Filed
Pursuant to Rule 424(b)(3)
Registration
No. 333-281160
PROSPECTUS
SUPPLEMENT NO. 1
(to
Prospectus dated August 9, 2024)
![](https://www.sec.gov/Archives/edgar/data/1831979/000149315224032280/form424b3_001.jpg)
STARDUST
POWER INC.
Up
to 55,190,875 Shares of Common Stock
Up
to 10,566,596 Shares of Common Stock Underlying Warrants
Up
to 5,566,667 Warrants to Purchase Common Stock
This
prospectus supplement supplements the prospectus dated August 9, 2024 (the “Prospectus”), which forms a part of our
registration statement on Form S-1 (No. 333-281160). This prospectus supplement is being filed to update and supplement the information
in the Prospectus with the information contained in our Form 10-Q for the fiscal quarter ended June 30, 2024 filed with the Securities
and Exchange Commission (the “SEC”) on August 14, 2024 (the “Form 10-Q”). Accordingly, we have
attached the Form 10-Q to this prospectus supplement.
The
Prospectus and this prospectus supplement relate to the offer and resale from time to time by the selling securityholders named in this
Registration Statement or their permitted transferees (the “Selling Securityholders”) of the following:
(i)
up to 55,190,875 shares of common stock, par value $0.0001 per share (the “Common Stock”), consisting of:
(a) |
up
to 127,777 shares of Common Stock issued to former GPAC II Public Shareholders (as defined in the Prospectus) at Closing (as defined
in the Prospectus) pursuant to certain Non-Redemption Agreements (as defined in the Prospectus); |
|
|
(b) |
up
to 4,000,000 shares of Common Stock (including 1,000,000 shares that are subject to forfeiture) issued to the Sponsor at Closing
in exchange for an equivalent number of Class B ordinary shares, par value $0.0001 per share,
of GPAC II that were originally purchased for approximately $0.003 per share; |
|
|
(c) |
up
to 1,077,541 shares of Common Stock issued to PIPE Investors (as defined in the Prospectus) at Closing pursuant to certain PIPE Subscription
Agreements (as defined in the Prospectus) at a purchase price of $9.35 per share; |
|
|
(d) |
up
to 2,024,985 shares of Common Stock held by holders of vested RSU awards; |
|
|
(e) |
up
to 42,393,905 shares of Common Stock issued to certain third parties and affiliates of Stardust Power at Closing (which in each case
were issued as consideration in the Business Combination (as defined in the Prospectus) based on a value of $10.00 per share); and |
|
|
(f) |
up
to 5,566,667 shares of Common Stock issuable upon exercise of the Private Warrants (as defined in the Prospectus); and |
(ii)
up to 5,566,667 Private Warrants, which were originally purchased at a price of $1.50 per Private Warrant.
We
will not receive any proceeds from the sale of shares of Common Stock or Warrants (as defined in the Prospectus) by the Selling Securityholders
pursuant to the Prospectus or in any supplement to the Prospectus, except upon the exercise of Warrants.
The
shares of Common Stock, not including Common Stock issuable upon exercise of the Warrants, being offered for resale pursuant to the Prospectus
or in any supplement to the Prospectus by the Selling Securityholders represent approximately 99.72% of shares of Common Stock (and assuming
the exercise of all Warrants, 91.48% of Common Stock) outstanding as of July 31, 2024. Given the substantial number of shares of Common
Stock being registered for potential resale by Selling Securityholders pursuant to the Prospectus and this prospectus supplement, the
sale of shares of Common Stock or Warrants by the Selling Securityholders, or the perception in the market that the Selling Securityholders
of a large number of holders of Common Stock or Warrants intend to sell such securities, could increase the volatility of the market
price of our Common Stock or Warrants or result in a significant decline in the public trading price of our Common Stock or Warrants.
Even if our trading price of Common Stock is significantly below $10.00 per share, the offering price for the units offered in the IPO
(as defined in the Prospectus), certain of the Selling Securityholders, including the Sponsor, may still have an incentive to sell shares
of Common Stock, because they purchased the shares at prices lower than the public investors or the current trading price of our Common
Stock.
We
will only receive proceeds from the exercise of Warrants if and when the holders of the Warrants choose to exercise them. The exercise
of the Warrants, and any proceeds we may receive from their exercise, are highly dependent on the price of our Common Stock and the spread
between the exercise price of the Warrants and the price of our Common Stock at the time of exercise. If the market price of our Common
Stock is less than the exercise price of a holder’s Warrants, it is unlikely that holders will choose to exercise. There can be
no assurance that the Warrants will be in the money prior to their expiration. In addition, our Warrant holders have the option to exercise
the Warrants on a cashless basis in certain circumstances. See “Description of Securities - Warrants” in the Prospectus.
As such, it is possible that we may never generate any cash proceeds from the exercise of our Warrants.
We
will bear all costs, expenses and fees in connection with the registration of the securities. The Selling Securityholders will bear all
commissions and discounts, if any, attributable to their respective sales of the securities.
Our
registration of the securities covered by the Prospectus or in any prospectus supplement does not mean that either we or the Selling
Securityholders will issue, offer or sell, as applicable, any of the Common Stock. The Selling Securityholders may offer and sell the
securities covered by the Prospectus or in any prospectus supplement in a number of different ways and at varying prices. We provide
more information about how the Selling Securityholders may sell the shares in the section entitled “Plan of Distribution”
in the Prospectus.
You
should read the Prospectus, this prospectus supplement and any prospectus supplement or amendment carefully before you invest in our
Common Stock or Warrants.
Our
Common Stock and Warrants are listed on the Nasdaq Global Market (“Nasdaq”) under the symbols “SDST” and
“SDSTW,” respectively. On August 13, 2024, the last reported sales price of our Common Stock was $10.12 per share
and the last reported sales price of our Warrants was $0.50 per Warrant.
Our
Chief Executive Officer, Roshen Pujari (hereinafter, Roshan Pujari) owns a majority of the voting power of our issued and outstanding
Common Stock. As a result, we qualify as a “controlled company” within the meaning of the corporate governance standards
of Nasdaq.
We
are an “emerging growth company” as defined under U.S. federal securities laws and, as such, have elected to comply with
reduced public company reporting requirements. The Prospectus and this prospectus supplement comply with the requirements that apply
to an issuer that is an emerging growth company. This prospectus supplement updates and supplements the information in the Prospectus
and is not complete without, and may not be delivered or utilized except in combination with, the Prospectus, including any amendments
or supplements thereto. This prospectus supplement should be read in conjunction with the Prospectus and if there is any inconsistency
between the information in the Prospectus and this prospectus supplement, you should rely on the information in this prospectus supplement.
Investing
in our securities involves a high degree of risk. You should review carefully the risks and uncertainties described in the section titled
“Risk Factors” beginning on page 6 of the Prospectus, and under similar headings in any amendments or supplements
to the Prospectus.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities, or passed
upon the accuracy or adequacy of the Prospectus or this prospectus supplement. Any representation to the contrary is a criminal offense.
The
date of this prospectus supplement is August 14, 2024.
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the quarterly period ended June 30, 2024
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the transition period from __________ to __________
Commission
File Number: 001-39875
STARDUST
POWER INC.
