v3.26.1
INCOME TAXES
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
INCOME TAXES

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:

 

   Year ended
December 31,
2025		   Year ended
December 31,
2024		 
United States  $(15,723,636)  $(23,753,863)

 

The federal and state income tax provision (benefit) is summarized as follows:

 

    Year ended
December 31,
2025		    Period from
March 16, 2024
(inception)
through
December 31,
2024		 
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, 2025, and December 31, 2024.

 

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.

 

 

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:

 

   December 31, 2025   December 31, 2024 
Deferred tax assets:          
Start-up expenses  $2,193,428   $2,469,389 
Land development costs   -    - 
Net operating loss   4,929,276    2,442,165 
Capital loss carryforward   

216,247

    

-

 
Accruals and other   113,472    696 
Stock based compensation   1,245,853    1,623,724 
Accrued bonuses   379,692    289,460 
Bridge loan discount   -    375,240 
Total deferred tax assets   9,077,968    7,200,674 
           
Deferred tax liabilities:          
Fixed assets   

(967

)   (495

)

Total deferred tax liabilities   (967)   (495

)

           
Valuation allowance   (9,077,001)   (7,200,179)
Net deferred taxes  $-   $- 

 

ASC 740 requires that the tax benefit of net operating losses, temporary differences and credit carryforwards 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 carryforward period. Because of the Company’s recent history of operating losses, management believes that recognition of the deferred tax assets is currently not likely to be realized and, accordingly, has provided a valuation allowance.

 

The valuation allowance increased by $1,876,822 during the year ended December 31, 2025, and $6,611,889 during the period December 31, 2024.

 

Net operating losses and tax credit carryforwards as of the Financial Statement Date December 31, 2025, are as follows:

 

   Amount   Expiration Years
        
Net operating losses, federal (Post December 31, 2017)  $22,503,903   Do Not Expire
Net operating losses, state   6,438,506   2044

Capital loss carryforward

   

1,029,745

  2030

 

 

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:

 

   Year ended
December 31, 2025		   Year ended
December 31, 2024		 
         
Statutory rate   21.00%  21.00%
State tax   %   1.44%
SPAC exploration expenses   -%   - 
SAFE note expenses    %   -0.84%
Change in valuation allowance   -11.98%   -25.77%
Start up costs   -

%

   8.06%
Other   0.16%   -1.20%
Earn out shares value adjustment   0.71%   3.60%
Warrant liability value adjustment   1.88%   -%
Success based fees   -%   2.78%
Stock based compensation   -11.81%   -2.37%
Sale of investments   0.19

%

   -%
Legal fees associated with stock issuance   -0.15%   -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, 2025

   Year ended
December 31, 2024		 
         
Statutory rate  $(3,301,963)  $(4,988,311)
State tax   

-

    (343,105)
SPAC exploration expenses   

-

    - 
SAFE note expenses   

-

    200,550 
Change in valuation allowance   

1,884,111

    6,122,057 
Start up costs   

-

    (1,914,151)
Other   

(25,490

)   285,233 
Earn out shares value adjustment   

(110,880

)   (856,002)
Warrant liability value adjustment   

(295,932

)   -

Success based fees   

-

    (661,500)
Stock based compensation   

1,856,609

    563,884 
Sale of investments   (29,600)   - 
 Legal fees associated with stock issuance   

23,145

    1,591,345 
Total  $-   $-