Stardust Power Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 (“GPAC 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 tons per annum of battery grade lithium.

NOTE 2 –BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared on the accrual basis of accounting in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all normal and recurring adjustments (which consist primarily of accruals, estimates and assumptions that impact the unaudited condensed consolidated financial statements) considered necessary to present fairly the Company’s unaudited condensed consolidated balance sheet as of June 30, 2026, its unaudited condensed consolidated statements of operations and stockholders’ deficit for the three and six months ended June 30, 2026 and June 30, 2025, and its unaudited condensed consolidated statements of cash flows for the six months ended June 30, 2026 and June 30, 2025. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this report should be read in conjunction with the audited consolidated financial statements and notes thereto of Stardust Power for the year ended December 31, 2025 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 25, 2026 (the “Form 10-K”), which provides a more complete discussion of the Company’s accounting policies and certain other information. The accompanying condensed consolidated balance sheet as of December 31, 2025, has been derived from the audited consolidated balance sheet as of December 31, 2025, contained in the above referenced Form 10-K.

The unaudited condensed consolidated financial statements include the accounts of Stardust Power Inc. and its wholly owned subsidiaries, Stardust Power LLC and Strike Merger Sub II, LLC. All material intercompany balances have been eliminated upon consolidation. Interim results are not necessarily indicative of results for a full year or any future periods.

These unaudited condensed consolidated financial statements are presented in U.S. dollars.

Use of Estimates

The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the unaudited condensed consolidated financial statements and accompanying notes. Those estimates and assumptions include, but are not limited to, useful life of assets, realization of deferred tax assets, the incremental borrowing rate for determining operating lease assets and liabilities and fair valuation of stock-based compensation, common shares purchase agreement, warrants, convertible notes, and sponsor earnout shares. The Company evaluates estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ from these estimates, and those differences could be material to the unaudited condensed consolidated financial statements.

Emerging Growth Company

Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies, but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when an accounting standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

**Reverse Stock Split **

On September 8, 2025, the Company effected a 1-for-10 reverse stock split (the “Reverse Stock Split”) of the Company’s common stock, par value $0.0001 per share (“Common Stock”). As a result of the Reverse Stock Split, every 10 shares of the Company’s Common Stock issued and outstanding were automatically converted into one new share of Common Stock. Proportionate adjustments were also made to (i) the exercise prices, and the number of shares underlying the Company’s outstanding equity awards, as applicable, (ii) the number of shares issuable under the Company’s equity incentive plans and certain existing agreements, and (iii) the number of shares purchasable upon exercise, and/or the exercise prices, of the Company’s outstanding warrants to purchase shares of the Company’s Common Stock. The Reverse Stock Split did not decrease the number of authorized shares of Common Stock and preferred stock or otherwise affect the par value of the Common Stock. No fractional shares were issued in connection with the Reverse Stock Split and any fractional shares resulting from the Reverse Stock Split were rounded down to the nearest whole share. Stockholders who were otherwise entitled to receive fractional shares as a result of the Reverse Stock Split were paid cash in lieu thereof. All shares of the Company’s Common Stock, per-share data and related information included in the accompanying unaudited condensed consolidated financial statements have been retroactively adjusted as though the Reverse Stock Split had been effected prior to all periods presented.

Going Concern

The Company’s unaudited condensed consolidated financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

As of June 30, 2026, the Company has $540,264 of unrestricted cash. The Company is a development stage entity having no revenues and has incurred a net loss of $3,902,894 and $9,137,586 for the three and six months ended June 30, 2026, respectively. The Company has an accumulated deficit of $77,480,170 and stockholders’ deficit of $8,240,860 as of June 30, 2026. The Company expects to continue to incur significant costs in pursuit of its operating and investment plans. These costs exceed the Company’s existing cash balance and net working capital. These conditions raise substantial doubt about its ability to continue as a going concern.

On December 23, 2025, the Company entered into a Securities Purchase Agreement (the “Lind Securities Purchase Agreement”) with Lind Global Asset Management XIII LLC (“Lind”) providing for up to $15,000,000 in senior secured convertible debt financing. Simultaneously, the Company initially drew down gross proceeds of $4,000,000 in exchange for issuance to Lind of a Senior Secured Convertible Promissory Note in the amount of $4,800,000 (the “2025 Convertible Note”) and a Common Stock Purchase Warrant (the “2025 Lind Warrant”), for the purchase of approximately 411,245 shares (the “Lind Warrant Shares”). After deducting a commitment fee of $100,000 and other transaction-related costs, the Company received net cash proceeds of $3,792,500 (See Note 8).