(Exact
name of registrant as specified in its charter)
Delaware |
|
99-3863616 |
(State or other jurisdiction
of
incorporation or organization) |
|
(I.R.S. Employer
Identification Number) |
15
E. Putnam Ave, Suite 378
Greenwich, CT |
|
06830 |
(Address of principal executive
offices) |
|
(Zip Code) |
Registrant’s
telephone number, including area code: (800) 742-3095
Not
applicable
(Former
name or former address, if changed since last report)
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on Which Registered |
Common Stock, par value
$0.0001 per share |
|
SDST |
|
The
Nasdaq Global Market |
Redeemable warrants,
each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 |
|
SDSTW |
|
The
Nasdaq Global Market |
Securities
registered pursuant to Section 12(g) of the Act: None
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate
by check mark whether the registrant has submitted electronically every Interactive Date File required to be submitted and pursuant to
Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files). Yes ☒ No ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer,” “smaller
reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer |
☐ |
Accelerated filer |
☐ |
Non-accelerated filer |
☒ |
Smaller reporting company |
☒ |
|
Emerging growth company |
☒ |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ☐
As
of August 14, 2024, there were 47,699,608 shares of common stock, par value $0.0001 per share, issued and outstanding.
EXPLANATORY
NOTE
On
July 8, 2024 (the “Closing Date”), subsequent to the fiscal quarter ended June 30, 2024, the fiscal quarter to which
this Quarterly Report on Form 10-Q (this “Quarterly Report”) relates, Global Partner Acquisition Corp II (“GPAC
II”) (now known as Stardust Power Inc.), a Delaware corporation that is our predecessor, consummated the previously announced
business combination (the “Business Combination”) pursuant to that certain 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 direct
wholly owned subsidiary of GPAC II (“Second Merger Sub”), and Stardust Power Inc., a Delaware corporation (the
“Company,” “Stardust” or “Stardust Power”). On the Closing Date, pursuant to the Business
Combination Agreement, prior to the consummation of the Mergers (as defined below) contemplated by the Business Combination
Agreement, and upon receipt of Supermajority Acquiror Shareholder Approval (as defined therein), GPAC II merged with and
into Stardust Power, with Stardust Power being the surviving company.
Unless
stated otherwise, this Quarterly Report contains information about the Company before the Business Combination. References to the “Company,”
“our,” “us” or “we” in this Quarterly Report refer to GPAC II and its consolidated subsidiaries before
the consummation of the Business Combination and to Stardust Power and its consolidated subsidiaries after the Business Combination,
as the context suggests.
Except
as otherwise expressly provided herein, the information in this Quarterly Report does not reflect the consummation of the Business Combination,
which, as discussed above, occurred subsequent to the period covered hereunder.
STARDUST
POWER INC
FORM
10-Q FOR THE QUARTER ENDED
June 30, 2024
Table
of Contents
PART
I – FINANCIAL INFORMATION
ITEM
1. FINANCIAL STATEMENTS
Stardust
Power Inc.
(F/K/A
Global Partner Acquisition Corp II)
Condensed
Consolidated Balance Sheets
| |
June 30, 2024 | | |
December 31, 2023 | |
| |
(unaudited) | | |
| |
ASSETS | |
| | | |
| | |
Current assets | |
| | | |
| | |
Cash and cash equivalents | |
$ | - | | |
$ | 22,000 | |
Prepaid expenses | |
| 405,000 | | |
| 14,000 | |
Total current assets | |
| 405,000 | | |
| 36,000 | |
| |
| | | |
| | |
Cash held in trust account | |
| 1,531,000 | | |
| 43,704,000 | |
Total assets | |
$ | 1,936,000 | | |
$ | 43,740,000 | |
| |
| | | |
| | |
LIABILITIES AND SHAREHOLDERS’ DEFICIT | |
| | | |
| | |
Current liabilities | |
| | | |
| | |
Accounts payable | |
$ | 1,937,000 | | |
$ | 64,000 | |
Promissory note – related party | |
| 755,000 | | |
| 755,000 | |
Extension promissory notes – related party | |
| 3,372,000 | | |
| 2,726,000 | |
Accrued liabilities | |
| 5,730,000 | | |
| 4,327,000 | |
Total current liabilities | |
| 11,794,000 | | |
| 7,872,000 | |
Other liabilities | |
| | | |
| | |
Warranty liability | |
| 1,906,000 | | |
| 337,000 | |
Deferred underwriting commission | |
| 10,500,000 | | |
| 10,500,000 | |
Total liabilities | |
| 24,200,000 | | |
| 18,709,000 | |
Commitments and contingencies | |
| - | | |
| - | |
Class A ordinary shares subject to possible redemption; 134,550 and 3,931,719 shares, respectively (at approximately $11.38 and $11.12 per share at June 30, 2024 and December 31, 2023, respectively) | |
| 1,531,000 | | |
| 43,704,000 | |
| |
| | | |
| | |
Shareholders’ Deficit: | |
| | | |
| | |
Preference shares, $0.0001 par value; 5,000,000 shares authorized, none issued or outstanding at June 30, 2024 and December 31, 2023 | |
| - | | |
| - | |
Class A ordinary shares, $0.0001
par value, 500,000,000
authorized shares, 7,400,000 and 0
shares, respectively, issued and outstanding at June 30, 2024 and December 31, 2023 (excluding 134,550
and 3,931,719
shares, respectively, subject to possible redemption at June 30, 2024 and December 31, 2023) | |
| 1,000 | | |
| - | |
Class B ordinary shares, $0.0001
par value, 50,000,000
authorized shares, 100,000 and 7,500,000
shares, respectively issued and outstanding at June 30, 2024 and December 31, 2023 | |
| - | | |
| 1,000 | |
Ordinary shares | |
| - | | |
| 1,000 | |
Additional paid-in capital | |
| - | | |
| - | |
Accumulated deficit | |
| (23,796,000 | ) | |
| (18,674,000 | ) |
Total shareholders’ deficit | |
| (23,795,000 | ) | |
| (18,673,000 | ) |
Total liabilities, Class A ordinary shares subject to possible redemption and shareholders’ deficit | |
$ | 1,936,000 | | |
$ | 43,740,000 | |
See
accompanying notes to unaudited condensed consolidated financial statements.
Stardust
Power Inc.
(F/K/A
Global Partner Acquisition Corp II)
Condensed
Consolidated Statements of Operations
(unaudited)
| |
June 30, 2024 | | |
June 30, 2023 | | |
June 30, 2024 | | |
June 30, 2023 | |
| |
Three Months Ended | | |
Six Months Ended | |
| |
June 30, 2024 | | |
June 30, 2023 | | |
June 30, 2024 | | |
June 30, 2023 | |
Revenue | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
General and administrative expenses | |
| (1,462,000 | ) | |
| (313,000 | ) | |
| (3,553,000 | ) | |
| (1,391,000 | ) |
Gain from settlement and release of liabilities | |
| - | | |
| - | | |
| - | | |
| 2,961,000 | |
Operating (loss)/ income | |
| (1,462,000 | ) | |
| (313,000 | ) | |
| (3,553,000 | ) | |
| 1,570,000 | |
Other incomes (expenses) | |
| | | |
| | | |
| | | |
| | |
Income from cash and investments held in the Trust Account | |
| 215,000 | | |
| 471,000 | | |
| 488,000 | | |
| 1,392,000 | |
Write-off contingent warrants associated with shares redeemed | |
| - | | |
| - | | |
| - | | |
| 130,000 | |
Change in fair value of warrant liability | |
| (928,000 | ) | |
| 1,964,000 | | |
| (1,569,000 | ) | |
| (56,000 | ) |
Total other income/ (expenses) | |
| (713,000 | ) | |
| 2,435,000 | | |
| (1,081,000 | ) | |
| 1,466,000 | |
| |
| | | |
| | | |
| | | |
| | |
Net (Loss)/ income | |
$ | (2,175,000 | ) | |
$ | 2,122,000 | | |
$ | (4,634,000 | ) | |
$ | 3,036,000 | |
| |
| | | |
| | | |
| | | |
| | |
Weighted average Class A ordinary shares outstanding -– basic and diluted | |
| 8,796,000 | | |
| 3,932,000 | | |
| 5,472,000 | | |
| 5,372,000 | |
Net (loss)/ income per Class A ordinary share – basic and diluted | |
$ | (0.24 | ) | |
$ | 0.19 | | |
$ | (0.49 | ) | |
$ | 0.24 | |
Weighted average Class B ordinary shares outstanding -– basic and diluted | |
| 425,000 | | |
| 7,500,000 | | |
| 3,963,000 | | |
| 7,500,000 | |
Net (loss) income per Class B ordinary share – basic and diluted | |
$ | (0.24 | ) | |
$ | 0.19 | | |
$ | (0.49 | ) | |
$ | 0.24 | |
See
accompanying notes to unaudited condensed consolidated financial statements.
