10-K: Stardust Power Faces Going Concern Doubt Amidst Refinery Development

Stardust Power Inc. reports significant net losses and a going concern warning, despite progress in its Oklahoma lithium refinery project and securing non-binding supply and offtake agreements.

Summary

• Stardust Power Inc. is a development-stage company focused on building a lithium refinery in Muskogee, Oklahoma, with an expected capacity of up to 50,000 metric tons per annum (tpa) of battery-grade lithium carbonate (BGLC).
• The company has not generated any revenue since its inception and reported a net loss of $15,723,636 for the year ended December 31, 2025, an improvement from a $23,753,863 net loss in 2024.
• An accumulated deficit of $68,342,584 as of December 31, 2025, and negative operating cash flow of $8,275,679 for the same period, raise substantial doubt about the company's ability to continue as a going concern.
• The company's strategy involves a phased approach to refinery construction, with Phase 1 targeting 25,000 mtpa capacity, estimated at approximately $500 million in capital expenditures.
• Stardust Power has secured a 66-acre site in Muskogee, Oklahoma, for $1,662,030, with the purchase completed on December 16, 2024.
• Non-binding letters of intent for lithium chloride feedstock supply have been signed with Prairie Lithium Limited (6,000 mtpa LCE) and Mandrake Resources Limited (7,500 mtpa LCE).
• A non-binding offtake agreement with Sumitomo Corporation of Americas contemplates the acquisition of 20,000 to 25,000 metric tons of lithium carbonate per year for 10 years.
• The company has licensed KMX's vacuum membrane distillation (VMD) technology for exclusive use in its refining and upstream operations across the U.S., Canada, and select international markets.
• Stardust Power has received an illustrative incentive analysis for up to $257 million in performance-based incentives from the State of Oklahoma.
• The company successfully regained compliance with Nasdaq's continued listing standards for market value of publicly held shares and minimum bid price, and transferred its listing to the Nasdaq Capital Market to cure market value of listed securities non-compliance.
• A 1-for-10 reverse stock split was effected on September 8, 2025.
• Financing activities in 2025 included public offerings generating $10,270,400, a warrant inducement transaction yielding $2,971,040, and $3,792,500 net proceeds from a $15,000,000 senior secured convertible debt financing with Lind Global Asset Management XIII LLC.
• The company repaid short-term loans totaling $3,550,000 (principal) from related parties and other investors in 2025.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a challenging outlook due to the explicit 'going concern' warning, significant accumulated deficit, and reliance on future capital raises, despite strategic progress in facility development and non-binding agreements.

Positives

• Net loss decreased by $8.03 million from $23,753,863 in 2024 to $15,723,636 in 2025, indicating improved financial performance in a development stage.
• Net cash used in operating activities improved from $(9,719,714) in 2024 to $(8,275,679) in 2025.
• Secured a 66-acre site in Muskogee, Oklahoma, for its lithium refinery, providing a strategic location with existing multi-modal transportation infrastructure.
• Completed a Front End Loading (FEL-3) study by Primero, estimating Phase 1 capital expenditures at approximately $500 million for a 25,000 mtpa facility, with a 90% probability of achievement.
• Licensed KMX's vacuum membrane distillation (VMD) technology exclusively for use in its refining and upstream operations in the U.S., Canada, and select international markets, aiming to reduce technology risk.
• Entered into non-binding letters of intent for lithium chloride feedstock supply with Prairie Lithium Limited (6,000 mtpa LCE for 6 years) and Mandrake Resources Limited (7,500 mtpa LCE for 12 years), diversifying potential supply sources.
• Signed a non-binding letter agreement with Sumitomo Corporation of Americas for a long-term commercial offtake of 20,000 to 25,000 metric tons of lithium carbonate per year.
• Received an illustrative incentive analysis for up to $257 million in performance-based incentives from the State of Oklahoma.
• Regained compliance with Nasdaq's market value of publicly held shares and minimum bid price requirements, and successfully transferred to the Nasdaq Capital Market.
• The refinery design is optimized for multiple lithium chloride inputs from brine sources (oilfield, salt flats, geothermal, produced water), which is expected to reduce environmental impact compared to hard rock mining.
• The facility is planned to be engineered for a zero-liquid-discharge (ZLD) system, minimizing wastewater discharge and conserving water.
• The company's management team has extensive experience in mining, lithium-ion technology, and capital raising.