On February 12, 2026, the Company entered into a Common Stock Purchase Agreement (the “B. Riley Purchase Agreement”) with B. Riley Principal Capital II, LLC (“B. Riley Principal Capital II”), the selling stockholder. Upon the terms and subject to the satisfaction of the conditions set forth in the B. Riley Purchase Agreement, the Company will have the right, in its sole discretion, to sell up to $10,000,000 of Common Stock to B. Riley Principal Capital II, subject to certain conditions and limitations contained in the B. Riley Purchase Agreement, from time to time during the term of the B. Riley Purchase Agreement. Sales of Common Stock pursuant to the B. Riley Purchase Agreement, and the timing of any sales, are solely at the option of the Company. The Company is under no obligation to sell any securities to B. Riley Principal Capital II under the B. Riley Purchase Agreement. As of the date of this filing, the Company has issued 505,866 shares of Common Stock aggregating to net proceeds of $1,310,904 under this arrangement (See Note 4).

On May 8, 2026, the Company entered into an At Market Issuance Sales Agreement (the “Sales Agreement”) with B. Riley Securities, Inc. (the “Agent”). Pursuant to the terms of the Sales Agreement, the Company may sell from time to time through the Agent, shares of the Company’s common stock, par value $0.0001 per share (the “Placement Shares”), having an aggregate offering price of up to $5,000,000 (the “ATM Offering”). The Company intends to use this facility to raise capital as needed. As of the date of this filing, the Company has issued 2,159,867 Placement shares of Common Stock aggregating to net proceeds of $3,112,021 under this arrangement (See Note 4).

As of the date on which these unaudited condensed consolidated financial statements were available to be issued, the Company believes that the cash on hand, and additional investments available through issuance of new Common Stock, will be inadequate to satisfy the Company’s working capital and capital expenditure requirements for at least the next twelve months. The ability of the Company to continue as a going concern is dependent upon management’s plan to raise additional capital from issuance of equity or receive additional borrowings to fund the Company’s operating and investing activities over the next year. These unaudited condensed consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Summary of Significant Accounting Policies

The significant accounting policies applied in the Company’s audited consolidated financial statements as of and for the year ended December 31, 2025, as disclosed in the Company’s Annual Report on Form 10-K filed with the SEC on March 25, 2026, are applied consistently in these unaudited interim condensed consolidated financial statements.

Net Loss per Share

The Company adopted Accounting Standard Codification (“ASC”) 260,“Earnings per Share”, at its inception. Basic net loss per share is calculated by dividing the net loss by the weighted average number of Common Stock outstanding for the period. Diluted loss per share is calculated by dividing the Company’s net loss available to common stockholders by the diluted weighted average number of shares outstanding for the period. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted as at the first of the year for any potentially dilutive debt or equity. Potential common stock from unvested restricted stock options, earnouts and common stock warrants are computed using the treasury stock method. Contingently issuable shares are included in basic EPS only when there is no circumstance under which those shares would not be issued.

The following table sets forth the computation of the basic and diluted net loss per share:

The following potentially dilutive shares were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented, because including them would have had an anti-dilutive effect:

Debt Issuance Costs

Debt issuance costs consist of expenditures associated with obtaining debt financing, principally legal and commitment fees. Such costs are deferred and amortized over the term of the related credit arrangements using a method that approximates the effective interest method. Debt issuance costs are included in the unaudited condensed consolidated balance sheets as a direct deduction from the carrying amount of long-term debt and are included in Interest expense in the unaudited condensed consolidated statements of operations. The payment of debt issuance costs will be recorded under financing activities in the unaudited condensed consolidated statements of cash flows.

Capital Project Costs and Property and Equipment, Net

The Company capitalizes costs incurred in connection with the development and construction of its planned lithium refinery in Muskogee, Oklahoma (the “Facility”), in accordance withASC 360,Property, Plant, and Equipment. Capitalized costs include expenditures that are directly attributable to the acquisition, development, and construction of the Facility, including land acquisition costs, permitting costs, engineering, front-end loading (“FEL”) studies, environmental studies, and other costs necessary to prepare the asset for its intended use.

Costs incurred during the preliminary project stage that are not directly attributable to the construction of the Facility are expensed as incurred. Capitalization of project costs begins when activities necessary to prepare the asset for construction are in progress and it is probable that the project will be completed.

