424B3 1 form424b3.htm 424B3

Filed Pursuant to Rule 424(b)(3)

Registration No. 333-281160

PROSPECTUS SUPPLEMENT NO. 1

(to Prospectus dated April 15, 2026)

STARDUST POWER INC.

Up to 5,519,087 Shares of Common Stock

Up to 1,056,659 Shares of Common Stock Underlying Warrants

Up to 5,566,667 Warrants to Purchase Common Stock

This prospectus supplement supplements the prospectus dated April 15, 2026 (the “Prospectus”), which forms a part of our registration statement on Form S-1 (No. 333-281160). This prospectus supplement is being filed to update and supplement the information in the Prospectus with the information contained in our Form 10-Q for the fiscal quarter ended March 31, 2026 filed with the Securities and Exchange Commission (the “SEC”) on May 14, 2026 (the “Form 10-Q”). Accordingly, we have attached the Form 10-Q to this prospectus supplement.

The Prospectus and this prospectus supplement relate to the offer and resale from time to time by the selling securityholders named in this Registration Statement or their permitted transferees (the “Selling Securityholders”) of the following:

(i) up to 5,519,087 shares of common stock, par value $0.0001 per share (the “Common Stock”), consisting of:

(a)	up to 12,777 shares of Common Stock issued to former GPAC II Public Shareholders (as defined in the Prospectus) at Closing (as defined in the Prospectus) pursuant to certain Non-Redemption Agreements (as defined in the Prospectus);

(b)	up to 400,000 shares of Common Stock (including 100,000 shares that are subject to forfeiture) issued to the Sponsor at Closing in exchange for an equivalent number of Class B ordinary shares, par value $0.0001 per share, of GPAC II that were originally purchased for approximately $0.03 per share;

(c)	up to 107,754 shares of Common Stock issued to PIPE Investors (as defined in the Prospectus) at Closing pursuant to certain PIPE Subscription Agreements (as defined in the Prospectus) at a purchase price of $93.50 per share;

(d)	up to 202,498 shares of Common Stock held by holders of vested RSU awards;

(e)	up to 4,239,390 shares of Common Stock issued to certain third parties and affiliates of Stardust Power at Closing (which in each case were issued as consideration in the Business Combination (as defined in the Prospectus) based on a value of $100.00 per share); and

(f)	up to 556,666 shares of Common Stock issuable upon exercise of the Private Warrants (as defined in the Prospectus); and

(ii) up to 5,566,667 Private Warrants, which were originally purchased at a price of $1.50 per Private Warrant.

We will not receive any proceeds from the sale of shares of Common Stock or Warrants (as defined in the Prospectus) by the Selling Securityholders pursuant to the Prospectus or in any supplement to the Prospectus, except upon the exercise of Warrants.

The shares of Common Stock, not including Common Stock issuable upon exercise of the Warrants, being offered for resale pursuant to the Prospectus or in any supplement to the Prospectus by the Selling Securityholders represent approximately 91.74% of shares of Common Stock (and assuming the exercise of all Warrants, 93.15% of Common Stock) outstanding as of April 28, 2025. Given the substantial number of shares of Common Stock being registered for potential resale by Selling Securityholders pursuant to the Prospectus and this prospectus supplement, the sale of shares of Common Stock or Warrants by the Selling Securityholders, or the perception in the market that the Selling Securityholders of a large number of holders of Common Stock or Warrants intend to sell such securities, could increase the volatility of the market price of our Common Stock or Warrants or result in a significant decline in the public trading price of our Common Stock or Warrants. Even if our trading price of Common Stock is significantly below $100.00 per share, the offering price for the units offered in the IPO (as defined in the Prospectus), certain of the Selling Securityholders may still have an incentive to sell shares of Common Stock, because they purchased the shares at prices lower than the public investors or the current trading price of our Common Stock.

We will only receive proceeds from the exercise of Warrants if and when the holders of the Warrants choose to exercise them. The exercise of the Warrants, and any proceeds we may receive from their exercise, are highly dependent on the price of our Common Stock and the spread between the exercise price of the Warrants and the price of our Common Stock at the time of exercise. If the market price of our Common Stock is less than the exercise price of a holder’s Warrants, it is unlikely that holders will choose to exercise. There can be no assurance that the Warrants will be in the money prior to their expiration. In addition, our Warrant holders have the option to exercise the Warrants on a cashless basis in certain circumstances. See “Description of Securities - Warrants” in the Prospectus. As such, it is possible that we may never generate any cash proceeds from the exercise of our Warrants.

We will bear all costs, expenses and fees in connection with the registration of the securities. The Selling Securityholders will bear all commissions and discounts, if any, attributable to their respective sales of the securities.

