S-1: Stardust Power Files S-1 for Public Offering Amidst Significant Losses and Nasdaq Delisting Concerns

Stardust Power Inc., a development-stage American manufacturer of battery-grade lithium products, has filed an S-1 registration statement for a public offering of up to $5 million in common stock and pre-funded warrants, while facing substantial accumulated deficits and notices of non-compliance with Nasdaq listing standards.

Summary

• Stardust Power Inc. is a development-stage company focused on constructing a battery-grade lithium refinery in Muskogee, Oklahoma, with a projected capacity of up to 50,000 tons per annum (tpa).
• The company has not generated any revenue since its inception on March 16, 2023, and reported an accumulated deficit of approximately $56.43 million as of March 31, 2025.
• For the three months ended March 31, 2025, the company incurred a net loss of $3.81 million, an increase from $1.40 million for the same period in 2024.
• Operating cash flow was negative $2.88 million for the three months ended March 31, 2025, compared to negative $0.93 million for the same period in 2024.
• The company is offering up to 8,139,346 shares of common stock and/or pre-funded warrants, aiming to raise approximately $5 million in gross proceeds, with net proceeds estimated at $4.4 million after expenses.
• Stardust Power received notices from Nasdaq on March 18, 2025, and March 19, 2025, for non-compliance with the minimum market value of publicly held shares ($15 million) and minimum bid price ($1.00) rules, respectively, and an additional notice on April 3, 2024, for falling below the $50 million market value of listed securities requirement.
• The company's ability to continue as a going concern is dependent on raising additional capital, as current cash and anticipated investments are deemed inadequate for the next twelve months.
• Key strategic initiatives include securing feedstock through non-binding letters of intent with Usha Resources, IGX, and QXR, and an exclusive licensing agreement with KMX for vacuum membrane distillation technology.
• The company has acquired land in Port Muskogee, Oklahoma, for its refinery and is proceeding with engineering and environmental studies, with a total refinery cost estimated at $1.165 billion.
• Roshan Pujari, CEO, ceased to be a controlling shareholder as of April 16, 2025, due to a transfer of shares to an irrevocable trust, resulting in the company no longer qualifying as a controlled company under Nasdaq rules.
• The company has engaged Aegis Capital Corp. as the underwriter for the public offering, with a 7.0% underwriting discount and a 0.5% non-accountable expense allowance.
• Outstanding shares of common stock were 60,508,357 as of June 9, 2025, with an additional 10,430,800 shares underlying outstanding warrants.
• The company has identified material weaknesses in its internal control over financial reporting in prior years, which management believes were remediated in fiscal year 2024, but ongoing monitoring is required.

Sentiment

Score: 3

Explanation: The sentiment is low due to the company's development stage, significant accumulated losses, negative cash flow, and explicit 'going concern' doubt. The multiple Nasdaq delisting notices highlight severe operational and financial challenges. While there are strategic plans and potential, the immediate financial health and regulatory compliance issues present substantial risks.

Positives

• Stardust Power is strategically positioned to become a significant domestic supplier of battery-grade lithium carbonate (BGLC) in the United States, aiming for energy independence.
• The company's planned refinery in Muskogee, Oklahoma, is designed for a substantial capacity of up to 50,000 tpa, optimized for multiple lithium brine inputs, offering feedstock flexibility and reduced dependence on a single source.
• The chosen site in Port Muskogee offers advantageous logistics, existing industrial infrastructure, and a Foreign Trade Zone designation, potentially reducing costs.
• The company has engaged experienced engineering firms (Hatch Ltd. and Primero Group) and secured an exclusive license for KMX's vacuum membrane distillation (VMD) technology, aiming to reduce technology risk and enhance purification.
• Stardust Power emphasizes sustainable operations, including the use of brine feedstock (lower environmental impact than hard rock mining), partially electric refinery design for lower emissions, and a zero-liquid discharge (ZLD) system for water recycling.
• The company has received an illustrative incentives package of up to $257 million from the State of Oklahoma, subject to meeting milestones, and is applying for federal grants (e.g., Department of Energy, Defense Production Act).
• Non-binding letters of intent with Usha Resources, IGX, and QXR indicate potential future feedstock supply, and a non-binding letter agreement with Sumitomo contemplates a long-term commercial offtake agreement for 20,000-25,000 metric tons of lithium carbonate per year.
• The management team possesses decades of technical expertise in mining, lithium-ion technology, and capital raising, which is crucial for a development-stage company.
• The company has implemented robust corporate governance policies, including a Code of Business Conduct and Ethics, Privacy Policy, and a Related Party Transactions Policy.

