Stardust Power Inc.: Form 10-Q for the period ended Jun 30, 2026

The following discussion and analysis of the financial condition and results of operations should be read together with our unaudited condensed consolidated financial statements and the related notes thereto contained elsewhere in this Quarterly Report.

Company Overview and History

On July 8, 2024, Stardust Power Operating Inc. (f/k/a Stardust Power Inc. prior to the consummation of the Business Combination, or “Legacy Stardust Power”) consummated the business combination contemplated by the Business Combination Agreement, dated as of November 21, 2023 (as amended, the “Business Combination Agreement”), by and among Global Partner Acquisition Corp. II, a Cayman Islands exempted company (“GPAC II”), Strike Merger Sub I, Inc., a Delaware corporation and direct wholly owned subsidiary of GPAC II (“First Merger Sub”), Strike Merger Sub II, LLC, a Delaware limited liability company and a direct wholly owned subsidiary of GPAC II (“Second Merger Sub”), and Legacy Stardust Power (the “Business Combination”). Pursuant to the Business Combination Agreement, First Merger Sub merged into Legacy Stardust Power, with Legacy Stardust Power being the surviving corporation. Legacy Stardust Power then merged into Second Merger Sub, with Second Merger Sub being the surviving entity. Upon the completion of the Business Combination, GPAC II was renamed Stardust Power Inc. Unless the context otherwise requires, any reference in this Quarterly Report on Form 10-Q to the “Company,” “we,” “us,” “our,” or “Stardust Power” refers to Stardust Power Inc. and its consolidated subsidiaries.

We are a U.S.-based development stage battery grade lithium manufacturer designed to foster clean energy independence for the United States. We are in the process of creating capacity to manufacture battery grade lithium products, for a wide variety of applications, including energy storage systems, e-mobility, grid infrastructure, and data centers, by developing a large-scale lithium refinery in the United States. We seek to become a sustainable, cost effective supplier of battery grade lithium carbonate, by our innovative approach in the development of a large central refinery optimized for multiple inputs of lithium chloride in Oklahoma.

We intend to source lithium chloride feedstock from various suppliers and may make investments upstream to secure additional feedstock. We seek to sell our products to electric vehicle (“EV”) manufacturers as our primary market, with potential applications in other areas such as battery manufacturers, the U.S. military, and original equipment manufacturers (“OEMs”).

Some of the key driving factors are the demand for battery grade lithium products, fueled largely by the demand for energy storage solutions, production of electric vehicles and automotive OEMs, and battery manufacturers seeking domestic supply options, leading to demand for minerals used in battery cells, such as lithium, governmental incentives for American manufacturing and evolving geopolitical climate that is creating a national security priority for the U.S. market.

In February 2023, we received an illustrative incentive analysis for up to $257 million in performance-based incentives from the State of Oklahoma and potential federal incentives, which also included potential eligibility for further federal grants. The state incentives were based on initial job creation, equipment procurement, training and recruitment incentives, property tax exemptions, sales tax exemptions, and capital expenditure projections submitted to the Oklahoma Department of Commerce in the first quarter of 2023 and could be subject to changes as we progress in setting up our planned lithium refinery in Muskogee, Oklahoma (the “Facility”) and commercial production of battery grade lithium in the future. These incentives may change based on the actual financial metrics of the Company in the future, which may be lower or higher.

We believe that we are well positioned to address these opportunities by emerging as a leading, fully integrated domestic lithium supplier, and contribute to restoring American energy independence, thereby bridging the gap in the domestic supply of battery grade lithium products.

Recent Developments

Recent Financing Activity

On December 23, 2025, we 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, we initially drew down gross proceeds of approximately $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 “2025 Lind Warrant”).

On February 12, 2026, we entered into a Common Stock Purchase Agreement (the “B. Riley Purchase Agreement”) and a 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”). Pursuant to the B. Riley Agreements, we have the right, in our 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 our Common Stock (the “Total Commitment”), subject to an exchange cap and other conditions and limitations set forth in the agreement.

On April 20, 2026, we entered into a Letter of Intent (the “LOI”) with a single institutional investor to support project level financing for our Facility. Under the terms of the LOI, the institutional investor has indicated its intent to invest up to $150 million at the project level, with flexibility across equity, debt, and hybrid financing structures. The agreement is non-binding and outlines a framework for a potential investment, including the ability to support the financing through syndication and direct capital participation. We and the investor have also agreed to proceed through customary due diligence and negotiation of definitive agreements, and any potential investment remains subject to satisfactory due diligence and the execution of definitive documentation and is not committed capital for purposes of liquidity or going concern analysis.

On May 8, 2026, we 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, we may sell from time to time through the Agent, shares of our Common Stock, par value $0.0001 per share, having an aggregate offering price of up to $5,000,000 (the “Shares”). We intend to use this facility to raise capital as needed.

Notice from Nasdaq

On April 24, 2026, we were notified by the listing qualifications staff of Nasdaq that we did not satisfy the minimum $35 million market value of the listed securities requirement for 30 consecutive business days, as required under Nasdaq Listing Rule 5550(b)(2) for the Nasdaq Capital Market (the “MVLS Requirement”). Nasdaq also noted that we do not meet the requirements under Listing Rules 5550(b)(1) and 5550(b)(3). In accordance with Nasdaq rules, we have a period of 180 calendar days (or until October 21, 2026) to regain compliance with the MVLS Requirement. To the extent we seek to regain compliance through the MVLS Requirement, our market value of listed securities must close at $35 million or more for a minimum of 10 consecutive business days during the 180-day compliance period. The notification received has no immediate effect on the listing of our securities on The Nasdaq Capital Market.

Recent Supply Agreements

On March 13, 2026, we entered into a non-binding letter agreement with a strategic counterparty for the supply of 15,000 metric tons per annum of lithium carbonate equivalent 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 us, with the option for us to renew for an additional six-year term.