Negatives

• The company has not generated any revenue since its inception and continues to incur significant operating losses, with a net loss of $15,723,636 for the year ended December 31, 2025.
• An accumulated deficit of $68,342,584 as of December 31, 2025, and negative operating cash flow, raise substantial doubt about the company's ability to continue as a going concern.
• Cash on hand and potential additional liquidity are believed to be inadequate to satisfy working capital and capital expenditure requirements for at least the next twelve months.
• The company's ability to continue as a going concern is dependent on successfully raising additional capital through equity issuance or borrowings, which is not assured.
• A non-binding letter of intent with Usha Resources Ltd. for the Jackpot Lake Lithium Brine Project diminished in likelihood, leading to a $50,000 deposit write-off.
• A non-binding letter of intent with QX Resources Limited for the Liberty Lithium project lapsed, and an initial equity investment of $200,000 was made.
• The company recognized a loss on sale of investment in IRIS Metals Limited of $179,805 and a loss of $711,655 due to change in fair value of investment in IRIS Metals Limited, as the strategic investment was no longer viable.
• Promissory notes and deposits totaling $564,844 related to strategic partnerships with IGX, IGL, and Usha Resources were written off as uncollectible.
• The Prior B. Riley Purchase Agreement was terminated, requiring a make-whole payment of $471,942, partially settled with shares and cash, indicating a less favorable outcome than initially planned.
• The company is subject to a lawsuit from H.C. Wainwright & Co., LLC alleging breach of an engagement agreement and seeking unpaid sums.
• The company's market value of listed securities fell below $50 million for 30 consecutive business days, leading to a delisting notice from Nasdaq, although this was cured by transferring to the Nasdaq Capital Market.

Risks

• Substantial doubt exists regarding the company's ability to continue as a going concern due to significant operating losses and negative cash flows.
• There is no guarantee that the development of the lithium refinery will result in the commercial production of lithium from brine sources.
• The company faces numerous risks related to exploration, construction, and extraction of brine by its suppliers, including economic feasibility and unforeseen geological formations.
• Quarterly and annual operating and financial results are likely to fluctuate significantly due to factors like working capital, equipment malfunction, and regulatory delays.
• Long-term success depends on generating revenues, achieving profitability, and developing positive cash flows from BGLC production, which is uncertain.
• The pipeline of lithium feedstock may prove to be non-viable, or sufficient supply may not be available at the onset of production.
• Logistics costs associated with a hub-and-spoke refinery model could increase substantially, making the project economically unviable.
• Even if initial phases are completed, the company may not be successful in commencing and expanding commercial operations to support business growth.
• The company's ability to manage future growth will impact its business, financial condition, and results of operations.
• Products may not qualify for use by intended customers due to strict purity requirements for lithium-ion batteries.
• The company might not be able to sell its products as intended due to evolving market dynamics, competitive pricing, or changes in demand.
• Delays and other obstacles, such as permitting, construction, procurement, or political opposition, may prevent the successful completion of the facility.
• Inability to successfully access capital and financial markets may limit the company's ability to continue as a going concern or fund operations.
• Failure to develop, maintain, or grow strategic relationships with suppliers, offtakers, and technology partners could impair overall growth.
• Lithium can be highly combustible, and incidents could adversely impact the company's reputation, operations, and financial viability.
• The lithium brine industry includes well-capitalized companies, and Stardust Power may lack sufficient resources to compete effectively.
• Low-cost producers, especially from foreign jurisdictions with less rigorous standards, could disrupt the market and make the company's pricing less competitive.
• Inability to qualify for existing federal and state grants and incentives, or delays in their disbursement, could adversely impact operations and financing.
• Volatility in demand for lithium products or the development of alternative battery technologies could adversely affect the market for lithium.
• Lithium prices are subject to unpredictable fluctuations, which may adversely affect operations and the business plan.
• Future growth and success are dependent on consumer demand for electric vehicles in a competitive, cyclical, and volatile automotive industry.
• Inability to successfully negotiate final, binding terms for non-binding memoranda of understanding and letters of intent could harm commercial prospects.
• Escalation of global conflicts (e.g., Ukraine, Middle East) or emergence of new conflicts may adversely affect the business.
• Unstable market and macroeconomic conditions, including tariffs, trade policy, and inflation, may have serious adverse consequences.
• Climate change legislation, regulations, and policies may result in increased operating costs and affect the business.
• Failure to maintain proper and effective internal controls over financial reporting could impair the ability to produce accurate and timely financial statements.
• The company's shares of Common Stock are thinly traded, potentially making it difficult for stockholders to sell shares.
• Upon dissolution, stockholders may not recoup all or any portion of their investment.
• An active trading market for Common Stock may never develop or be sustained, leading to price fluctuations.
• Inability to satisfy Nasdaq's continued listing requirements could limit the ability of stockholders to effect transactions.
• Delaware law and governing documents contain anti-takeover provisions that may limit stockholder actions or prevent a change in control.
• The exclusive forum provisions in the Certificate of Incorporation could limit stockholders' ability to obtain a favorable judicial forum.
• Uncertainty exists regarding the actual number of shares to be sold under the B. Riley Purchase Agreement and the resulting gross proceeds, potentially causing substantial dilution.
• Securities litigation or stockholder activism could cause significant expenses, hinder strategy execution, and impact stock price.
• The company does not intend to pay cash dividends for the foreseeable future.
• As an emerging growth company, reduced public company reporting requirements may make the Common Stock less attractive to investors.
• A small number of stockholders continue to have substantial control over Stardust Power, limiting other stockholders' influence.
• Exercise of warrants for Common Stock would increase the number of shares eligible for future resale and result in further dilution.
• Failure to meet public guidance or investment analyst expectations could cause the market price of Common Stock to decline.
• If securities or industry analysts cease publishing research or publish negative reports, the market price of Common Stock could decline.
• A sale of a substantial number of shares of Common Stock may cause the price to decline.
• The company may issue additional shares of Common Stock or other equity securities without stockholder approval, diluting ownership interests.
• As a holding company, Stardust Power is dependent on distributions from subsidiaries to pay taxes and dividends.
• The company's business is dependent on proprietary technologies, processes, and information, making it vulnerable to IT system failures or cyberattacks.
• The company may be subject to liabilities and losses not covered by insurance.
• Lawsuits, such as the one from H.C. Wainwright & Co., LLC, may adversely affect the business, financial condition, or liquidity.