Our registration of the securities covered by the Prospectus or in any prospectus supplement does not mean that either we or the Selling Securityholders will issue, offer or sell, as applicable, any of the Common Stock. The Selling Securityholders may offer and sell the securities covered by the Prospectus or in any prospectus supplement in a number of different ways and at varying prices. We provide more information about how the Selling Securityholders may sell the shares in the section entitled “Plan of Distribution” in the Prospectus.

You should read the Prospectus, this prospectus supplement and any prospectus supplement or amendment carefully before you invest in our Common Stock or Warrants.

Our Common Stock and Warrants are listed on The Nasdaq Capital Market (“Nasdaq”) under the symbols “SDST” and “SDSTW,” respectively. On May 18, 2026, the last reported sales price of our Common Stock was $2.11 per share and the last reported sales price of our Warrants was $0.1226 per Warrant.

We are an “emerging growth company” and a “smaller reporting company” as defined under U.S. federal securities laws and, as such, have elected to comply with reduced public company reporting requirements. The Prospectus and this prospectus supplement comply with the requirements that apply to an issuer that is an emerging growth company and a smaller reporting company. This prospectus supplement updates and supplements the information in the Prospectus and is not complete without, and may not be delivered or utilized except in combination with, the Prospectus, including any amendments or supplements thereto. This prospectus supplement should be read in conjunction with the Prospectus and if there is any inconsistency between the information in the Prospectus and this prospectus supplement, you should rely on the information in this prospectus supplement.

Investing in our securities involves a high degree of risk. You should review carefully the risks and uncertainties described in the section titled “Risk Factors” beginning on page 12 of the Prospectus, and under similar headings in any amendments or supplements to the Prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities, or passed upon the accuracy or adequacy of the Prospectus or this prospectus supplement. Any representation to the contrary is a criminal offense.

The date of this prospectus supplement is May 20, 2026.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 001-39875

STARDUST POWER INC.

(Exact name of registrant as specified in its charter)

Delaware

99-3863616

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification Number)

15 E. Putnam Ave, Suite 378

Greenwich, CT

06830

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (800) 742-3095

Not applicable

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	SDST	The Nasdaq Capital Market
Redeemable warrants, with 10 warrants exercisable for one share of Common Stock at an exercise price of $115.00	SDSTW	The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 13, 2026, there were 10,579,727 shares of common stock, par value $0.0001 per share, issued and outstanding.

Table of Contents

		Page

PART I – FINANCIAL INFORMATION		1

Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets as of March 31, 2026 (unaudited) and December 31, 2025	1
	Condensed Consolidated Statements of Operations for the three months ended March 31, 2026, and 2025 (unaudited)	2
	Condensed Consolidated Statements of Changes in Stockholders’ Deficit for the three months ended March 31, 2026, and 2025 (unaudited)	3
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2026, and 2025 (unaudited)	4
	Notes to Condensed Consolidated Financial Statements (unaudited)	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42

Item 4.	Controls and Procedures	44

PART II – OTHER INFORMATION		45

Item 1.	Legal Proceedings	45

Item 1A.	Risk Factors	45

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45

Item 3.	Defaults Upon Senior Securities	45

Item 4.	Mine Safety Disclosures	45

Item 5.	Other Information	45

Item 6.	Exhibits	46

Signature		47

Cautionary Statement Regarding Forward-Looking Statements

Certain statements contained in this Quarterly Report on Form 10-Q may constitute “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including statements concerning, without limitation, our expectations, hopes, beliefs, intentions, plans, objectives, goals, prospects, financial results or strategies regarding us and the future held by our management team and the products and markets, future events, future financial condition, expected future revenues or performance financing needs, our ability to continue as a going concern, business trends and market opportunities of our business and other information referred to under the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” are forward-looking statements. These statements constitute projections, forecasts and forward-looking statements, and are not guarantees of performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. In some cases, you can identify forward-looking statements by terms such as “estimate,” “continue,” “could,” “may,” “might,” “possible,” “predict,” “should,” “would,” “plan,” “project,” “forecast,” “intend,” “will,” “expect,” “anticipate,” “believe,” “seek,” “target,” “designed to” or other similar expressions that predict or indicate future events or trends or that are not statements of historical facts. In addition, any statements that refer to projections, forecasts, or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements.