Negatives

• The company has a limited operating history, having been incorporated on March 16, 2023, and has not yet commenced commercial production or generated any revenue.
• Stardust Power has incurred significant operating losses since inception, with an accumulated deficit of $56.43 million as of March 31, 2025, and negative operating cash flow of $2.88 million for the three months ended March 31, 2025.
• Management has identified conditions that raise substantial doubt about the company's ability to continue as a going concern, indicating a critical need for additional capital.
• The total estimated cost for the refinery is $1.165 billion, a significant capital requirement that the company is still seeking to finance through a mix of debt, equity, and grants, with no binding commitments for debt financing at this time.
• The company is currently non-compliant with Nasdaq's minimum bid price ($1.00), minimum market value of publicly held shares ($15 million), and minimum market value of listed securities ($50 million) rules, facing potential delisting if compliance is not regained by September 15, 2025, and September 30, 2025.
• Reliance on non-binding memoranda of understanding and letters of intent for feedstock supply and offtake agreements introduces significant commercial risk, as there is no guarantee these will culminate in binding, favorable terms.
• The lithium market has experienced substantial price decreases, with spot prices declining over 88% from December 2022 to March 2025, which could adversely impact future revenue and profitability.
• The company faces intense competition from well-capitalized established players in the lithium industry, who possess greater financial and technical resources.
• Potential changes in government policies, such as the executive order pausing disbursement of funds from the BIL/IRA, could impact the availability and timing of anticipated grants and incentives.
• The company's business model relies on a 'hub and spoke' refinery model, which introduces transportation costs that could increase and impact economic viability.
• The development of non-lithium battery technologies or shifts in battery chemistry could adversely affect demand for lithium compounds.
• The company identified material weaknesses in its internal control over financial reporting in prior years, which, if not effectively remediated or if new deficiencies arise, could impact financial reporting accuracy and investor confidence.

