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Stardust Power Inc.(SDST) - 2024 Q3 - Quarterly Report
SDSTStardust Power Inc.(SDST)2024-11-14 00:30

Business Development - Stardust Power is developing a large-scale lithium refinery in Oklahoma to manufacture battery grade lithium products primarily for the electric vehicle market [136]. - The business combination with Global Partner Acquisition Corp II was completed on July 8, 2024, resulting in the renaming of the company to Stardust Power Inc. [144]. - An engineering agreement was signed with Primero USA, Inc. for approximately 4.7milliontoassistinthedevelopmentoftheMuskogeeLithiumfacility[147].−ThecompanyisintheprocessofconductingfeasibilitystudiesfortheproductionoflithiumproductsfromtheLibertyLithiumBrineProjectinCalifornia[152].−StardustPowerisdevelopingaphasedcentralrefinerywithaninitialcapacityof25,000tonsperannum,aimingforatotalcapacityof50,000tonsperannuminthesecondphase[157].FinancialPerformance−Thecompanyhasnotgeneratedanyrevenuesinceinceptionandhasincurredanoperatinglossof4.7 million to assist in the development of the Muskogee Lithium facility [147]. - The company is in the process of conducting feasibility studies for the production of lithium products from the Liberty Lithium Brine Project in California [152]. - Stardust Power is developing a phased central refinery with an initial capacity of 25,000 tons per annum, aiming for a total capacity of 50,000 tons per annum in the second phase [157]. Financial Performance - The company has not generated any revenue since inception and has incurred an operating loss of 10,092,312 for the three months ended September 30, 2024, compared to a loss of 843,800forthesameperiodin2023[183].−GeneralandadministrativeexpensesforthethreemonthsendedSeptember30,2024,totaled843,800 for the same period in 2023 [183]. - General and administrative expenses for the three months ended September 30, 2024, totaled 8,980,965, an increase of 8,202,510comparedto8,202,510 compared to 778,455 for the same period in 2023 [183]. - The company incurred a net loss of 10,092,312forthethreemonthsendedSeptember30,2024,comparedtoanetlossof10,092,312 for the three months ended September 30, 2024, compared to a net loss of 843,800 for the same period in 2023, reflecting an increase in losses of 9,248,512[199].−TheaccumulateddeficitasofSeptember30,2024,was9,248,512 [199]. - The accumulated deficit as of September 30, 2024, was 43.0 million, up from 3.8millionasofDecember31,2023[200].−Thecompanyhasnotearnedanyrevenuesinceinceptionandhasbeenoperatingataloss,withastockholders′deficitof3.8 million as of December 31, 2023 [200]. - The company has not earned any revenue since inception and has been operating at a loss, with a stockholders' deficit of 13,304,610 as of September 30, 2024 [205]. Capital and Financing - The company received up to 257millioninperformance−basedincentivesfromtheStateofOklahoma,contingentonjobcreationandcapitalexpenditureprojections[139].−Thetotalrefinerycostisestimatedat257 million in performance-based incentives from the State of Oklahoma, contingent on job creation and capital expenditure projections [139]. - The total refinery cost is estimated at 1,165 million, which the company intends to finance through a mix of debt, equity, and potential government grants [201]. - The company entered into a Common Stock Purchase Agreement allowing it to sell up to 50,000,000ofnewlyissuedshares,subjecttocertainconditions[206].−Thecompanyhasfundedoperationsthroughsalesofcommonstock,promissorynotes,SAFEnotes,andconvertibleequityagreements,withallpromissorynotesfullyrepaidasofSeptember30,2024[204].−ThecompanyhasafinancingcommitmentwithAIGDallowingforanadditional50,000,000 of newly issued shares, subject to certain conditions [206]. - The company has funded operations through sales of common stock, promissory notes, SAFE notes, and convertible equity agreements, with all promissory notes fully repaid as of September 30, 2024 [204]. - The company has a financing commitment with AIGD allowing for an additional 15 million drawdown on terms similar to existing SAFE notes [216]. Operational Challenges - Stardust Power has an accumulated deficit and stockholders' deficit, raising substantial doubt about its ability to continue as a going concern for at least the next twelve months [161]. - The success of the refinery's operations is contingent upon raising adequate capital and obtaining relevant permits in a timely manner [160]. - The company has not sourced any raw materials to date and is negotiating with multiple suppliers for brine feedstock, including from the oil and gas industry [173]. - The company expects operational expenditures to increase as it begins commercial production of battery-grade lithium and recruits more personnel [199]. - The company is subject to credit risk with respect to cash balances exceeding the FDIC insured amount of $250,000, with only one financial banking institution [269]. Strategic Plans - The company expects to generate future revenue primarily from long-term contracts for battery-grade lithium, with pricing structures that include caps and ceilings [172]. - The Company plans to enter into 10-year long-term sales contracts with EV manufacturers to address fluctuations in product pricing, implementing a cap and floor pricing strategy [256]. - The Company is negotiating fixed price off-take agreements with suppliers to mitigate commodity price risk associated with lithium hydroxide and lithium carbonate [254]. - The company plans to differentiate its refinery by screening for a broader set of contaminants compared to other lithium refineries [158]. - The fair value of common stock is estimated based on third-party valuations and various financial performance factors due to the absence of an active market [238].