10-K/A: Stardust Power Amends 2024 Annual Report, Declares Internal Controls Effective After Remediation of Prior Weaknesses

Stardust Power Inc. filed an amendment to its 2024 Annual Report on Form 10-K to disclose that its principal executive and financial officers concluded disclosure controls and internal control over financial reporting were effective as of December 31, 2024, following the remediation of previously identified material weaknesses.

Summary

• Stardust Power Inc. filed an Amendment No. 1 to its Annual Report on Form 10-K for the fiscal year ended December 31, 2024, to update disclosures regarding Item 9A, "Controls and Procedures."
• The original filing inadvertently omitted statements on the effectiveness of disclosure controls and management's assessment of internal control over financial reporting (ICFR).
• The Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures were effective as of December 31, 2024.
• Management assessed and concluded that internal control over financial reporting was effective as of December 31, 2024, using the COSO 2013 Framework criteria.
• Material weaknesses identified during the period from March 16, 2023 (inception) to December 31, 2023, related to COSO 13 Framework implementation, lack of segregation of duties, management oversight, and control surrounding maintenance of adequate repository of contracts, appropriate classifications of expenses, and complex financial instruments, have been remediated.
• The company's aggregate market value of voting stock held by non-affiliates was $38,684,080 as of December 31, 2024.
• As of July 10, 2025, there were 84,447,421 shares of common stock outstanding.

Sentiment

Score: 8

Explanation: The company successfully remediated material weaknesses in internal controls and declared both disclosure controls and internal control over financial reporting effective. This indicates improved financial governance and reliability, which is a strong positive for investor confidence.

Positives

• Disclosure controls and procedures were concluded to be effective as of December 31, 2024.
• Internal control over financial reporting was concluded to be effective as of December 31, 2024.
• Previously identified material weaknesses in internal control over financial reporting, which existed from inception (March 16, 2023) to December 31, 2023, have been remediated.
• Management believes the financial statements in the Annual Report on Form 10-K fairly present the financial position, results of operations, and cash flows in all material respects.

Negatives

• Material weaknesses in internal control over financial reporting were identified during the period from March 16, 2023 (inception) to December 31, 2023, before their remediation. These included issues with COSO 13 Framework implementation, lack of segregation of duties, management oversight, and control over contracts, expense classification, and complex financial instruments.

Risks

• If unable to remediate future material weaknesses or if additional deficiencies arise, or if an effective system of internal control over financial reporting is not maintained, the company may not be able to accurately or timely report financial results.
• Failure to accurately or timely report financial results could lead to a loss of investor confidence and adversely impact the stock price.
• Internal control systems, due to inherent limitations like human error or circumvention of controls, may not prevent or detect all misstatements or fraud.
• The effectiveness of controls in future periods is subject to the risk that controls may become inadequate due to changing conditions or that compliance may deteriorate.
• Compliance with annual internal control report requirements will depend on the effectiveness of financial reporting controls, which are expected to involve significant expenditures and may become more complex as the business grows.

Future Outlook

The company expects its systems and controls to involve significant expenditures and become more complex as the business grows, necessitating continuous improvement in operational, financial, and management controls, as well as reporting systems and procedures.

Management Comments

• Our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2024.
• Management concluded that we maintained effective internal control over financial reporting as of December 31, 2024 and our disclosure controls and procedures had no material weakness as of December 31, 2024.
• Management believes that the financial statements included in this Annual Report on Form 10-K present fairly in all material respects our financial position, results of operations and cash flows for the period presented.
• We designed and implemented measures to improve our controls over financial reporting process and remediated these material weaknesses.

Industry Context

This amendment highlights a common practice for publicly traded companies to ensure compliance with the Sarbanes-Oxley Act, particularly Section 404, which mandates management's assessment of internal controls over financial reporting. As an emerging growth company (EGC), Stardust Power Inc. benefits from certain exemptions, such as not requiring an independent registered public accounting firm attestation on internal controls, which is a standard provision under the JOBS Act to ease regulatory burdens for smaller, newer public entities. The remediation of material weaknesses demonstrates a commitment to robust financial governance, a critical aspect for investor confidence across all industries.

Comparison to Industry Standards

• The company's management assessed the effectiveness of its internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in its Internal Control Integrated Framework (2013), which is a widely recognized and adopted standard for internal control systems globally.
• The remediation of previously identified material weaknesses, including those related to the COSO 13 Framework implementation, segregation of duties, and management oversight, aligns with best practices for improving corporate governance and financial reporting integrity.
• As an emerging growth company, Stardust Power Inc. is exempt from the independent registered public accounting firm attestation requirement on internal control over financial reporting, a common regulatory relief for companies of its size and stage, differentiating its compliance requirements from larger, accelerated filers like Apple Inc. or Microsoft Corporation, which are subject to full SOX 404(b) compliance.

Corporate Governance

Stakeholder Impact

• Shareholders: Enhanced confidence in the accuracy and reliability of financial reporting due to effective internal controls and remediation of prior weaknesses. Reduced risk of financial misstatements.
• Regulatory Authorities: Demonstrates compliance with SEC filing requirements and Sarbanes-Oxley Act provisions regarding internal controls.
• Management: Increased assurance in the integrity of financial data for decision-making.

Next Steps

• Continue to improve operational, financial, and management controls.
• Continue to improve reporting systems and procedures as the business grows and becomes more complex.
• Comply with annual internal control report requirements.

Key Dates

Recommendation

Keywords

Stardust Power Inc., SEC filing, Form 10-K/A, Annual Report Amendment, Internal Control Over Financial Reporting, Disclosure Controls, Material Weaknesses, Sarbanes-Oxley Act, SOX, Corporate Governance, Financial Reporting, Emerging Growth Company, NASDAQ