Risks

• Substantial doubt about the company's ability to continue as a going concern due to significant operating losses and accumulated deficit.
• Inability to raise additional capital through equity issuance or borrowings on satisfactory terms, or at all, which would severely restrict liquidity and impact business plans.
• Uncertainty regarding the commercial production of lithium from brine sources, as the company is a development-stage entity with no revenue from lithium sales.
• Risks related to exploration, construction, and extraction of brine by suppliers, including economic feasibility, geological formations, natural disasters, power outages, construction delays, and labor costs.
• Fluctuations in quarterly and annual operating and financial results due to factors like working capital, equipment malfunction, regulatory delays, and weather.
• Non-viability of lithium feedstock pipelines or inability to secure sufficient supply at economically feasible prices.
• Increased logistics costs in the 'hub and spoke' refinery model potentially making the project economically unviable.
• Failure to successfully commence and expand commercial operations, attract customers, and negotiate long-term supply agreements on favorable terms.
• Challenges in managing future growth, including strains on financial, technical, operational, and administrative resources.
• Products may not qualify for use by intended customers due to stringent quality requirements for lithium-ion batteries.
• Inability to secure long-term buyers for products due to evolving market dynamics, competitive pricing, logistical costs, or changes in demand.
• Delays and other obstacles in the successful completion of the Facility, including permitting, construction, procurement, and community opposition.
• High combustibility of concentrated lithium, posing fire and explosion hazards if not handled with appropriate protocols, potentially leading to operational impacts and increased insurance costs.
• Competition from well-capitalized companies and low-cost producers in the lithium brine industry, potentially impacting market share and profitability.
• Inability to qualify for existing federal and state grants and incentives, or delays/removal of such incentives due to policy changes.
• Adverse impact from the development of non-lithium battery technologies on demand for lithium compounds.
• Unpredictable fluctuations in lithium prices due to global economic and political trends, supply-demand dynamics, and new discoveries.
• Dependence of refinery development on projected demand for lithium-based end products, which may not materialize as expected.
• Dependence on consumer demand for electric vehicles, which is subject to competitive, cyclical, and volatile automotive industry factors.
• Inability to successfully negotiate final, binding terms for current non-binding memoranda of understanding and letters of intent for supply and offtake agreements.
• Adverse effects on business from escalation of geopolitical conflicts (e.g., Ukraine, Middle East) or global trade wars/tariffs.
• Increased operating costs and business impact from climate change legislation, regulation, and physical impacts like adverse weather.
• Material weaknesses or deficiencies in internal control over financial reporting, potentially leading to inaccurate financial reporting and loss of investor confidence.
• Volatility in the market price of common stock due to various factors, including company performance, industry changes, and macroeconomic conditions.
• Immediate and substantial dilution for new investors due to the public offering and potential future dilution from warrants, options, and convertible notes.
• Thinly traded common stock, potentially making it difficult for stockholders to sell shares at desired prices or at all.
• Risk of losing all or part of investment upon company dissolution if assets are insufficient to pay stockholders.
• Management's broad discretion over the use of net proceeds from the offering, which may not yield beneficial results.
• Purchasers under securities purchase agreements may have rights not available to other purchasers, creating potential disparities.
• Risk of delisting from Nasdaq due to non-compliance with listing requirements, negatively impacting liquidity and market price.
• No public market for Pre-Funded Warrants, limiting their liquidity.
• Lack of stockholder rights for Pre-Funded Warrant holders until exercise.
• Failure to adequately protect intellectual property or trade secrets, potentially impairing competitive position and leading to costly litigation.
• Claims challenging inventorship or ownership of intellectual property, leading to disputes and potential loss of rights.
• Trademark and trade name challenges, potentially impeding brand recognition.
• Lawsuits from third parties for alleged intellectual property infringement, leading to costs and diversion of management attention.
• Increased stakeholder focus on sustainability matters, requiring adaptation to evolving standards and potential reputational damage if not met.
• Substantial compliance requirements and increased operating costs due to environmental, health, and safety laws and regulations.
• Potential for significant monetary damages and fines from non-compliance with health and safety laws.
• Impact of changes in federal, state, and local regulations and policies on environmental attributes markets.
• Increased expenditures and adverse impact on operating cash flows due to compliance with data privacy regulations.
• Risk of securities litigation or stockholder activism, leading to substantial costs and diversion of resources.
• Inability to predict the ultimate value of warrants, which may expire worthless.
• Potential for future sales of substantial amounts of common stock to cause price decline and further dilution.
• Issuance of additional shares without stockholder approval, diluting ownership interests.
• Company's status as a 'controlled company' (though recently ceased) and its implications for corporate governance.
• Company's status as a holding company dependent on subsidiary distributions to pay taxes and dividends.
• Potential for hedging arrangements to result in financial losses or counterparty failure.
• Risks associated with future acquisitions or investments, including diversion of management attention, dilution, and unforeseen difficulties.

Future Outlook

Stardust Power anticipates significant future revenue from the sale of battery-grade lithium, primarily to the EV market, expecting to enter into long-term contracts with cap and ceiling pricing. The company projects its refinery to supply approximately 1.2 million EVs, contributing to 10-11% of the U.S. EV market by 2035. Future growth is dependent on securing additional funding, expanding its ecosystem of commercial arrangements with brine suppliers, and maintaining technology affiliations. The company expects operating expenses to increase as it sets up the facility and hires more personnel. The total refinery cost is estimated at $1.165 billion, which the company intends to finance through a mix of debt, equity, and potential government grants. The company is actively monitoring macroeconomic conditions and industry trends to adapt its business strategy.