Air Permit

During six months ended June 30, 2026, we received our air quality construction permit from the Oklahoma Department of Environmental Quality (“ODEQ”) for our lithium refinery in Muskogee, Oklahoma. This key milestone represents the final significant permit required for construction and commissioning, positioning us to advance one of the largest planned lithium refineries in the United States.

Reverse Stock Split

On September 3, 2025, we filed a certificate of amendment to our Certificate of Incorporation with the Secretary of State of the State of Delaware to effectuate a 1-for-10 reverse stock split (the “Reverse Stock Split”) of the outstanding shares of our common stock, par value $0.0001 (“Common Stock”). Our stockholders previously approved the Reverse Stock Split at the Company’s annual meeting of stockholders held on June 9, 2025 and granted our board of directors (the “Board”) the authority to determine the exact split ratio and when to proceed with the Reverse Stock Split. The Reverse Stock Split became effective on September 8, 2025, and our Common Stock began trading on the Nasdaq on a Reverse Stock Split-adjusted basis on September 8, 2025 at market open. 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. As a result of the Reverse Stock Split, shares of Common Stock, outstanding warrants, stock options, and restricted stock units were proportionately decreased (and the respective per share value and exercise prices, if applicable, were proportionately increased) (see Part I, Item 1, Note 2, Basis of Presentation and summary of significant accounting policies in the notes to unaudited condensed consolidated financial statements in this Quarterly Report).

Key Factors Affecting Our Performance

We believe that our performance and future success depend on a number of factors that present significant opportunities for us but also pose risks and challenges, including competition from other lithium brine and other brine producers, changes to existing federal and state level incentive framework, changes in regulations, and other factors discussed under the section titled “Risk Factors” in our Form 10-K and in this Quarterly Report. We believe the factors described below are key to our success.

Commencing Commercial Operations

We are a development stage company, and we have purchased a site in Southside Industrial Park, Muskogee, Oklahoma to build the Facility (the “Site”). We have completed a number of required site assessments and technical studies, including the critical issue analysis, Phase I ESA, front-end loading (“FEL”) -1 study and FEL-3 study. Additional studies may be required as the project progresses.

The project required evaluation for certain federal, state, and local permits. State permitting focuses on air emissions, wastewater, and stormwater permits. Federal permitting focuses on possible cultural, biological, and natural resources and threatened/endangered species impacts. The key permitting agency for the project at the state level is the ODEQ. We have received from the ODEQ the general permit for stormwater discharges from Construction Activities, approval of its stormwater pollution prevention plan and air quality construction permit (“Air Permit”). Under current design plans, we do not expect to require a waste water permit for the Facility since no waste water is expected to be discharged.

We are developing a large central refinery in a phased approach. The first phase is the construction of a production line with up to 25,000 metric tons per annum. The second phase is to add a second production line with up to 25,000 tons per annum, to create a total capacity of up to 50,000 tons per annum.

A technological innovation of our planned refinery is the ability for the Facility to refine different sources of lithium chloride inputs derived from lithium brines. The Facility is being designed to accept lithium chloride of a certain approved chemical composition. It is our intention that the Facility should be able to dilute and pre-treat feedstock as necessary, so that various lithium feedstock can be blended, in order to produce a consistent feedstock. Our strategy is to differentiate ourselves by screening for a broader set of contaminants, in comparison to other lithium refineries.

Partnership Ecosystem

Our success will depend on whether we can execute and expand our ecosystem of commercial arrangements with additional suppliers of brine and executing agreements with them at favorable terms. The availability of brine for the purpose of extracting lithium is still in a nascent stage and we would require access to multiple sources as we start commercial production and grow our business. Our management team frequently evaluates current and future sources of supplies for reliability and geographic locations for logistics and cost efficiency. We would also have to maintain technology arrangements with existing strategic affiliations on whose patented and proprietary processes we depend on, as well as forge new technology affiliations as exploration, extraction and purification processes evolve, to obtain raw materials required to manufacture high-quality lithium suitable for consumption by the EV industry, and other potential usages. These affiliations should enable us to refine and sell battery grade lithium at competitive prices, which in turn helps secure the growth and profitability of our business operations in the long term.

Adequate Capital Raise

The success of our refinery’s activities relating to producing battery grade lithium from brine and our ability to obtain relevant permits in a timely manner require significant capital investment and financing to fund the initial investment in all aspects of setting up the operations, and may subsequently be impacted by our operating losses, competition from substitute products and services from larger companies, protection of proprietary technology of our strategic partners, and dependence on key individuals.

Our unaudited condensed consolidated financial statements have been presented on the basis that we are a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We have not earned any revenue and have been operating at a loss since inception. We have an accumulated deficit and stockholders’ deficit. We believe that the cash on hand and additional investments available through issuance of new Common Stock will be inadequate to satisfy our working capital and capital expenditure requirements for at least the next twelve months. These conditions raise substantial doubt about our ability to continue as a going concern for one year from the issuance of these unaudited condensed consolidated financial statements. As a development stage company, we need to raise additional capital to realize our business objectives. Our long-term success and ability to continue as a going concern are dependent upon our ability to successfully raise additional capital or financing, or successfully enter into strategic partnerships. Until commercial production is achieved from our planned operations, we will continue to incur operating and investing net cash outflows associated with, among other things, maintaining and acquiring exploration properties and undertaking ongoing exploration activities.

Limited Operating History

We have a limited operating history and there is limited historical financial information upon which to base an evaluation of our performance. Our business and financial condition must be considered in light of the uncertainties, risks, expenses, and difficulties frequently encountered by companies in their early stages of operation.

Key Business Metrics

Since we have yet to start the construction of our Facility and associated commercial production, we do not have financial information on key business metrics. We do not currently present any non-GAAP financial measures. However, based on our experience and industry knowledge, we expect the following would be key business metrics:

• 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 our 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 in 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 us 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.

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• 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.

Further, since we are yet to generate revenue, we do not currently utilize non-GAAP financial measures such as EBITDA or EBITDA margin. To the extent we introduce any non-GAAP financial measures in future periods, we will provide the disclosures required by Item 10(e) of Regulation S-K, including a reconciliation to the most directly comparable financial measure calculated in accordance with U.S. GAAP.

Business and Macroeconomic Conditions

Our business and financial condition has been, and we believe will continue to be, impacted by adverse and uncertain macroeconomic conditions and events, including higher inflation, higher interest rates, supply chain and logistics challenges, banking crises, fluctuations or volatility in capital markets, foreign exchange rate volatility, government shutdowns, changes in monetary policy, changes in trade policies, including tariffs and other trade restrictions or the threat of such actions, and rising geopolitical instability, including the conflicts in the Middle East and Ukraine, and the related volatility in the price of oil and other commodity prices.

Components of Results of Operations

Revenue

We have not generated any revenue to date. We expect to generate a significant portion of our future revenue from the sale of battery grade lithium carbonate primarily to the energy storage system and EV markets. We expect to enter into long-term contracts (typically 10 years), driven by industry dynamics, with a pricing structure at cap and ceiling, and sharing of variable price between customers and us.

Cost of Goods Sold

We have not sourced any raw material to date. We expect to source brine from lithium producing suppliers including the oil and gas industry as a byproduct of their exploration and extraction processes. We are in the process of negotiating with multiple suppliers for brine feedstock, including producers from the oil and gas industry. The length, tenure and pricing of these contracts will depend largely on the type of supply and are expected to vary from supplier to supplier.

Expenses

General and administrative

General and administrative expense consists of costs to maintain our daily operations and administer the business that are not directly attributable to generating revenue or cost of goods or raw material. These consist primarily of consulting services (including advisory services and administrative related services from contractors, consultants), professional services such as accounting advisory, statutory auditor fees, technical consultants, and business consulting, as well as personnel related expenses (including stock based compensation), legal and book-keeping services, insurance expenses (including director and officer’s insurance), investor relations activities and marketing expenses. We expect our general and administrative expenses will increase in absolute dollars over time as we continue to invest in setting up our Facility, hire additional employees, and subsequently invest in the growth of our business and incur costs associated with being a publicly traded company with respect to compliance with the regulations of the SEC and Nasdaq.

Other Income (Expenses)

Interest income

Interest income is comprised of interest earned on promissory notes. During the year ended December 31, 2024, we issued promissory notes of $176,000 and $316,000 to IGX Minerals LLC and IG Lithium LLC, respectively. These notes carried an interest rate of 6% with maturity dates of February 28, 2025, and July 1, 2025, respectively.

Interest expense

Interest expense is currently comprised primarily of amortization of debt discount and issuance costs associated with the 2025 Convertible Note issued in December 2025 (see Note 8). Interest expense has also historically included interest on insurance premium financing with AFCO Insurance Premium Finance and on promissory notes issued under various Term Sheets, including notes with related parties (see Note 11). Both the insurance premium financing and the Term Sheet notes were fully repaid during fiscal year 2025 and no longer contribute to interest expense in the current period. Interest expense may also include interest charged by vendors on overdue invoices, when applicable.

Finance charges

Finance charges are comprised of costs incurred to enter into the B. Riley Purchase Agreement, issuing shares and the change in fair value of our make-whole provision related to the B. Riley Purchase Agreement.

Change in fair value of sponsor earnout shares

Change in fair value of sponsor earnout shares relates to movements in fair value of earnout shares issued to Global Partner Sponsor II, LLC (“Sponsor”) at the closing of the Business Combination, which have been classified as liability instruments in the unaudited condensed consolidated financial statements. The earnout liability is remeasured at each reporting period based on third party valuations carried out at period end. As at June 30, 2026 and December 31, 2025, we did not identify any indicators that a change in the fair value of the Sponsor Earnout Shares last measured as of March 31, 2025, would be material, and accordingly did not perform an updated Monte Carlo valuation as of either date.

Change in fair value of warrant liability

Change in fair value of warrant liability relates to movements in fair value of Public Warrants and Private Warrants (as defined in Note 6 of the Notes to Condensed Consolidated Financial Statements) which have been classified as liability instruments in the unaudited condensed consolidated financial statements, that need to be recorded in the unaudited condensed consolidated statement of operations for each reporting period, based on fair value at period end.

Change in fair value of investment in equity securities

Change in fair value of investment in equity securities relates to movements in fair value of investment in equity securities of strategic investments such as the investment in QX Resources Limited (“QXR”) and IRIS Metals Limited (“Iris Metals”), that need to be recorded in the unaudited condensed consolidated statements of operations for each reporting period, based on readily available quoted prices for such investment.

Loss on sale of investments in equity securities

Loss on sale of investment in equity securities relates to realized loss on sale of investment in equity securities of IRIS Metals. The sale was made in response to evolving market conditions and liquidity needs.

Loss on write-off of promissory note and deposit

Loss on write-off of promissory note and deposit relates to the write-off of a promissory note and deposit made in connection with a previously contemplated strategic partnership with IGX and Usha Resources. The likelihood of entering into definitive agreements with them had diminished significantly during the quarter, and based on an updated assessment, these amounts were deemed uncollectible.

Loss on extinguishment of liability, net

Loss on extinguishment of liability represents the loss recognized on the extinguishment of the 2025 Convertible Note balance due to payment of installment through issuance of shares, partially offset by gain on extinguishment of vendor payable balance.

Provision for income taxes

We are constituted as a Delaware corporation and are subject to U.S. federal and state income taxes based on enacted rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities and changes in tax law.

Results of Operations

The following table sets forth our unaudited condensed statements of operations information for the periods indicated:

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Revenues

We have not earned any revenue since inception.

Cost of Goods Sold

We did not manufacture any products, and hence did not incur any direct costs related to production or carrying inventory, since inception.

General and Administrative Expenses

General and administrative expenses are primarily attributable to employee-related compensation expenses representing base salary, benefits and stock-based compensation expense, fees for professional and consulting fees, mainly comprising marketing advisory services, insurance costs, and other consulting and, legal services. The details of these expenses are as follows:

For the three months ended June 30, 2026, general and administrative expenses increased compared to the three months ended June 30, 2025, primarily due to an increase in Professional and consulting fees mainly driven by reversal of stock-based compensation of a consultant due to forfeiture during the three months ended June 30, 2025, which did not occur in the current quarter. The increase was partially offset by lower employee-related costs driven by a decrease in stock-based compensation expense of employees, a decrease in legal fees due to the appointment of in-house general counsel and reduced SEC filings during the three months ended June 30, 2026.