Stardust
Power Inc.
(F/K/A
Global Partner Acquisition Corp II)
Condensed
Consolidated Statements of Changes in Shareholders’ Deficit
(unaudited)
For
three months ended June 30, 2024
|
|
|
|
|
|
| |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Deficit | |
| |
Class A
Ordinary shares
|
|
Class B
Ordinary shares | | |
Additional
Paid-in | | |
Accumulated | | |
Total
Shareholders’ | |
| |
Shares |
|
Amount |
|
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Deficit | |
Balance at March 31, 2024 | |
|
- |
|
$ |
- |
|
| 7,500,000 | | |
$ | 1,000 | | |
$ | - | | |
$ | (21,406,000 | ) | |
$ | (21,405,000 | ) |
Conversion of class B to class A shares | |
|
7,400,000 |
|
|
1,000 |
|
| (7,400,000 | ) | |
| (1,000 | ) | |
| - | | |
| - | | |
| - | |
Accretion in value of class A ordinary shares subject to redemption | |
|
- |
|
|
- |
|
| - | | |
| - | | |
| - | | |
| (215,000 | ) | |
| (215,000 | ) |
Net (loss) | |
|
- |
|
|
- |
|
| - | | |
| - | | |
| - | | |
| (2,175,000 | ) | |
| (2,175,000 | ) |
Balance as at June 30, 2024 | |
|
7,400,000 |
|
$ |
1,000 |
|
| 100,000 | | |
$ | - | | |
$ | - | | |
$ | (23,796,000 | ) | |
$ | (23,795,000 | ) |
For
six months ended June 30, 2024
|
|
Class A
Ordinary shares | |
Class B
Ordinary shares | | |
Additional
Paid-in | | |
Accumulated | | |
Total
Shareholders’ | |
|
|
Shares |
|
Amount | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Deficit | |
Balance at December 31, 2023 |
|
|
- |
|
$ |
- | |
| 7,500,000 | | |
$ | 1,000 | | |
$ | - | | |
$ | (18,674,000 | ) | |
$ | (18,673,000 | ) |
Conversion of class B to class A shares |
|
|
7,400,000 |
|
|
1,000 | |
| (7,400,000 | ) | |
| (1,000 | ) | |
| - | | |
| - | | |
| - | |
Accretion in value of class A ordinary shares subject to redemption |
|
|
- |
|
|
- | |
| - | | |
| - | | |
| - | | |
| (488,000 | ) | |
| (488,000 | ) |
Net (loss) |
|
|
- |
|
|
- | |
| - | | |
| - | | |
| - | | |
| (4,634,000 | ) | |
| (4,634,000 | ) |
Balance as at June 30, 2024 |
|
|
7,400,000 |
|
$ |
1,000 | |
| 100,000 | | |
$ | - | | |
$ | - | | |
$ | (23,796,000 | ) | |
$ | (23,795,000 | ) |
For
three months ended June 30, 2023
|
|
Class A
Ordinary shares | |
Class B
Ordinary shares | | |
Additional
Paid-in | | |
Accumulated | | |
Total
Shareholders’ | |
|
|
Shares |
|
Amount | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Deficit | |
Balance as at March 31, 2023 |
|
|
- |
|
$ |
- | |
| 7,500,000 | | |
$ | 1,000 | | |
$ | - | | |
$ | (15,192,000 | ) | |
$ | (15,191,000 | ) |
Accretion in value of class A ordinary shares subject to redemption |
|
|
- |
|
|
- | |
| - | | |
| - | | |
| - | | |
| (921,000 | ) | |
| (921,000 | ) |
Net income |
|
|
- |
|
|
- | |
| - | | |
| - | | |
| - | | |
| 2,122,000 | | |
| 2,122,000 | |
Balance as at June 30, 2023 |
|
|
- |
|
$ |
- | |
| 7,500,000 | | |
$ | 1,000 | | |
$ | - | | |
$ | (13,991,000 | ) | |
$ | (13,990,000 | ) |
For
six months ended June 30, 2023
|
|
Class A
Ordinary shares | |
Class B
Ordinary shares | | |
Additional
Paid-in | | |
Accumulated | | |
Total
Shareholders’ | |
|
|
Shares |
|
Amount | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Deficit | |
Balance as at December 31, 2022 | |
|
- |
|
$ |
- |
|
| 7,500,000 | | |
$ | 1,000 | | |
$ | - | | |
$ | (14,735,000 | ) | |
$ | (14,734,000 | ) |
Balance | |
|
- |
|
$ |
- |
|
| 7,500,000 | | |
$ | 1,000 | | |
$ | - | | |
$ | (14,735,000 | ) | |
$ | (14,734,000 | ) |
Accretion in value of class A ordinary shares subject to redemption | |
|
- |
|
|
- |
|
| - | | |
| - | | |
| - | | |
| (2,292,000 | ) | |
| (2,292,000 | ) |
Net income | |
|
- |
|
|
- |
|
| - | | |
| - | | |
| - | | |
| 3,036,000 | | |
| 3,036,000 | |
Net income (loss) | |
|
|
|
|
|
|
| - | | |
| - | | |
| - | | |
| 3,036,000 | | |
| 3,036,000 | |
Balance as at June 30, 2023 | |
|
- |
|
$ |
- |
|
| 7,500,000 | | |
$ | 1,000 | | |
$ | - | | |
$ | (13,991,000 | ) | |
$ | (13,990,000 | ) |
Balance | |
|
- |
|
$ |
- |
|
| 7,500,000 | | |
$ | 1,000 | | |
$ | - | | |
$ | (13,991,000 | ) | |
$ | (13,990,000 | ) |
See
accompanying notes to unaudited condensed consolidated financial statements.
Stardust
Power Inc.