We caution readers of this Quarterly Report on Form 10-Q that these forward-looking statements are subject to substantial known and unknown risks, uncertainties, and other factors, most of which are difficult to predict and many of which are beyond our control and could cause our actual results, outcomes, performance or achievements, or the timing of such results, outcomes, performance or achievements, to differ materially from the expected results, outcomes, performances or achievements expressed or implied by the forward-looking statements. The following factors, among others, could cause actual results and the timing of events to differ materially from the anticipated results or other expectations expressed in the forward-looking statements contained in this Quarterly Report on Form 10-Q:

	●	the substantial doubt regarding our ability to continue as a going concern and the need to raise capital in the near term in order to maintain the Company’s operations;
	●	our failure to realize the anticipated benefits of the Business Combination;
	●	our ability to maintain the listing of the Common Stock and the Public Warrants on the Nasdaq and comply with Nasdaq’s continued listing requirements;
	●	the Company’s ability to issue equity or equity-linked securities, to obtain debt financing, or refinance existing indebtedness on satisfactory terms, or otherwise raise financing in the future;
	●	the liquidity and trading of the Common Stock and the Public Warrants;
	●	members of the Company’s management team allocating their time to other businesses and potentially having conflicts of interest with the Company’s business;
	●	the Company’s future financial performance;
	●	the Company’s success in retaining or recruiting, or changes required in, its officers, key employees, or directors;
	●	the Company’s ability to manage future growth;
	●	the Company’s ability to operate in the lithium industry;
	●	the Company’s ability to enter into and deliver products under offtake agreements;
	●	the Company’s ability to develop new products and services, bring them to market in a timely manner, and make enhancements to its business;
	●	the effects of competition on the Company’s business;
	●	market demand for and uses of lithium-based end products;
	●	changes in domestic and foreign business, financial, political, and legal conditions;
	●	future global, regional, or local macroeconomic and market conditions;
	●	the outcome of any potential litigation, government and regulatory proceedings, investigations, and inquiries;
	●	the development, effects and enforcement of laws and regulations;
	●	the Company’s ability to maintain proper and effective internal controls over financial reporting, and the Company’s ability to produce accurate and timely financial statements; and
	●	the Company’s other plans, objectives, expectations, intentions and risks and uncertainties described or referenced in this Quarterly Report on Form 10-Q under the heading “Risk Factors,” in our Annual Report on Form 10-K under the heading “Risk Factors,” and in other documents that the Company files from time to time with the SEC.

If any of these risks, uncertainties and other factors materialize or our assumptions prove incorrect, actual results, outcomes, performance or achievements, or the timing of such results, outcomes, performance or achievements could differ materially from those implied by these forward-looking statements. There may be additional risks, uncertainties and other factors that we do not presently know or that we currently believe are immaterial that could also cause actual results, outcomes, performance or achievements, or the timing of such results, outcomes, performance or achievements, to differ materially from those contained in the forward-looking statements.

In addition, forward-looking statements reflect our expectations, estimates, assumptions, plans or forecasts of future events and views as of the date of this Quarterly Report on Form 10-Q. We anticipate that subsequent events and developments will cause our assessments to change. Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results or outcomes could differ materially from those anticipated in any forward-looking statements, whether as a result of new information, future developments, changes in assumptions or otherwise. These forward-looking statements should not be relied upon as representing our assessment as of any date subsequent to the date hereof.

These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements.

You should read this Quarterly Report on Form 10-Q and the documents that we reference in and have filed as exhibits to this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results, outcomes, performance or achievements, or the timing of such results, outcomes, performance or achievements, may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Stardust Power Inc. and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEETS

(all amounts in USD, except number of shares)

	As of March 31, 2026			As of December 31, 2025
	(unaudited)			(audited)
ASSETS
Current assets
Cash	$	1,235,564		$	3,480,151
Prepaid expenses and other current assets		479,110			573,834
Deferred transaction costs		-			25,000
Total current assets	$	1,714,674		$	4,078,985
Property and equipment, net		1,757,810			1,757,271
Capital project costs		5,371,667			5,354,493
Investment in equity securities		42,975			37,374
Other long-term assets		550,109			547,169
Total assets	$	9,437,235		$	11,775,292

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities
Accounts payable	$	8,462,791		$	8,305,096
Accrued liabilities and other current liabilities		3,467,569			4,836,999
Current portion of early exercised shares option liability		1,024			1,122
Current portion of convertible note		1,826,820			933,022
Short-term loans		103,848			205,403
Total current liabilities	$	13,862,052		$	14,281,642
Warrant liability		1,709,607			1,042,036
Earnout liability		4,700			4,700
Convertible note		1,728,143			2,259,984
Early exercised shares option liability		398			613
Total liabilities	$	17,304,900		$	17,588,975

Commitments and contingencies (Note 3)		-			-

Stockholders’ equity (deficit)
Preferred stock, $0.0001 par value, 100,000,000 shares authorized, Nil shares issued and outstanding as at March 31, 2026, and December 31, 2025		-			-
Common stock, $0.0001 par value, 700,000,000 shares authorized, 9,966,473 and 9,869,558 shares issued and outstanding as at March 31, 2026, and December 31, 2025, respectively		985			975
Additional paid-in capital		65,708,626			62,527,926
Accumulated deficit		(73,577,276	)		(68,342,584	)
Total stockholders’ deficit	$	(7,867,665	)	$	(5,813,683	)

Total liabilities and stockholders’ deficit	$	9,437,235		$	11,775,292

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Stardust Power Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(all amounts in USD, except number of shares)