For the six months ended June 30, 2026, general and administrative expenses decreased compared to the six months ended June 30, 2025, primarily due to lower employee related costs driven by a decrease in stock-based compensation expense of employees, a decrease in legal fees due to appointment of in house general counsel and a decrease in legal services for SEC filings during six months ended June 30, 2026. The decrease was partially offset by an increase in professional and consulting fees primarily driven by reversal of stock-based compensation of a consultant due to forfeiture during the six months ended June 30, 2025.

Other Income (Expenses)

Interest income

For the three and six months ended June 30, 2026, interest income was de minimis, compared to interest income of $4,731 and $12,010 for the same periods in 2025, respectively. The decrease is attributable to interest income earned in the prior year period on promissory notes issued in fiscal year 2024. These promissory notes, including accrued interest, were written off in fiscal year 2025 as the notes were deemed unrecoverable.

Interest expense

For the three and six months ended June 30, 2026, interest expenses increased by $273,623 and $531,388, respectively, compared to the three and six months ended June 30, 2025. The increase was primarily due to interest accretion related to convertible notes issued in December 2025, interest charged by vendors on outstanding overdue invoices, partially offset by decreases in interest expense incurred on the financing agreement for our purchase of directors’ and officers’ and other insurance policies and interest expense on other short-term loans with various lenders.

Finance charges

The increase in finance charges of $66,036 and $94,800 for the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025, was due to the cost incurred to enter into the B. Riley Purchase Agreement and increase in cost of the issuance of shares under the B. Riley Purchase Agreement, partially offset by a change in fair value of our make-whole provision related to the Prior B. Riley Agreements entered into on October 7, 2024 with B. Riley Principal Capital II.

Change in fair value of sponsor earnout shares

The decrease in income from the change in fair value of earnout shares by $528,000 for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, was related to movements in fair value of earnout shares issued to the Sponsor, primarily driven by a decrease in quoted market price, which have been classified as liability instruments in the unaudited condensed consolidated financial statements. The fair value adjustment is recorded in the unaudited condensed consolidated statement of operations for each reporting period, based on third party valuations carried out at period end.

Change in fair value of warrant liability

The increase in income by $79,274 for the three months ended June 30, 2026, and decrease in income by $2,287,474 for the six months ended June 30, 2026 from change in fair value of warrant liability, compared to the three and six months ended June 30, 2025, respectively, was related to movements in fair value of Public and Private Warrants, which have been classified as liability instruments in the unaudited condensed consolidated financial statements.

Change in fair value of investment in equity securities

For the three and six months ended June 30, 2026, the change in fair value of investment in equity securities increased by $724,716 and $719,562, respectively, compared to the three and six months ended June 30, 2025, primarily due to fluctuations in the fair value of investments in QXR and IRIS Metals, based on readily available quoted market prices for these investments.

Loss on sale of investments in equity securities

During the three and six months ended June 30, 2025, the Company recorded a loss of $95,178 in connection with the sale of investment in equity securities. These securities were originally acquired as part of a broader investment strategy but were sold during the quarter ended June 30, 2026 in response to evolving market conditions and liquidity needs. The loss reflects the decline in market value relative to the carrying amount at the time of sale. The Company did not sell any investment in equity securities during the three and six months ended June 30, 2026.

Loss on write-off of promissory note and deposit

During the three and six months ended June 30, 2025, the Company recorded a loss of $182,481 and $50,000 related to the write-off of a promissory note and deposit associated with a previously contemplated strategic partnership with IGX and Usha Resources, respectively. The arrangement was terminated during the quarter, and based on an updated assessment these amounts were deemed uncollectible. Accordingly, the full balance was written off and recognized as a non-operating loss. No such write off was noted during the three and six months ended June 30, 2026.

Loss on extinguishment of liability, net

For the three and six months ended June 30, 2026, we recognized a loss on extinguishment of liability of $127,381 and $122,409, respectively, on settlement of the 2025 Convertible Note monthly installment through issuance of Repayment Shares. The loss reflects the difference between the installment amount and the fair value of the Repayment Shares as of the date of issuance. This is partially offset by credit received against a vendor payable balance. For the three and six months ended June 30, 2025, there was no loss or gain recognized on extinguishment of liability.

Tax expenses

For the three and six months ended June 30, 2026, and 2025 the tax expense is nil, due to net losses incurred during these periods. We do not carry any deferred tax assets on the unaudited condensed consolidated balance sheet as at June 30, 2026 and the audited condensed consolidated balance sheet as at December 31, 2025, primarily due to net operating loss carry forwards resulting from historically incurred net operating losses and full valuations allowance of those losses, as our ability to realize future tax benefits related to these assets is largely dependent upon operational profitability, which is uncertain. As a result of this uncertainty, we have established a full valuation allowance, and have not recognized a net provision or benefit for income taxes in the periods reported.

Net loss

For the three and six months ended June 30, 2026, we incurred a net loss of $3,902,894 and $9,137,586 respectively, and for the three and six months ended June 30, 2025, we incurred a net loss of $3,704,438 and $ 7,514,138 respectively. Since we have yet to start commercial production of battery-grade lithium, our operating expenses are expected to increase as we continue to recruit more personnel to perform general operational tasks, setting up the Facility and execute supply agreements.

Liquidity and Capital Resources

Overview

We have devoted substantial efforts and financial resources to raising capital and organizing and staffing the Company, and as a result, have incurred significant operating losses. As of June 30, 2026, and December 31, 2025, we had an accumulated deficit of $77,480,170 and $68,342,584, respectively.

We have not earned any revenue and have been operating at a loss since inception. We have an accumulated deficit and stockholders’ deficit.