Future Outlook

Stardust Power anticipates robust growth in U.S. lithium demand, driven by electric vehicles, energy storage systems, and military applications. The company expects to become a leading producer of battery-grade lithium carbonate in the U.S. by establishing a large central refinery optimized for multiple lithium chloride inputs. It projects Phase 1 construction to take approximately 24 months and aims to supply batteries for approximately 1 million EVs, or 8% of the U.S. EV market, by 2035. The company expects to continue to incur operating losses and negative cash flows as it invests in facility development and growth.

Management Comments

• Management believes that the secured site at Southside Industrial Park within Port Muskogee, and Oklahoma in general, is an ideal location for its Facility, advantageous from a supply and offtake perspective.
• Management believes that the United States lithium refinery sector is critical and on a robust growth trajectory, with significant investments from both new entrants like Stardust Power and established players.
• Management believes that the current control processes have been operating effectively and have been independently validated by management as of the date of this annual report.
• Management believes that the new procedures and controls provide an appropriate remediation of the material weaknesses that have been identified and these will strengthen the Company’s internal controls over financial reporting.

Industry Context

StockSavvy.ai notes that Stardust Power is positioning itself within a rapidly evolving U.S. lithium refinery landscape, driven by increasing demand for battery-grade lithium from EVs, energy storage systems, and defense applications. The company's strategy to build one of North America's largest refineries and optimize for multiple brine-derived lithium chloride inputs differentiates it from competitors like Tesla (acid-free refining), ExxonMobil (Arkansas facility), Ioneer Ltd (Rhyolite Ridge), Lithium Americas (Thacker Pass), and Standard Lithium (South West Arkansas Project), which often focus on specific extraction methods or hard rock sources. The emphasis on domestic production aligns with strong governmental incentives like the IRA and BIL, aiming to reduce reliance on foreign supply chains, particularly China's dominance. However, the industry faces challenges from lithium price volatility and the potential rise of alternative battery chemistries like sodium-ion, which could ease lithium demand growth post-2030.

Comparison to Industry Standards

• Stardust Power's planned 50,000 metric tpa BGLC refinery aims to be one of the largest in North America, comparable in scale to significant projects by established players like Tesla's Texas refinery and ExxonMobil's Arkansas facility, both targeting substantial EV battery support.
• The company's focus on brine-derived lithium chloride inputs and a hub-and-spoke model differentiates it from hard rock or clay-based projects, such as Lithium Americas' Thacker Pass or Standard Lithium's South West Arkansas Project, which are targeting production capacities of 22,500 tpa by 2028.
• The use of commercially proven technologies in its refinery process, as validated by B&V's Independent Engineering Red Flag Report, aims to mitigate technology risk, a common challenge for new entrants in the DLE space where only adsorption-based DLE has reached commercial scale (e.g., in Argentina and China).
• The estimated Phase 1 CAPEX of $500 million for 25,000 mtpa is a substantial investment, reflecting the high capital intensity typical of large-scale chemical processing plants in the critical minerals sector, similar to the multi-billion dollar investments seen in other major lithium projects globally.