Construction-in-progress assets are not depreciated until the underlying assets are placed into service, at which time depreciation commences over the estimated useful lives of the related assets. The construction of the Facility is still in progress and hence no depreciation is charged on capital project costs.

Property and equipment, net is stated at cost less accumulated depreciation and accumulated impairment loss. The Company depreciates computer and equipment using the straight-line method over the estimated economic useful lives of the asset, which are generally three tofive years. Land is a non-depreciable asset and is stated at cost.

Impairment of Long-Lived Assets

The Company evaluates long-lived assets for possible impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets to be held and used is measured by a comparison of the carrying amount of the asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount exceeds the fair value of the asset. Fair value is estimated at the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”), under its ASC or other standard setting bodies, and adopted by the Company as of the specified effective date. The Company has reviewed the accounting pronouncements issued during the six months ended June 30, 2026, and concluded they were either not applicable or not expected to have a material impact on the Company’s unaudited condensed consolidated financial statements.

NOTE 3 -COMMITMENTS AND CONTINGENCIES

Certain conditions may exist as at the date the unaudited condensed consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. The Company monitors the arrangements that are subject to guarantees in order to identify if the obligor who is responsible for making the payments fails to do so. If the Company determines it is probable that a loss has occurred, then any such estimable loss would be recognized under those guarantees. The methodology used to estimate potential loss related to guarantees considers the guarantee amount and a variety of factors, which include, depending on the counterparty, the latest financial position of the counterparty, actual defaults, historical defaults, and other economic conditions. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.

On February 7, 2025 (the “License Agreement Effective Date”), the Company executed an exclusive license agreement (the “License Agreement”) with KMX Technologies, Inc., a Delaware corporation (“KMX”). Under the terms of the License Agreement, KMX agreed to irrevocably license to the Company the use of KMX’s vacuum membrane distillation technology (“VMD Technology”) and associated processes and systems (including units incorporating the VMD Technology (“KMX VMD Units”)) for use in the Company’s 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 the Licensor during the term of the License Agreement on the terms and conditions set forth therein.

On October 20, 2025, the Company entered into a non-binding letter agreement with Prairie Lithium Limited (“Prairie”), an Australia-based company, for the supply of 6,000 metric tons per annum of lithium carbonate equivalent (“LCE”) in the form of lithium chloride. The lithium chloride is sourced from the Prairie Lithium Project in Saskatchewan, Canada and will be used as feedstock at the Facility. The initial contract term would span 6 years starting from the date on which the first commercial shipment is received by the Company, with the option for the Company to renew for two additional six-year terms.

On October 31, 2025, the Company entered into a non-binding letter agreement with Mandrake Resources Limited (“Mandrake”), an Australia-based company, for the supply of 7,500 metric tons per annum of LCE in the form of lithium chloride. The initial contract term would span 12 years starting from the date on which first commercial shipment is received by the Company, with the option for the Company to renew for an additional six-year term.

On March 13, 2026, the Company entered into a non-binding letter agreement with a strategic counterparty for the supply of 15,000 metric tons per annum of LCE in the form of lithium chloride. The initial contract term would span 12 years starting from the date on which first commercial shipment is received by the Company, with the option for the Company to renew for an additional six-year term.

Legal Proceedings

From time to time, the Company may be involved in certain legal and regulatory proceedings, as well as demands, investigations and claims that arise in the ordinary course of its business. The ultimate outcome of any litigation is often uncertain, and unfavorable outcomes could have a negative impact on the Company’s results of operations and financial condition. The Company makes a provision for a liability relating to legal matters when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impact of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. In the Company’s opinion, resolution of any pending claims (either individually or in the aggregate) is not expected to have a material adverse impact on the Company’s consolidated results of operations, cash flows or financial position, nor is it possible to provide an estimated amount of any such loss. However, depending on the nature and timing of any such dispute, an unfavorable resolution of a matter could materially affect the Company’s future financial position, results of operations, or cash flows, or all in a particular period.

On July 7, 2025, a complaint was filed in the Supreme Court of the State of New York, County of New York, captioned H.C. Wainwright & Co., LLC v. Stardust Power, Inc., Case No: 654037/2025. The complaint names the Company as a defendant, and alleges, among other things, that the Company breached an engagement agreement with the plaintiffs. The plaintiffs seek, among other things, payment of all purported unpaid sums due under such engagement agreement. On September 19, 2025, the Company filed its answer in response to the complaint, in which it denied all liability and asserted several affirmative defenses. The action is proceeding to the discovery stage and for further proceedings. The Company plans to vigorously defend against the lawsuit.