Management Comments

• "Stardust Power is a development stage American manufacturer of battery-grade lithium products designed to supply for energy storage across e-mobility, grid infrastructure, and data centers industry and help to secure America’s leadership in the energy transition."
• "Stardust Power is focused on the midstream refinery process, and currently, is not undertaking any exploration activities."
• "Stardust Power seeks to establish a refinery serving as a hub to process multiple sources of lithium brine primarily from the U.S. to supply battery grade lithium carbonate to domestic battery manufacturers."
• "As a newly incorporated entity, Stardust Power is dependent on the expertise of, and agreements with, its various consultants to execute its business strategy."
• "The ability of the Company to continue as a going concern is dependent upon management’s plan to raise additional capital from issuance of equity or receive additional borrowings to fund the Company’s operating and investing activities."
• "Our management believes these costs [logistics] can be limited through concentration and or crystallization."
• "We intend to regain compliance with the Nasdaq listing standards by pursuing measures that are in our best interest and the best interest of our shareholders."
• "We believe that the cash on hand and additional investments available through issuance of new Common Stock will be inadequate to satisfy the Company’s working capital and capital expenditure requirements for at least the next twelve months."
• "We believe lithium will continue to play an important role in the transition to a lower carbon future and the fight against climate change. Likewise, we believe that meeting the growing demand for lithium compounds must be balanced with considerations for responsible refining across the spectrum of ESG issues and concerns."
• "By working with best-in-class partners and consultants who are industry experts, as well as by leveraging the knowledge of our senior executive team, we expect to be able to limit or address strategic risk and execution risk."

Industry Context

The U.S. lithium refining industry is rapidly evolving, driven by increasing demand for battery-grade lithium from the electric vehicle (EV) market, energy storage systems (ESS), and military applications. China currently dominates global lithium-ion battery production capacity, creating a national security priority for the U.S. to bolster domestic supply chains. Government incentives like the Inflation Reduction Act (IRA) and Bipartisan Infrastructure Law (BIL) aim to stimulate domestic manufacturing. Stardust Power positions itself as a key player in the midstream refining process, aiming to establish one of North America's largest refineries. Unlike competitors focusing on hard rock lithium, Stardust Power's central refinery is designed to optimize multiple lithium brine inputs, potentially offering a competitive advantage by minimizing dependence on a single supply source. Despite recent global lithium price decreases due to oversupply, long-term demand is expected to rise, with S&P Global forecasting price stabilization. The industry is seeing new entrants and expansions by existing firms like Albemarle, intensifying competition for feedstock and market share.

Comparison to Industry Standards

• Stardust Power's projected capacity of up to 50,000 metric tons per annum (tpa) of battery-grade lithium carbonate (BGLC) aims to make it one of the largest lithium refineries in North America, comparable in scale to announced projects by Tesla (Texas refinery supporting 1 million EVs by 2025) and ExxonMobil (Arkansas refinery supporting over 1 million EVs by 2030).
• The company's focus on lithium brine inputs and Direct Lithium Extraction (DLE) technology differentiates it from hard rock lithium refineries, which are more common among other U.S. players like Ioneer Ltd (Rhyolite Ridge Lithium-Boron Project in Nevada) and Lithium Americas (Thacker Pass project in Nevada targeting mechanical completion of Phase 1 by 2027).
• Stardust Power's use of DLE technology, while emerging, is intended to offer environmental advantages (reduced environmental footprint, less freshwater usage, enhanced purity) compared to traditional evaporation ponds, aligning with evolving industry sustainability standards.
• The company's planned chemical conversion process for BGLC is described as 'mature, proven and well understood,' having been 'deployed substantially in South America,' suggesting reliance on established methods rather than entirely novel, unproven technologies for the core refining process.
• The company's strategy to screen for a broader set of contaminants and blend different types of feedstock aims to differentiate its product quality and supply chain resilience compared to other lithium refineries.
• The estimated total refinery cost of $1.165 billion for 50,000 tpa capacity is a significant investment, reflecting the capital intensity of large-scale lithium refining projects in the industry.
• The company's intention to enter into 10-year long-term sales contracts with EV manufacturers, with cap and floor pricing strategies, aligns with industry norms for managing commodity price volatility in the critical minerals sector.