Management Changes

Corporate Governance

Legal Proceedings

• On July 7, 2025, H.C. Wainwright & Co., LLC filed a complaint against Stardust Power Inc. in the Supreme Court of the State of New York, County of New York (Case No: 654037/2025).
• The complaint alleges that the company breached an engagement agreement with the plaintiffs and seeks payment of purported unpaid sums.
• On September 19, 2025, the company filed its answer, denying all liability and asserting several affirmative defenses.
• The action is proceeding to the discovery stage, and the company plans to vigorously defend against the lawsuit.

Related Party Transactions

• In December 2024, the company entered into a consulting agreement with DRE Chicago LLC, whose principal, Paramita Das, served as Chief Strategy Officer and Senior Advisor to the CEO. Ms. Das's employment was terminated in November 2025.
• In December 2024, the company entered into a binding term sheet with DRE Chicago LLC for a $250,000 loan at 15% interest, maturing in March 2025. The loan was repaid in 2025, and 10,474 shares of Common Stock and 52,374 warrants were issued as an Equity Kicker.
• In December 2024, the company entered into a binding term sheet with Endurance Antarctica Partners II, LLC (an affiliate of a director) for a $1,750,000 loan at 15% interest, maturing in March 2025. The loan was repaid in 2025, and 97,765 shares of Common Stock and 488,826 warrants were issued as an Equity Kicker.
• In March 2023, the company entered into unsecured notes payable with three related parties, allowing draws up to $1,000,000 in aggregate, accruing interest at the long-term semi-annual Applicable Federal Rate (4.71% as of December 31, 2025).
• In June 2025, the company drew $250,000 from Energy Transition Investors LLC (a related party) and repaid the amount in full during the same month, accruing $422 in interest.

Stakeholder Impact

• Shareholders face substantial dilution risk from ongoing and future equity capital raises, including the B. Riley Purchase Agreement and warrant exercises.
• Shareholders are exposed to significant financial risk due to the company's 'going concern' warning, accumulated deficit, and lack of revenue.
• Employees and consultants are impacted by stock-based compensation plans, with vesting schedules and potential forfeitures.
• Potential customers (battery manufacturers, U.S. defense industrial base, Western OEMs) are awaiting the commercial production of BGLC, with non-binding offtake agreements in place.
• Suppliers of lithium chloride feedstock, such as Prairie Lithium and Mandrake Resources, have non-binding agreements that could lead to long-term contracts if the refinery becomes operational.
• Creditors, particularly holders of the senior secured convertible debt from Lind, have priority claims on assets and specific repayment terms.
• Local communities in Muskogee, Oklahoma, are expected to benefit from job creation and economic development once the refinery is in production, particularly in economically depressed regions.

Next Steps

• Raise additional capital through equity issuance or borrowings to fund operating and investing activities.
• Commence construction of the lithium refinery facility in Muskogee, Oklahoma, within 12 months from January 10, 2024, and diligently proceed to completion.
• Continue to develop plans and specifications for the facility and start earthworks.
• Negotiate and finalize binding supply agreements for lithium chloride feedstock with partners like Prairie Lithium and Mandrake Resources.
• Negotiate and finalize a definitive long-term commercial offtake agreement with Sumitomo Corporation of Americas.
• Apply for and secure federal and state government grants and incentives, such as those under the Department of Defense, Defense Production Act, and Department of Energy.
• Continue to improve operational, financial, and management controls and reporting systems as the business grows.
• Vigorously defend against the lawsuit filed by H.C. Wainwright & Co., LLC.

Key Dates

Keywords

Lithium Refinery, Battery-Grade Lithium Carbonate, BGLC, Muskogee Oklahoma, Direct Lithium Extraction, DLE, Electric Vehicles, EVs, Energy Storage Systems, ESS, Critical Minerals, SEC Filing, 10-K, Stardust Power, SDST, Nasdaq Capital Market, Going Concern, Capital Raise, Warrants, Supply Chain, KMX Technology, Sumitomo, Primero, Oklahoma Incentives, Sustainability, Zero-Liquid Discharge, ZLD