 19.99% of the common shares outstanding immediately prior to the execution of the Purchase Agreement unless certain exceptions are met (the “Exchange Cap”). 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. Additionally, B. Riley Principal Capital II, LLC cannot acquire shares that would result in its beneficial ownership exceeding 4.99% of Stardust Power’s outstanding shares. The Exchange Cap does not apply if the average share price exceeds $7.7020 per share but will remain in place if this threshold is not met and stockholder approval is not obtained. The Company evaluated this common stock purchase agreement to determine whether they should be accounted for considering the guidance in ASC 815-40, “Derivatives and Hedging - Contracts on an Entity’s Own Equity” (“ASC 815-40”) and concluded that it is an equity-linked contract that does not qualify for equity classification, and therefore requires fair value accounting as a derivative. The Company has analyzed the terms of the freestanding purchased put right and has concluded that it had insignificant value as of December 31, 2024. 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, LLC as a consideration for this agreement. These shares, valued at $ 7.85 each (based on Nasdaq’s closing price on October 4, 2024), represent 1.0% of B. Riley Principal Capital II, LLC’s $ 50 million purchase commitment under the agreement. The cost of this on the effective date of the purchase agreement was $ 500,000 and is a component of finance charges in the accompanying consolidated statements of operations. Regarding the aforementioned commitment shares, the Purchase agreement specifies the following: a) If B. Riley Principal Capital II, LLC’s resale of the Commitment Shares yields less than $ 500,000 by specified dates, the Company may need to pay up to $ 500,000 in cash (“make-whole” payment) b) No cash payment will be made if B. Riley Principal Capital II, LLC’s net proceeds from reselling the shares meet or exceed $ 500,000 . c) If B. Riley Principal Capital II, LLC’s resale proceeds exceed $ 500,000 , it will pay the Company 50% of the amount above $ 500,000 . Under the terms of the Purchase Agreement, if the aggregate proceeds received by B. Riley Principal Capital II, LLC from its resale of the Commitment Shares is less than $ 500,000 then, upon notice by B. Riley Principal Capital II, LLC, the Company must pay the difference between $ 500,000 , and the aggregate proceeds received by B. Riley Principal Capital II, LLC from its resale of the Commitment Shares. On December 31, 2024, the fair market value of the Commitment Shares was $ 227,989 . Therefore, the Company’s make-whole obligation was $ 272,011 , and this amount was recorded in Accrued expenses and other current liabilities in the accompanying consolidated balance sheet as at December 31, 2024. The change in the fair value of the make-whole obligation is recorded as a component of finance charges in the accompanying consolidated statements of operations for the year ended December 31, 2024. The Company agreed to reimburse B. Riley Principal Capital II, LLC an amount of $ 75,000 for legal fees related to the Purchase and Registration Rights Agreements, with $ 25,000 paid upfront and $ 50,000 withheld by B. Riley Principal Capital II, LLC from 50 % of the purchase price of shares acquired in initial and subsequent purchases under the agreement until the full amount is covered. If the $ 50,000 is not fully withheld by December 31, 2024, or upon agreement termination, the Company must pay the remaining balance in cash. Additionally, the Company will reimburse up to $ 5,000 per fiscal quarter for B. Riley Principal Capital II, LLC’s legal fees related to due diligence and related matters. The Company issued 55,826 shares of Common Stock through December 31, 2024, aggregating to net proceeds of $ 260,927 under the Common Stock Purchase Agreement. F- 20 Stardust Power Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 7 – SHORT-TERM LOAN Insurance funding borrowing 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 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. The carrying amount of $ 258,552 is included as Short-term Loan Liability on the accompanying consolidated balance sheet as on December 31, 2024. The Company recognized interest expense of $ 14,876 on the accompanying consolidated statement of operations for the year ended December 31, 2024. On November 19, 2023, the Company entered into a financing agreement of $ 80,800 for the purchase of an insurance policy with First Insurance Funding. The debt is payable in monthly installments of $ 8,389 per month for 10 months. Payments include a stated interest rate of 8.25 % and are secured against lien on the insuran ce policy. The carrying amount of $ Nil and $ 72,967 is included as short-term loan liability on the accompanying consolidated balance sheet as on December 31, 2024, and December 31, 2023, respectively. The Company recognized interest expense of $ 2,369 and $ 717 on the accompanying consolidated statements of operations for the year ended December 31, 2024, and for the period from March 16, 2023 (inception) through December 31, 2023. Other 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. The Company recorded the short-term loan as a liability and evaluated embedded features in accordance with the accounting guidance and determined that bifurcation is not required for any embedded feature. By analyzing the economic characteristics of the Equity Kicker terms, the unconditional obligation to transfer variable number of shares where the monetary value of the obligation is a fixed monetary amount known at inception is akin to a traditional debt arrangement with a principal of $ 1,750,000 , which will be settled in cash along with a premium of $ 3,500,000 in the form of variable number of shares. The Equity Kicker $ 3,500,000 was triggered by the private placement that occurred on December 31, 2024. Upon such occurrence, the Company has recorded the accretion impact of this premium of $ 3,500,000 as finance charges in the consolidated statements of operations for the year ended December 31, 2024, and has reported the obligation (which will be settled through issuance of variable number of shares) as short-term loan. 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. The Company recorded the short-term loan as a liability and evaluated embedded features in accordance with the accounting guidance and determined that bifurcation is not required for any embedded feature. By analyzing the economic characteristics of the Equity Kicker terms, the unconditional obligation to transfer variable number of shares where the monetary value of the obligation is a fixed monetary amount known at inception is akin to a traditional debt arrangement with a principal of $ 1,800,000 , which will be settled in cash along with a premium of $ 2,700,000 in the form of variable number of shares. The Equity Kicker $ 2,700,000 was triggered by the private placement that occurred on December 31, 2024. Upon such occurrence, the Company has recorded the accretion impact of this premium of $ 2,700,000 as finance charges in the consolidated statements of operations for the year ended December 31, 2024, and has reported the obligation (which will be settled through issuance of variable number of shares) as short-term loan. 