(Unaudited)

	March 31, 2026			March 31, 2025
	Three months ended
	March 31, 2026			March 31, 2025
Revenue	$	-		$	-

General and administrative expenses		3,984,901			5,748,648
Operating Loss		(3,984,901	)		(5,748,648	)
Other income/ (expense)
Interest income		-			7,279
Interest expense		(365,606	)¹		(107,841	)¹
Finance charge		(227,187	)		(198,422	)
Change in fair value of sponsor earnout shares		-			528,000
Change in fair value of warrant liability		(667,571	)		1,699,177
Change in fair value of investment in equity securities		5,601			10,755
Gain on extinguishment of liability		4,972			-
Total other income/ (expense)		(1,249,791	)		1,938,948
Net loss	$	(5,234,692	)	$	(3,809,700	)

Net loss per share²
Basic ²	$	(0.53	)	$	(0.72	)
Diluted ²	$	(0.53	)	$	(0.72	)

Weighted average common shares outstanding²
Basic ²		9,914,832			5,297,899
Diluted ²		9,914,832			5,297,899

(1)	Includes related party amounts of nil and $58,229 for the three months ended March 31, 2026, and 2025, respectively.
(2)	Amounts have been adjusted to reflect the 1-for-10 reverse stock split that became effective on September 8, 2025. See Note 2 “Basis of presentation and summary of significant accounting policies” for additional details.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Stardust Power Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(all amounts in USD, except number of shares)

(Unaudited)

	Shares			Amount⁽¹⁾		capital⁽¹⁾			Deficit			Deficit
For three months ended March 31, 2025
	Common Stock⁽¹⁾					Additional paid-in			Accumulated			Total Stockholder’s
	Shares			Amount		capital⁽¹⁾			Deficit			Deficit
Balance as at December 31, 2024		4,773,628		$	460	$	33,232,704		$	(52,618,948	)	$	(19,385,784	)

Net loss		-			-		-			(3,809,700	)		(3,809,700	)
Stock based compensation (Note 5)		-			-		2,954,279			-			2,954,279
Transfer from early exercised stock option liability on vesting		-			1		360			-			361
Issuance of common stock		398			-		16,414			-			16,414
Issuance of common stock and warrants from January 2025 public offering, net of offering costs		479,200			48		4,591,021			-			4,591,069
Issuance of common stock for settlement of RSU		57,071			6		(6	)		-			-
Issuance of common stock upon warrant inducement, net of offering costs		479,200			48		2,798,151			-			2,798,199
Repurchase of unvested early exercised common stock		(24,449	)		-		-			-			-
Balance as at March 31, 2025		5,765,048		$	563	$	43,592,923		$	(56,428,648	)	$	(12,835,162	)


For three months ended March 31, 2026
	Common Stock				Additional paid-in			Accumulated			Total Stockholder’s
	Shares		Amount		capital			Deficit			Deficit
Balance as at December 31, 2025		9,869,558	$	975	$	62,527,926		$	(68,342,584	)	$	(5,813,683	)

Net loss		-		-		-			(5,234,692	)		(5,234,692	)
Stock based compensation (Note 5)		-		-		1,510,259			-			1,510,259
Transfer from early exercised stock option liability on vesting		-		-		313			-			313
Issuance of common stock		29,067		3		97,103			-			97,106
Issuance of common stock for settlement of RSU		67,848		7		(7	)		-			-
Issuance of common stock for settlement of accrued liability		-		-		1,573,032			-			1,573,032
Balance as at March 31, 2026		9,966,473	$	985	$	65,708,626		$	(73,577,276	)	$	(7,867,665	)

(1)

Amounts have been adjusted to reflect the 1-for-10 reverse stock split that became effective on September 8, 2025. See Note 2 “Basis of presentation and summary of significant accounting policies” for additional details.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Stardust Power Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(all amounts in USD)

(Unaudited)

	Three months ended March 31, 2026			Three months ended March 31, 2025
Cash flows from operating activities:
Net loss	$	(5,234,692	)	$	(3,809,700	)