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 700,000,000 and 100,000,000 shares, par value of $0.0001 per share, of Common Stock and Preferred Stock, respectively. At June 30, 2026, the Company had 11,628,657 shares of Common Stock issued and outstanding. As of December 31, 2025, the Company had 9,869,558 shares of Common Stock issued and outstanding.

Sponsor Earnout Shares

As part of the closing of the Business Combination, the Company issued 100,000 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 $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. 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.

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 $4,700 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 6,369 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 35,753 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 $109,405 and $55,776, respectively, which was less than one-third of the make-whole obligation of $157,315. Accordingly, the Company recorded an accrual of $47,910 as of December 31, 2025, and an additional accrual of $53,629 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 $157,314 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 $75,000. 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.

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 1,972,924 shares of Common Stock, which represents 19.99% 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 476,799 and 505,866 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.

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 79,503 shares of Common Stock at a weighted average price per share of $2.09, aggregating to net proceeds of $161,032, after deducting commissions and other offering expenses. Subsequent to quarter end, the Company sold 2,080,364 shares of Common Stock aggregating to net proceeds of 2,950,989. 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 50,000 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.

Vendor shares issuance

On October 30, 2025, the Company approved the issuance of 65,000 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 12,850 shares of Common Stock and 64,251 Warrants to the investors.

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 wereno 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:

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:

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.

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:

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:

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.

NOTE 6 –ACCOUNTING FOR WARRANT LIABILITY

The Company’s Public Warrants and Private Warrants (together, the “Warrants”) were issued in connection with the Business Combination that closed on July 8, 2024, as described in the Company’s Form 10-K. Each 10 Warrants entitle the holder to purchase one share of Common Stock at an exercise price of $115.00 per share. As at June 30, 2026, and December 31, 2025, there were 10,430,800 warrants outstanding, including 4,864,133 Public Warrants and 5,566,667 Private Warrants outstanding.

The Company may redeem the outstanding Public Warrants in whole and not in part at a price of $0.01 per warrant upon a minimum of 30 days’ prior written notice of redemption, only in the event that the last sale price of the Common Stock equals or exceeds $180.00 per share for any 20 trading days within the 30-trading day period ending on the third trading day before the Company sends the notice of redemption to the Public Warrant holders, and that certain other conditions are met. The Company may also redeem the outstanding Public Warrants in whole and not in part at a price of $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption, only in the event that the closing price of the common stock equals or exceeds $100.00 per share on the trading day prior to the date on which the Company sends the notice of redemption, and that certain other conditions are met. If the closing price of the common stock is less than $180.00 per share (as adjusted) for any 20 trading days within a 30-trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders, the Private Warrants must also concurrently be called for redemption on the same terms as the outstanding Public Warrants.

The Private Warrants have terms and provisions that are identical to those of the Public Warrants. However, the Private Warrants are not redeemable by the Company as long as they are held by the Sponsor or its permitted transferees. If the Private Warrants are held by holders other than the Sponsor or its permitted transferees, the Private Warrants will be redeemable by the Company in all redemption scenarios and exercisable by the holders on the same basis as the Public Warrants.

The Company continues to classify the Warrants as derivative liabilities under ASC 815-40, consistent with the classification analysis described in the Company’s Form 10-K. The Warrants are remeasured at fair value each reporting period, with changes recognized in the condensed consolidated statements of operations.

The following tables present information about the Company’s warrant liabilities that are measured at fair value on a recurring basis at June 30, 2026, and December 31, 2025, and indicate the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

At June 30, 2026 and December 31, 2025, the Company valued its Public Warrants by reference to the publicly traded price of the Public Warrants. The Company valued its Private Warrants based on the closing price of the Public Warrants since they are similar instruments.

The warrant liabilities are not subject to qualified hedge accounting. The Company’s policy is to record transfers between levels at the end of the reporting period. There were no transfers during the three and six months ended June 30, 2026.

NOTE 7 –INVESTMENT IN EQUITY SECURITIES

In October 2023, Legacy Stardust Power subscribed to and purchased 13,949,579 ordinary shares (1.26% of the total equity) of QX Resources Limited (“QXR”) for $200,000.