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. F- 21 Stardust Power Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Company recognized interest expense of $ 33,208 towards other short-term loans on the accompanying consolidated statements of operations for the year ended December 31, 2024. The following table summarizes the Company’s outstanding short-term loan arrangements: SCHEDULE OF SHORT TERM LOAN ARRANGEMENTS December 31, 2024 December 31, 2023 Insurance funding loan $ 258,552 $ 72,967 Short-term loans from related parties (See Note 16) 5,875,000 - Other short-term loans 3,875,000 - Total $ 10,008,552 $ 72,967 NOTE 8 – STOCK BASED COMPENSATION As the Business Combination has been accounted for as a reverse recapitalization, the consolidated financial statements of the merged entity reflect the continuation of Legacy Stardust Power, Inc. consolidated financial statements. Legacy Stardust Power’s. equity has been retroactively adjusted to the earliest period presented to reflect the legal capital of the legal acquirer, GPAC II. As a result, the number of shares was also retrospectively adjusted for periods ended prior to the Business Combination. Shares Issued at Inception At March 16, 2023 (inception of Legacy Stardust Power), certain employees and service providers participated in the purchase of restricted Common Stock of Legacy Stardust Power aggregating to 2,531,232 shares. Out of the total, certain restricted stock vested immediately and remaining unvested restricted stock aggregating to 1,191,980 shares vests over 24 months subject to service conditions and accelerated vesting upon certain events. The agreements also contain a repurchase option noting that if the employee or service provider is terminated, for any reason, the Company has the right and option to repurchase the service provider’s unvested restricted Common Stock. Since all shareholders purchased the shares at par value and the shares had no incremental value beyond the par value as at that date, during the periods from March 16, 2023 (inception) through December 31, 2023, and year ended December 31, 2024, the stock-based compensation expense impact is insignificant. As at December 31, 2024, 62,706 outstanding shares had not vested and the weighted average remaining contractual period of the unvested restricted stock is 0.25 years. Any shares subject to repurchase by the Company are not deemed, for accounting purposes, to be outstanding until those shares vest. The amount to be recorded as liabilities associated with shares issued with repurchase rights were immaterial as at December 31, 2024 and December 31, 2023. F- 22 Stardust Power Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Restricted stock activity for the year ended December 31, 2024, and balances as at the end of December 31, 2024, were as follows: SCHEDULE OF RESTRICTED STOCK ACTIVITY Common Stock Number of shares outstanding Weighted Average Grant-Date Fair Value Weighted average remaining contractual life (Years) Unvested as of December 31, 2023 313,528 $ 0.000002 Granted - - Vested ( 250,822 ) 0.000002 Forfeited or cancelled - - Unvested as of December 31, 2024 62,706 $ 0.000002 0.25 2023 Equity Incentive Plan At March 16, 2023, the Legacy Stardust Power stockholders approved the 2023 Equity Incentive Plan and 2,301,120 shares of the Company’s Common Stock were reserved for issuance thereunder. During the year ended December 31, 2024, the Board adopted a resolution to increase the number of shares of Common Stock authorized for issuance under the 2023 Equity Incentive Plan by 1,150,560 shares of Common Stock. During the period from March 16, 2023 (inception) through December 31, 2023, there were no grants under the 2023 Equity Incentive Plan. Stock Options During October and November 2023, Legacy Stardust Power granted options for 2,278,108 shares of stock options under the 2023 Equity Incentive Plan: 2,186,064 options were granted to employees, and 92,045 options were granted to a consultant. The employee grants vest over a period of 3 to 5 years, and the consultant grant vests over 18 months. The options granted to both employees and the consultant were exercisable at the exercise price of $ 0.0065 . All the options under the 2023 Equity Incentive Plan were early-exercised by grantees. Accordingly, the Company received a total amount of $ 14,850 towards the early exercise of these options during the period from March 16, 2023 (inception) through December 31, 2023, and recorded a liability against the early exercise of these options. On December 14, 2023, the Company repurchased 920,448 unvested shares that were granted to an employee under the 2023 Equity Incentive Plan at the original exercise price of $ 0.0065 . The Company repaid a total amount of $ 6,000 for the repurchase of these early exercised shares from the employee in January 2024. The amount was charged against the ‘Early exercised shares option liability’. During the year ended December 31, 2024, the Company repurchased 25,575 unvested shares that were granted to a consultant and 230,112 unvested shares that were granted to an employee under the 2023 Equity Incentive Plan at the original exercise price of $ 0.0065 . The early exercised shares liability amounting to $ 4,628 and $ 8,650 is outstanding as at December 31, 2024, and December 31, 2023, respectively, and is presented under ‘Early exercised shares option liability’ on the consolidated balance sheet. F- 23 Stardust Power Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Stock option activity for the year ended December 31, 2024, and balances as at the end of December 31, 2024 were as follows: SCHEDULE OF STOCK OPTION ACTIVITY Stock Options Number of options Weighted Average Grant-Date Fair Value Weighted average remaining contractual life (Years) Aggregate Intrinsic Value Unvested as of December 31, 2023 1,326,982 $ 0.57 3.49 $ 7,998,367 Granted - - Vested ( 361,303 ) 0.57 Forfeited ( 255,687 ) 0.60 Unvested as of December 31, 2024 709,992 $ 0.56 2.58 $ 2,537,156 The total compensation expense for stock options recognized in the General and administrative expenses of the Company’s consolidated statements of operations was $ 177,942 and $ 58,536 for the year ended December 31, 2024, and the period from March 16, 2023 (inception) through December 31, 2023, respectively. As at December 31, 2024, total unvested compensation cost for stock options granted to employees not yet recognized was $ 386,927 . The Company expects to recognize this compensation over a weighted average period of approximately 2.58 years. The weighted average fair value of options granted during period from March 16, 2023 (inception) through December 31, 2023 are provided below. The fair value was estimated on the date of grant using the Black-Scholes pricing model with the assumptions indicated below: SCHEDULE OF FAIR VALUE ASSUMPTIONS 2023 Expected option life (years) 5.07 - 5.93 years Expected volatility 60 % - 70 % Risk-free interest rate at grant date 3.84 - 3.86 % Dividend yield 0 % Due to the absence of an active market for the Company’s Common Stock at the time of the grant, the Company utilized methodologies in accordance with the framework of the American