Management Changes

Corporate Governance

Legal Proceedings

• The company is currently not aware of any legal proceedings or claims that it believes will have a material adverse impact on its business, financial condition, or operating results.
• The company is subject to certain routine legal and regulatory proceedings, as well as demands and claims that arise in the normal course of business, for which provisions are made when a liability is probable and estimable.

Related Party Transactions

• **Short-term loans from related parties:** In December 2024, the company entered into binding term sheets with Endurance Antarctica Partners II, LLC (an affiliate of a director and shareholder) for a $1,750,000 loan and with DRE Chicago LLC (whose principal is Paramita Das, Chief Strategy Officer and Senior Advisor to CEO) and other lenders for an aggregate of $1,800,000 in loans. These loans bore 15% interest and matured in March 2025. Both principal and accrued interest were fully repaid by March 31, 2025. As part of these agreements, the company agreed to issue 'Equity Kickers' in Common Stock ($3,500,000 to Endurance and $2,700,000 to lenders including DRE Chicago) and warrants (up to 50% of Common Stock issued as Equity Kicker at $11.50 exercise price). Subsequent to March 31, 2025, the equity shares and warrants were issued to Endurance (977,653 shares and 488,826 warrants) and DRE Chicago (104,748 shares and 52,374 warrants) on April 24, 2025.
• **Consulting Agreement with DRE Chicago LLC:** On September 18, 2024, the company entered into a consulting agreement for $500,000 with DRE Chicago LLC, whose principal is Paramita Das, Chief Strategy Officer and Senior Advisor to CEO.
• **Services Agreement with VIKASA Capital Partners LLC (VCP):** From March 16, 2023, to December 31, 2023, $980,000 was paid to VCP (an affiliate of the company) for corporate and advisory services, including organization setup, capital market advisory, and financial accounting. All services were completed by December 31, 2024, with no pending dues.
• **Consulting Agreement with 7636 Holdings LLC:** From March 16, 2023, to September 19, 2023, $180,806 was payable to 7636 Holdings LLC (an affiliate) for strategic, business, financial, operations, and industry advisory services. The agreement was terminated, and no dues are outstanding as of December 31, 2024.
• **Promissory Notes with Related Parties (2023):** In March 2023, the company entered into unsecured notes payable with three related parties (Energy Transition Investors LLC, VIKASA Clean Energy I LP, and Roshan Pujari) for an aggregate of up to $1,000,000. These notes accrued interest at 3.71% and were fully repaid by December 31, 2023.
• **Private Warrants:** The Sponsor (Global Partner Sponsor II LLC) purchased 5,566,667 private warrants at $1.50 per warrant, generating $8,350,000 gross proceeds. These warrants are non-redeemable by the company as long as held by the Sponsor or permitted transferees and are exercisable for common stock at $11.50 per share.
• **Sponsor Earnout Shares:** As part of the Business Combination, 1,000,000 shares were issued to the Sponsor, subject to vesting based on common stock price thresholds ($12.00 and $14.00 VWAP) or a change in control, with forfeiture if conditions are not met by the eighth anniversary of the Closing Date. These are classified as a liability.
• **Amended and Restated Registration Rights Agreement:** GPAC II, the Sponsor, and certain equityholders of Stardust Power are party to this agreement, granting customary registration rights for common stock and warrants.
• **Stockholder Agreement:** Entered into on the Closing Date with the Sponsor and Roshan Pujari and his affiliates, granting the Sponsor the right to designate one nominee to the Board until their aggregate ownership decreases to one-half of their initial interest.
• **Director and Officer Indemnification Agreements:** The company has entered into separate indemnification agreements with its directors and executive officers, in addition to provisions in its Certificate of Incorporation and Bylaws, to indemnify them to the fullest extent permitted by law.