(F/K/A
Global Partner Acquisition Corp II)
Condensed
Consolidated Statements of Cash Flows
(unaudited)
| |
June 30, 2024 | | |
June 30, 2023 | |
| |
Six Months Ended | |
| |
June 30, 2024 | | |
June 30, 2023 | |
Cash flows from operating activities: | |
| | | |
| | |
Net (loss)/ income | |
$ | (4,634,000 | ) | |
$ | 3,036,000 | |
| |
| | | |
| | |
Adjustments to reconcile net (loss)/ income to net cash provided by (used in) operating activities: | |
| | | |
| | |
Income from cash and investments held in Trust Account | |
| (488,000 | ) | |
| (1,392,000 | ) |
Change in fair value of warrant liability | |
| 1,569,000 | | |
| (74,000 | ) |
Changes in operating assets and liabilities: | |
| | | |
| | |
Prepaid expenses and other current assets | |
| (391,000 | ) | |
| (134,000 | ) |
Accounts payable | |
| 1,873,000 | | |
| (60,000 | ) |
Accrued liabilities and other current liabilities | |
| 1,403,000 | | |
| (1,995,000 | ) |
Net cash used in operating activities | |
| (668,000 | ) | |
| (619,000 | ) |
Cash flows from investing activities: | |
| | | |
| | |
Cash deposited in Trust Account | |
| - | | |
| (900,000 | ) |
Cash withdrawn from Trust Account to pay redemptions | |
| 42,661,000 | | |
| 265,050,000 | |
Net cash provided by investing activities | |
| 42,661,000 | | |
| 264,150,000 | |
Cash flows from financing activities: | |
| | | |
| | |
Redemption of 3,797,169 and
26,068,281 Class A common shares in 2024 and 2023, respectively | |
| (42,661,000 | ) | |
| (265,050,000 | ) |
Repayment of Promissory Note – related party | |
| - | | |
| (30,000 | ) |
Proceeds of Extension Promissory Note – related party | |
| 646,000 | | |
| 1,454,000 | |
Net cash used in financing activities | |
| (42,015,000 | ) | |
| (263,626,000 | ) |
| |
| | | |
| | |
Net increase in cash | |
| (22,000 | ) | |
| (95,000 | ) |
Cash at the beginning of the period | |
| 22,000 | | |
| 101,000 | |
Cash at the end of the period | |
$ | - | | |
$ | 6,000 | |
See
accompanying notes to unaudited condensed consolidated financial statements.
Stardust
Power Inc.
(F/K/A
Global Partner Acquisition Corp II)
Notes
to Condensed Consolidated Financial Statements June 30, 2024 (unaudited)
Note
1 – Description of Organization and Business Operations
Stardust
Power Inc. formerly known as Global Partner Acquisition Corp II was incorporated under the laws of the Cayman Islands as an exempted
company on November 3, 2020. Together with its wholly owned subsidiaries First Merger Sub and Second Merger Sub, both incorporated or formed in Delaware in November
2023, the Company was formed for the purpose of effecting a merger,
capital share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. The Company is an “emerging growth company,” as defined in Section 2(a) of the
Securities Act of 1933, as amended, or the “Securities Act,” as modified by the Jumpstart Our Business Startups Act of 2012
(the “JOBS Act”).
Domestication
and Mergers
As
previously announced, GPAC II, a Cayman Islands exempted company, entered into that certain Business Combination Agreement pursuant
to which on July 8, 2024 (the “Closing Date”), prior to the consummation of the Mergers (as defined below) contemplated
by the Business Combination Agreement, and upon receipt of Supermajority Acquiror Shareholder Approval (as defined therein), GPAC II
domesticated as a Delaware corporation (the “Domestication”) in accordance with Section 388 of the Delaware General
Corporation Law and Sections 206 to 209 of the Companies Act (As Revised) of the Cayman Islands.
Prior
to the Domestication, each GPAC II Class B ordinary share, par value $0.0001
per share (the “Class B Ordinary Share”),
outstanding was converted into one (1) GPAC II Class A ordinary share, par value $0.0001
per share (the “Class A Ordinary Share”
or “Public Share,” and together with Class B Ordinary Shares, the “GPAC II Ordinary Shares”), in accordance with
GPAC II’s amended and restated memorandum and articles of association (the “Articles of Association”) and as set forth
in the Sponsor Letter Agreement, dated as of January 11, 2021, as amended by that certain Letter Agreement Amendment, dated as of January
13, 2023, by and among Global Partner Sponsor II, LLC (the “Sponsor”), GPAC II, and GPAC II executive officers and directors
(the “Class B Ordinary Share conversion”). In connection with the Domestication, (i) each Class A Ordinary Share outstanding
immediately prior to the effective time of the Domestication and following the Class B Ordinary Share conversion was converted into one
share of GPAC II common stock, par value $0.0001
per share (the “GPAC II Common Stock”)
and (ii) each then-issued and outstanding whole warrant exercisable for one Class A Ordinary Share was converted into a warrant exercisable
for one share of GPAC II Common Stock at an exercise price of $11.50
per share on the terms and conditions set forth
in the Warrant Agreement, dated as of January 11, 2021, by and between GPAC II and Continental Stock Transfer & Trust Company, as
warrant agent (as amended or amended and restated from time to time). In connection with clauses (i) and (ii) of this paragraph, each
issued and outstanding unit of GPAC II that has not been previously separated into the underlying Class A Ordinary Shares and the underlying
GPAC II warrants was cancelled, entitling the holder thereof to one share of GPAC II Common Stock and one-sixth of one GPAC II warrant.
The
Business Combination Agreement provided for, among other things, the following, all of which occurred on July 8, 2024: (i) the Domestication,
(ii) following the Domestication, First Merger Sub merged with and into Stardust Power, with Stardust Power being the surviving company
(also referred to herein as the “Combined Company”) in the merger (the “First Merger”) and, (iii) immediately
following the First Merger, and as part of the same overall transaction as the First Merger, Stardust Power merged with and into Second
Merger Sub (the “Second Merger” and, together with the First Merger, the “Mergers”), with Merger Sub II being
the surviving company of the Second Merger (Merger Sub II, in its capacity as the surviving company of the Second Merger, the “Surviving
Company”), and as a result of which the Surviving Company became a wholly-owned subsidiary of GPAC II. At Closing, (i) the Sponsor
forfeited an aggregate of 3,500,000
GPAC II Ordinary Shares, (ii) reissued 127,777
GPAC II Ordinary Shares as Class A Ordinary Shares
to certain GPAC II investors who agreed not to redeem their respective shares of Class A Ordinary Shares in connection with GPAC II’s
extraordinary general meeting of shareholders held on January 9, 2024, (iii) issued 1,077,541
shares of GPAC II Common Stock to a large institutional
investor and two other investors (the “PIPE Investors”) pursuant to subscription agreements that were entered into on June
20, 2024 (the “PIPE Subscription Agreements”), and (iv) GPAC II changed its name to “Stardust Power Inc.” Following
Closing, Common Stock, par value $0.0001
per share (“Combined Company Common Stock”),
and warrants (the “Warrants”) trade on the Nasdaq Global Market (“Nasdaq”) under the new symbols “SDST”
and “SDSTW,” respectively. At Closing, in connection with the Transactions, GPAC II and certain holders of Combined Company
Common Stock (as defined below) (the “Stardust Power Stockholders”) entered into a Stockholder Agreement, a Registration
Rights Agreement and a Lock-Up Agreement, each in form and in substance that became effective upon the Closing.
In
accordance with the terms and subject to the conditions of the Business Combination Agreement, each share of Common Stock
(including Common Stock issued in connection with the Stardust Power SAFE Conversion), issued and outstanding immediately
prior to the First Effective Time other than any Cancelled Shares and Dissenting Shares were converted into the right to receive the
applicable Per Share Consideration. The total consideration paid at Closing to the selling parties in connection with the Business Combination
Agreement was based on an enterprise value of $447,500,000 (excluding a $50 million earnout, based upon an assumed price of $10 per share,
payable upon achievement of certain milestones), subject to certain adjustments as set forth in the Business Combination Agreement, including
with respect to certain transaction expenses and the cash and debt of Stardust Power.
In
accordance with the terms and subject to the conditions of the Business Combination Agreement, (i) each outstanding Company Option (as
defined in the Business Combination Agreement), whether vested or unvested, has converted into an option to purchase a number of shares
of GPAC II Common Stock equal to the number of shares of GPAC II Common Stock subject to such Company Option immediately prior to the
First Effective Time multiplied by the Per Share Consideration at an exercise price per share equal to the exercise price per share of
Common Stock divided by the Per Share Consideration, subject to certain adjustments and (ii) each share of Company Restricted
Stock (as defined in the Business Combination Agreement) outstanding immediately prior to the First Effective Time has converted into
a number of shares of GPAC II Common Stock equal to the number of shares of Common Stock subject to such Company Restricted
Stock multiplied by the Per Share Consideration. Except as provided in the Business Combination Agreement, the terms and conditions (including
vesting and exercisability terms, as applicable) have continued after Closing as were applicable to the corresponding former Company
Option and Company Restricted Stock, as applicable, immediately prior to the First Effective Time.