Adjustments to reconcile net loss to net cash used in operating activities:
Stock based compensation		1,510,259			2,954,279
Change in fair value of investment in equity securities		(5,601	)		(10,755	)
Amortization of debt discount and debt issuance cost		361,958			-
Loss from change in fair value of common stock make-whole obligation		25,027			197,930
Change in fair value of warrant liability		667,571			(1,699,177	)
Change in fair value of sponsor earnout shares		-			(528,000	)
Non-cash marketing expense for proposed stock issuance to vendor		75,562			-
Gain on extinguishment of liability		(4,972	)		-
Depreciation expense		992			764
Deferred transaction costs expensed		25,000			-
Changes in operating assets and liabilities:
Prepaid expenses and other assets		16,221			88,934
Accounts payable		318,798			290,879
Accrued liabilities and other current liabilities		178,575			(360,341	)
Net cash used in operating activities	$	(2,065,302	)	$	(2,875,187	)
Cash flows from investing activities:
Capital project costs		(173,685	)		(959,644	)
Land acquisition cost		-			(688	)
Purchase of property and equipment		(1,151	)		-
Net cash used in investing activities	$	(174,836	)	$	(960,332	)
Cash flows from financing activities:
Proceeds from issuance of common stock		97,106			16,414
Deferred transaction costs paid		-			(25,000	)
Repayment of short-term loan from related parties		-			(2,000,000	)
Repayment of short-term loan		(101,555	)		(1,677,914	)
Proceeds from advance received from PIPE investors		-			125,000
Proceeds from public offering		-			5,750,400
Proceeds from warrant inducement exercises		-			2,971,040
Transaction costs associated with public offering and warrant inducement		-			(648,860	)
Net cash (used in) provided by financing activities	$	(4,449	)	$	4,511,080

Net (decrease)/ increase in cash	$	(2,244,587	)	$	675,561
Cash at the beginning of the period		3,480,151			912,574
Cash at the end of the period	$	1,235,564		$	1,588,135

Supplemental disclosure for cash flow information:
Interest paid	$	39,155		$	141,718

Supplemental disclosure of non-cash investing and financing activities:
Unpaid capital project costs	$	1,959		$	1,545,171
Unpaid property and equipment purchase cost		380			-
Reclass of advances to capital project costs		-			236,235
Unpaid public offering issuance cost		-			652,312
Unpaid warrant inducement issuance costs		-			29,000
Unpaid amount for repurchase of unvested shares		-			1,593
Pending stock issuance under licensing arrangement		-			343,000
Incremental fair value of warrant inducement		-			2,108,480
Fair value of common stock issued to settle accrued liability		1,573,032			-

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Stardust Power Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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 March 31, 2026, its unaudited condensed consolidated statements of operations and stockholders’ deficit for the three months ended March 31, 2026 and March 31, 2025, and its unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2026 and March 31, 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, 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 (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.

Stardust Power Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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 March 31, 2026, the Company has $1,235,564 of unrestricted cash. The Company is a development stage entity having no revenues and has incurred a net loss of $5,234,692 and $3,809,700 for the three months ended March 31, 2026, and 2025, respectively. The Company has an accumulated deficit of $73,577,276 and stockholders’ deficit of $7,867,665 as of March 31, 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, 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”) and a related Registration Rights Agreement (the “B. Riley Registration Rights Agreement”, and together with the B. Riley Purchase Agreement, the “B. Riley Agreements”) 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 465,120 shares of Common Stock aggregating to net proceeds of $1,220,015 (See Note 4).

Subsequent to the quarter end, 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, having an aggregate offering price of up to $5,000,000 (the “Shares”). The Company intends to use this facility to raise capital as needed.

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.

Stardust Power Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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 shares 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:

	March 31, 2026			March 31, 2025
	Three months ended
	March 31, 2026			March 31, 2025

Numerator:
Net loss	$	(5,234,692	)	$	(3,809,700	)
Denominator:
Weighted average shares outstanding		9,914,832			5,297,899
Net loss per share, basic and diluted	$	(0.53	)	$	(0.72	)

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:

SCHEDULE OF ANTI-DILUTIVE EFFECT

	March 31, 2026		March 31, 2025
Restricted Stock options		21,742		41,012
Restricted Stock Units		117,857		277,095
Performance Stock units		50,658		50,658
Sponsor Earnout Shares (Note 4)*		-		-
Public warrants		486,413		486,413
Private warrants		556,666		556,666
Inducement warrants		-		958,400
Short term loan warrants		86,591		-
Private placement warrants		6,425		-
2025 Convertible note shares		822,340		-
2025 Convertible note warrants		411,245		-
Potentially dilutive shares		411,245		-

*	The Sponsor Earnout Shares (as defined in the Business Combination Agreement) were not included for purposes of calculating the number of diluted shares outstanding as of March 31, 2026, as the Sponsor Earnout Shares remain contingently forfeitable, as the conditions have not been met.

Stardust Power Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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 with ASC 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 three3 to five 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.

Stardust Power Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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 three months ended March 31, 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 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.

Stardust Power Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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 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 March 31, 2026, the Company had 9,966,473 shares of Common Stock issued and outstanding. Not reflected in the shares issued and outstanding as of March 31, 2026, is approximately 707,054 shares of Common Stock related to shares issued to a vendor and restricted stock units that vested during the three months ended March 31, 2026, but have not yet been settled and issued. As of December 31, 2025, the Company had 9,869,558 shares of Common Stock, par value $0.0001, issued and outstanding.

