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 and six months ended June 30, 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 $1,109 and $1,735 is outstanding as at June 30, 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 six months ended June 30, 2026, and balances as at the end of June 30, 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 $50,171 and $50,826 for the six months ended June 30, 2026, and 2025, respectively. The total compensation expense for stock options recognized in the General and administrative expenses of the Company’s unaudited condensed consolidated statements of operations were $25,022 and $25,017 for the three months ended June 30, 2026, and 2025 respectively.

As at June 30, 2026, total unvested compensation cost for stock options granted to employees not yet recognized was $92,769. The Company expects to recognize this compensation over a weighted average period of approximately 1.10 years.

Restricted Stock Units

Restricted stock unit (“RSU”) activity for the six months ended June 30, 2026, and balances as at June 30, 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 $826,865 and $2,392,528 for the six months ended June 30, 2026, and 2025, respectively.

The total compensation expense for RSU recognized in the General and administrative expenses of the Company’s unaudited condensed consolidated statements of operations was $357,967 and $1,094,640 for the three months ended June 30, 2026, and 2025, respectively.

The total fair value of RSU’s vested during six months ended June 30, 2026, was $1,782,495. As at June 30, 2026, total unvested compensation cost for RSUs granted to employees not yet recognized was $699,397. The Company expects to recognize this compensation over a weighted average period of approximately 1.23 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”). Additionally at the Annual Meeting on June 2, 2026, the Company’s stockholders approved an amendment and restatement of the Company’s 2024 Plan to increase the number of shares available for issuance under the 2024 Plan by 2,600,000 shares and extend the 2024 Plan’s term to April 8, 2036.

Stardust Power Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

During the six months ended June 30, 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 incentives.

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

RSU activity for the six months ended June 30, 2026, and balances as at the end of June 30, 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 $1,340,208 and $1,374,077 for the six months ended June 30, 2026, and 2025, respectively.

The total compensation expense for RSUs recognized in the General and administrative expenses of the Company’s unaudited condensed consolidated statements of operations was $604,056 and $23,564 for the three months ended June 30, 2026, and 2025, respectively.

The total fair value of RSU’s vested during six months ended June 30, 2026, was $2,954,614.

As at June 30, 2026, total unvested compensation cost for RSUs granted to employees and non-employee directors not yet recognized was $2,936,598. The Company expects to recognize this compensation over a weighted average period of approximately 2.27 years.

As at June 30, 2026, total unvested compensation cost for RSUs granted to the consultants not yet recognized was $480,872. The Company expects to recognize this compensation over a period of approximately 2.21 years.

Performance stock unit (“PSU”) activity for the six months ended June 30, 2026, and balances as at the end of June 30, 2026, were as follows:

SCHEDULE OF PERFORMANCE SHARES UNITS ACTIVITY 

Stardust Power Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The total compensation expense for PSUs recognized in the General and administrative expenses of the Company’s unaudited condensed consolidated statements of operations was $563,230 and $563,248 for the six months ended June 30, 2026, and 2025, respectively.

The total compensation expense for PSUs recognized in the General and administrative expenses of the Company’s unaudited condensed consolidated statements of operations was $283,170 and $283,179 for the three months ended June 30, 2026, and 2025, respectively.

As at June 30, 2026, total unvested compensation cost for PSUs granted to employees not yet recognized was $1,378,621. The Company expects to recognize this compensation over a weighted average period of approximately 1.21 years.