Liquidity Requirements

Our primary requirements for liquidity and capital are investment in new facilities, new technologies, working capital and general corporate needs. Specifically, in this regard, the total refinery cost, which includes all direct and indirect costs and contingencies needed to build phase 1 of the refinery, (25,000 metric tons per annum of battery grade lithium carbonate), has been estimated at approximately $500 million following completion of the FEL-3 study. We intend to finance our project cost through a mix of debt, equity and potential government grants. We expect our operational expenditures to increase for the foreseeable future in connection with ongoing and future activities. Specifically, expenditures will increase as we:

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

Our current and ongoing liquidity requirements will depend on many factors, including: our launch cadence, the timing and extent of spending to support additional development efforts, the introduction of new and enhanced offerings, the expected market adoption of our offerings, and the timing and extent of additional capital expenditures to build and invest in the development of our Facility. In addition, we may, in the future, enter into arrangements to acquire or invest in complementary businesses, business offerings and technologies. However, we do not have agreements or commitments to enter into any such acquisitions or investments at this time.

Sources of Liquidity and Going Concern

We have funded our operations with proceeds from sales of Legacy Stardust Power Common Stock, promissory notes, simple agreements for future equity notes (“SAFE notes”), debt financing, equity financing and convertible equity agreements. To continue as a going concern, we anticipate funding our near-term operations through the sale of equity securities, promissory notes, debt financing or from other capital sources. If adequate funds are not available, we may be required to curtail, delay, or eliminate some or all of our planned activities, or raise additional financing to continue to fund operations, and may not be able to continue as a going concern.

Our unaudited condensed consolidated financial statements have been presented on the basis that we are a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We are a development stage entity with no revenues, and have accumulated deficit of $77,480,170 and stockholders’ deficit of $8,240,860 as at June 30, 2026. We expect to continue to incur significant costs in pursuit of its operating and investment plans. These costs exceed our existing cash balance and net working capital.

As discussed above:

• On December 23, 2025, we entered into the Lind Securities Purchase Agreement with Lind providing for up to $15,000,000 in senior secured convertible debt financing. Simultaneously, we initially drew down gross proceeds of approximately $4,000,000 in exchange for the issuance to Lind of a Senior Secured Convertible Promissory Note in the amount of $4,800,000 and a 2025 Lind Warrant, for the purchase of approximately 411,245 shares. After deducting a commitment fee of $100,000 and other transaction-related costs, we received net cash proceeds of approximately $3,792,500.
• On February 12, 2026, we entered into the B. Riley Purchase Agreement and the B. Riley Registration Rights Agreement. Upon the terms and subject to the satisfaction of the conditions set forth in the B. Riley Purchase Agreement, we will have the right, in our 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 our option. We are 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, we have issued 505,866 shares of Common Stock aggregating to net proceeds of $1,310,904 under this arrangement.
• On May 8, 2026, we 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, we may sell from time to time through the Agent, shares of our Common Stock, par value $0.0001 per share, having an aggregate offering price of up to $5,000,000 (the “Shares”). We intend to use this facility to raise capital as needed. As of the date of this filing, we have issued 2,159,867 shares of Common Stock aggregating to net proceeds of $3,112,021 under this arrangement.

We believe that the cash on hand, and additional investments available through issuance of new Common Stock, will be inadequate to satisfy our working capital and capital expenditure requirements for at least the next twelve months. Our ability to continue as a going concern is dependent upon management’s plan to raise additional capital from the issuance of equity or to obtain additional borrowings to fund our operating and investing activities over the next year. The accompanying 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 if we are unable to continue as a going concern.

No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to us. Even if we are able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in the case of equity financing. Failure to secure adequate financing could have a material adverse effect on our business, operations and financial performance.

Insurance funding borrowing

On August 5, 2025, we entered into a financing agreement of $407,500 for the purchase of an insurance policy with AFCO Insurance Premium Finance. The debt is payable in monthly installments through June 2026 and bears an interest rate of 7.5%. As at June 30, 2026, the loan was fully repaid. The carrying amount of Nil and $205,403 is included as Short-term Loan on the accompanying unaudited condensed consolidated balance sheet as on June 30, 2026, and audited consolidated balance sheet as on December 31, 2025, respectively.

Subsequent to three months ended June 30, 2026, we entered into a financing agreement of $493,532 for the purchase of an insurance policy with AFCO Insurance Premium Finance. We made a downpayment of $172,736, which was applied to the loan amount at the time of the loan agreement. The debt is payable in 7 monthly installments of $47,189 per month and bears an interest rate of 6.99%.

Other short-term loans

Our short-term loans with Endurance Antarctica Partners II, LLC and under the Term Sheets (including DRE Chicago LLC, a related party) are described in Note 11, Related Party Transactions, included elsewhere in this quarterly report and described in greater detail in Note 7 to our Form 10-K. Both arrangements were fully repaid, together with accrued interest, as of December 31, 2025, and carried no balance as of June 30, 2026. The Company recognized interest expense of $103,938 towards other short-term loans on the accompanying unaudited condensed consolidated statements of operations for the six months ended June 30, 2025.

Cash Flow

Summary

The following table summarizes our cash flows for the periods presented:

Cash Flows Used in Operating Activities

For the six months ended June 30, 2026, net cash used in operating activities was $4,002,652 consisting of a $9,137,586 net loss, adjusted for an aggregate of $3,968,080 in non-cash charges for stock based compensation, non-cash marketing expense for stock issued to vendor, amortization of 2025 Convertible Note discount and issuance costs, change in fair value of investments, warrant liability, common stock issued for make-whole obligation, loss on extinguishment of debt, deferred transaction cost expenses, and depreciation and a $1,166,854 net positive change in operating assets and liabilities, primarily driven by a decrease of $12,701 in prepaid expense and other assets and by an increase of $1,169,963 in accounts payable and other current liabilities which represent the various costs that are expected to be incurred as we set up operations during this period, partially offset by decrease of $15,810 in operating lease right-of-use asset and liability.