Stardust Power Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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. The Company did not perform a fair valuation of expected earnout consideration using the Monte Carlo method as of December 31, 2025, as the Company determined that change in fair value is deemed immaterial to the fair value of earnout consideration. As at March 31, 2026 and December 31, 2025, the fair value of Sponsor Earnout Shares amounted to $4,700.

The Sponsor Earnout Shares were valued using the following assumptions under the Monte Carlo Model that assumes optimal exercise of the Company’s redemption option at the earliest possible date:

	March 31, 2025
Market price of public stock	$	4.71
Expected term (years)		7.27 years
Volatility		75.00	%
Risk-free interest rate		4.10	%
Dividend rate		0.00	%

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 March 31, 2025, the fair market value of the commitment shares was $30,059, resulting in a make-whole obligation of $469,941. The change in the fair value of the make-whole obligation of $197,930 was recognized as a component of finance charges in the unaudited condensed consolidated statements of operations for the three months ended March 31, 2025.

Stardust Power Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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 March 31, 2026, the fair value of the Settlement Shares was $109,405 and $84,378, 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 $25,027 for the three months ended March 31, 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. As of December 31, 2025 and March 31, 2026, the total make-whole obligation balance was $362,538 and $230,251, 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 $25,027 is recorded as a component of finance charges in the accompanying unaudited condensed consolidated statements of operations for the three months ended March 31, 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 March 31, 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.

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 months ended March 31, 2026, the Company issued 29,067 shares of Common Stock aggregating to net proceeds of $94,193. Subsequent to quarter end, the Company issued 436,053 shares of Common Stock aggregating to net proceeds of $1,125,821.

Public Offering and Warrant Inducement

On January 27, 2025, the Company consummated a public offering of 479,200 shares of Common Stock and accompanying warrants to purchase up to 479,200 shares of Common Stock at a public offering price of $12.00 per share and warrant, generating aggregate gross proceeds of $5,750,400 before offering expenses of $1,159,331. The common stock purchase warrants, exercisable at $13.00 per share and expiring five years from issuance, were issued under an effective registration statement on Form S-1 (File No. 333-284298) filed by the Company with the SEC under the Securities Act of 1933, as amended (the “Securities Act”) that became effective on January 23, 2025.

On March 16, 2025, the Company entered into a letter agreement (the “Inducement Letter”) with a warrant holder (the “Exercising Holder”) providing for the immediate cash exercise of outstanding warrants to purchase 479,200 shares of the Company’s Common Stock at a reduced exercise price of $6.20 per share. In order to further incentivize the early exercise of these outstanding warrants, the Company also agreed to issue new common stock purchase warrants (the “Inducement Warrants”) to purchase up to 958,400 shares of Common Stock at an exercise price of $7.00 per share, subject to shareholder approval and Nasdaq rules. Pursuant to the Inducement Letter, the warrant holders exercised the outstanding warrants on March 18, 2025, and the Company received gross proceeds of $2,971,040 before cash offering expenses of $172,841.

Stardust Power Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

On October 30, 2025, the Company entered into the Exchange Agreement with the Exercising Holder. Pursuant to the Exchange Agreement, the Exercising Holder agreed to irrevocably exchange all of its warrants to purchase shares of Common Stock, originally issued on March 16, 2025, representing the right to purchase an aggregate of 958,400 shares of Common Stock (the “Warrant Shares”), for newly issued shares of Common Stock at an exchange ratio of 1.31 Warrant Shares for 1 share of Common Stock, resulting in the issuance to the Exercising Holder of 730,689 shares of Common Stock at closing with no other payment or any other additional consideration from the investor. At the closing of the Exchange Agreement, the Warrant Shares were surrendered for cancellation, deemed automatically cancelled and retired in full, and all rights, liabilities and obligations thereunder were discharged in full.

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 sub license, 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 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 initially recognized a liability of $343,000 as other long-term liabilities, with a corresponding debit recorded as other long-term assets on the audited and unaudited condensed consolidated balance sheets as of December 31, 2025 and March 31, 2026, respectively.

Vendor shares issuance, pending settlement

On October 30, 2025, the Company approved 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 for the three months ended March 31, 2026, and a prepaid expense of $226,688 and $151,126 as of December 31, 2025 and March 31, 2026, respectively. The corresponding amounts were recorded as an increase to additional paid-in capital. Subsequent to the quarter end, the Company issued the shares to the vendor.

Stardust Power Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 5 – STOCK BASED COMPENSATION

2023 Equity Incentive Plan

At March 16, 2023 (inception), the Legacy Stardust Power stockholders approved the 2023 Equity Incentive Plan, and 230,112 shares of the Company’s Common Stock were reserved for issuance thereunder. During the year ended December 31, 2024, the Board adopted a resolution to increase the number of shares of Common Stock authorized for issuance under the 2023 Equity Incentive Plan by 115,056 shares of Common Stock. During the three months ended March 31, 2026, there were no grants under the 2023 Equity Incentive Plan.

Stock Options

During October and November 2023, Legacy Stardust Power granted stock options to purchase 227,810 shares of Common Stock under the 2023 Equity Incentive Plan. All the options under the 2023 Equity Incentive Plan were early-exercised by grantees. Accordingly, the Company received a total amount of $14,850 towards the early exercise of these options during the period from March 16, 2023 (inception) through December 31, 2023, and recorded a liability against the early exercise of these options.

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

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

SCHEDULE OF STOCK OPTION ACTIVITY

	Number of Shares			Weighted Average Grant-Date Fair Value
Unvested as at December 31, 2025		26,560			5.55
Granted		-			-
Vested		(4,818	)		5.23
Forfeited		-			-
Unvested as at March 31, 2026		21,742			5.62

Stardust Power Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

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

Restricted Stock Units

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

SCHEDULE OF RESTRICTED STOCK ACTIVITY

	Number of Shares			Weighted Average Grant-Date Fair Value
Unvested as at December 31, 2025		54,561		$	87.10
Granted		-			-
Vested		(10,402	)		85.68
Forfeited		-			-
Unvested as at March 31, 2026		44,159			87.44

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

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

2024 Equity Incentive Plan

The Board adopted, and the stockholders of the Company approved, the 2024 Equity Incentive Plan (the “2024 Plan”) in September 2024. The maximum number of shares with respect to one or more awards that may be granted to any one participant during any calendar year shall be 467,366 shares of Common Stock.

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

Stardust Power Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

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

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

SCHEDULE OF RESTRICTED STOCK ACTIVITY

	Number of Shares			Weighted Average Grant-Date Fair Value
Unvested as at December 31, 2025		89,147			53.62
Granted		682,054			2.49
Vested		(697,500	)		3.36
Forfeited		-			-
Unvested as at March 31, 2026		73,701			56.10

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

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

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

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

	Number of Shares		Weighted Average Grant-Date Fair Value
Unvested as at December 31, 2025		50,658		67.33
Granted		-		-
Vested		-		-
Forfeited		-		-
Unvested as at March 31, 2026		50,658		67.33

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

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

Stardust Power Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 6 – ACCOUNTING FOR WARRANT LIABILITY

The Sponsor purchased from GPAC II, a Cayman Islands exempted company, an aggregate of 5,566,667 warrants at a price of $1.50 per warrant in a private placement that occurred simultaneously with the completion of the Company’s initial public offering (the “Private Warrants”). The Company established the initial fair value of the Private Warrants and the Company’s detachable redeemable warrants and distributable redeemable warrants (the “Public Warrants”) on July 8, 2024, the date of consummation of the Business Combination, and revalued the warrants on March 31, 2026. Each 10 Warrants entitle the holder to purchase one share of Common Stock at an exercise price of $115.00 per share. For additional terms refer to the Company’s Registration Statement on Form S-4/A filed with the SEC on May 8, 2024. As at March 31, 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 Company timely filed a registration statement on Form S-1 with the SEC on August 1, 2024, for the registration of the shares issuable upon exercise of the warrants. The registration statement (File No. 333-281160) was declared effective by the SEC on August 9, 2024.

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.

Stardust Power Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The Company’s warrants are not indexed to the Company’s Common Stock in the manner contemplated by ASC Section 815-40-15 because the holder of the instrument is not an input into the pricing of a fixed-for-fixed option on equity shares. Further, there is a settlement cap for Public Warrants, and Private Warrants upon transfer from Sponsor or permitted transferees to other holders, if the holder elects to exercise warrants on a cashless basis if the Company fails to maintain an effective registration statement covering the Common Stock issuable upon warrant exercises throughout the term of the warrants. Maintenance of an effective registration statement is not an input to the fair value option model for a fixed-for-fixed option or forward. As such, the Company’s warrants are accounted for as derivative warrant liabilities which are required to be valued at fair value at each reporting period.

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

Description	At March 31, 2026		Quoted Price In Active Markets (level 1)		Significant Other Observable Input (level 2)		Significant Other Unobservable Input (level 3)
Warrant liability
Public warrants	$	797,230	$	797,230	$	-	$	-
Private warrants		912,377		-		912,377		-
Warrant liability	$	1,709,607	$	797,230	$	912,377	$	-

Description	At December 31, 2025 (audited)		Quoted Price In Active Markets (level 1)		Significant Other Observable Input (level 2)		Significant Other Unobservable Input (level 3)
Warrant liability
Public warrants	$	485,926		485,926		-	$	-
Private warrants		556,110		-		556,110		-
Warrant liability	$	1,042,036		485,926		556,110	$	-

At March 31, 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 months ended March 31, 2026.

Stardust Power Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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 $42,975 and $37,374 as at March 31, 2026, and December 31, 2025, respectively. The Company recognized a gain of $5,601 and loss of $4,031 for the three months ended March 31, 2026, and March 31, 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.