Institute of Certified Public Accountants Technical Practice Aid (Valuation of Privately Held Company Equity Securities Issued as Compensation) to estimate the fair value of its Common Stock. In determining the exercise prices for options granted, the Company has considered the estimated fair value of the Common Stock as at the grant date. The estimated fair value of the Common Stock has been determined at each grant date based upon a variety of factors, including the business, financial condition and results of operations, economic and industry trends, the illiquid nature of the Common Stock, the market performance of peer group of similar publicly traded companies, and future business plans of the Company. Significant changes to the key assumptions underlying the factors used could result in different fair values of Common Stock at each valuation date. The Company based the risk-free interest rate on a U.S. Treasury Bond Yield with a term substantially equal to the option’s expected term. The Company based the expected volatility on a blend of historical volatility and implied volatility derived from price of publicly traded shares of peer group of similar companies. The expected term represents the period that stock-based awards are expected to be outstanding. The expected term for option grants is determined using the simplified method which represents the average of the contractual term of the option and the weighted average vesting period of the option. The Company considers this appropriate as there is not sufficient historical information available to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. F- 24 Stardust Power Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Restricted Stock Units During April and June 2024, Legacy Stardust Power granted 2,024,985 restricted stock units (“2023 Plan RSUs”) to employees under the 2023 Equity Incentive Plan. These 2023 Plan RSUs are subject to a service-based vesting requirement, and a liquidity plus service-based vesting requirement, which is defined as completion of a go public transaction or change in control. In order for any shares to vest, both the service-based vesting requirement and the liquidity plus service-based vesting requirement must be satisfied with respect to such shares. The liquidity conditions were met on July 8, 2024, upon consummation of the Business Combination, and therefore compensation expenses related to these awards began to be recognized in the year ended December 31, 2024, using a graded vesting method over the requisite service period. Given the absence of a public trading market prior to the closing of the Business Combination, the Legacy Stardust Power board of directors considered numerous objective and subjective factors to determine the fair value of its common stock at each grant date. These factors included, but were not limited to: (i) independent contemporaneous third-party valuations of common stock; (ii) the prices for the Company’s convertible notes sold to outside investors; (iii) the rights and preferences of convertible preferred stock relative to common stock; (iv) the lack of marketability of its common stock; (v) developments in the business; and (vi) the likelihood of achieving a liquidity event, such as an IPO, given prevailing market conditions. Subsequent to the closing of the Business Combination, the fair value of common stock is based on the closing price of the Company’s common stock, as reported on The Nasdaq Global Select Market on the date of grant. RSU activity for the year ended December 31, 2024, and balances as at the end of December 31, 2024, were as follows: SCHEDULE OF RESTRICTED STOCK ACTIVITY Number of shares Weighted Average Grant-Date Fair Value Unvested as at December 31, 2023 - $ - Granted 2,024,985 8.80 Vested ( 502,411 ) 8.67 Forfeited ( 517,752 ) 9.17 Unvested as at December 31, 2024 1,004,822 $ 8.67 The total compensation expense for RSUs recognized in the General and administrative expenses of the Company’s consolidated statements of operations was $ 6,789,594 and $ Nil for the year ended December 31, 2024, and the period from March 16, 2023 (inception) through December 31, 2023, respectively. The total fair value of RSU’s vested during the year ended December 31, 2024, was $ 4,356,440 . As at December 31, 2024, total unvested compensation cost for RSUs granted to employees not yet recognized was $ 5,314,982 . The Company expects to recognize this compensation over a weighted average period of approximately 2.47 years. In October 2024, one of the employees transitioned to a consultant role, under a Consulting Agreement. A Service Provider Letter dated November 27, 2024, confirmed his continued status under the Equity Incentive Plan. On December 31, 2024, his consulting agreement was terminated. Following the termination on December 31, 2024, as part of his severance benefits, 172,584 RSUs that were scheduled to vest on March 15, 2025, which otherwise would have been forfeited upon separation, were accelerated with vesting as on December 31, 2024. The Company determined that the acceleration of the unvested units constituted a Type III modification in accordance with ASC 718, since the expectation of the award vesting changed from improbable to probable, which resulted in a new measurement of compensation cost. For the year ended December 31, 2024, the acceleration resulted in the recognition of $ 617,851 of stock-based compensation expense using the reassessed fair value on the modification date and a reversal of $ 1,190,220 in stock-based compensation expense for previously recognized expense using the original grant date fair value. F- 25 2024 Equity Incentive Plan The Board adopted, and the stockholders of the Company approved, the 2024 Equity Incentive Plan in September 2024. The maximum number of shares with respect to one or more awards that may be granted to any one participant during any calendar year shall be 4,673,665 shares of Common Stock. The 2024 Equity Incentive Plan provides for the grant of stock options, RSUs, PSUs share appreciation rights, restricted shares, dividend equivalents, substitute awards, and other share or cash-based awards (such as cash bonus awards and performance awards) for issuance to employees or consultants of the Company (or any of the Company’s parents or subsidiaries), or directors of the Company. During the year ended December 31, 2024, the Company granted (a) 1,524,296 RSUs to independent directors, officers, employees and consultants which are subject to a service based vesting requirement, (b) 74,000 RSUs fully vested as of the date of grant to consultants and (c) 506,596 PSUs to employees with a service and market condition. These PSUs cliff vest at the end of a three-year term subject to share price based market condition (i.e., the volume weighted average price of the Common Stock is greater than or equal to $ 12.00 per share for a period of 20 trading days in any 30 trading day period or there is a change of control, or the PSUs are otherwise forfeited). The compensation expense for these RSUs and PSUs were recognized on a straight-line basis over the term of the award. The fair value of common stock is based on the closing price of the Company’s common stock, as reported on The Nasdaq Global Select Market