The
accompanying unaudited condensed consolidated financial statements reflect the accounts and activities of only GPAC II, First Merger
Sub, and Second Merger Sub, as of June 30, 2024, prior to the closing date.
All
dollar amounts are rounded to the nearest thousand dollars.
Business
Prior to the Business Combination
Prior
to the Business Combination, GPAC II had two wholly owned subsidiaries which were formed on November 3, 2020, First Merger Sub and Second
Merger Sub.
All
activity for the period from November 3, 2020 (inception) through June 30, 2024 relates to the Company’s formation, the
initial public offering (“Initial Public Offering”), which is described below, identifying a target company for a
Business Combination and consummating the acquisition of Stardust Power. The Company did not generate any operating revenues prior
to completing its Business Combination. During the fiscal quarter, the Company generated non-operating income in the form of
interest income from the proceeds derived from the Public Offering.
In
January 2023, the shareholders of the Company (the “shareholders”) took various actions and the Company entered into various
agreements resulting in a change of control of the Company, redemption of approximately 87%
of its Class A Ordinary Shares, an extension of the date to complete a Business Combination and certain additional financing
and other matters as discussed in further detail in the Form 10-K Annual Report filed on March 19, 2024 (the “Form 10-K”),
the amended report on Form 10-K/A filed on April 22, 2024 amending the Form 10-K (the “Form 10-K/A”, and together with Form
10-K, the “Annual Report”), and the Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on
January 18, 2023.
On
January 9, 2024, in connection with the 2024 Extension Meeting (as defined below), there was a further extension of the date to complete
a business combination resulting in a new date upon which the Company must complete a Business Combination (the “New Termination
Date”), as well as shareholder redemptions of 2,137,134 Class A Ordinary Shares for approximately $23,615,000 and non redemption
agreements with holders of 1,503,254 Class A Ordinary Shares in exchange for the transfer of 127,777 Class B ordinary shares, par value
$0.0001 per share (the “Class B Ordinary Shares” and together with Class A Ordinary Shares, the “Ordinary Shares”),
following the conversion of 7,400,000 Class B Ordinary Shares into Class A Ordinary Shares, and the increase in the amount available
to the Company under the extension promissory notes among other items, as discussed in various notes below regarding the 2024 Extension
Meeting and as described in the Form 8-K filed with the SEC on January 16, 2024 and April 8, 2024.
On
April 5, 2024, the Sponsor converted 7,400,000 Class B Ordinary Shares into Class A Ordinary Shares, on a one-for-one basis. The Sponsor
waived any right to receive funds from the Company’s Trust Account with respect to the Class A Ordinary Shares received upon such
conversion and acknowledged that such shares will be subject to all of the restrictions applicable to the Class B Ordinary Shares under
the terms of that certain letter agreement, dated as of January 11, 2021, by and among the Company and its officers, its directors and
the Sponsor (as amended). Following the conversion, the Company had a total of 9,194,585 Class A Ordinary Shares and 100,000 Class B
Ordinary Shares outstanding.
On
April 24, 2024, the Company, First Merger Sub, Second Merger Sub, and Stardust Power, entered into Amendment No. 1 (the “Amendment”)
to that certain Business Combination Agreement, dated November 21, 2023, (as it may be amended, supplemented or otherwise modified from
time to time in accordance with its terms, the “Business Combination Agreement”), to, among other things, (i) amend the definition
of “Equity Value” and (ii) amend the definition of “Alternative Financing.” Other than the terms of the Amendment,
all the terms, covenants, agreements, and conditions of the Business Combination Agreement remain in full force and effect in accordance
with its original terms.
On May 24, 2024, GPAC II filed a definitive proxy
statement/prospectus (the “Definitive Proxy Statement”) for the solicitation of proxies in connection with a special meeting
(the “Special Meeting”) of GPAC II shareholders, to vote upon, among other things, a proposal to adopt and approve
that certain Business Combination Agreement.
On June 20, 2024, GPAC II, First
Merger Sub, Second Merger Sub, and Stardust Power entered into Amendment No. 2 to the Business Combination Agreement to (i) amend the
definition of “Sponsor Loans Settlement” to provide that Global Partner Sponsor II LLC shall waive any entitlement to the
1,709,570 additional private placement warrants it would otherwise be entitled to with respect to the conversion of the $2,564,355 of
Sponsor Loans incurred prior to October 3, 2023 and (ii) amend the definition of “Enterprise Value” to mean $447.5 million,
which reflects a $2,500,000 reduction from the prior value. Other than the terms of Amendment No. 2, all of the terms, covenants, agreements,
and conditions of the Business Combination Agreement remained in full force and effect in accordance with its original terms. Additionally,
on June 20, 2024, GPAC II entered into PIPE Subscription Agreements with PIPE Investors pursuant to which the PIPE Investors agreed to
purchase in a private placement, 1,077,541 shares of GPAC II common stock at a price of $9.35 per share, for an aggregate commitment amount
of $10,075,000 (the “PIPE Investment”). The PIPE Subscription Agreements provided, among other things, that the PIPE Investment
were conditioned upon the consummation of the transactions contemplated by the Business Combination Agreement. In connection with the
negotiation of the PIPE Subscription Agreement, GPAC II and Stardust Power did not intend to draw down in excess of $3 million, if at
all, on the commitments under the existing Financing Commitment and Equity Line of Credit Agreement between Stardust Power and the large
institutional investor in the PIPE Investment, which provided Stardust Power an option to issue additional Common Stock to such investor.
The purpose of the PIPE Investment was to raise additional capital for use by the Company following the consummation of the transactions
contemplated by the Business Combination.
On June
27, 2024, the Company held its Special Meeting where, among other things, the proposal to adopt that certain Business Combination Agreement
was approved.
Trust
Account:
The
funds in the Trust Account can only be invested in cash or U.S. government treasury bills with a maturity of one hundred and eighty-five
(185) days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act of 1940. On January
11, 2023, the Company liquidated the U.S. government treasury obligations or money market funds held in the Trust Account. Funds will
remain in the Trust Account until the earlier of (i) the consummation of its initial Business Combination or (ii) the distribution of
the Trust Account as described below. The remaining funds outside the Trust Account may be used to pay for business, legal and accounting
due diligence on prospective acquisition targets, legal and accounting fees related to regulatory reporting obligations, payment for
services of investment professionals and support services, continued listing fees and continuing general and administrative expenses.
The
Company’s amended and restated memorandum and articles of association provided that, other than the withdrawal of interest to pay
tax obligations, if any, less up to $100,000 of interest to pay dissolution expenses, none of the funds held in trust will be released
until the earliest of (a) the completion of the initial Business Combination, (b) the redemption of any Class A Ordinary Shares that
are not subject to all the restrictions applicable to Class B Ordinary Shares under the terms of that certain letter agreement, dated
as of January 11, 2021, by and among the Company and its officers, its directors and the Sponsor (as amended) properly submitted in connection with a shareholder vote to amend the Company’s amended and restated memorandum of association
(i) to modify the substance or timing of the Company’s obligation to redeem 100% of the Public Shares if the Company does not complete
the initial Business Combination by the date by which the Company is required to consummate a business combination pursuant to the amended
and restated memorandum and articles of association, July 14, 2024 if extended per below (previously January 14, 2023 and then January
14, 2024 as discussed below) (the “Termination Date”), or (ii) with respect to any other provision relating to shareholders’
rights or pre-Business Combination activity, and (c) the redemption of the Public Shares if the Company is unable to complete the initial
Business Combination by the Termination Date, subject to applicable law, which includes the extended time that the Company has to consummate
a Business Combination beyond the Termination Date as a result of a shareholder vote to amend the Company’s amended and restated
articles of incorporation. The proceeds deposited in the Trust Account could become subject to the claims of creditors, if any, which
could have priority over the claims of holders of Public Shares.
