COMMON STOCK |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Equity [Abstract] | |
| COMMON STOCK | NOTE 4 – COMMON STOCK
On July 8, 2024, the Common Stock and Public Warrants began trading on Nasdaq under the ticker symbols “SDST” and “SDSTW”, respectively.
Each share of Common Stock is entitled to one vote. The holders of Common Stock are also entitled to receive dividends whenever funds are legally available and when declared by the board of directors (the “Board”), subject to prior rights of the convertible preferred stockholders. Shares of Common Stock issued and outstanding on the unaudited condensed consolidated balance sheet and unaudited condensed consolidated statement of stockholders’ deficit includes shares related to restricted stock that are subject to repurchase.
The Company is authorized to issue and shares, par value of $ per share, of Common Stock and Preferred Stock, respectively. At June 30, 2026, the Company had shares of Common Stock issued and outstanding. As of December 31, 2025, the Company had shares of Common Stock issued and outstanding.
Sponsor Earnout Shares
As part of the closing of the Business Combination, the Company issued shares to Global Partner Sponsor II, LLC (the “Sponsor”). These shares are subject to vesting (or forfeiture) based on achieving certain trading price thresholds following the closing (“Sponsor Earnout Shares”). Fifty percent of the Sponsor Earnout Shares will vest when the Volume-Weighted Average Price (“VWAP”) of the Common Stock price equals or exceeds $ 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 $ per share for a period of 20 trading days in a 30 trading day period. There are no service conditions or any requirement for the participants to provide goods or services in order to vest in the Sponsor Earnout Shares. Accordingly, the Company determined that the Sponsor Earnout Shares are not within the scope of ASC 718. The accounting for the Sponsor Earnout Shares was evaluated under ASC Topic 480, “Distinguishing Liabilities from Equity”, and ASC Subtopic 815-40, “Derivatives and Hedging — Contracts in Entity’s Own Equity” (“ASC 815-40”), to determine if the Sponsor Earnout Shares should be classified as a liability or within equity. As part of the analysis, it was determined that the Sponsor Earnout Shares subject to vesting are freestanding from other shares of Combined Company Common Stock held by the Sponsor and do not meet the criteria in ASC 815-40 to be considered indexed to the Combined Company Common Stock, due to the settlement provisions including a change in control component which could impact the number of the Sponsor Earnout Shares that are ultimately settled for, which is not an input to a fixed-for-fixed option pricing model. As a result, the Sponsor Earnout Shares were classified as a liability. Subsequent changes in the fair value of the Sponsor Earnout Shares will be reflected in the unaudited condensed consolidated statement of operations.
Stardust Power Inc. and Subsidiaries NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Upon the occurrence of a change in control, any remaining unvested Sponsor Earnout Shares become vested. Unvested Sponsor Earnout Shares will be forfeited if vesting does not occur prior to the eighth anniversary of the Closing Date. The Company assesses the fair value of expected earnout consideration at each reporting period using the Monte Carlo Method, which is consistent with the initial measurement of the expected earnout consideration. As at June 30, 2026 and December 31, 2025, the Company did not identify any indicators that a change in the fair value of the Sponsor Earnout Shares last measured at $ as of March 31, 2025, would be material, and accordingly did not perform an updated Monte Carlo valuation as of either date.
Common Stock Purchase Agreement
On October 7, 2024, the Company entered into a common stock purchase agreement and a related registration rights agreement with B. Riley Principal Capital II (the “Prior B. Riley Agreements”), pursuant to which the Company could have, at its sole discretion and subject to certain conditions and limitations (including 4.99% beneficial ownership limitation), sold up to the lesser of $50.0 million of its Common Stock or the applicable Exchange Cap (19.99% of the common shares outstanding immediately prior to execution of the Prior B. Riley Agreements) during the 36-month term of the Prior B. Riley Agreements. The purchase price of shares is based on the VWAP of the Company’s Common Stock on the applicable purchase date, less a fixed 3% discount.
In connection with the Prior B. Riley Agreements, the Company issued shares of Common Stock as commitment shares to B. Riley Principal Capital II with a grant date fair value of $500,000, which was recorded as a component of finance charges in the consolidated statements of operations for the year ended December 31, 2024. The Prior B. Riley Agreements also provided for a make-whole mechanism whereby, if B. Riley Principal Capital II’s aggregate resale proceeds from the commitment shares were less than $500,000, the Company would pay the shortfall in cash, and if the resale proceeds exceeded $500,000, B. Riley Principal Capital II would remit 50% of the excess to the Company. As of June 30, 2025, the fair market value of the commitment shares was $12,546, resulting in a make-whole obligation of $487,454. The change in the fair value of the make-whole obligation of $17,513 and $215,443 was recognized as a component of finance charges in the unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2025, respectively.