on the date of grant. F- 26 Stardust Power Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS RSU activity for the year ended December 31, 2024, and balances as at the end of December 31, 2024, were as follows: SCHEDULE OF RESTRICTED STOCK ACTIVITY Number of shares Weighted Average Grant-Date Fair Value Unvested as at December 31, 2023 - $ - Granted 1,598,296 11.52 Vested ( 116,215 ) 11.62 Forfeited - - Unvested as at December 31, 2024 1,482,081 $ 11.51 The total compensation expense for RSUs recognized in the General and administrative expenses of the Company’s consolidated statements of operations was $ 2,450,003 and $ Nil for the year ended December 31, 2024, and the period from March 16, 2023 (inception) through December 31, 2023, respectively. The total fair value of RSU’s vested during the year ended December 31, 2024, was $ 1,350,418 . As at December 31, 2024, total unvested compensation cost for RSUs granted to employees and non-employee directors not yet recognized was 6,323,682 . The Company expects to recognize this compensation over a weighted average period of approximately 2.69 years. As at December 31, 2024, total unvested compensation cost for RSUs granted to the consultants not yet recognized was $ 9,637,715 . We expect to recognize this compensation over a period of approximately 3.71 years. The estimated grant date fair value of the PSUs was determined using a Monte Carlo simulation valuation model. Assumptions used in the valuation were as follows: SCHEDULE OF ESTIMATED GRANT DATE FAIR VALUE OF PSU Assumptions Fair value of Common Stock $ 11.62 Selected volatility 60 % Risk-free interest rate 3.42 % Contractual terms (years) 3.0 PSU activity for the year ended December 31, 2024, and balances as at the end of December 31, 2024, were as follows: SCHEDULE OF PERFORMANCE SHARES UNITS ACTIVITY Number of shares Weighted Average Grant-Date Fair Value Unvested as at December 31, 2023 - $ - Granted 506,596 6.73 Vested - - Forfeited - - Unvested as at December 31, 2024 506,596 $ 6.73 The total compensation expense for PSUs recognized in the General and administrative expenses of the Company’s consolidated statements of operations was $ 332,971 and $ Nil for the year ended December 31, 2024, and the period from March 16, 2023 (inception) through December 31, 2023, respectively. As at December 31, 2024, total unvested compensation cost for PSUs granted to employees not yet recognized was $ 3,077,636 . The Company expects to recognize this compensation over a weighted average period of approximately 2.71 years. F- 27 Stardust Power Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 9 – ACCOUNTING FOR WARRANT LIABILITY The Company established the initial fair value of the Private Placement and Public Warrants on July 8, 2024, the date of consummation of the Business Combination, and revalued the warrants on December 31, 2024. Each Warrant entitles the holder to purchase one share of Common Stock at $ 11.50 per share. For additional terms refer to the Company’s Registration Statement on Form S-4/A filed with the SEC on May 8, 2024. At December 31, 2024 and December 31, 2023, there were 10,430,800 and Nil warrants, outstanding respectively, including 4,864,133 Public Warrants and 5,566,667 Private Placement Warrants outstanding at December 31, 2024 and Nil Public and Private Placement Warrants outstanding at December 31, 2023. During the year ended December 31, 2024, 135,796 Public Warrants were exercised at a price of $ 11.50 , generating proceeds of $ 1,561,655 . Each Warrant entitles the holder to purchase one share of Common Stock at $ 11.50 per share. Once the Public Warrants become exercisable, the Company may redeem the outstanding Public Warrants in whole and not in part at a price of $0.01 per warrant upon a minimum of 30 days’ prior written notice of redemption, only in the event that the last sale price of the Common Stock equals or exceeds $18.00 per share for any 20 trading days within the 30-trading day period ending on the third trading day before the Company sends the notice of redemption to the Public Warrant holders, and that certain other conditions are met. Once the Public Warrants become exercisable, the Company may also redeem the outstanding Public Warrants in whole and not in part at a price of $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption, only in the event that the closing price of the common stock equals or exceeds $10.00 per share on the trading day prior to the date on which the Company sends the notice of redemption, and that certain other conditions are met. If the closing price of the common stock is less than $18.00 per share (as adjusted) for any 20 trading days within a 30-trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders, the Private Placement Warrants must also concurrently be called for redemption on the same terms as the outstanding Public Warrants. The Company, in no event later than twenty (20) Business Days after the closing of its initial Business Combination, shall use its commercially reasonable efforts to file with the Commission a registration statement for the registration, under the Securities Act, of the Ordinary Shares issuable upon exercise of the warrants. The Company shall use its commercially reasonable efforts to cause the same to become effective within sixty (60) Business Days following the closing of its initial Business Combination and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration or redemption of the warrants in accordance with the provisions of this Agreement. If any such registration statement has not been declared effective by the sixtieth (60 th ) Business Day following the closing of the Business Combination, holders of the warrants shall have the right, during the period beginning on the sixty-first (61 st ) Business Day after the closing of the Business Combination and ending upon such registration statement being declared effective by the Commission, and during any other period when the Company shall fail to have maintained an effective registration statement covering the issuance of the Ordinary Shares issuable upon exercise of the warrants, to exercise such warrants on a “cashless basis,” by exchanging the warrants (in accordance with Section 3(a)(9) of the Securities Act or another exemption) for that number of Ordinary Shares equal to the lesser of: (A) the quotient obtained by dividing (x) the product of the number of Ordinary Shares underlying the warrants, multiplied by the excess of the Fair Market Value less the warrant Price by (y) the Fair Market Value and (B) 0.361 per warrant (“a settlement cap” for accounting purposes). The Private Placement Warrants have terms and provisions that are identical to those of the Public Warrants. However, the Private Placement Warrants are not redeemable by the Company as long as they are held by the Sponsor or its permitted transferees. If the Private Placement Warrants are held by holders other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company in all redemption scenarios and exercisable by the holders on the same basis as the Public Warrants. F- 28 Stardust Power Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Company’s warrants are not indexed to the Company’s Common Stock in the manner contemplated by ASC Section 