For the six months ended June 30, 2025, net cash used in operating activities was $4,490,450 consisting of a $7,514,138 net loss, adjusted for $2,983,759 non-cash charge for stock based compensation, change in fair value of investments, warrant liability, sponsor earnout shares, common stock make-whole obligation, loss on sale of investments, loss on write off of deferred transaction cost, promissory note and deposits and depreciation and a $39,929 net change in operating assets and liabilities, primarily driven by a decrease of $239,723 in prepaid expenses and other assets partially offset by a decrease of $199,794 in accounts payable and other current liabilities which represent the various costs that are expected to be incurred as we set up operations during this period.

Cash Flows Used in Investing Activities

For the six months ended June 30, 2026, net cash used in investing activities was $194,312, primarily representing $175,644 on account of capital project costs related to construction of the refinery and $18,668 on account of purchase of computer, equipment and furniture.

For the six months ended June 30, 2025, net cash used in investing activities was $2,217,068, primarily representing $2,278,760 on account of capital project costs related to construction of the refinery offset partially by $78,311 proceeds from sale of investments in equity securities.

Cash Flows from Financing Activities

For the six months ended June 30, 2026, net cash provided by financing activities was $1,257,077 related primarily to gross proceeds from common stock issuance proceeds of $1,512,480 partially offset by repayment of short-term loan of $205,403 and payment of deferred transaction costs of $50,000.

For the six months ended June 30, 2025, net cash provided by financing activities was $8,401,694 related primarily to gross proceeds from consummation of a public offering of $10,270,400, Warrant Inducement gross proceeds of $2,971,040, advance from PIPE investors of $125,000, common stock issuance proceeds of $122,551 partially offset by repayment of short-term loans of $3,808,552, payment of transaction costs associated with public offering and warrant inducement of $1,252,152, and deferred transaction costs payment of $25,000.

Operating and Capital Expenditure Requirements

We have not earned any revenue and have been operating at a loss since inception. We have an accumulated deficit and stockholders’ deficit. These conditions raise substantial doubt about our ability to continue to finance operations over the next twelve months and is dependent upon management’s plan to raise additional capital from issuance of equity or receive additional borrowings to fund our operating and investing activities over the next one year. Our intended capital requirements depend on many factors including the capital expenditure required to set up our Facility, and undertake all activities necessary to start commercial production, prices of capital equipment, and preliminary costs. In the future, it will depend on our expansion of acquiring new assets/sites to have access and potential ownership of raw material. We may in the future enter into arrangements to acquire or invest in complementary businesses, services and technologies, including intellectual property rights. We may be required to seek additional equity or debt financing. If additional financing is required from outside sources, over and above what we are intending to raise currently, we may not be able to raise it on acceptable terms or at all. If we are unable to raise additional capital when desired, our business, results of operations and financial condition would be materially and adversely affected, and we may not be able to continue our intended operations as a going concern.

Commitments and Contractual Obligations

See Note 3 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report for additional details regarding other contractual obligations and commitments as at June 30, 2026. While we have not entered into any other binding commitments, other strategic partnerships are being evaluated which could lead to future contractual obligations.

Summary of Critical Accounting Estimates

We believe that the following accounting policies and estimates involve a high degree of judgment and complexity. Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our unaudited condensed consolidated financial condition and results of our operations. See Note 2 to our unaudited condensed consolidated financial statements appearing elsewhere in this Quarterly Report for a description of our other significant accounting policies. The preparation of our unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and judgments that affect the amounts reported in those unaudited condensed consolidated financial statements and accompanying notes. Although we believe that the estimates we use are reasonable, due to the inherent uncertainty involved in making those estimates, actual results reported in future periods could differ from those estimates.

Income Taxes

Income taxes are recorded in accordance with Accounting Standard Codification (“ASC”) 740, “Income Taxes” (“ASC 740”), which provides for deferred taxes using an asset and liability approach. We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the unaudited condensed consolidated financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided, if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. We account for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, we recognize the tax benefit of tax positions to the extent that the benefit would more likely than not be realized assuming examination by the taxing authority. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. We recognize any interest and penalties accrued related to unrecognized tax benefits as income tax expense.

Recent Accounting Pronouncements

See Note 2 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report for additional details regarding recent accounting pronouncements.

Segment Reporting

We report 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 Topic 280, “Segment Reporting.” We have 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 accessed. Our CODM is the Chief Executive Officer, who reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. We have a single, common management team and our cash flows are reported and reviewed on a total-company basis.

Related Party Transactions

We previously entered into a consulting agreement and loan arrangement with DRE Chicago LLC (“DRE Chicago”), whose principal, Paramita Das, was our former Chief Strategy Officer and Senior Advisor to the Chief Executive Officer as described in our Form 10-K. We recognized interest expense of $7,187 during the six months ended June 30, 2025. The loan was fully repaid, together with accrued interest, as of December 31, 2025, and 52,374 warrants, remain outstanding. DRE Chicago’s loan was entered into as part of a larger $1,800,000 Term Sheets facility with several lenders, which was fully repaid, together with accrued interest, as of December 31, 2025. Ms. Das terminated her employment with us in November 2025 and is no longer considered a related party as of June 30, 2026.

We previously entered into a loan arrangement with Endurance Antarctica Partners II, LLC (“Endurance”), an affiliate of a director at the time and a shareholder, as described in our Form 10-K. We recognized interest expense of $51,042 during the six months ended June 30, 2025. The loan was fully repaid, together with accrued interest, as of December 31, 2025, and 488,826 warrants, remain outstanding. As of the date of this quarterly report, the Endurance-affiliated individual is no longer a member of our board of directors.

We previously entered into unsecured notes payable with three related parties. These notes payable provided us the ability to draw up to $1,000,000, in aggregate. In June 2025, we drew $250,000 from Energy Transition Investors LLC, and subsequently repaid the drawn amount by quarter ended June 30, 2025. We had accrued interest of $422 during the three months ended June 30, 2025 on the drawn amount and subsequently paid the interest in January 2026.