On December 11, 2025, the Company entered into a letter agreement with B. Riley Principal Capital II, pursuant to which the parties mutually agreed to terminate the Prior B. Riley Agreements. As part of the termination, the Company agreed to satisfy the make-whole payment as per the terms of the Prior B. Riley Agreements of $471,942, in three equal portions: (i) through the issuance of restricted Common Stock priced at $4.40 per share and subject to resale registration, (ii) in cash upon the Company’s next equity or convertible financing, and (iii) in connection with a future equity line, at-the-market program, or similar financing that the Company is currently working on with the Investor or its affiliate, or otherwise in cash if unpaid by September 30, 2026. On December 15, 2025, the Company issued shares of Common Stock (“Settlement Shares”) to B. Riley Principal Capital II to satisfy one-third of the make-whole payment as per the terms of the Agreement. As of December 31, 2025, and June 30, 2026, the fair value of the Settlement Shares was $ and $, respectively, which was less than one-third of the make-whole obligation of $. Accordingly, the Company recorded an accrual of $as of December 31, 2025, and an additional accrual of $ for the six months ended June 30, 2026, representing the differential between the fair value of the Settlement Shares and one-third of the make-whole obligation. In January 2026, the Company made a cash payment of $ to settle one-third of the make-whole obligation and in May 2026, the Company received an invoice for the remaining one-third of the make-whole obligation of $157,314 and made a cash payment of $. As of December 31, 2025 and June 30, 2026, the total make-whole obligation balance was $362,538 and $101,539, respectively and is included in accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheets. The change in the fair value of the make-whole obligation of $28,602 and $53,629 is recorded as a component of finance charges in the accompanying unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2026.
Stardust Power Inc. and Subsidiaries NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
On February 12, 2026, the Company entered into the B. Riley Agreements. Pursuant to the B. Riley Agreements, the Company has the right, in its sole discretion, to sell to B. Riley Principal Capital II, from time to time during the 36-month investment period, up to $10,000,000 of newly issued shares of Common Stock (the “Total Commitment”), subject to the Exchange Cap (as defined below) and other conditions and limitations set forth in the agreement.
Under the applicable Nasdaq rules, and absent stockholder approval or satisfaction of an “at-market” exception, the Company may not issue to B. Riley Principal Capital II under the B. Riley Agreements more than shares of Common Stock, which represents % of the Common Stock outstanding immediately prior to the execution of the B. Riley Agreements (the “Exchange Cap”). In addition, B. Riley Principal Capital II may not acquire shares under the B. Riley Agreements to the extent such issuances would result in B. Riley Principal Capital II and its affiliates beneficially owning more than 4.99% of Stardust’s outstanding common stock (the “Beneficial Ownership Limitation”), as determined under Section 13(d) of the Exchange Act and Rule 13d-3 thereunder. The Company evaluated the B. Riley Agreements to determine whether they should be accounted for considering the guidance in ASC 815-40 and concluded that it is an equity-linked contract that does not qualify for equity classification and therefore requires fair value accounting as a derivative. The Company has analyzed the terms of the freestanding purchased put right and has concluded that it had insignificant value as of June 30, 2026.
The purchase price of the shares of Common Stock to be sold under the B. Riley Agreements, is determined by reference to the VWAP of the Common Stock over specified VWAP or Intraday VWAP Purchase Periods on the applicable purchase dates, less a fixed 3% discount to such VWAP, and subject to daily volume-based limits, the Exchange Cap, the Beneficial Ownership Limitation and a minimum Threshold Price condition with terms as defined in the B. Riley Agreements.