815-40-15 because the holder of the instrument is not an input into the pricing of a fixed-for-fixed option on equity shares. Further, there is a settlement cap for Public Warrants, and Private Placement Warrants upon transfer from Sponsor or permitted transferees to other holders, if the holder elects to exercise warrants on a cashless basis if the Company fails to maintain an effective registration statement covering the Common Stock issuable upon warrant exercises throughout the term of the warrants. Maintenance of an effective registration statement is not an input to the fair value option model for a fixed-for-fixed option or forward. As such, the Company’s warrants are accounted for as derivative warrant liabilities which are required to be valued at fair value at each reporting period. The following tables present information about the Company’s warrant liabilities that are measured at fair value on a recurring basis at December 31, 2024 and indicate the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: SCHEDULE OF WARRANT LIABILITIES THAT ARE MEASURED AT FAIR VALUE ON A RECURRING BASIS Description At December 31, 2024 Quoted price in active markets (level 1) Significant other observable input (level 2) Significant other unobservable input (level 3) Warrant liabilities Public warrants $ 1,143,071 $ 1,143,071 $ - $ - Private placement warrants 1,308,166 - 1,308,166 - Warrant liability $ 2,451,237 $ 1,143,071 $ 1,308,166 $ - At December 31, 2024 the Company valued its Public Warrants by reference to the publicly traded price of the Public Warrants. The Company valued its Private Placement Warrants based on the closing price of the Public Warrants since they are similar instruments. The warrant liabilities are not subject to qualified hedge accounting. The Company’s policy is to record transfers between levels at the end of the reporting period. There were no transfers during the year ended December 31, 2024. NOTE 10 – INVESTMENT IN EQUITY SECURITIES In October 2023, Legacy Stardust Power subscribed to and purchased 13,949,579 ordinary shares ( 1.26 % of the total equity) of QXR, an Australian limited liability company whose ordinary shares are listed on the Australian Securities Exchange (“ASX”), 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 IGL (“the Earn-in Venture”). The Company 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. The Company will conduct feasibility studies to assess the lithium brine at its own cost and if successful, will have the option to execute a commercial off-take agreement with QXR for the supply of brine from the Project. No formal off-take agreement has been executed as at December 31, 2024. Further, no material expenses have been incurred towards the feasibility studies during the year ended December 31, 2024. All costs associated with the feasibility studies would be expensed as incurred. The Company neither has a controlling financial interest nor does it exercise significant influence over QXR. Accordingly, the investment in QXR’s ordinary shares does not result in either the consolidation or application of equity method of accounting for the Company. QXR’s ordinary shares are listed on the ASX with a readily determinable fair value and change in fair value is recognized in the consolidated statements of operations. Accordingly, the investment in these securities has been recorded at cost at initial recognition and at fair value of $ 34,707 and $ 218,556 as at December 31, 2024 and December 31, 2023, respectively. The Company recognized a loss of $ 183,849 for the year ended December 31, 2024, and a gain of $ 18,556 for the period from March 16, 2023 (inception) to December 31, 2023, due to change in fair value of securities in the consolidated statements of operations. Further, this investment in securities has been disclosed outside of current assets on the consolidated balance sheet in accordance with ASC 210-10-45-4 because the investment has been made for the purpose of affiliation and continuing business reasons as described above. F- 29 Stardust Power Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS In 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 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. No formal off take agreement has been executed as at December 31, 2024. Further no material expenses have been incurred towards due diligence during the year ended December 31, 2024. All cost associated would be expensed as incurred. 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. Additionally, the Company has the option to acquire a second tranche of 10,000,000 shares on similar terms as the initial investment, plus 20,000,000 free attaching warrants to acquire ordinary shares of IRIS Metals at an exercise price of $ 0.40 per share. This second tranche investment is subject to approval by the Company and IRIS Metals shareholders and other conditions precedent. IRIS Metals’ ordinary shares are listed on the ASX with a readily determined fair value and change in the fair value is recognized in the consolidated statements of operations. Accordingly, the investment in these securities has been recorded at cost at initial recognition and at fair value of $ 1,461,715 as at December 31, 2024.The company recognized a loss of $ 138,285 for the year ended December 31, 2024, due to change in fair value of securities in the consolidated statements of operations. Further, this investment in securities has been disclosed outside of current assets on the consolidated balance sheet in accordance with ASC 210-10-45-4 because the investment has been made for the purpose of affiliation and continuing business reasons as described above. NOTE 11 – SIMPLE AGREEMENT FOR FUTURE EQUITY (SAFE NOTES) On June 6, 2023, Legacy Stardust Power received $ 2,000,000 in cash from a single investor and funded a 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 20, 2023, Legacy Stardust Power received an additional $ 2,000,000 in cash from a single investor, which, along with the $ 1,000,000 deposit received in September 2023, funded a new $ 3,000,000 SAFE note. On February 23, 2024, the Company entered into a third SAFE note and received an additional $ 200,000 in cash from a single investor. The SAFE notes were classified as a liability based on evaluating characteristics of the instrument and is presented at fair value as a non-current liability in the Company’s consolidated balance sheets. The SAFE notes provide the Company 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. 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. The terms for SAFE notes were amended on November 18, 2023 for both the original and new issuance to introduce a discount rate of 20 % to the lowest price per share of preferred stock sold or the listing price of the Company’s Common Stock upon consummation of a SPAC transaction or IPO. Additionally, the SAFE notes provide the investor certain rights upon an equity financing, change in control or dissolution. 