NOTE
1 – DESCRIPTION OF THE COMPANY
Nature
of Business
Stardust
Power Inc. (the “Company” or “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
redomesticated 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 Nasdaq under the symbol
“SDST” and “SDSTW”, respectively.
As
per the Business Combination Agreement:
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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
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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 12,777
ordinary shares of Stardust Power at a price per share
of approximately $100.00 per
share at closing of the Business Combination. |
| ● |
Additionally,
the Combined Company issued 100,000
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 volume-weighted average
price (“VWAP”) of the Common Stock price equals or exceeds $120.00 per share for a period of 20 trading days in
a 30 trading day period, and the remaining fifty percent of the Sponsor Earnout Shares will vest when the VWAP of the Common Stock
price equals or exceeds $140.00 per share for a period of 20 trading days in a 30 trading day period, 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 500,000 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 $120.00 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. |
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Immediately
prior to the closing of the Business Combination, the SAFE notes automatically converted into the 13,839
shares of Legacy Stardust Power Common Stock. |
| ● |
Immediately
prior to the closing of the Business Combination, the 2024 convertible notes automatically converted into 5,588
shares of Legacy Stardust Power Common Stock. |
| ● |
Stardust
Power issued 107,754
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).
|