Stakeholder Impact

• **Shareholders:** Face significant dilution from the current public offering and potential future exercises of warrants and options. Existing shareholders will experience immediate and substantial dilution. The market price of common stock is highly volatile and thinly traded, posing liquidity risks. Nasdaq delisting could further reduce liquidity and investor confidence. The company's 'going concern' doubt presents a fundamental risk to investment value. Concentration of ownership by a small number of stockholders may limit the influence of other shareholders.
• **Employees:** The company's ability to manage future growth and secure additional capital will impact job security and potential for new hires. Stock-based compensation plans are in place, but their value is tied to the volatile stock price. The company's commitment to hiring from local communities near the facility is a positive for regional employment.
• **Customers (Battery Manufacturers, OEMs, U.S. Defense):** The company aims to provide a domestic, sustainable, and cost-effective supply of battery-grade lithium, which could enhance supply chain stability for U.S.-based manufacturers. However, delays in facility completion or failure to meet quality standards could disrupt potential supply. Non-binding offtake agreements introduce uncertainty for future supply commitments.
• **Suppliers (Lithium Brine Producers, Technology Partners):** The company's business model relies on securing feedstock from multiple suppliers and maintaining relationships with technology partners. Failure to finalize binding agreements or if suppliers face economic viability issues could impact their business with Stardust Power. The company's investment in IRIS Metals and promissory notes to IGX and IGL indicate direct financial relationships with potential suppliers.
• **Creditors:** The company's 'going concern' doubt and significant accumulated deficit pose risks to creditors. The company relies on debt financing, and its ability to repay loans is dependent on future capital raises and commercial success. Loans from related parties have been repaid, but future debt may carry high interest rates or restrictive covenants.
• **Local Communities (Muskogee, Oklahoma):** The establishment of the refinery is expected to bring job creation and economic benefits to the region, particularly in economically backward areas. The company's commitment to community outreach and providing educational opportunities is a positive social impact. However, potential environmental impacts and construction delays could also affect local communities.

Next Steps

• Regain compliance with Nasdaq's minimum bid price ($1.00), minimum market value of publicly held shares ($15 million), and minimum market value of listed securities ($50 million) rules by September 15, 2025, and September 30, 2025, respectively.
• Successfully complete the current public offering of common stock and pre-funded warrants to secure estimated net proceeds of $4.4 million for working capital and general corporate purposes.
• Continue to raise additional capital through equity issuance or borrowings to fund operating and investing activities, as current funds are deemed inadequate for the next twelve months.
• Proceed with the construction of the lithium refinery in Muskogee, Oklahoma, with Phase 1 (25,000 tpa capacity) expected to span 24-30 months post-Final Investment Decision (FID).
• Complete the FEL-3 report by Primero Group in the first half of 2025 to inform project viability decisions and assist in obtaining project finance.
• Negotiate and finalize binding supply agreements for lithium brine feedstock with partners like Usha Resources, IGX, and QXR, and definitive long-term offtake agreements with potential customers like Sumitomo.
• Continue to apply for and secure federal and state grants and incentives, such as those from the Department of Energy and State of Oklahoma, to offset refinery costs.
• Monitor and address any future material weaknesses or deficiencies in internal control over financial reporting.
• Develop and implement more efficient production capabilities based on mineral-rich brine and DLE technologies.
• Recruit additional personnel for general operational tasks and facility setup.

Key Dates

Recommendation

Keywords

Lithium, Battery-grade lithium carbonate, EV market, Energy storage, Direct Lithium Extraction, Lithium refinery, Muskogee Oklahoma, SEC filing, S-1, Public offering, Pre-funded warrants, Nasdaq delisting, Going concern, Capital raise, Sustainable operations, Critical minerals, Supply chain, Geopolitical risk, Financial losses, Accumulated deficit, Corporate governance, Related party transactions, Intellectual property, Environmental regulations, Stock dilution