QXR’s ordinary shares are listed on the ASX with a readily determinable fair value, and change in fair value is recognized in the unaudited condensed consolidated statement of operations. Accordingly, the investment in these securities has been recorded at cost at initial recognition and at fair value of $28,802 and $37,374 as at June 30, 2026, and December 31, 2025, respectively. The Company recognized a loss of $14,173 and $8,572 for the three and six months ended June 30, 2026, and $12,448 and $16,479 for the three and six months ended June 30, 2025, respectively, due to change in fair value of securities in the unaudited condensed consolidated statement of operations. Further, this investment in securities has been disclosed outside of current assets on the unaudited condensed consolidated balance sheet in accordance with ASC 210-10-45-4 because the investment has been made for the purpose of affiliation and continuing business.

The Company held an investment in IRIS Metals Limited (“IRIS Metals”), an ASX listed equity security which was fully divested during fiscal year 2025 and is described in the Company’s Form 10-K. During the three months ended June 30, 2025, the Company sold 1,175,000 ordinary shares of IRIS Metals for total proceeds of $78,311. The carrying value of the shares at the time of sale was $173,489, resulting in a realized loss of $95,178. The remaining shares of IRIS Metals were subsequently sold during the second half of 2025. Accordingly, as of June 30, 2026, and December 31, 2025, the Company no longer held any investment in IRIS Metals and no gain or loss due to changes in the fair value of securities was recognized during the three and six months ended June 30, 2026. During the three and six months ended June 30, 2025, the Company recognized loss due to changes in the fair value of securities of $726,441 and $711,655, respectively.

NOTE 8 –CONVERTIBLE NOTES AND WARRANTS

Lind 2025 Convertible Note

On December 23, 2025, the Company entered into the Lind Securities Purchase Agreement with Lind providing for up to $15,000,000 in senior secured convertible debt financing. At closing, the Company received net cash proceeds of $3,792,500 after payment of a $100,000 commitment fee and $107,500 in legal fees in exchange for issuing to Lind the 2025 Convertible Note with a principal amount of $4,800,000 and the 2025 Lind Warrant to purchase approximately 411,245 shares of the Company’s Common Stock.

The 2025 Convertible Note does not bear a stated rate of interest. The principal is repayable in 20 consecutive monthly installments of $240,000 each, commencing 120 days after the issuance date. Each installment may be settled, at the Company’s election, either (i) in cash (subject to a 4% premium), (ii) shares of common stock (“Repayment Shares”), or (iii) a combination of cash and Repayment Shares. The number of Repayment Shares shall be equal to the principal portion paid in shares divided by the Repayment Share price, which is 90% of the average of five consecutive daily VWAPs selected by Lind during the 20 trading days prior to issuance. The 2025 Convertible Note is convertible at Lind’s option at a fixed conversion price of $5.837 per share, subject to customary anti-dilution adjustments and a floor price mechanism. Conversions are subject to a 4.99% beneficial ownership limitation (which may be increased to 9.99% under certain conditions). In addition, the total number of shares issuable upon conversion is subject to limitations under applicable stock exchange rules (including the 19.99% cap) unless stockholder approval is obtained.

Any overdue amounts under the 2025 Convertible Note bear interest at 10% per annum, compounded annually on a 360-day year basis, from the due date until paid in full. All accrued and unpaid amounts, including interest on overdue interest, are payable on demand.

The 2025 Convertible Note held by Lind is transferable and may be sold, assigned, or pledged, subject to compliance with applicable laws and regulations. The note may be prepaid in full by the Company upon 10 days’ prior written notice; however, upon any such prepayment notice, Lind may elect to convert up to one-third of the then-outstanding principal at the lower of (i) the applicable conversion price or (ii) the Repayment Share price.

The 2025 Convertible Note includes customary provisions related to change-in-control events, delisting, and events of defaults, which may result in accelerated repayment or conversion at adjusted prices. Upon the occurrence of any of the aforementioned events, Lind may require cash repayment or elect alternative settlement provisions.

