SDST

Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended June 30, 2024, for Stardust Power Inc. (formerly Global Partner Acquisition Corp II or "GPAC II"). The filing represents the company's status as a Special Purpose Acquisition Company (SPAC) prior to the consummation of its business combination with Stardust Power, which closed on July 8, 2024. The financial statements reflect the accounts of GPAC II and its merger subsidiaries, excluding the operating results of the target company, Stardust Power.

Key Financial Metrics

Material Changes vs. Prior Period

• Net Loss vs. Net Income: The company reported a net loss of $2.175 million for the three months ended June 30, 2024, compared to a net income of $2.122 million for the same period in 2023. This reversal is primarily driven by a $928,000 loss from the change in fair value of warrant liabilities in Q2 2024, compared to a $1.964 million gain in Q2 2023.
• Operating Expenses: General and administrative expenses increased significantly to $1.462 million in Q2 2024 from $313,000 in Q2 2023, reflecting costs associated with the business combination process and extension meetings.
• Trust Account Depletion: Cash held in the trust account dropped from $43.7 million at December 31, 2023, to $1.531 million at June 30, 2024. This reduction is due to massive shareholder redemptions: approximately $23.6 million in January 2024 and $18.9 million in June 2024.
• Share Count Reduction: Class A ordinary shares subject to redemption decreased from 3.93 million at year-end 2023 to 134,550 at June 30, 2024, following the redemption events.

Outlook, Risks, and Unusual Items

• Business Combination Closing: The company successfully consummated its merger with Stardust Power on July 8, 2024. The transaction included a PIPE investment of $10.075 million and the domestication of the company from the Cayman Islands to Delaware.
• Going Concern Warning: Management has identified conditions that raise substantial doubt about the company's ability to continue as a going concern. As of June 30, 2024, the company had $0 in operating cash and a significant working capital deficit. Future viability depends on the success of the business combination and the ability to raise additional capital.
• Warrant Liability Volatility: The fair value of warrant liabilities is a significant driver of earnings volatility. The liability increased to $1.906 million at June 30, 2024, from $337,000 at December 31, 2023.
• Related Party Debt: The company held $4.127 million in related party promissory notes (including extension notes) as of June 30, 2024. These were subsequently forgiven in connection with the closing of the business combination.
• Risk Factors: Key risks include the inability to secure additional financing, the viability of the lithium brine feedstock pipeline, potential delays in the Oklahoma refinery facility, and the competitive landscape of the lithium industry.

Investor Verification Checklist

• Post-Closing Financials: Verify the pro forma financial statements and cash position immediately following the July 8, 2024 closing, including the integration of Stardust Power's operations.
• PIPE Investment Terms: Confirm the final terms and vesting schedules of the $10.075 million PIPE investment and the status of the $50 million earnout provision.
• Debt Forgiveness: Confirm the accounting treatment and tax implications of the forgiveness of the $4.127 million in related party promissory notes.
• Redemption Finality: Verify the final number of shares outstanding after the reversal of redemptions by 2,877 shareholders on July 3, 2024.
• Capital Expenditure Plan: Review the updated capital expenditure requirements for the lithium refinery in Oklahoma and the timeline for commercial production.