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, granting the Company 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, the Company amended and restated the August 2023 SAFE note and the November 2023 SAFE. On May 1, 2024, the Company amended and restated the February 2024 SAFE note. These amendments clarify the conversion mechanism in connection with the Business Combination. F- 30 Stardust Power Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The estimated fair value of the SAFE notes considered the timing of issuance and whether there were changes in the various scenarios since issuance. Pursuant to the consummation of the Business Combination, the SAFE notes converted into 636,916 Common Stock shares of the Company and therefore no further fair valuation was required as at December 31, 2024. As at December 31, 2023, the fair value of the SAFE notes was $ 5,212,200 , and is classified as a non-current liability. 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 is not SAFE notes and/or pari preferred equity. NOTE 12 – CONVERTIBLE NOTES On April 24, 2024, Legacy Stardust Power entered into a convertible equity agreement (“convertible notes”) for $ 2,000,000 with AIGD. Further, the Company entered into separate convertible equity agreements with other individuals for a total of $ 100,000 in April 2024, based on similar terms to the AIGD convertible equity agreement. The convertible notes were classified as a liability based on evaluating characteristics of the instrument and were presented at fair value as a non-current liability in the Company’s consolidated balance sheets as at June 30, 2024. The estimated fair value of the convertible notes considered the timing of issuance and whether there were changes in the various scenarios since issuance. The convertible notes had no interest rate or maturity date, no description of Dividend and no participation rights. The liquidation preference of the convertible 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 is not convertible and/or pari preferred equity. Pursuant to the consummation of the Business Combination and in accordance with the terms of the convertible equity agreements, the convertible notes converted into 257,216 shares of the Company’s Common Stock and therefore no further fair valuation was required as at December 31, 2024. NOTE 13 – FAIR VALUE MEASUREMENTS The following tables summarize the Company’s assets and liabilities that are measured at fair value in the consolidated financial statements: SCHEDULE OF ASSETS AND LIABILITIES ARE MEASURED AT FAIR VALUE Level 1 Level 2 Level 3 Total Fair Value Measurements as at December 31, 2023 Level 1 Level 2 Level 3 Total Other noncurrent assets: Investment in equity securities (a) $ 218,556 $ - $ - $ 218,556 Total financial assets $ 218,556 $ - $ - $ 218,556 Level 1 Level 2 Level 3 Total Fair Value Measurements as at December 31, 2024 Level 1 Level 2 Level 3 Total Other noncurrent assets: Investment in equity securities (a) $ 1,496,422 $ - $ - $ 1,496,422 Total financial assets $ 1,496,422 $ - $ - $ 1,496,422 Level 1 Level 2 Level 3 Total Fair Value Measurements as at December 31, 2023 Level 1 Level 2 Level 3 Total Liabilities SAFE notes (b) $ - $ - $ 5,212,200 $ 5,212,200 Sponsor earnout shares (c) - - - - Total financial liabilities $ - $ - $ 5,212,200 $ 5,212,200 Level 1 Level 2 Level 3 Total Fair Value Measurements as at December 31, 2024 Level 1 Level 2 Level 3 Total Liabilities Sponsor earnout shares (c) - - 532,700 532,700 Total financial liabilities $ - $ - $ 532,700 $ 532,700 ( a ) These represent equity investments with a readily determinable fair value. The Company has measured its investments to fair value in accordance with ASC 321, Investments-Equity Securities, based on quoted prices in active markets. F- 31 Stardust Power Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (b) The valuation of the Level 3 measurement considered the probabilities of the occurrence of the scenarios as discussed in Note 2 the audited consolidated financial statements of Legacy Stardust Power and notes thereto for the period March 16, 2023 (inception) to December 31, 2023, included in the Company’s Registration Statement on Form S-4/A filed with the SEC on May 8, 2024. (c) For Level 3 earnout liability, the Company assesses the fair value of expected earnout liability at each reporting period using the Monte Carlo Method, which is consistent with the initial measurement of the expected earnout consideration. This fair value measurement is considered a Level 3 measurement because the Company estimates projections during the earnout period utilizing various potential pay-out scenarios. The Monte Carlo simulation method repeats a process thousands of times in an attempt to predict all the possible future outcomes. At the end of the simulation, several random trials produce a distribution of outcomes that are then analyzed to determine the average present value of earnout. Change in the fair value of earnout liability is reflected in our consolidated statements of operations. The make-whole obligation liability related to the Purchase Agreement is measured at fair value categorized within Level 1 of the fair value hierarchy. See Note 6. The following table provides a reconciliation of activity and changes in fair value for the Company’s SAFE notes, convertible notes and Sponsor earnout liability: SCHEDULE OF RECONCILIATION OF ACTIVITY AND CHANGES IN FAIR VALUE SAFE notes at fair value Convertible notes at fair value Sponsor Earnout liability at fair value Balance as at March 16, 2023 (inception) $ - $ - $ - Issuance of notes 5,000,000 - - Change in fair value 212,200 - - Balance as at December 31, 2023 $ 5,212,200 $ - $ - Issuance of notes 200,000 2,100,000 - Sponsor earnout liability recognized on closing of Business Combination - - 4,608,900 Change in fair value 955,000 471,400 ( 4,076,200 ) Issuance of common stock upon conversion ( 6,367,200 ) ( 2,571,400 ) - Balance as at December 31, 2024 $ - $ - $ 532,700 The valuation of the Level 3 measurement for SAFE notes considered the probabilities of the occurrence of the scenarios as discussed in Note 2 of the audited consolidated financial statements and notes thereto for the period March 16, 2023 (inception) to December 31, 2023, included in the Company’s Registration Statement on Form S-4/A filed with the SEC on May 8, 2024. The Company valued the SAFE notes based on the occurrence of the preferred financing or a SPAC transaction. As of the date of initial measurement and December 31, 2023, the management has assigned zero probability for a change in control event or a dissolution event. Pursuant to the consummation of the Business Combination and in accordance with the terms of the convertible equity and SAFE note agreements, the SAFE notes and convertible notes converted into 636,916 and 257,216 shares of the Company’s Common Stock, respectively. F- 32 Stardust Power Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 14 – PROMISSORY NOTES In March 2023, Legacy Stardust Power entered into unsecured notes payable with three related parties as described in Note 16. 