SDST 10-Q

Stardust Power Inc. (SDST)

10-Q 2024-11-14 For: 2024-09-30

View Original

Added on April 12, 2026

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 Global Market
Redeemable warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50	SDSTW	The Nasdaq Global Market

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

		Page

PART I – FINANCIAL INFORMATION		1

Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets as of September 30, 2024 (unaudited) and December 31, 2023	1
	Condensed Consolidated Statements of Operations for the three months ended September 30, 2024 and 2023, nine months ended September 30, 2024 and for the period from March 16, 2023 to September 30, 2023(unaudited)	2
	Condensed Consolidated Statements of Changes in Shareholders’ Deficit for the three months ended September 30, 2024 and 2023, nine months ended September 30, 2024 and for the period from March 16, 2023 to September 30, 2023 (unaudited)	3
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and for the period from March 16, 2023 to September 30, 2023 (unaudited)	4
	Notes to Condensed Consolidated Financial Statements (unaudited)	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38

Item 4.	Controls and Procedures	40

PART II – OTHER INFORMATION		41

Item 1.	Legal Proceedings	41

Item 1A.	Risk Factors	41

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43

Item 3.	Defaults Upon Senior Securities	43

Item 4.	Mine Safety Disclosures	43

Item 5.	Other Information	43

Item 6.	Exhibits	44

Signature		45

	As of September 30, 2024			As of December 31, 2023
	(unaudited)
ASSETS
Current assets
Cash	$	1,587,086		$	1,271,824
Prepaid expenses and other current assets		1,024,850			426,497
Deferred transaction costs		199,724			1,005,109
Promissory notes issued		495,397			-
Total current assets	$	3,307,057		$	2,703,430
Computer and equipment, net		14,830			1,968
Pre-acquisition capital project costs		1,937,487			100,000
Investment in equity securities		67,562			218,556
Other long-term assets		50,000			-
Total assets	$	5,376,936		$	3,023,954

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities
Accounts payable	$	6,494,165		$	1,256,792
Accrued liabilities and other current liabilities		4,129,258			208,107
Current portion of early exercised shares option liability		4,408			2,990
Short-term loan		383,797			72,967
Total current liabilities	$	11,011,628		$	1,540,856
SAFE notes		-			5,212,200
Warrant liability		4,693,859			-
Earnout liability		2,972,800			-
Early exercised shares option liability		3,259			5,660
Total liabilities	$	18,681,546		$	6,758,716

Commitments and contingencies (Note 2)		-			-

Stockholders’ equity (deficit)
Preferred stock, $0.0001 par value, 100,000,000 and Nil shares authorized, Nil shares issued and outstanding as at September 30, 2024 and December 31, 2023		-			-
Common stock, $0.0001 par value, 700,000,000 and 69,033,000 shares authorized, 47,872,445 and 41,499,772 shares issued and outstanding as at September 30, 2024 and December 31, 2023, respectively		4,573			4,023
Additional paid-in capital		29,741,789			54,800
Accumulated deficit		(43,050,972	)		(3,793,585	)
Total stockholders’ deficit	$	(13,304,610	)	$	(3,734,762	)

Total liabilities and stockholders’ deficit	$	5,376,936		$	3,023,954

	September 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023
	Three months ended						Nine months ended			Period from March 16, 2023 (inception) through
	September 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023
Revenue	$	-		$	-		$	-		$	-

General and administrative expenses		8,980,965	¹		778,455	¹		11,483,389	¹		1,902,653	¹
Operating Loss		(8,980,965	)		(778,455	)		(11,483,389	)		(1,902,653	)
Other income (expenses)
SAFE note issuance costs		-			(29,655	)		-	²		(466,302	)²
Other transaction costs		-			(35,690	)		-	³		(452,519	)³
Interest income		3,397			-			3,397			-
Interest expense		(8,558	)		-			(10,637	)⁴		(7,111	)⁴
Change in fair value of sponsor earnout shares		1,636,100			-			1,636,100			-
Change in fair value of warrant liability		(2,753,964	)		-			(2,753,964	)		-
Change in fair value of investment in equity securities		11,678			-			(150,994	)		-
Change in fair value of convertible notes		-			-			(471,400	)		-
Change in fair value of SAFE notes		-			-			(955,000	)		-
Total other expenses		(1,111,347	)		(65,345	)		(2,702,498	)		(925,932	)

Net Loss	$	(10,092,312	)	$	(843,800	)	$	(14,185,887	)	$	(2,828,585	)

Loss per share
Basic	$	(0.22	)	$	(0.02	)	$	(0.34	)	$	(0.07	)
Diluted	$	(0.22	)	$	(0.02	)	$	(0.34	)	$	(0.07	)

Weighted average common shares outstanding
Basic		45,171,254			40,453,289			41,694,909			40,367,188
Diluted		45,171,254			40,453,289			41,694,909			40,367,188

(1)	Includes related party amounts of $Nil and $147,497 for the three months ended September 30, 2024 and 2023, respectively and $Nil and $771,935 for the nine months ended September 30, 2024 and from March 16, 2023 to September 30, 2023, respectively.
(2)	Includes related party amounts of $Nil and $435,000 for the nine months ended September 30, 2024 and from March 16, 2023 to September 30, 2023, respectively.
(3)	Includes related party amounts of $Nil and $100,000 for the nine months ended September 30, 2024 and from March 16, 2023 to September 30, 2023, respectively.
(4)	Includes related party amounts of $Nil and $7,111 for the nine months ended September 30, 2024 and from March 16, 2023 to September 30, 2023, respectively.

	Shares		Amount		capital			Deficit			Deficit
For three months ended September 30, 2023
	Common Stock				Additional paid-in			Accumulated			Total Stockholder’s
	Shares		Amount		capital			Deficit			Deficit
Balance as at March 16, 2023 (inception)	$	-	$	-	$	-		$	-		$	-
Issuance of common stock		9,000,000		90		-			-			90
Retroactive application of recapitalization		32,420,154		4,052		(4,052	)		-			-
Balance as at March 16, 2023 (inception)		41,420,154	$	4,142	$	(4,052	)	$	-		$	90
Net loss		-		-		-			(245,505	)		(245,505	)
Balance as at March 31, 2023		41,420,154	$	4,142	$	(4,052	)	$	(245,505	)	$	(245,415	)
Net loss		-		-		-			(1,739,280	)		(1,739,280	)
Balance as at June 30, 2023		41,420,154	$	4,142	$	(4,052	)	$	(1,984,785	)	$	(1,984,695	)
Net loss		-		-		-			(843,800	)		(843,800	)
Balance as at September 30, 2023		41,420,154	$	4,142	$	(4,052	)	$	(2,828,585	)	$	(2,828,495	)

For the period from March 16 (inception) through September 30, 2023
	Common Stock				Additional paid-in			Accumulated			Total Stockholder’s
	Shares		Amount		capital			Deficit			Deficit
Balance as at March 16, 2023 (inception)	$	-	$	-	$	-		$	-		$	-
Issuance of common stock		9,000,000		90		-			-			90
Retroactive application of recapitalization		32,420,154		4,052		(4,052	)		-			-
Balance as at March 16, 2023 (inception)		41,420,154	$	4,142	$	(4,052	)	$	-		$	90
Net loss		-		-		-			(2,828,585	)		(2,828,585	)
Balance as at September 30, 2023		41,420,154	$	4,142	$	(4,052	)	$	(2,828,585	)	$	(2,828,495	)

For nine months ended September 30, 2024
	Common Stock				Additional paid-in			Accumulated			Total Stockholders’
	Shares		Amount		Capital			Deficit			Deficit
Balance as at December 31, 2023		9,017,300	$	87	$	58,736		$	(3,793,585	)	$	(3,734,762	)
Retroactive application of recapitalization		32,482,472		3,936		(3,936	)		-			-
Balance as at December 31, 2023		41,499,772	$	4,023	$	54,800		$	(3,793,585	)	$	(3,734,762	)
Balance		41,499,772	$	4,023	$	54,800		$	(3,793,585	)	$	(3,734,762	)
Net loss		-		-		-			(14,185,887	)		(14,185,887	)
Stock based compensation (Note 3)		-		-		7,034,079			-			7,034,079
Transfer from early exercised stock option liability on vesting (Note 3)		-		12		971			-			983
Shares issued upon exercise of common stock warrants		135,796		13		1,626,606			-			1,626,619
Shares issued upon conversion of SAFE notes		636,916		64		6,367,136			-			6,367,200
Shares issued upon conversion of convertible notes		257,216		26		2,571,374			-			2,571,400
Issuance of common stock upon the reverse capitalization including PIPE financing, net of transaction cost		5,342,745		435		(5,483,454	)		-			(5,483,019	)
Transaction costs		-		-		(7,501,223	)		-			(7,501,223	)
Merger Earnout shares (Note 3)		-		-		25,071,500			(25,071,500	)		-
Balance as at September 30, 2024		47,872,445	$	4,573	$	29,741,789		$	(43,050,972	)	$	(13,304,610	)
Balance		47,872,445	$	4,573	$	29,741,789		$	(43,050,972	)	$	(13,304,610	)

	Nine months ended September 30, 2024			Period from March 16, 2023 (inception) through September 30, 2023
Cash flows from operating activities:
Net loss	$	(14,185,887	)	$	(2,828,585	)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Stock based compensation		7,034,079			-
Change in fair value of investment in equity securities		150,994			-
Change in fair value of SAFE notes		955,000			-
Change in fair value of warrant liability		2,753,964			-
Change in fair value of convertible notes		471,400			-
Change in fair value of earnout shares		(1,636,100	)		-
Depreciation expense		1,074			-
SAFE notes issuance costs		-			466,302
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(461,575	)		(15,000	)
Accounts payable		(4,055,728	)		733,998
Accrued liabilities and other current liabilities		458,618			11,240
Due to related parties		-			49,616
Net cash used in operating activities	$	(8,514,161	)	$	(1,582,429	)
Cash flows from investing activities:
Pre-acquisition capital project costs		(726,102	)		(25,000	)
Investment in other long-term assets		(50,000	)		-
Purchase of computer and equipment		(11,155	)		-
Promissory notes issued		(492,000	)		-
Net cash used in investing activities	$	(1,279,257	)	$	(25,000	)
Cash flows from financing activities:
Proceeds from investor for issuance of SAFE notes		200,000			2,000,000
Proceeds from investor deposits		-			1,000,000
Proceeds from issuance of notes payable to related parties		-			1,000,000
Repayment of notes payable to related parties		-			(1,000,000	)
Proceeds from stock issuance		-			90
Proceeds from exercise of warrants		1,561,655			-
Proceeds from issuance of convertible notes		2,100,000			-
Deferred transaction costs paid		(4,134,056	)		-
Payment of SAFE note issuance cost to related parties		-			(435,000	)
Proceeds from short-term loan		510,000			-
Repayment of short-term loan		(199,170	)		-
Proceeds from of business combination and issuance of PIPE shares		11,639,088			-
Repayment of sponsor promissory notes		(1,562,834	)		-
Repurchase of unvested shares		(6,003	)		-
Net cash provided by financing activities	$	10,108,680		$	2,565,090

Net (decrease)/ increase in cash	$	315,262		$	957,661
Cash at the beginning of the period		1,271,824			-
Cash at the end of the period	$	1,587,086		$	957,661

Supplemental disclosure for cash flow information:
Interest paid	$	8,814		$	7,111

Supplemental disclosure of non-cash investing and financing activities:
Unpaid deferred transaction costs	$	3,470,991		$	-
Conversion of legacy SAFE notes		64			-
Conversion of legacy convertible notes		26			-
Sponsor earnout share liability		4,608,900			-
Issuance of common stock to Sponsor		400			-
Net liabilities assumed upon closing of business combination		14,638,315			-
Issuance of common stock to non-redeeming shareholders		13			-
Unpaid SAFE note issuance costs		-			31,302
Unpaid pre-acquisition capital project costs		846,385			-

●	Each share of common stock of Legacy Stardust Power (“Legacy Stardust Power Common Stock”) issued and outstanding immediately prior to the First Effective Time converted into the right to receive the number of shares of combined company (“Newco”) common stock (“Newco Stock”) equal to the merger consideration divided by the number of shares of the Company fully diluted stock (“per share consideration”).
●	Each outstanding option to purchase Legacy Stardust Power Common Stock (each a “Legacy Stardust Power Option”), whether vested or unvested, automatically converted into an option to purchase a number of shares of Newco Stock equal to the number of shares of Newco Stock subject to such Legacy Stardust Power Option immediately prior to the First Effective Time multiplied by the per share consideration.
●	Each share of Legacy Stardust Power Restricted Stock (as defined in the Business Combination Agreement) outstanding immediately prior to the First Effective Time converted into a number of shares of Newco Stock equal to the number of shares of Legacy Stardust Power Common Stock subject to such Stardust Power Restricted Stock multiplied by the per share consideration (the “Exchanged Company Restricted Common Stock”).
●	All outstanding redeemable public warrants and private warrants of GPAC II representing the right to purchase one Class A ordinary share were adjusted to represent the right to purchase one share of the Newco Stock
●	All outstanding GPAC Class A (after redemptions) and Class B common shares were cancelled and converted into shares of the Newco Stock.
●	As consideration for certain Class A ordinary shareholders entering into non-redemption agreements (“NRAs”) agreeing not to redeem or to reverse any redemption demands previously submitted, the Company issued 127,777 ordinary shares of Stardust Power at a price per share of approximately $10.00 per share at closing of the Business Combination.
●	Additionally, the Combined Company issued one million shares of Newco Stock to the Sponsor as additional merger consideration that vest in the event that prior to the eighth anniversary of the closing of the Business Combination. Fifty percent of the Sponsor Earnout Shares will vest when the volume-weighted average price (“VWAP”) of the Common Stock price equals or exceeds $12.00 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 $14.00 per share for a period of 20 trading days in a 30 trading day period, or are otherwise forfeited.
●	Additionally, the Combined Company will issue five million shares of Newco Stock to the holders of Legacy Stardust Power as additional merger consideration that vest in the event that prior to the eighth anniversary of the closing of the Business Combination, the volume-weighted average price of Company Common Stock is greater than or equal to $12.00 per share for a period of 20 trading days in any 30-trading-day period or there is a change of control, or are otherwise forfeited.
●	Immediately prior to the closing of the Business Combination, the SAFE notes automatically converted into the 138,393 shares of Legacy Stardust Power Common Stock.
●	Immediately prior to the closing of the Business Combination, the convertible notes automatically converted into 55,889 shares of Legacy Stardust Power Common Stock.
●	Stardust Power issued 1,077,541 shares of Common Stock in exchange for $10,075,002 of cash in accordance with the terms of the PIPE Subscription Agreement (“PIPE”) in connection with the Business Combination.

	Three months ended
	September 30, 2024			September 30, 2023			Nine months ended September 30, 2024			Period from March 16, 2023 (inception) through September 30, 2023

Numerator:
Net loss	$	(10,092,312	)	$	(843,800	)	$	(14,185,887	)	$	(2,828,585	)
Denominator:
Weighted average shares outstanding		45,171,254			40,453,289			41,694,909			40,367,188
Net loss per share, basic and diluted	$	(0.22	)	$	(0.02	)	$	(0.34	)	$	(0.07	)

	September 30, 2024		September 30, 2023
Unvested common stock – restricted shares (Note 5)		125,411		893,985
Restricted Stock options		851,655		-
Restricted Stock Units		3,281,911		-
Performance Stock units		506,596		-
Sponsor Earnout Shares (Note 3)*		-		-
Public warrants		4,864,133		-
Private placement warrants		5,566,667		-

	●	Stardust Power shareholders who controlled Legacy Stardust Power prior to the Business Combination, retained the majority voting interest in the Combined Company immediately after the Business Combination;
	●	Legacy Stardust Power has the ability to elect a majority of the members of the Combined Company’s governing body;
	●	Legacy Stardust Power’s senior management makes up the senior management of the Combined Company;
	●	The Combined Company assumed Stardust Power’s name.

Market price of public stock	$	9.74
Expected term (years)		8 years
Volatility		60.00	%
Risk-free interest rate		4.25	%
Dividend rate		0.00	%


Stardust Power rollover equity ⁽¹⁾⁽²⁾			42,393,905
GPAC II public shareholders ⁽³⁾⁽⁴⁾			137,427
Sponsor ⁽⁵⁾⁽⁶⁾			4,000,000
PIPE ⁽⁷⁾			1,077,541
Non-redemption shares ⁽⁸⁾			127,777
Total Shares issued and Outstanding			47,736,650

⁽¹⁾	Includes eight shareholders, whose shares are not subject to lock-up or transfer restrictions.
⁽²⁾	Includes (i) 894,132 shares of Combined Company Common Stock issued in exchange for shares of Legacy Stardust Power Common Stock with the conversion of the SAFE notes and convertible equity agreements and (ii) 41,499,772 shares of Combined Company Common Stock issued in accordance with the Business Combination Agreement underlying the Exchanged Company Restricted Common Stock.
⁽³⁾	Excludes 4,999,929 Public Warrants that converted automatically into a whole warrant exercisable for one share of Common Stock.
⁽⁴⁾	Reflects the reclassification of $1,564,086 of cash held in trust account, after reversal of redemptions of 2,877 shares at $11.38 per share, post June 30, 2024, resulting in a net increase of $1,564,086, net of redemptions, in cash.
⁽⁵⁾	Excludes 5,566,667 Private Placements Warrants that converted automatically into a whole warrant exercisable for one share of Common Stock.
⁽⁶⁾	Includes 1,000,000 Sponsor Earnout Shares (as defined in the Business Combination Agreement). While the Earnout Shares are legally issued, they are subject to forfeiture based on vesting conditions not being met. (See Note 13).
⁽⁷⁾	Reflects the receipt of $10,075,002 of PIPE proceeds resulting in issuance of 1,077,541 shares with the corresponding impact of $108 in Combined Company Common Stock and the balance impact being booked to additional paid-in capital.
⁽⁸⁾	Includes 127,777 shares of Combined Company Common Stock issued to GPAC II shareholders entering into NRAs.

	Recapitalization
Cash proceeds from GPAC II, net of redemptions		1,564,086
Cash proceeds from PIPE financing	$	10,075,002
Less: Cash payment of assumed liabilities of GPAC II		(921,493	)
Less: Settlement of sponsor promissory notes	$	(1,562,834	)
Net cash proceeds upon closing of the Business Combination and PIPE financing		9,154,761
Less: Non-cash net liabilities assumed from GPAC II		(14,638,215	)
Net charge to additional paid-in-capital as a result of the Business Combination reported in stockholder’s (deficit)		(5,483,454	)

	September 30, 2024
Market price of public stock	$	8.14
Expected term (years)		7.77 years
Volatility		60.00	%
Risk-free interest rate		3.71	%
Dividend rate		0.00	%

	Restricted Stock
	Number of shares			Weighted Average Grant-Date Fair Value
Unvested as of December 31, 2023		313,528			0.000002
Granted		-			-
Vested		(188,117	)		0.000002
Forfeited		-			-
Unvested as of September 30, 2024		125,411		$	0.000002

	Number of shares			Weighted Average Grant-Date Fair Value
Unvested as at December 31, 2023		1,326,979			0.57
Granted		-			-
Vested		(219,644	)		0.57
Forfeited		(255,680	)		0.60
Unvested as at September 30, 2024		851,655			0.56

	2023
Expected option life (years)		5.07 - 5.93 years
Expected volatility		60% - 70	%
Risk-free interest rate at grant date		3.84 - 3.86	%
Dividend yield		0	%

	Assumptions
Fair value of Common Stock	$	11.62
Selected volatility		60	%
Risk-free interest rate		3.42	%
Contractual terms (years)		3.0

Description	At September 30, 2024		Quoted price in active markets (level 1)		Significant other observable input (level 2)		Significant other unobservable input (level 3)
Warrant liabilities
Public warrants	$	2,188,859	$	2,188,859	$	-	$	-
Private placement warrants		2,505,000		-		2,505,000		-
Warrant liability	$	4,693,859	$	2,188,859	$	2,505,000	$	-

	Level 1		Level 2		Level 3		Total
	Fair Value Measurements as at December 31, 2023
	Level 1		Level 2		Level 3		Total
Other noncurrent assets:
Investment in equity securities (a)	$	218,556	$	-	$	-	$	218,556
Total financial assets	$	218,556	$	-	$	-	$	218,556

	SAFE notes at fair value			Convertible notes at fair value			Sponsor Earnout liability at fair value
Balance as at March 16, 2023 (inception)	$	-		$	-		$	-
Issuance of notes		2,000,000			-			-
Change in fair value		-			-			-
Balance as at June 30, 2023	$	2,000,000		$	-		$	-
Issuance of notes		-			-			-
Change in fair value		-			-			-
Balance as at September 30, 2023	$	2,000,000		$	-		$	-
Issuance of notes		3,000,000			-			-
Change in fair value		212,200			-			-
Balance as at December 31, 2023	$	5,212,200		$	-		$	-
Issuance of notes		200,000			-			-
Change in fair value		107,900			-			-
Balance as at March 31, 2024	$	5,520,100		$	-		$	-
Issuance of notes		-			2,100,000			-
Change in fair value		847,100			471,400			-
Balance as at June 30, 2024	$	6,367,200		$	2,571,400		$	-
Issuance of common stock upon conversion		(6,367,200	)		(2,571,400	)		-
Sponsor earnout liability recognized on closing of Business Combination		-			-			4,608,900
Change in fair value		-			-			(1,636,100	)
Balance as at September 30, 2024	$	-		$	-		$	2,972,800

	September 30, 2024		September 30, 2023		Nine Months Ended September 30, 2024		Period from March 16, 2023 (inception) through September 30, 2023
	Three months ended
	September 30, 2024		September 30, 2023		Nine Months Ended September 30, 2024		Period from March 16, 2023 (inception) through September 30, 2023


Energy Transition Investors LLC	$	-	$	-	$	-	$	750,000
VIKASA Clean Energy I LP		-		-		-		160,000
Roshan Pujari		-		-		-		90,000
Notes obtained from related parties		-		-		-		1,000,000

	September 30, 2024		December 31, 2023
Accrued expenses		1,053,345		151,284
Capital market advisory fees		3,000,000		-
Payroll liabilities		75,913		56,823
		4,129,258		208,107

●	*Raw Material Cost/ton*: This includes the input cost of lithium chloride for the plant. As this may be obtained from various sources, the weighted average cost will be calculated to arrive at the raw material cost per ton and reflects the Company’s ability to procure high-quality raw materials at an appropriate price. The weighted average method also helps in calculating the gross margin on a per-ton basis. The technology implemented and the efficiency of the operations are also reflected on the gross margin per ton.

●	*Selling Price/ton*: This multiple is driven by the demand and supply of the lithium price as well as the efficient operations of the plant. The computation of the selling price may be based on the output sold per long-term contract, which is expected to have a floor and a cap, as well as the spot price on the date of placing a purchase order by the customer, with the Company and the customer sharing the difference between the floor and spot price.

●	*Capex/ton*: This reflects the Capex incurred on a per-ton basis. It includes both direct and indirect costs. It also has contingency costs built in for any impact on Capex, to account for unforeseen events. The key is to optimize plant efficiency in long-term operations with the appropriate technology and set-up.

●	*Opex/ton*: This includes the ongoing expenses incurred from the day-to-day running of the operations. It helps in measuring how much profit a company makes on a dollar of sales after paying for variable costs of production, such as wages and raw materials, but before paying interest or tax. The lower multiple reflects the efficient functioning of the management.

●	*Capacity Utilization*: This measures how much output a plant is producing, compared to its maximum potential output, which is dependent on two key factors: (a) design capacity, which impacts the operational efficiency of the plant, and (b) the plant’s downtime for its maintenance. Timely maintenance is also the key to running any efficient operations.

	Three Months Ended									Nine Months Ended			Period from March 16, 2023 (inception) through
	September 30, 2024			September 30, 2023			Changes			September 30, 2024			September 30, 2023			Changes
Revenue	-			-			-			-			-			-

General and administrative expenses		8,980,965			778,455			8,202,510			11,483,389			1,902,653			9,580,736
Operating Loss		(8,980,965	)		(778,455	)		(8,202,510	)		(11,483,389	)		(1,902,653	)		(9,580,736	)
Other income (expenses)																	-
SAFE note issuance costs		-			(29,655	)		29,655			-			(466,302	)		466,302
Other transaction costs		-			(35,690	)		35,690			-			(452,519	)		452,519
Interest income		3,397			-			3,397			3,397			-			3,397
Interest expense		(8,558	)		-			(8,558	)		(10,637	)		(7,111	)		(3,526	)
Change in fair value of earnout shares		1,636,100			-			1,636,100			1,636,100			-			1,636,100
Change in fair value of warrant liability		(2,753,964	)		-			(2,753,964	)		(2,753,964	)		-			(2,753,964	)
Change in fair value of investment in equity securities		11,678			-			11,678			(150,994	)		-			(150,994	)
Change in fair value of convertible equity		-			-			-			(471,400	)		-			(471,400	)
Change in fair value of SAFE notes		-			-			-			(955,000	)		-			(955,000	)
Total other expenses		(1,111,347	)		(65,345	)		(1,046,002	)		(2,702,498	)		(925,932	)		(1,776,566	)

Net Loss		(10,092,312	)		(843,800	)		(9,248,512	)		(14,185,887	)		(2,828,585	)		(11,357,302	)

	●	Secure and build facilities;
	●	invest in research and development activities to advance the development of our technologies; and
	●	incur additional expenses associated with transitioning to, and operating as, a public company.