The Company evaluated that the 2025 Convertible Note contains embedded features requiring recognition as derivatives and bifurcation. However, the Company determined the fair value of these embedded derivatives was immaterial as of December 31, 2025, and therefore measured the 2025 Convertible Note at amortized cost and recorded it as a liability on the consolidated balance sheet. Because the 2025 Convertible Note and related warrant were issued in a single financing transaction, the Company allocated the net proceeds to the 2025 Convertible Note and the warrants based on their relative fair values. A portion of the total debt issuance costs of $207,500 was allocated to the warrants based on their relative fair value, resulting in an allocation of $34,610 to the warrants and $172,890 to the 2025 Convertible Note. In total, $34,610 was recorded in additional paid-in capital (“APIC”) related to the warrants, and a debt discount and debt issuance costs of $1,640,062 were recorded as a reduction of the carrying amount of the 2025 Convertible Note, representing the difference between the $4,800,000 principal amount and the amount allocated to the debt component at issuance.

As of December 31, 2025 and June 30, 2026, the principal amount outstanding under the 2025 Convertible Note was $4,800,000 and $4,080,000, respectively, and unamortized debt discount and issuance costs, including amount attributed to warrants issued, totaled $1,606,994 and $914,285, respectively, resulting in a net carrying amount of $3,193,006 and $3,165,715, respectively, at an effective interest rate of 43.2%.

For the three and six months ended June 30, 2026, the Company recognized $330,752 and $692,710 of interest expense related to the 2025 Convertible Note, representing amortization of debt discount and issuance cost. Such interest expense is included within interest expense in the Company’s unaudited condensed consolidated statement of operations for the three and six months ended June 30, 2026.

During the three and six months ended June 30, 2026, the Company elected to repay the three scheduled monthly principal installments under the 2025 Convertible Note through the issuance of Repayment Shares. The number of shares issued for each installment was determined in accordance with the terms of the Lind Securities Purchase Agreement. Upon settlement, the Company recognized loss on extinguishment of 2025 Convertible Note of $127,381 for the three months ended June 30, 2026, in the unaudited condensed consolidated statement of operations reflecting the difference between the installment amount and the fair value of the Repayment Shares as of the date of issuance.

The future contractual payments of 2025 Convertible Note as of June 30, 2026, are as follows:

Under Section 2.1(s) of the 2025 Convertible Note issued to Lind in December 2025, an event of default occurs if the Company’s market capitalization remains below $15.0 million for ten consecutive trading days. Subsequent to the quarter end, this event of default occurred automatically and without any applicable cure period on August 11, 2026, (the “Triggering Event”). The Triggering Event did not result from any failure by the Company to make scheduled payments under the 2025 Convertible Note. As a result of the Triggering Event, the Company, among other things, became obligated to pay the Mandatory Default Amount, equal to 110% of the outstanding principal (approximately $4.22 million), plus all other amounts owing under the 2025 Convertible Note, with default interest accruing at a rate of 10% per annum. Lind may declare the Mandatory Default Amount immediately due and payable and exercise remedies as a secured creditor over substantially all of the assets of the Company and its subsidiaries, including the pledged equity interests. Lind may also convert outstanding principal into shares of Common Stock at a discounted conversion price.

The Company and Lind are engaged in discussions regarding a potential forbearance, waiver, or amendment with respect to the Triggering Event; however, there can be no assurance that such discussions will result in a definitive agreement, or that any agreement will be reached on terms acceptable to the Company. As of the date these unaudited condensed consolidated financial statements were available to be issued, Lind had not accelerated the 2025 Convertible Note or exercised any remedies thereunder.

Lind Common Stock Warrant:

On December 23, 2025, in connection with the 2025 Convertible Note, the Company also issued to Lind a warrant to purchase up to 411,245 shares of Common Stock at an exercise price of $5.837 per share, exercisable beginning six months after issuance and expiring 60 months thereafter. These may be exercised for cash or, in limited circumstances when a resale registration statement is unavailable or in connection with certain fundamental transactions, on a net share (cashless) basis, in which case Lind receives a reduced number of shares based on the intrinsic value of the warrants.

The warrants provide for standard protection in the event of major transactions (for example, the holder receives equivalent consideration, or, in some cases, cash based on Black-Scholes value) and include anti-dilution adjustments for stock splits, stock dividends, and certain issuances of stock below the then-current exercise price.

The warrants are also subject to beneficial ownership limitations, are transferable subject to securities law compliance, and confer no voting or dividend rights until exercised.