On
January 11, 2023, the Company’s shareholders voted to extend the date by which the Company has to consummate a Business Combination
from January 14, 2023 to April 23, 2023 and to allow the Company, without another shareholder vote, to elect to extend the date to consummate
a Business Combination on a monthly basis for up to nine times by an additional one month each time up until the Termination Date of
January 14, 2024. Upon each of the nine one-month extensions, the Sponsor or one or more of its affiliates, members or third-party designees
may contribute to the Company $150,000 as a loan to be deposited into the Trust Account. During the year ended on December 31, 2023 the
board of directors of the Company approved (i) one-month extensions of the Termination Date in from April through December, resulting
in a new Termination Date of January 14, 2024, and (ii) draws of an aggregate of $1,800,000 pursuant to the Extension Promissory Note
- related party (as defined below) to fund the extensions.
On
January 9, 2024, the Company held the extraordinary general meeting of shareholders of the Company (the “2024 Extension Meeting”)
to amend (the “2024 Articles Amendment”), by way of special resolution, the Company’s amended and restated memorandum
and articles of association to extend the date by which the Company has to consummate a Business Combination until the New Termination
Date for a total of an additional six months after January 14, 2024, unless the closing of a Business Combination shall have occurred
prior thereto (collectively, the “2024 Extension Amendment Proposal”); to eliminate, by way of special resolution, from the
amended and restated memorandum and articles of association the limitation that GPAC II may not redeem Class A Ordinary Shares to the
extent that such redemption would result in GPAC II having net tangible assets of less than $5,000,001 (the “Redemption Limitation”)
in order to allow the Company to redeem Public Shares irrespective of whether such redemption would exceed the Redemption Limitation
(the “Redemption Limitation Amendment Proposal”); to provide, by way of special resolution, that Public Shares may be issued
to the Sponsor by way of conversion of Class B Ordinary Shares, into Public Shares, despite the restriction on issuance of additional
Public Shares (the “Founder Conversion Amendment Proposal” and together with the 2024 Extension Amendment Proposal and Redemption
Limitation Amendment Proposal, the “Proposals”); and, if required an adjournment proposal to adjourn, by way of ordinary
resolution, the 2024 Extension Meeting to a later date or dates, if necessary, (i) to permit further solicitation and vote of proxies
if, based upon the tabulated vote at the time of the 2024 Extension Meeting, there are insufficient Ordinary Shares at the 2024 Extension
Meeting to approve the Proposals, or (ii) where the board of directors of the Company has determined it is otherwise necessary (the “Adjournment
Proposal”). The shareholders of the Company approved the Proposals at the 2024 Extension Meeting and on January 11, 2024, the Company
filed the 2024 Articles Amendment with the Registrar of Companies of the Cayman Islands.
On January
9, 2024 and in connection with the 2024 Extension Meeting to approve the 2024 Extension Amendment Proposal, the Company’s Sponsor
entered into non-redemption agreements (the “Non-Redemption Agreements”) with several unaffiliated third parties, pursuant
to which such third parties agreed not to redeem (or to validly rescind any redemption requests on) an aggregate of 1,503,254
Class A Ordinary Shares of the Company in connection with the 2024 Extension Amendment Proposal. In exchange for the foregoing
commitments not to redeem such Class A Ordinary Shares of the Company, the Sponsor agreed to transfer or cause to be issued for no consideration,
an aggregate of 127,777 Ordinary Shares and simultaneous
forfeiture of 127,777 Ordinary Shares in
connection with the Company’s completion of its initial Business Combination.
In connection
with the Business Combination, at the Special Meeting on June 27, 2024, holders of 1,660,035
Class A Ordinary Shares exercised their right to redeem their shares for cash at a redemption price of approximately $11.38
per share, for an aggregate redemption amount of $18,893,209.
Following such redemptions, 134,550
Class A Ordinary Shares held by shareholders other than the Sponsor, remain outstanding, representing $1,531,342
cash in trust. Subsequently on July 3, 2024 holders of 2,877
GPAC II Class A Ordinary Shares reversed their redemptions, resulting in a total of 137,427
GPAC II Class A Ordinary Shares outstanding as of July 3, 2024.
Going
Concern:
At
June 30, 2024, the Company had approximately $0 in
cash and approximately $11,389,000 in
working capital deficit. The Company has incurred significant costs and expects to continue to
incur additional costs in pursuit of its Business Combination. Until June 30, 2024, and through the closing date, the Company
used the funds from Sponsor loans in connection with consummating the Business Combination with Stardust.
Upon
completion of the Business Combination with Stardust Power Inc. on July 8, 2024, the Company’s consolidated cash balance increased
due to the PIPE investments of $10,075,000, and $1,481,835 of trust account proceeds, net of redemptions and related fees. The combined
company is also required to make various payments including SPAC transaction costs incurred upon the close of the Business Combination.
As
of the date on which these unaudited condensed consolidated financial statements were available to be issued, we believe that the
cash on hand and additional investments obtained through the Business Combination will be inadequate to satisfy Company’s
working capital and capital expenditure requirements for at least the next twelve months. 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 over the next year. These 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 should the Company be unable to continue as a going concern.
Note
2 – Summary of Significant Accounting Policies
Principles
of Consolidation:
The
unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, First Merger
Sub and Second Merger Sub, both formed to facilitate the acquisition of Stardust Power (Note 1). All significant intercompany balances and transactions have been eliminated in consolidation.
Basis
of Presentation:
The
accompanying unaudited condensed consolidated interim financial statements of the Company are presented in U.S. dollars and in conformity
with accounting principles generally accepted in the United States of America (“U.S. GAAP”) pursuant to the rules and regulations
of the SEC and reflect all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary
for a fair presentation of the financial position and the results of operations and cash flows for the periods presented. Certain information
and disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to such rules
and regulations. Interim results are not necessarily indicative of results for a full year or any future periods.
The
accompanying unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s
audited financial statements and notes thereto included in the Company’s audited financial statements included in the
Company’s Annual Report which contains the audited financial statements and notes thereto as of December 31, 2023 and for the
year then ended.
Emerging
Growth Company:
Section
102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards
until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a
class of securities registered under the Securities Exchange Act of 1934 (the “Exchange Act”)) are required to comply with
the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition
period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable.
The Company has elected not to opt out of such extended transition period which means that when an accounting standard is issued or revised
and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new
or revised standard at the time private companies adopt the new or revised standard.
Net
(Loss) Income per Ordinary Share:
Net
(loss) income per Ordinary Share is computed by dividing (loss) income applicable to Ordinary Shareholders by the weighted average
number of Ordinary Shares outstanding for the period. The Company has not considered the effect of the warrants sold in the Public
Offering and private placement to purchase an aggregate of 10,557,453
at June 30, 2024 (11,221,954
at December 31, 2023) Class A Ordinary Shares in the calculation of diluted (loss) income per Ordinary Share, since their inclusion
would be anti-dilutive under the treasury stock method and are dependent on future events. As a result, diluted (loss) income per
Ordinary Share is the same as basic (loss) income per Ordinary Share for the period.
