v3.26.1
FAIR VALUE MEASUREMENTS
 12 Months Ended
Dec. 31, 2025
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS

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, 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 

 

 

Stardust Power Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

                 
   Fair Value Measurements as at December 31, 2025 
   Level 1   Level 2   Level 3   Total 
Other noncurrent assets:                              
Investment in equity securities (a)  $37,374            37,374 
Total financial assets  $37,374            37,374 

 

   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 (b)   -    -    532,700    532,700 
Total financial liabilities  $-   $-   $532,700   $532,700 

 

   Level 1   Level 2   Level 3   Total 
   Fair Value Measurements as at December 31, 2025 
   Level 1   Level 2   Level 3   Total 
Liabilities                    
Sponsor earnout shares (b)   -    -    4,700    4,700 
Total financial liabilities  $-   $-   $4,700   $4,700 

 

(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.

 

(b)   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, 2024 convertible notes and Sponsor earnout liability:

  

    SAFE notes at
fair value		    

2024

Convertible notes
at fair value

     Sponsor Earnout
liability at
fair value		  
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  
Change in fair value     -       -       (528,000 )
Balance as at December 31, 2025   $ -     $ -     $ 4,700  

 

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 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 2024 convertible notes converted into 63,692 and 25,722 shares of the Company’s Common Stock, respectively.

 

 

Stardust Power Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS