Filing identity and reporting period
Important identity discrepancy: The request identifies Stardust Power Inc., but the supplied Form 10-Q is for Global Partner Acquisition Corp II, a Cayman Islands SPAC, for the quarter ended March 31, 2023. The filing does not provide financial information for Stardust Power.
Global Partner Acquisition Corp II had not commenced operations; its activities were formation and seeking a business combination. It had no operating revenue in the quarter and expects no operating revenue before a business combination.
Financial results and liquidity
| Metric | Q1 2023 | Q1 2022 |
|---|---|---|
| Revenue | None | None |
| General and administrative expense | $1.078 million | $191,000 |
| Settlement/release credit to expenses | $2.961 million | None |
| Net income | $882,000 | $6.683 million |
| Net income per ordinary share, basic and diluted | $0.06 | $0.18 |
| Operating cash flow | $(567,000) | $(314,000) |
Q1 2023 income included $921,000 of trust-account interest and a $2.020 million warrant fair-value expense. The $2.961 million creditor settlement credit materially offset administrative expenses. The filing reports no operating margin because the company had no revenue.
At March 31, 2023, cash was $3,000, prepaid expenses were $206,000, and current assets totaled $209,000. Working capital deficit was approximately $1.989 million. The trust account held $40.996 million, compared with $304.675 million at December 31, 2022, following approximately $265.050 million of shareholder redemptions. Total liabilities were $15.055 million, including a $10.5 million deferred underwriting commission and related-party notes. The filing reports no conventional long-term debt; sponsor loans are described below.
Material changes and notable items
- In January 2023, holders redeemed 26,068,281 Class A shares, about 87% of the public shares, leaving 3,931,719. The redemption price was approximately $10.167 per share.
- Shareholders approved an extension of the business-combination deadline. The filing describes an initial extension and monthly extension options; subsequent April and May board approvals extended the deadline to June 12, 2023, with $300,000 borrowed for those two extensions.
- The sponsor-related extension note had approximately $949,000 principal outstanding at March 31, 2023 but was recorded at a fair value of $604,000. A separate sponsor working-capital note had $755,000 outstanding. Extension notes may, at the lender’s election, be converted into warrants at $1.50 per warrant.
- The company reported a $32,000 fair-value expense on extension notes and a $377,000 inception-date fair-value amount credited to equity.
- The statements of operations report a $2.020 million warrant fair-value expense in Q1 2023 and $6.849 million warrant fair-value income in Q1 2022. MD&A instead describes Q1 2022 warrant fair-value income of approximately $9.029 million; this difference is not reconciled in the supplied filing text.
Outlook, risks, and controls
Management intends to fund the search and transaction costs with sponsor financing and available trust funds, but there is no assurance it will complete a business combination within the permitted period. Failure to do so could require liquidation. With only $3,000 of cash and a working-capital deficit, the filing says these conditions raise substantial doubt about the company’s ability to continue as a going concern. Sponsor financing availability and further deadline extensions are important to its plan.
Other risks include further shareholder redemptions, the need for additional transaction financing, potential dilution or debt-related restrictions, variable interest rates on trust cash, and possible claims against trust assets. The filing reports no legal proceedings and no changes to previously disclosed risk factors. Management concluded disclosure controls were effective at March 31, 2023; it also disclosed a previously identified 2021 material weakness involving accounting for complex financial instruments. No auditor attestation on internal controls was included, citing emerging-growth-company status.
Investor facts to verify
- Confirm the filing belongs to the intended company: the supplied document is for Global Partner Acquisition Corp II, not Stardust Power Inc.
- Confirm the applicable business-combination deadline and any later extensions, given differing deadline references within the filing and the post-quarter extensions.
- Verify sponsor-note principal, fair-value accounting, repayment terms, and any warrant-conversion elections.
- Reconcile the Q1 2022 warrant fair-value income reported in MD&A with the amount in the financial statements.
- Assess the remaining trust balance after redemptions, potential additional redemptions, and the company’s ability to fund operations and complete a transaction.