Private Warrants

The Sponsor purchased from GPAC II 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 our initial public offering (the “Private Warrants”). At closing of the Business Combination, we acquired the net liabilities for GPAC II including the Private Warrants. Each 10 Private Warrant entitles the holder to purchase one share of Common Stock at $115.00 per share. At June 30, 2026, there were 5,566,667 Private Warrants outstanding. As at June 30, 2026, the fair value of Private Warrants amounted to $617,900. We valued our Private Warrants based on the closing price of the Public Warrants since they are similar instruments.

Sponsor Earnout Shares

As part of the closing of the Business Combination, we issued 100,000 shares to 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 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. 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. We assess 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. As at June 30, 2026 and December 31, 2025, we did not identify any indicators that a change in the fair value of the Sponsor Earnout Shares last measured at $4,700 as of March 31, 2025, would be material, and accordingly did not perform an updated Monte Carlo valuation as of either date.

Subsequent Events

See Note 16 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report for additional details regarding subsequent events.

Market Risk Framework

Market risk represents the risk of losses, or financial volatility in our operations, that may result from the fluctuations of various factors. The scope of our market risk, management policies and procedures is expected to include market-sensitive data related to interest rate, liquidity, input and selling prices.

The Company’s different types of market risk include:

Interest rate risk

Interest rate risk represents the potential volatility from changes in market interest rates. We are exposed to interest rate risk arising from changes in the level and volatility of interest rates, changes in the slope of the yield curve, changes in credit spreads, and the rate of prepayments on our interest-earning assets (e.g., inventories) and our funding sources (e.g., short-term financing) which finance these assets. Project finance and loan facilities are a key component of our financing strategy. Volatility in the interest rate market could impede our plans for growth.

Liquidity risk

Liquidity risk is the risk that we are unable to timely access necessary funding sources in order to operate our business, as well as the risk that we are unable to timely divest securities that we hold in connection with our sales and trading activities. We have been successful in equity financing in the past but there is no assurance that we will continue to be able to finance the Company with equity financing. We do not have substantial credit lines for financing the Company.

Credit risk

Credit risk refers to the potential for loss due to the default or deterioration in credit quality of a counterparty, customer, borrower, or issuer. The nature and amount of credit risk depends on the type of transaction, the structure and duration of that transaction and the parties involved. Credit risk also results from an obligor’s failure to meet the terms of any contract with us or otherwise fail to perform as agreed. This may be reflected through issues such as settlement obligations or payment collections.

Operational risk

The success of our plan requires us to be able to operationally deliver on the project plan and timelines as projected by management. In order to mitigate and control operational risk, we expect to develop policies and procedures that are designed to help identify and manage operational risk at appropriate levels throughout the organization. We also expect to have business continuity plans in place that we believe should cover critical processes on a company-wide basis, and redundancies are built into our systems as we deem appropriate. These control mechanisms will be designed to help confirm that operational policies and procedures are being followed and that our various businesses are operating within established corporate policies and limits. We are leveraging and intend to continue implementing established best practices for our industry to reduce operational risk.

Human Capital Risk

The success of our business is dependent upon the skills, expertise, industry knowledge and performance of our employees. Human capital risks represent the risks posed if we fail to attract and retain qualified individuals, particularly those having specialized technical knowledge in the exploration, extraction, and purification of brine from varying sources to produce battery-grade lithium, and employees who are motivated to serve the best interests of our clients, thereby serving our best interests. Attracting and retaining employees depends, among other things, on our Company’s culture, management, work environment, geographic locations and compensation. There are risks associated with the proper recruitment, development and rewards of our employees to ensure quality performance and retention. We offer competitive compensation and benefits to retain human capital, intend to offer educational opportunities to allow advancement, and promote balance in work life conditions by offering hybrid work- from-home options.

Legal and regulatory risk

Legal and regulatory risk includes the risk of non-compliance with applicable legal and regulatory requirements and the loss to our reputation that we may suffer as a result of a failure to comply with laws, regulations, rules, related self-regulatory organization standards and codes of conduct applicable to our business activities. We are generally subject to extensive regulations in the various jurisdictions in which we conduct our business. We are in the process of setting up procedures that are designed to help promote compliance with applicable statutory and regulatory requirements, such as public company reporting obligations, regulatory net capital requirements, sales practices, potential conflicts of interest, anti-money laundering, privacy and recordkeeping. We also expect to establish procedures that are designed to require that our policies relating to ethics and business conduct are followed.

Market Risk Exposure

Interest Rate Risk

As of June 30, 2026, our outstanding debt instruments, including the 2025 Convertible Note and our short-term insurance premium financing, bear interest at fixed rates. Accordingly, we do not believe we have significant exposure to changes in market interest rates on our existing debt; however, changes in prevailing interest rates could affect the cost and availability of any future debt or equity financing that we may need to raise to fund our operations.

Credit Risk

We are subject to credit risk with respect to our cash balances for those amounts in excess of the FDIC insured amount of $250,000. We have only one financial banking institution.

Inflation Risk

We do not believe that inflation has had a material effect on our business, financial condition, or results of operations for the three months ended June 30, 2026, other than its impact on the general economy. However, we are currently operating in a more volatile inflationary environment due to macroeconomic conditions and have limited data and experience doing so in our history, particularly as we continue to invest in growth in our business. The principal inflationary factor affecting our business is higher costs. Our inability or failure to address challenges relating to inflation could harm our business, financial condition, and results of operations.

Evaluation of Disclosure Controls and Procedures

We are required to comply with the internal control requirements of the Sarbanes-Oxley Act. Only in the event that we are deemed to be a large accelerated filer or an accelerated filer and no longer qualify as an emerging growth company would we be required to comply with the independent registered public accounting firm attestation requirement on internal control over financial reporting. Further, for as long as we remain an emerging growth company as defined in the JOBS Act, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirement.