The Company reviewed the warrants in connection with the securities purchase agreements under ASC 815, “Derivatives and Hedging,” (“ASC 815”) and concluded that the warrants are not in scope of ASC 480, “Distinguishing Liabilities from Equity,” and are not subject to the derivative guidance under ASC 815. Accordingly, the warrants were equity classified. The fair value of the warrants at the issuance date of $667,172 was determined using a Black-Scholes option pricing model, which includes the use of Level 3 inputs. The resulting fair value of the warrants was recorded in APIC, net of issuance costs, and is not subject to subsequent remeasurement. The Company estimates its stock price volatility using the historical volatility of publicly traded peer companies. The term is equal to the contractual term of the warrants. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve for the time period equal to the term of the warrants. The expected dividend yield is zero based on the fact that the Company has never paid cash dividends on Common Stock and does not expect to pay any cash dividends in the foreseeable future. Assumptions used in calculating the fair value of the warrants at the issuance date include the following:

NOTE 9 –FAIR VALUE MEASUREMENTS

The following tables summarize the Company’s assets and liabilities that are measured at fair value in the condensed consolidated financial statements:

The make-whole obligation liability related to the Prior B. Riley Purchase Agreement is measured at fair value categorized within Level 1 of the fair value hierarchy. See Note 4.

NOTE 10 –SEGMENT REPORTING

The Company reports segment information in the same way management internally organizes the business in assessing performance and making decisions regarding allocation of resources in accordance with ASC 280, “Segment Reporting”. The Company has a single reportable operating segment which operates as a single business platform. In reaching this conclusion, management considered the definition of the Chief Operating Decision Maker (“CODM”), how the business is defined by the CODM, the nature of the information provided to the CODM, how the CODM uses such information to make operating decisions, and how resources and performance are assessed. The Company’s CODM is its Chief Executive Officer, who reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. The Company has a single, common management team and the Company’s cash flows are reported and reviewed with no distinct cash flows. The measure of segment assets is reported on the unaudited condensed consolidated balance sheets as total consolidated assets. All of the Company’s long-lived assets are located in the United States.

In addition to the significant expense categories included within net loss presented on the Company’s unaudited condensed consolidated statements of operations, see below for disaggregated amounts that comprise general and administrative expenses.

NOTE 11 –RELATED PARTY TRANSACTIONS

The Company previously entered into a consulting agreement and loan arrangement with DRE Chicago LLC (“DRE Chicago”), whose principal, Paramita Das, was the Company’s former Chief Strategy Officer and Senior Advisor to the Chief Executive Officer as described in the Company’s Form 10-K. The Company recognized interest expense of $7,187 during the six months ended June 30, 2025. The loan was fully repaid, together with accrued interest, as of December 31, 2025, and 52,374 warrants, remain outstanding. DRE Chicago’s loan was entered into as part of a larger $1,800,000 Term Sheets facility with several lenders, which was fully repaid, together with accrued interest, as of December 31, 2025. Ms. Das terminated her employment with the Company in November 2025 and is no longer considered a related party as of June 30, 2026.

The Company previously entered into a loan arrangement with Endurance Antarctica Partners II, LLC (“Endurance”), an affiliate of a director at the time and a shareholder, as described in the Company’s Form 10-K. The Company recognized interest expense of $51,042 during the six months ended June 30, 2025. The loan was fully repaid, together with accrued interest, as of December 31, 2025, and 488,826 warrants, remain outstanding. As of the date of this quarterly report, the Endurance-affiliated individual is no longer a member of our board of directors.

In March 2023, the Company entered into unsecured notes payable with three related parties. These notes payable provided the Company the ability to draw up to $1,000,000, in aggregate. In June 2025, the Company drew $250,000 from Energy Transition Investors LLC, and subsequently repaid the drawn amount by quarter end. The Company had accrued interest of $422 during the six months ended June 30, 2025 on the drawn amount and subsequently paid the interest in January 2026.

NOTE 12 -ACCRUED LIABILITIES AND OTHER CURRENT LIABILITIES:

**NOTE 13 –**SHORT-TERM LOANS

Insurance funding borrowing

On August 5, 2025, the Company entered into a financing agreement of $407,500 for the purchase of an insurance policy with AFCO Insurance Premium Finance. The debt is payable in monthly installments through June 2026 and bears an interest rate of 7.5%. The carrying amount of Nil and $205,403 is included as Short-term Loan on the accompanying unaudited condensed consolidated balance sheet as on June 30, 2026, and the audited consolidated balance sheet as on December 31, 2025, respectively. The Company recognized interest expense of $963 and $4,217 on the accompanying unaudited condensed consolidated statement of operations for the three and six months ended June 30, 2026, respectively.