The
Company complies with the accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share.” The Company
has two classes of shares, which are referred to as Class A Ordinary Shares and Class B Ordinary Shares. Income and losses are shared
pro rata among the two classes of shares. Net (loss) income per Ordinary Share is calculated by dividing the net (loss) income by the
weighted average number of Ordinary Shares outstanding during the respective period. The changes in redemption value that are accreted
to Public Shares subject to redemption (see below) is representative of fair value and therefore is not factored into the calculation
of earnings per share.
The
following tables reflect the earnings per share after allocating (loss) income between the shares based on outstanding shares:
Schedule
of Basic and Diluted Net Loss Per Share
| |
Three months ended
June 30, 2024 | | |
Six months ended
June 30, 2024 | |
| |
Class A | | |
Class B | | |
Class A | | |
Class B | |
Numerator: | |
| | | |
| | | |
| | | |
| | |
Basic and diluted net (loss) income per Ordinary Share: | |
| | | |
| | | |
| | | |
| | |
Allocation of (loss) income– basic and diluted | |
$ | (2,075,000 | ) | |
$ | (100,000 | ) | |
$ | (2,688,000 | ) | |
$ | (1,946,000 | ) |
Denominator: | |
| | | |
| | | |
| | | |
| | |
Basic and diluted weighted average Ordinary Shares: | |
| 8,796,000 | | |
| 425,000 | | |
| 5,472,000 | | |
| 3,963,000 | |
| |
| | | |
| | | |
| | | |
| | |
Basic and diluted (loss) income per Ordinary Share | |
$ | (0.24 | ) | |
$ | (0.24 | ) | |
$ | (0.49 | ) | |
$ | (0.49 | ) |
| |
Three months ended
June 30, 2023 | | |
Six months ended
June 30, 2023 | |
| |
Class A | | |
Class B | | |
Class A | | |
Class B | |
Numerator: | |
| | | |
| | | |
| | | |
| | |
Basic and diluted net (loss) income per Ordinary Share: | |
| | | |
| | | |
| | | |
| | |
Allocation of (loss) income– basic and diluted | |
$ | 730,000 | | |
$ | 1,392,000 | | |
$ | 1,267,000 | | |
$ | 1,769,000 | |
Denominator: | |
| | | |
| | | |
| | | |
| | |
Basic and diluted weighted average Ordinary Shares: | |
| 3,932,000 | | |
| 7,500,000 | | |
| 5,372,000 | | |
| 7,500,000 | |
| |
| | | |
| | | |
| | | |
| | |
Basic and diluted (loss) income per Ordinary Share | |
$ | 0.19 | | |
$ | 0.19 | | |
$ | 0.24 | | |
$ | 0.24 | |
Concentration
of Credit Risk:
The
Company can have significant cash balances at financial institutions which throughout the year may exceed the federally insured limit
of $250,000. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial
condition, results of operations, and cash flows.
Cash
and Cash Equivalents:
The
Company considers all highly liquid instruments with original maturities of three months or less when acquired to be cash equivalents.
The Company had no cash equivalents at June 30, 2024 and December 31, 2023.
Fair
Value Measurements:
The
Company complies with FASB ASC 820, “Fair Value Measurements” (“ASC 820”), for its financial assets and
liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that
are re-measured and reported at fair value at least annually. As of June 30, 2024 and December 31, 2023, the carrying values of
cash, prepaid expenses, accounts payable, accrued expenses and promissory notes payable – related party (including the
extension promissory note) approximate their fair values primarily due to the short-term nature of the instruments.
Fair
value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction
between market participants at the measurement date. U.S. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs
used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets
or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
● |
Level
1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
|
|
● |
Level
2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted
prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active;
and |
|
|
● |
Level
3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions,
such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
In
some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In
those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input
that is significant to the fair value measurement.
Use
of Estimates:
The
preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires the Company’s management to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the condensed consolidated balance sheet and the reported amounts of expenses during the reporting period. Making estimates
requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition,
situation or set of circumstances that existed at the date of the condensed consolidated financial statements, which management considered
in formulating its estimate, could change in the near term due to one or more future confirming events. One of the more significant estimates
included in these condensed consolidated financial statements is the determination of the fair value of the warrant liability. Such estimates
may be subject to change as more current information becomes available and accordingly the actual results could differ significantly
from those estimates.
Offering
Costs:
The
Company complies with the requirements of the FASB ASC 340-10-S99-1 and SEC Staff Accounting Bulletin Topic 5A— “Expenses
of Offering.” Costs incurred in connection with preparation for the Public Offering totaled approximately $17,054,000 including
$16,500,000 of underwriters’ discount. Such costs were allocated among the temporary equity and warrant liability components, based
on their relative fair value. Upon completion of the Public Offering, approximately $16,254,000 has been charged to temporary equity
for the temporary equity components and approximately $800,000 has been charged to other expense for the warrant liability.
Class
A Ordinary Shares Subject to Possible Redemption:
As
discussed in Note 3, all of the 30,000,000 Class A Ordinary Shares sold as part of the Units (as defined below) in the Public Offering
contain a redemption feature that allows for the redemption under the Company’s liquidation or tender offer/shareholder approval
provisions. In accordance with FASB ASC 480, redemption provisions not solely within the control of the Company require the security
to be classified outside of permanent equity. Ordinary liquidation events, which involve the redemption and liquidation of all of the
entity’s equity instruments, are excluded from the provisions of FASB ASC 480. All of the Public Shares are redeemable, and are
subject to redemption on the enclosed condensed consolidated balance sheets.
On January
11, 2023, in connection with the vote to approve the 2023 Extension Amendment Proposal the holders of 26,068,281 Class A Ordinary Shares
of the Company exercised their right to redeem their shares for cash at a redemption price of approximately $10.167 per share for an
aggregate redemption amount of approximately $265,050,000 reducing the number of Class A Ordinary Shares to 3,931,719.
On
January 9, 2024, in connection with the vote to approve the 2024 Extension Amendment Proposal, the holders of 2,137,134 Class A Ordinary
Shares of the Company exercised their right to redeem their shares for cash at a redemption price of approximately $11.05 per share for
an aggregate redemption amount of approximately $23,615,000 reducing the number of Class A Ordinary Shares from 3,931,719 to 1,794,585.
On
June 27, 2024, in connection with the Special Meeting to approve the Business Combination and other related matters, the holders
of 1,660,035 Class A Ordinary Shares of the Company exercised their right to redeem their shares for cash at a redemption price of approximately
$11.38 per share for an aggregate redemption amount of approximately $18,893,209 reducing the number of Class A Ordinary Shares from
1,794,585 to 134,550. Subsequently on July 3, 2024 holders of 2,877 GPAC II Class A Ordinary Shares
reversed their redemptions, resulting in a total of 137,427
GPAC II Class A Ordinary Shares outstanding as of July 3, 2024.
The
Company recognizes changes immediately as they occur and adjusts the carrying value of the securities at the end of each reporting period.
Increases or decreases in the carrying amount of redeemable Class A Ordinary Shares are affected by adjustments to additional paid-in
capital. Accordingly, 134,550 and 3,931,719 shares, respectively, were classified outside of permanent deficit at June 30, 2024 and December
31, 2023, respectively.