Disclosure controls are procedures with the objective of ensuring that information required to be disclosed in our reports under the Exchange Act, such as this report, is recorded, processed, summarized and reported within the time period specified in the SEC’s rules and forms. Disclosure controls are designed with the objective of ensuring that information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2026. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective as of June 30, 2026. Accordingly, management believes that the financial statements included in this Quarterly Report on Form 10-Q present fairly in all material respects our financial position, results of operations and cash flows for the period presented.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures is also based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Please refer to Part I, Item 1A—Risk Factors of the Company’s Form 10-K . Any of these factors could result in a significant or material adverse effect on our business, results of operations, or financial condition.

In addition to the risk factors set forth in our Form 10-K, the following risk factors should be considered carefully in evaluating our Company and our business.

Our failure to regain compliance with the Nasdaq continued listing requirements could result in the delisting of our Common Stock and Public Warrants, which could have a material adverse effect on our business and the value of your investment, and would trigger an event of default under our 2025 Convertible Note.

On April 24, 2026, we received written notice from the Listing Qualifications Staff of The Nasdaq Stock Market LLC (“Nasdaq”) notifying us that we were not in compliance with the minimum $35 million market value of listed securities requirement set forth in Nasdaq Listing Rule 5550(b)(2) for continued listing on The Nasdaq Capital Market (the “MVLS Requirement”) because our market value of listed securities had been below $35 million for 30 consecutive business days. The notice also indicated that we do not currently meet the alternative continued listing requirements under Nasdaq Listing Rules 5550(b)(1) (stockholders’ equity of at least $2.5 million) or 5550(b)(3) (net income from continuing operations of at least $500,000 in the most recently completed fiscal year or in two of the last three most recently completed fiscal years).

In accordance with Nasdaq rules, we have a period of 180 calendar days, or until October 21, 2026, to regain compliance with the MVLS Requirement. To regain compliance, our market value of listed securities must close at $35 million or more for a minimum of 10 consecutive business days during the 180-day compliance period. If we do not regain compliance within the compliance period, we may be eligible for an additional compliance period or we may face delisting proceedings. There can be no assurance that we will be able to regain compliance with the MVLS Requirement or any other continued listing requirement or maintain compliance with any other applicable requirements for continued listing on The Nasdaq Capital Market.

If our securities are delisted from Nasdaq, we may face significant adverse consequences, including limited availability of market quotations for our securities, reduced liquidity with respect to our securities, a determination that our Common Stock is a “penny stock” which would require brokers trading in our Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities, a limited amount of news and analyst coverage, and a decreased ability to issue additional securities or obtain additional financing in the future. In addition, a delisting of our securities from Nasdaq would constitute an event of default under our 2025 Convertible Note with Lind Global Asset Management XIII LLC (“Lind”), which could result in the acceleration of the outstanding principal and any accrued and unpaid amounts thereunder at Lind’s election. Any such acceleration would have a material adverse effect on our financial condition and our ability to continue as a going concern. The national securities exchange on which our securities are listed is a material term of our existing and any future financing agreements, and delisting could trigger defaults, acceleration, or other adverse consequences under such arrangements.

There is substantial doubt about our ability to continue as a going concern, and we will need to raise additional capital in the near term to maintain our operations.

As of June 30, 2026, we had $540,264 of unrestricted cash. We are a development stage company, have not generated any revenue, and have incurred significant losses since inception. As of June 30, 2026, we had an accumulated deficit of $77,480,170 and a stockholders’ deficit of $8,240,860. We expect to continue to incur significant costs in pursuit of our operating and investment plans, which costs exceed our existing cash balance and net working capital. These conditions raise substantial doubt about our ability to continue as a going concern.

We believe that our cash on hand, together with additional investments available through the issuance of new Common Stock, will be inadequate to satisfy our working capital and capital expenditure requirements for at least the next twelve months. Our ability to continue as a going concern is dependent upon management’s ability to raise additional capital from the issuance of equity securities or obtain additional borrowings to fund our operating and investing activities over the next year. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to us. Even if we are able to obtain additional financing, it may contain restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in the case of equity financing. If we are unable to raise additional capital when needed, we may be required to curtail, delay, or eliminate some or all of our planned activities and may not be able to continue as a going concern, which would have a material adverse effect on our business, results of operations, and financial condition.

We are subject to default and acceleration risk under our senior secured 2025 Convertible Note.

Our 2025 Convertible Note with Lind is a senior secured obligation and includes customary events of default, including, among others, failure to make required payments when due, failure to comply with covenants, breach of representations and warranties, insolvency or bankruptcy, delisting of our Common Stock from Nasdaq, and certain change-in-control events. Upon an event of default, Lind may, at its election, require immediate repayment in cash or elect alternative settlement provisions at adjusted prices. As of June 30, 2026, the outstanding principal amount under the 2025 Convertible Note was $4,080,000. Given our current financial condition and limited cash resources, we may not be able to satisfy our obligations under the 2025 Convertible Note if an event of default occurs and Lind elects to accelerate the outstanding amounts. Our inability to satisfy an acceleration demand would have a material adverse effect on our financial condition and our ability to continue as a going concern. Additionally, because the 2025 Convertible Note is secured by substantially all of our assets, Lind could exercise remedies against our collateral in the event of a default, which could result in the loss of our assets and severely impair or preclude our ability to conduct our business.

As described in Note 8, “Convertible Note and Warrants” and Item 5, “Other Information,” on August 11, 2026, an event of default occurred under our 2025 Convertible Note (the “Triggering Event”) as a result of our market capitalization remaining below $15.0 million for ten consecutive trading days. As a result of the Triggering Event, we became obligated to pay a Mandatory Default Amount equal to 110% of the outstanding principal, and default interest began accruing at 10% per annum. In addition, the remaining capacity under the Lind Securities Purchase Agreement might not be available unless Lind waives the Triggering Event. The loss of access to this committed funding source, combined with our existing liquidity constraints, could further exacerbate the substantial doubt about our ability to continue as a going concern. We are engaged in discussions with Lind regarding a potential forbearance, waiver, or amendment with respect to the Triggering Event; however, there can be no assurance that such discussions will result in a definitive agreement, or that any agreement will be reached on terms acceptable to us.

Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business, results of operations, or financial condition.