	Nine months ended September 30, 2024			Period from March 16, 2023 (inception) through September 30, 2023			Change
Net cash used in operating activities		(8,514,161	)		(1,582,429	)		(6,931,732	)
Net cash used in investing activities		(1,279,257	)		(25,000	)		(1,254,257	)
Net cash provided by financing activities		10,108,680			2,565,090			7,543,590
Net change in cash		315,262			957,661			(642,399	)

	●	independent third-party valuations of our Common Stock;
	●	estimated probabilities of future liquidation scenarios;
	●	projected future cash flows provided by management;
	●	guideline public company information;
	●	discount rates;
	●	our actual operating and financial performance;
	●	current business conditions and projections;
	●	our stage of development;
	●	U.S. and global capital markets conditions; and
	●	expected volatility based on comparable public company stock performance over the time period being measured.

●	Our limited history makes it difficult to evaluate our business and prospects and may increase the risks associated with your investment.

●	Our management has identified conditions that raise substantial doubt about our ability to continue as a going concern.

●	We are a development stage company, and there is no guarantee that our development will result in the commercial production of lithium from brine sources.

●	Pipeline of lithium feedstock may prove to be non-viable, which could have material adverse impact on our business and operations.

●	Even if we are successful in completing all initial phases and the first commercial production at our large central refinery optimized for multiple inputs of lithium brine inputs (the “Facility”) in Oklahoma and consistently produce battery grade lithium on a commercial scale, we may not be successful in commencing and expanding commercial operations to support the growth of our business.

●	Our products may not qualify for use for our intended customers.

●	Delays and other obstacles may prevent the successful completion of our Facility.

●	Lithium can be highly combustible, and if we have incidents, it could adversely impact us.

●	The lithium brine industry includes well capitalized players.

●	Low-cost producers could disrupt the market and be able to provide products cheaper than the Company.

●	We may be unable to qualify for existing federal and state level grants and incentives and the grants and incentives may not be released to us as quickly or efficiently as we anticipate or at all.

●	Our success as a company producing battery grade lithium and related products depends to a great extent on the capabilities of our partners for lithium extraction from brine and our ability to secure capital for the implementation of brine processing plants.

●	Changes in technology or other developments could adversely affect demand for lithium compounds or result in preferences for substitute products.

●	The development of our lithium refinery is highly dependent upon the currently projected demand for and uses of lithium-based end products.

●	Our future growth and success are dependent upon consumers’ demand for electric vehicles in an automotive industry that is generally competitive, cyclical and volatile.

●	We may be unable to successfully negotiate final, binding terms related to our current non-binding memoranda of understanding and letters of intent for supply and offtake agreements, which could harm our commercial prospects.

●	Our future business prospects could be adversely affected if we are unable to enter into definitive agreements relating to contemplated joint ventures and, if such agreements are in fact completed, there can be no assurance that the required financing for such joint ventures will be available, that their respective projects will be completed in a timely manner, or that they will ultimately be successful.

●	If we fail to adequately protect our intellectual property or technology (including any later developed or acquired intellectual property or technology), our competitive position could be impaired and we may lose valuable assets, generate reduced revenue and incur costly litigation to protect our rights.

●	The reduction or elimination of government subsidies and economic incentives for alternative energy technologies, or the failure to renew such subsidies and incentives, could reduce demand for our products, lead to a reduction in our revenues, and adversely impact our operating results and liquidity.

●	We identified material weaknesses in our internal control over financial reporting. If we are unable to remediate these material weaknesses or if we experience additional material weaknesses or other deficiencies in the future or otherwise fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately or timely report our financial results, which could result in loss of investor confidence and adversely impact our stock price.

●	An active trading market for Common Stock may never develop or be sustained, which may make it difficult to sell the shares of Common Stock you receive.

●	The Company’s certificate of incorporation and bylaws, which became effective on July 8, 2024, provide for a classified board of directors, with directors serving staggered three-year terms, which could make it more difficult for stockholders to replace a majority of the directors.

●	There is no guarantee that the warrants will ever be in the money, and they may expire worthless.

●	We may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.