A separate insurance financing agreement entered into in July 2024 was fully repaid in June 2025; the Company recognized related interest expense of $1,164 and $5,067 for the three and six months ended June 30, 2025, respectively.

Subsequent to three months ended June 30, 2026, the Company entered into a financing agreement of $493,532 for the purchase of an insurance policy with AFCO Insurance Premium Finance. The Company made a down payment of $172,736, which was applied to the loan amount at the time of the loan agreement. The debt is payable in 7 monthly installments of $47,189 per month and bears an interest rate of 6.99%.

Other short-term loans

The Company’s short-term loans with Endurance Antarctica Partners II, LLC and under the Term Sheets (including DRE Chicago LLC, a related party) are described in Note 11, Related Party Transactions above and described in greater detail in Note 7 to the Company’s Form 10-K. Both arrangements were fully repaid, together with accrued interest, as of December 31, 2025, and carried no balance as of June 30, 2026. The Company recognized interest expense of $103,938 towards other short-term loans on the accompanying unaudited condensed consolidated statements of operations for the six months ended June 30, 2025.

The following table summarizes the Company’s outstanding short-term loan arrangements:

NOTE 14 -LEASES

The Company has entered into a lease agreement with Tower Lake LLC for office space. The Company has not recognized any right-of-use asset or lease liability pursuant to this lease as it is a short-term lease. The Company recorded rent expense of $7,811 for the three months ended June 30, 2026 and 2025 and $15,621 for the six months ended June 30, 2026, and 2025, in the unaudited condensed consolidated statements of operations.

In February 2026, the Company entered into a two-year sublease agreement expiring on February 29, 2028, with Chesmar Homes, LLC for office space located in Houston, Texas. The monthly base rent under the agreement is $8,761 and the Company paid a security deposit of $17,523 upon execution of the sublease agreement, 50% of which will be adjusted against the final lease payment. The lease was contractually scheduled to commence on March 1, 2026. However, as the Company obtained control of the underlying asset, including physical possession, on May 1, 2026, the lease commenced on May 1, 2026, under ASC 842, “Leases”. The Company recognized a right-of-use asset and corresponding lease liability of $173,254 as of May 1, 2026.

The Company incurred operating lease cost of $17,524 for the three and six months ended June 30, 2026. Cash paid for amounts included in the measurement of operating lease liabilities was $17,524 for both the three and six months ended June 30, 2026, and is classified within operating activities in the condensed consolidated statement of cash flows. The weighted average remaining term of operating leases was 1.67 years as of June 30, 2026, and the weighted-average discount rate used to measure the present value of the operating lease liabilities was 12.5% as of May 1, 2026.

As of June 30, 2026, the operating lease right-of-use asset was $157,444, and the operating lease liability of $157,444 was classified as $90,527 current and $66,917 non-current in the unaudited condensed consolidated balance sheet.

Future operating lease payments as of June 30, 2026, were as follows:

NOTE 15 –PROMISSORY NOTES AND WRITE-OFFS

On August 19, 2024, Legacy Stardust Power entered into a promissory note arrangement with IGX Minerals LLC (“IGX”) (the “IGX Note”) for $176,000. Both arrangements are described in the Company’s Form 10-K. During the three months ended June 30, 2025, the Company wrote off the promissory note balance, including interest, in the amount of $182,481 as the note was deemed unrecoverable from IGX and the likelihood of entering into definitive agreements with IGX had diminished significantly. As a result, the Company recognized a loss of $182,481 in the Other Income/Expense section of the unaudited condensed consolidated statement of operations for the three and six months ended June 30, 2025.

On March 15, 2024, Legacy Stardust Power entered into a non-binding Letter of Intent with Usha Resources Ltd. (“Usha Resources”) to potentially acquire an interest in its Jackpot Lake lithium brine project, paying a non-refundable exclusivity payment of $25,000. A further non-refundable $50,000 payment was made on May 14, 2024. Both arrangements are described in the Company’s Form 10-K. As of June 30, 2025, the Company determined that the likelihood of entering into definitive agreements with Usha Resources Ltd. had diminished significantly and wrote off the $50,000 deposit balance. The Company recognized a loss of $50,000 in the Other Income/Expense section of the unaudited condensed consolidated statement of operations for the three and six months ended June 30, 2025.

NOTE 16 –SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date the unaudited condensed consolidated financial statements were available to be issued. Other than as disclosed above, there are no additional subsequent events that would have a material impact on the Company’s unaudited condensed consolidated financial statements.