NOTE 5 – STOCK BASED COMPENSATION

2023 Equity Incentive Plan

At March 16, 2023 (inception), the Legacy Stardust Power stockholders approved the 2023 Equity Incentive Plan, and 230,112 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 115,056 shares of Common Stock. During the three months ended March 31, 2026, there were no grants under the 2023 Equity Incentive Plan.

Stock Options

During October and November 2023, Legacy Stardust Power granted stock options to purchase 227,810 shares of Common Stock under the 2023 Equity Incentive Plan. 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.

The early exercised shares liability amounting to $1,422 and $1,735 is outstanding as at March 31, 2026, and December 31, 2025, respectively, and is presented under ‘Early exercised shares option liability’ on the unaudited condensed and audited consolidated balance sheets, respectively.

Stock option activity for the three months ended March 31, 2026, and balances as at the end of March 31, 2026, were as follows:

SCHEDULE OF STOCK OPTION ACTIVITY 

Stardust Power Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The total compensation expense for stock options recognized in the General and administrative expenses of the Company’s unaudited condensed consolidated statements of operations was $25,149 and $25,809 for the three months ended March 31, 2026, and 2025, respectively.

As at March 31, 2026, total unvested compensation cost for stock options granted to employees not yet recognized was $117,791. The Company expects to recognize this compensation over a weighted average period of approximately 1.29 years.

Restricted Stock Units

Restricted stock unit (“RSU”) activity for the three months ended March 31, 2026, and balances as at March 31, 2026, were as follows:

SCHEDULE OF RESTRICTED STOCK ACTIVITY 

The total compensation expense for RSUs recognized in the General and administrative expenses of the Company’s unaudited condensed consolidated statements of operations was $468,898 and $1,297,888 for the three months ended March 31, 2026, and 2025, respectively.

As at March 31, 2026, total unvested compensation cost for RSUs granted to employees not yet recognized was $1,057,364. The Company expects to recognize this compensation over a weighted average period of approximately 1.37 years.

2024 Equity Incentive Plan

The Board adopted, and the stockholders of the Company approved, the 2024 Equity Incentive Plan (the “2024 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 467,366 shares of Common Stock.

On March 13, 2026, the Company filed a Registration Statement on Form S-8 for the purpose of registering an additional (i) 732,159 shares of Common Stock that became issuable under the 2024 Plan pursuant to the provisions of the 2024 Plan providing for automatic increases in the number of shares reserved for issuance thereunder (the “Evergreen Shares”) and (ii) 82,000 shares of Common Stock that may again become available for issuance with respect to awards under the 2024 Plan pursuant to the share counting, share recycling and other terms and conditions of the 2024 Plan (the “Recycled Shares”).

Stardust Power Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

During the three months ended March 31, 2026, the Company granted (a) 40,000 RSUs to employees, which vested immediately upon grant, (b) 620,362 RSUs to employees, which vested immediately upon grant and were issued in settlement of prior year bonuses and (c) 21,692 RSUs to consultants which vested immediately upon grant and were issued in settlement of prior year bonuses.

The fair value of common stock is based on the closing price of the Company’s Common Stock, as reported on the Nasdaq on the date of grant.

RSU activity for the three months ended March 31, 2026, and balances as at the end of March 31, 2026, were as follows:

SCHEDULE OF RESTRICTED STOCK ACTIVITY 

The total compensation expense for RSUs recognized in the General and administrative expenses of the Company’s unaudited condensed consolidated statements of operations was $736,152 and $1,350,513 for the three months ended March 31, 2026, and 2025, respectively.

As at March 31, 2026, total unvested compensation cost for RSUs granted to employees and non-employee directors not yet recognized was $3,486,743. The Company expects to recognize this compensation over a weighted average period of approximately 2.47 years.

As at March 31, 2026, total unvested compensation cost for RSUs granted to the consultants not yet recognized was $534,784. The Company expects to recognize this compensation over a period of approximately 2.46 years.

Performance stock unit (“PSU”) activity for the three months ended March 31, 2026, and balances as at the end of March 31, 2026, were as follows:

SCHEDULE OF PERFORMANCE SHARES UNITS ACTIVITY 

The total compensation expense for PSUs recognized in the General and administrative expenses of the Company’s unaudited condensed consolidated statements of operations was $280,060 and $280,069 for the three months ended March 31, 2026, and 2025, respectively.

As at March 31, 2026, total unvested compensation cost for PSUs granted to employees not yet recognized was $1,661,792. The Company expects to recognize this compensation over a weighted average period of approximately 1.46 years.

Stardust Power Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)