In connection with entering into the B. Riley Agreements, the Company agreed to reimburse B. Riley Principal Capital II for certain fees and expenses, including (i) a Qualified Independent Underwriter (“QIU”) fee and initial legal fee reimbursements payable at or around Closing and Commencement (as defined in the B. Riley Agreements) and (ii) ongoing quarterly legal fee reimbursements for B. Riley Principal Capital II’s due-diligence and related matters. The Company also agreed that a fully earned, non-refundable Prior Transaction Cash Holdback Amount of $157,314, relating to a prior terminated transaction with B. Riley Principal Capital II, will be funded by allowing B. Riley Principal Capital II to withhold 10% of the gross purchase price on each VWAP or Intraday VWAP Purchase under the new facility until cumulative withholdings equal to $157,314. If the Company fails to pay in full this Prior Transaction Cash Holdback Amount on or before September 30, 2026, the Company will also be obligated to pay B. Riley Principal Capital II a one-time non-refundable commitment fee of up to $100,000, in accordance with the terms of the B. Riley Agreements. In May 2026, the Company received an invoice for the Holdback Amount of $157,314 and made a cash payment of $75,000.
Other than shares that may be issued to B. Riley Principal Capital II under this facility, the Company has issued and may continue to issue additional shares of its Common Stock from time to time in separate transactions, which may result in further dilution to existing stockholders.
During the three and six months ended June 30, 2026, the Company issued and shares of Common Stock aggregating to net proceeds of $1,216,711 and $1,310,904, respectively.
At-the-Market Issuance Sales Agreement
On May 8, 2026, the Company entered into the Sales Agreement with the Agent, pursuant to which the Company may issue and sell the Placement Shares from time to time, in its sole discretion, through the ATM Offering, through or to the Agent acting as sales agent or principal. The ATM Offering is registered under the Company’s shelf registration statement on Form S-3 (File No. 333-294938), which has been declared effective by the SEC. The Company has filed a Prospectus Supplement specifically relating to the Placement Shares. The Company is not obligated to sell any shares under the Sales Agreement and may suspend or terminate the Sales Agreement at any time. The Company’s ability to raise capital through sales of Placement Shares under the Sales Agreement is subject to, among other things, the continued effectiveness of the shelf registration statement and related Prospectus Supplement and market conditions, including the trading price and trading volume of the Company’s common stock, and the Company may be unable to sell Placement Shares at times, or on terms, that are acceptable to the Company.
Stardust Power Inc. and Subsidiaries NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Sales of the Placement Shares, if any, will be made by means of ordinary brokers’ transactions on the Nasdaq Capital Market or any other existing trading market for the Company’s common stock, in negotiated transactions, or by any other method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended. Under the terms of the Sales Agreement, the Agent may also purchase Placement Shares as principal for its own account at a price to be agreed upon at the time of sale.
The Agent will be entitled to compensation under the terms of the Sales Agreement at a commission rate equal to up to 3.0% of the gross proceeds of the sales price of common stock that it sells as Agent and up to 5.0% of the gross proceeds of the sales price of common stock sold to the Agent as principal. In connection with entering into the Sales Agreement, the Company agreed to reimburse the Agent for certain fees and expenses, reasonable and documented legal, filing and other direct offering costs, including reimbursement of Agent counsel fees not to exceed $50,000 in connection with the execution of the Sales Agreement and $5,000 per calendar quarter thereafter for ongoing representation updates. During the three months ended June 30, 2026, the Company incurred legal and professional fees of $107,875 in connection with entering into the Sales Agreement, which was capitalized as deferred offering costs and will be allocated against proceeds as shares are sold. Of this amount $3,584 was allocated against proceeds as shares are sold during the three months ended June 30, 2026.
The Company has evaluated the Sales Agreement and the Placement Shares issued thereunder in accordance with applicable accounting guidance. The Company determined that the Sales Agreement is not within the scope of ASC 480, Distinguishing Liabilities from Equity, as it does not embody an unconditional obligation to repurchase the Company’s equity shares, an obligation to settle by transferring assets, or an obligation to issue a variable number of shares for a fixed monetary amount. The Sales Agreement was further evaluated under ASC 815, Derivatives and Hedging, and ASC 815-40, Contracts in an Entity’s Own Equity. The Company concluded that the Sales Agreement is not a derivative instrument and does not contain any features that require bifurcation as embedded derivatives. The Sales Agreement is indexed to the Company’s own equity and satisfies all conditions for equity classification under ASC 815-40. Accordingly, the Placement Shares issued under the ATM Offering are classified as permanent equity in the accompanying condensed consolidated balance sheets, and no derivative liability has been recognized in connection with the Sales Agreement or the ATM Offering.