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. These 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 3.71 %. As at December 31, 2024, the Company had $ 840,000 available to draw. NOTE 15 – SEGMENT REPORTING The Company reports 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 280, “ Segment Reporting” . The Company has 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 assessed. The Company has a single, common management team and our cash flows are reported and reviewed with no distinct cash flows. The measure of segment assets is reported on the consolidated balance sheets as total consolidated assets. All of the Company’s long-lived assets are located in the United Sates. In addition to the significant expense categories included within net loss presented on the Company’s consolidated statements of operations, see below for disaggregated amounts that comprise general and administrative expenses. SCHEDULE OF SEGMENT REPORTING CONSOLIDATED STATEMENTS OF OPERATIONS Year ended Period from March 16, 2023 (inception) through December 31, 2024 December 31, 2023 Professional and consulting fees $ 4,455,225 $ 1,586,680 Legal and book-keeping services 1,134,778 347,835 Personnel and related taxes 10,951,854 443,672 Insurance 355,932 12,473 Marketing and advertisement 91,319 119,363 Other 983,720 165,675 Total general and administrative expenses $ 17,972,828 $ 2,675,698 F- 33 Stardust Power Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 16 – RELATED PARTY TRANSACTIONS Legacy Stardust Power entered into a service agreement with VIKASA Capital Partners LLC (“VCP”) 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 total of $ 1,050,000 , of which $ 980,000 has been incurred as of December 31, 2023. On March 16, 2023, Legacy Stardust Power entered into a consulting agreement with 7636 Holdings LLC, which was subsequently amended on April 1, 2023, and also separately entered into an agreement with VIKASA Capital LLC. 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. On September 18, 2024, the Company entered into a consulting agreement with DRE Chicago LLC, whose principal is Paramita Das. Paramita was onboarded as a Chief Strategy Officer and Senior Advisor to CEO of the Company. Additionally, in December 2024, the Company entered into a binding term sheet with DRE Chicago LLC, providing for loan in the principal amount of $ 250,000 , bearing interest at a rate of 15 % per year, and maturing in March 2025 . (the “Maturity Date”). Pursuant to the Term Sheets, an aggregate of approximately 470,000 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 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 Stock at an exercise price of $ 11.50 in accordance with the Private Placement terms. The Company is yet to issue the equity shares and warrants as of the date of the issuance of the consolidated financial statements. In December 2024, the Company entered into a binding term sheet (“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 in March 2025 (the “Maturity Date”). 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. 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. The Company is yet to issue the equity shares and warrants as of the date of the issuance of the consolidated financial statements. The Company incurred the following expenses with related parties, which were all affiliates of the Company: SCHEDULE OF EXPENSES WITH RELATED PARTIES Expense type Year Ended December 31,2024 Period from March 16, 2023 (inception) through December 31, 2023 Expenses under contract due to: DRE Chicago LLC Consulting expense $ 143,057 $ - DRE Chicago LLC Interest 1,979 - DRE Chicago LLC Finance charges 375,000 - Endurance Antarctica Partners II, LLC Interest 18,958 - Endurance Antarctica Partners II, LLC Finance charges 3,500,000 - Finance charges Finance charges 3,500,000 - VIKASA Capital Partners LLC Consulting expense - 980,000 7636 Holdings LLC Consulting expense - 180,806 VIKASA Capital LLC Consulting expense - 171,213 Consulting expense Consulting expense - 171,213 Energy Transition Investors LLC* Interest - 5,333 VIKASA Clean Energy I LP* Interest - 1,138 Roshan Pujari* Interest - 640 Interest Interest - 640 Total expenses $ 4,038,994 $ 1,339,130 Other expenses paid on the Company’s behalf due to: DRE Chicago LLC $ 6,679 $ - VIKASA Capital LLC - 34,318 VIKASA Capital Partners LLC - 9,868 Total other expenses paid on the Company’s behalf 6,679 44,186 Total $ 4,045,673 $ 1,383,316 F- 34 Stardust Power Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2023, $ 1,383,316 of expenses including interest were paid. During the period from March 16, 2023 (inception) through December 31, 2023, the Company provided shares to shareholders in exchange for a subscription of $ 90 . The Company received the $ 90 on June 14, 2023. As at December 31, 2023, no amounts were due to related parties of the Company. As of December 31, 2024, $ 149,735 of expenses were paid. As at December 31, 2024, $ 3,895,938 was due to related parties of the Company. The Company and Legacy Stardust Power entered into notes payable agreements of $ 5,875,000 in 2024 and $ 1,000,000 in 2023, respectively with related parties, all of whom were affiliates. SCHEDULE OF RELATED PARTIES Year Ended December 31, 2024 Period from March 16, 2023 (inception) through December 31, 2023 Energy Transition Investors LLC * Notes payable $ - $ 750,000 VIKASA Clean Energy I LP * Notes payable - 160,000 Roshan Pujari* Notes payable - 90,000 DRE Chicago LLC Interest Accrued 1,979 - Endurance Antarctica Partners II, LLC Interest Accrued 18,958 - DRE Chicago LLC ** Short-term loan** 625,000 - Endurance Antarctica Partners II, LLC ** Short-term loan** 5,250,000 - Notes obtained from related parties $ 5,895,937 $ 1,000,000 * VIKASA Capital LLC facilitated the initial funding of the notes obtained on behalf of the related parties. ** Short-term loan includes Equity Kicker payable as per the terms of the loan agreement. As of December 31, 2024, $ 20,937 of interest on these notes was due to related parties. During the period from March 16, 2023 (inception) through December 31, 2023, the Company incurred and paid $ 7,111 of interest expense related to the notes payable. As at December 31, 2024, the Company had $ 5,875,000 outstanding notes payable to related parties and as at December 31, 2023, the Company had repaid all the above notes. Subsequent to year end, the Company has fully repaid the principal amount of $ 2,000,000 and accrued interest of $ 20,937 to the related parties. F- 35 Stardust Power Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 17 - NET LOSS PER SHARE As the Business Combination has been accounted for as a reverse recapitalization, the consolidated financial statements of the merged entity reflect the continuation of Legacy Stardust Power consolidated financial statements. Legacy Stardust Power equity has been retroactively adjusted to the earliest period presented to reflect the legal capital of the legal acquirer, GPAC II. As a result, net loss per share was also retrospectively adjusted for periods ended prior to the Business Combination. See Note 3 for details of this recapitalization. The following table sets forth the computation of the basic and diluted net loss per share: SCHEDULE OF BASIC AND DILUTED NET LOSS PER SHARE Year ended December 31, 2024 Period from March 16, 2023 (inception) through December 31, 2023 Numerator: Net loss $ ( 23,753,863 ) $ ( 3,793,585 ) Denominator: Weighted average shares outstanding 42,821,940 40,396,516 Net loss per share, basic and diluted $ ( 0.55 ) $ ( 0.09 ) The following potentially dilutive shares were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented, because including them would have had an anti-dilutive effect: SCHEDULE OF ANTI-DILUTIVE EFFECT December 31, 2024 December 31, 2023 Unvested common stock – restricted shares (Note 8) 62,706 1,640,505 Restricted stock options 709,992 - Restricted stock units 2,486,403 - Performance stock units 506,596 - Sponsor earnout shares (Note 3) * - - Public warrants 4,864,133 - Private placement warrants 5,566,667 - * The Sponsor Earnout Shares (as defined in the Business Combination Agreement) were not included for purposes of calculating the number of diluted shares outstanding as of December 31, 2024, as the Sponsor earnout shares remain contingently forfeitable, as the conditions have not been met F- 36 Stardust Power Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 18 – INCOME TAXES The Company accounts for income taxes in accordance with authoritative guidance, which requires the use of the asset and liability method. Under this method, deferred income tax assets and liabilities are determined based upon the difference between the consolidated financial statement carrying amounts and the tax basis of assets and liabilities and are measured using the enacted tax rate expected to apply to taxable income in the years in which the differences are expected to be reversed. Income/(loss) before provision for income taxes consisted of the following: SCHEDULE OF INCOME LOSS BEFORE PROVISION FOR INCOME TAX Year ended December 31, 2024 Period from March 16, 2023 (inception) through December 31, 2023 United States $ ( 23,753,863 ) $ ( 3,793,585 ) The federal and state income tax provision (benefit) is summarized as follows: SCHEDULE OF FEDERAL AND STATE INCOME TAX PROVISION (BENEFIT) Year ended December 31, 2024 Period from March 16, 2023 (inception) through December 31, 2023 Current Federal $ - $ - State * - - Other - - Total current tax expense - - Deferred Federal - - State - - Other - - Total deferred tax expense - - Total tax expense $ - $ - * Immaterial amounts The Company had no income tax expense for the year ended December 31, 2024, and for the period from March 16, 2023 (inception) through December 31, 2023. Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and (b) operating losses and tax credit carryforwards. F- 37 Stardust Power Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The tax effects of significant items comprising the Company’s deferred taxes as of December 31 are as follows: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES December 31, 2024 December 31, 2023 Deferred tax assets: Start-up expenses $ 2,469,389 $ 524,208 Land development costs - 52,584 Net operating loss 2,442,165 1,715 Accruals and other 696 137 Stock based compensation 1,623,724 - Accrued bonuses 289,460 - Bridge loan discount 375,240 - Total deferred tax assets 7,200,674 578,644 Deferred tax liabilities: Fixed assets ( 495 ) - Total deferred tax liabilities ( 495 ) - Valuation allowance ( 7,200,179 ) ( 578,644 ) Net deferred taxes $ - $ - ASC 740 requires that the tax benefit of net operating losses, temporary differences and credit carry forwards be recorded as an asset to the extent that management assesses that realization is “more likely than not.” Realization of the future tax benefits is dependent on the Company’s ability to generate sufficient taxable income within the carry forward period. Because of the Company’s recent history of operating losses, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly, has provided a valuation allowance. The valuation allowance increased by $ 6,621,535 during the year ended December 31, 2024, and $ 578,644 during the period from March 16, 2023 (inception) through December 31, 2023. Net operating losses and tax credit carryforwards as of the Financial Statement Date December 31, 2024, are as follows: SCHEDULE OF NET OPERATING LOSSES AND TAX CREDIT CARRYFORWARDS Amount Expiration Years Net operating losses, federal (Post December 31, 2017) $ 10,985,067 Do Not Expire Net operating losses, state 4,225,813 - F- 38 Stardust Power Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The effective tax rate of the Company’s provision (benefit) for income taxes differs from the federal statutory rate as follows: SCHEDULE OF EFFECTIVE TAX RATE OF COMPANY’S PROVISION (BENEFIT) Year ended December 31, 2024 Period from March 16, 2023 (inception) through December 31, 2023 Statutory rate 21.00 % 21.00 % State tax 1.44 % 0.74 % SPAC exploration expenses - - 2.49 % SAFE note expenses - 0.84 % - 3.76 % Change in valuation allowance - 25.77 % - 15.25 % Start up costs 8.06 % - Other - 1.20 % - 0.24 % Earn out shares value adjustment 3.60 % - Success based fees 2.78 % - Stock based compensation - 2.37 % - IPO related finance charge - 6.70 % - Total - - The effective tax rate of the Company’s provision (benefit) for income taxes differs from the federal statutory rate as follows (in dollars): Year ended December 31, 2024 Period from March 16, 2023 (inception) through December 31, 2023 Statutory rate $ ( 4,988,311 ) $ ( 796,653 ) State tax ( 343,105 ) ( 28,171 ) SPAC exploration expenses - 94,524 SAFE note expenses 200,550 142,485 Change in valuation allowance 6,122,057 578,644 Start up costs ( 1,914,151 ) - Other 285,233 9,171 Earn out shares value adjustment ( 856,002 ) - Success based fees ( 661,500 ) - Stock based compensation 563,884 - IPO related finance charge 1,591,345 - Total $ - $ - F- 39 Stardust Power Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 19 – SUBSEQUENT EVENTS On January 28, 2025, the Company entered into a non-binding letter agreement with Sumitomo Corporation of Americas (“Sumitomo”), a New York corporation, 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 Technologies, Inc. a Delaware corporation. Under the terms of the License Agreement, KMX agreed to irrevocably license to the Company the use of KMX’s vacuum membrane distillation technology (the “VMD Technology”) and associated processes and systems (including units incorporating the VMD Technology (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 the Licensor 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 Company Common Stock. The securities are being offered and sold by the Company pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Act”) provided by Section 4(a)(2) and/or Regulation D promulgated thereunder, as a transaction not involving a public offering. On March 18, 2025, the Company received notice from the Nasdaq that the Company was not in compliance with the Minimum Market Value of Publicly held shares requirement of $ 15,000,000 as set forth in Nasdaq Listing Rule 5450(b)(2)(C). On March 19, 2025, the Company received a subsequent notice from the Nasdaq that the Company was not in compliance with the minimum bid price of $ 1.00 per share as set forth in Nasdaq Listing Rule 5450(a)(1). These letters have no immediate effect on the listing of the Common Stock or Public Warrants on The Nasdaq Global Market. The Company has 180 calendar days from receipt of the notices, or until September 15, 2025, in which to regain compliance. The Company has evaluated subsequent events through the date the consolidated financial statements were available to be issued and there are no other items that would have had a material impact on the Company’s consolidated financial statements. F- 40 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None.