In December 2024, Stardust Power subscribed to and purchased 10,000,000 ordinary shares (approximately 6% of the total equity) of IRIS Metals Limited (“IRIS Metals”), an Australian limited company whose ordinary shares are listed on the ASX, for $1,600,000.

IRIS Metals’ ordinary shares are listed on the ASX with a readily determinable fair value, and changes in fair value are recognized in the condensed consolidated statements of operations. During the year ended December 31, 2025, management determined that a strategic investment in IRIS Metals was no longer viable. As a result, the Company sold all of its investment in IRIS Metals. Accordingly, as of March 31, 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 months ended March 31, 2026. During the three months ended March 31, 2025, the Company recognized gain due to changes in the fair value of securities of $14,786.

Stardust Power Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 8 – CONVERTIBLE NOTES AND WARRANTS

Lind 2025 Convertible Notes

On December 23, 2025, the Company entered into a Securities Purchase Agreement (“SPA”) with Lind Global Asset Management XIII LLC (“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 a Senior Secured Convertible Promissory Note with a principal amount of $4,800,000 (the “2025 Convertible Note”), and a Common Stock Purchase Warrant to purchase approximately 411,245 shares of the Company’s Common Stock (the “2025 Lind Warrant”).

The 2025 Convertible Note does not bear 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 Notes contain 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.

Stardust Power Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

As of December 31, 2025 and March 31, 2026, the principal amount outstanding under the 2025 Convertible Note was $4,800,000 and $4,800,000, respectively, and unamortized debt discount and issuance costs, including amount attributed to warrants issued, totaled $1,606,994 and $1,245,037, respectively, resulting in a net carrying amount of $3,193,006 and $3,554,963, respectively, at an effective interest rate of 43.2%. As of December 31, 2025, the estimate fair value of the instrument approximates carrying value given the instrument was issued in December 2025 and has a short time period until maturity.

For the three months ended March 31, 2026, the Company recognized $361,958 of interest expense related to the 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 months ended March 31, 2026.

The future contractual payments of 2025 Convertible Note as of March 31, 2026, are as follows:

SCHEDULE OF FUTURE CONTRACTUAL PAYMENT

Year	As of March 31, 2026
Remainder of 2026		2,246,400
2027		2,745,600
Total		4,992,000

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.

Stardust Power Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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:

SCHEDULE OF FAIR VALUE ASSUMPTION

	Assumptions
Fair value of Common Stock as of December 23, 2025	$	3.04
Exercise Price	$	5.84
Risk-free interest rate		3.78	%
Contractual terms (years)		5.5
Volatility		75	%
Dividend Yield		0	%

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:


	Fair Value Measurements as at December 31, 2025 (audited)
	Level 1		Level 2		Level 3		Total
Other noncurrent assets:
Investment in equity securities (a)	$	37,374	$	-	$	-	$	37,374
Total financial assets	$	37,374	$	-	$	-	$	37,374


	Fair Value Measurements as at March 31, 2026
	Level 1		Level 2		Level 3		Total
Other noncurrent assets:
Investment in equity securities (a)	$	42,975	$	-	$	-	$	42,975
Total financial assets	$	42,975	$	-	$	-	$	42,975


	Fair Value Measurements as at December 31, 2025 (audited)
	Level 1		Level 2		Level 3		Total
Liabilities
Sponsor earnout shares (b)	$	-	$	-	$	4,700	$	4,700
Total financial liabilities	$	-	$	-	$	4,700	$	4,700


	Fair Value Measurements as at March 31, 2026
	Level 1		Level 2		Level 3		Total
Liabilities
Sponsor earnout shares (b)	$	-	$	-	$	4,700	$	4,700
Total financial liabilities	$	-	$	-	$	4,700	$	4,700

(a)	These represent equity investments with a readily determinable fair value. The Company has measured its investments to fair value in accordance with ASC 321, “Investments-Equity Securities,” based on quoted prices in active markets.

(b)

For Level 3 earnout liability, the Company assesses the fair value of expected earnout liability at each reporting period using the Monte Carlo Method, which is consistent with the initial measurement of the expected earnout consideration. This fair value measurement is considered a Level 3 measurement because the Company estimates projections during the earnout period utilizing various potential pay-out scenarios. The Monte Carlo simulation method repeats a process thousands of times in an attempt to predict all the possible future outcomes. At the end of the simulation, several random trials produce a distribution of outcomes that are then analyzed to determine the average present value of earnout. Change in the fair value of earnout liability is reflected in the unaudited condensed consolidated statements of operations.

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.

Stardust Power Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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 Sates.

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.


	Three months ended March 31, 2026		Three months ended March 31, 2025
Payroll and related taxes	$	2,768,736

SEC Form 424B3 filed by Stardust Power Inc.