During the three months ended June 30, 2026, the Company sold an aggregate of shares of Common Stock at a weighted average price per share of $, aggregating to net proceeds of $161,032, after deducting commissions and other offering expenses. Subsequent to quarter end, the Company sold shares of Common Stock aggregating to net proceeds of . The Company intends to use the net proceeds from sales of Placement Shares under the Sales Agreement for general corporate purposes, including working capital, capital expenditures, and advancement of its lithium refinery project in Muskogee, Oklahoma.
In connection with the Company’s ATM offering program, the Company has agreed to indemnify the Agent against losses arising from material misstatements or omissions in the Registration Statement or Prospectus, excluding losses attributable to information furnished in writing by the Agent. If indemnification is unavailable, contribution will be allocated based on relative benefits received (Net Proceeds to the Company vs. commissions to the Agent), with the Agent’s contribution capped at total commissions received. These obligations survive termination of the sales agreement. As of June 30, 2026, no claims have been asserted, and the Company does not believe a loss is probable; accordingly, no liability has been accrued.
Public Offering and Warrant Inducement
During the six months ended June 30, 2025, the Company completed two public offerings generating gross proceeds of $5,750,400 (January 2025), approximately $4,520,000 (June 2025, inclusive of a partially exercised over-allotment option) and a warrant inducement transaction generating gross proceeds of $2,971,040 (March 2025). No warrants issued in these transactions remain outstanding as of June 30, 2026. These transactions, and the October 2025 warrant exchange in which the Inducement Warrants were exchanged for shares and cancelled, are described in greater detail in Note 6 to the Company’s Form 10-K.
KMX Licensing Agreement
On February 7, 2025, the Company executed the License Agreement with KMX. Under the terms of the License Agreement, KMX agreed to irrevocably license to the Company the use of KMX’s VMD Technology and associated processes and systems (including KMX VMD Units) for the purpose of the Company’s use of the technology in its refining and upstream operations. Among other obligations set forth in the License Agreement, the Company shall be required to exclusively purchase all KMX VMD Units from KMX during the term of the License Agreement on the terms and conditions set forth therein. The License Agreement grants the Company the exclusive right to sublicense, use, market, sell and operate KMX’s VMD Technology across the United States, Canada and select international markets. As a consideration for this license, the Company agreed to pay KMX a royalty comprised of shares of the Company’s Common Stock.
As of the License Agreement Effective Date, the license did not meet the recognition criteria for an intangible asset under U.S. GAAP, as it did not provide probable future economic benefits independent of the KMX VMD Units, which are expected to be acquired only upon the commencement of operations at the Company’s planned facility. Accordingly, the Company recognized $343,000 as other long-term assets on the audited and unaudited condensed consolidated balance sheets as of December 31, 2025 and June 30, 2026, respectively.
Stardust Power Inc. and Subsidiaries NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Vendor shares issuance
On October 30, 2025, the Company approved the issuance of shares of Common Stock to a vendor for services to be rendered over a period of 12 months. The shares fully vested upon issuance and will be expensed as services are received. The Company recognized consulting expense of $75,562 and $151,128 for the three and six months ended June 30, 2026, and a prepaid expense of $226,688 and $75,560 as of December 31, 2025 and June 30, 2026, respectively. The corresponding amounts were recorded as an increase to additional paid-in capital. During the quarter ended June 30, 2026, the Company issued the shares to the vendor.
Private Placement Agreement
On December 31, 2024, the Company entered into binding term sheets with certain investors (“2024 Investors”) pursuant to which the Company agreed to sell, and the 2024 Investors agreed to purchase, Company securities for an aggregate amount of $550,000 (the “Private Placement”). The 2024 Investors agreed to purchase, and the Company agreed to issue and sell, up to $550,000 in shares of Common Stock at a price equal to 95% of the closing bid price of the Common Stock on the last trading day prior to the closing date for the Private Placement. In addition, each 2024 Investor will receive warrants representing the right, exercisable within five years of the closing date, to purchase up to 50% of the shares of Common Stock purchased by such 2024 Investor in the Private Placement, with 10 warrants exercisable for one share of Common Stock at an exercise price of $115.00. The Company received proceeds of $425,000 in December 2024 and additional proceeds of $125,000 in January 2025 from certain 2024 Investors. The Company had accounted for this transaction as Advance from PIPE investor for shares and warrants to be issued based on purchase agreement to be entered on the consolidated balance sheet as of December 31, 2024. On April 24, 2025, the Company issued shares of Common Stock and Warrants to the investors.
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