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. |
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).
|