Public
Shares subject to possible redemption consist of the following:
Schedule
of Ordinary Shares Subject to Redemption Consist
| |
Dollars | | |
Shares | |
Gross proceeds of Public Offering | |
$ | 300,000,000 | | |
| 30,000,000 | |
Less: Proceeds allocated to Public Warrants | |
| (14,100,000 | ) | |
| - | |
Offering costs | |
| (16,254,000 | ) | |
| - | |
Plus: Accretion of carrying value to redemption value | |
| 30,354,000 | | |
| - | |
Subtotal at inception and at December 31, 2021 | |
| 300,000,000 | | |
| 30,000,000 | |
Plus: Accretion of carrying value to redemption value | |
| 4,675,000 | | |
| - | |
Class A Ordinary Shares subject to possible redemption at December 31, 2022 | |
$ | 304,675,000 | | |
| 30,000,000 | |
Less: Class A Ordinary Shares redeemed on January 11, 2023 | |
| (265,050,000 | ) | |
| (26,068,281 | ) |
Plus: Accretion of carrying value to redemption value | |
| 4,079,000 | | |
| - | |
Balance at December 31, 2023 | |
$ | 43,704,000 | | |
| 3,931,719 | |
Less: Public Shares redeemed on January 9, 2024 | |
| (23,768,000 | ) | |
| (2,137,134 | ) |
Plus: Accretion of carrying value to redemption value | |
| 273,000 | | |
| - | |
Balance at March 31, 2024 (unaudited) | |
$ | 20,209,000 | | |
| 1,794,585 | |
Less: Public Shares redeemed on June 27, 2024 | |
| (18,893,000 | ) | |
| (1,660,035 | ) |
Plus: Accretion of carrying value to redemption value | |
| 215,000 | | |
| - | |
Balance at June 30, 2024 (unaudited) | |
$ | 1,531,000 | | |
| 134,550 | |
Income
Taxes:
FASB
ASC 740 prescribes a recognition threshold and a measurement attribute for the balance sheet recognition and measurement of tax positions
taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be
sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s
major tax jurisdiction. There were no unrecognized tax benefits as of June 30, 2024 and December 31, 2023. The Company recognizes interest
and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties
at June 30, 2024 or December 31, 2023. The Company is currently not aware of any issues under review that could result in significant
payments, accruals or material deviation from its position. The Company has been subject to income tax examinations by major taxing authorities
since inception.
The
Company is considered a Cayman Islands exempted company and is presently not subject to income taxes or income tax filing requirements
in the Cayman Islands or the United States. As such, the Company’s tax provision was zero for the periods presented. The Company’s
management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.
Warrant
Liability:
The
Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s
specific terms and applicable authoritative guidance in FASB ASC 480 and ASC 815, “Derivatives and Hedging” (“ASC 815”).
The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability
pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether
the warrants are indexed to the Company’s own Ordinary Shares, among other conditions for equity classification. This assessment,
which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period
end date while the warrants are outstanding.
For
issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component
of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification,
the warrants are required to be recorded as a liability at their initial fair value on the date of issuance, and each balance sheet date
thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the unaudited condensed
consolidated statement of operations. Costs associated with issuing the warrants accounted for as liabilities are charged to operations
when the warrants are issued.
Subsequent
Events:
The
Company evaluated subsequent events and transactions that occurred after the date of the unaudited condensed consolidated balance
sheet through the date that the unaudited condensed consolidated financial statements were available to be issued and has concluded
that all such events that would require adjustment or disclosure in the unaudited condensed consolidated financial statement have
been recognized or disclosed.
On
July 8, 2024, GPAC II completed its Business Combination with Stardust Power. Refer to notes 1 and 3 for details. GPAC II
deregistered as a Cayman Islands exempted company and domesticate as a Delaware corporation. As per the Business Combination
Agreement, the First Merger Sub merged into the Company, with the Company being the surviving corporation. Following the First
Merger, the Company merged into Second Merger Sub, with Second Merger Sub being the surviving entity. With the consummation of the business combination, the underwriters waived their commission fees.
Recent
Accounting Pronouncements:
In
August 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06, “Debt — Debt with Conversion and Other
Options” (Subtopic 470-20) and “Derivatives and Hedging — Contracts in Entity’s Own Equity” (Subtopic 815-40)
(“ASU 2020-06”), to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that
require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope
exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces
additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity.
ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible
instruments. ASU 2020-06 is effective January 1, 2024 and should be applied on a full or modified retrospective basis. The Company has
adopted this standard for its Extension promissory notes and there is no impact to the unaudited condensed consolidated financial statements
– related party as further discussed in Note 4.
Management
does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a
material effect on the Company’s unaudited condensed consolidated financial statements.
Note
3 – Public Offering
On
January 14, 2021, the Company consummated the Public Offering and sale of 30,000,000 units at a price of $10.00 per unit (the “Units”).
Each Unit consists of one share of the Company’s Class A Ordinary Shares, one-sixth of one detachable redeemable warrant (the “Detachable
Redeemable Warrants”) and the contingent right to receive, in certain circumstances, in connection with the Business Combination,
one-sixth of one distributable redeemable warrant for each Public Share that a Public Shareholder holds and does not redeem in connection
with the Company’s initial Business Combination (the “Distributable Redeemable Warrants,” and together with the Detachable
Redeemable Warrants, the “Redeemable Warrants”). Each whole Redeemable Warrant offered in the Public Offering is exercisable
to purchase one of the Company’s Class A Ordinary Shares. Only whole Redeemable Warrants may be exercised. Under the terms of the
warrant agreement, the Company has agreed to use its commercially reasonable efforts to file a new registration statement under the Securities
Act, following the completion of the Company’s initial Business Combination covering the Class A Ordinary Shares issuable upon
the exercise of warrants. No fractional shares will be issued upon exercise of the Redeemable Warrants. If, upon exercise of the Redeemable
Warrants, a holder would be entitled to receive a fractional interest in a share, the Company will, upon exercise, round down to the
nearest whole number the number of Class A Ordinary Shares to be issued to the Redeemable Warrant holder. Each Redeemable Warrant will
become exercisable on the later of 30 days after the completion of the Company’s initial Business Combination or 12 months from
the closing of the Public Offering and will expire five years after the completion of the Company’s initial Business Combination
or earlier upon redemption or liquidation. However, if the Company does not complete its initial Business Combination on or prior to
the New Termination Date, the Redeemable Warrants will expire at the end of such period. If the Company is unable to deliver registered
Class A Ordinary Shares to the holder upon exercise of a Redeemable Warrant during the exercise period, there will be no net cash settlement
of these Redeemable Warrants and the Redeemable Warrants will expire worthless, unless they may be exercised on a cashless basis in the
circumstances described in the warrant agreement. Once the Redeemable Warrants become exercisable, the Company may redeem the outstanding
Redeemable Warrants in whole and not in part at a price of $0.01 per Warrant upon a minimum of 30 days’ prior written notice of
redemption, only in the event that the last sale price of the Class A Ordinary Shares equals or exceeds $18.00 per share for any 20 trading
days within the 30-trading day period ending on the third trading day before the Company sends the notice of redemption to the Redeemable
Warrant holders, and that certain other conditions are met. Once the Redeemable Warrants become exercisable, the Company may also redeem
the outstanding Redeemable Warrants in whole and not in part at a price of $0.10 per Warrant upon a minimum of 30 days’ prior written
notice of redemption, only in the event that the closing price of the Class A Ordinary Shares equals or exceeds $10.00 per share on the
trading day prior to the date on which the Company sends the notice of redemption, and that certain other conditions are met. If the
closing price of the Class A Ordinary Shares is less than $18.00 per share (as adjusted) for any 20 trading days within a 30-trading
day period ending three trading days before the Company sends the notice of redemption to the warrant holders, the Private Placement
Warrants must also concurrently be called for redemption on the same terms as the outstanding public warrants, as described above (the
“Public Warrants”). If issued, the Distributable Redeemable Warrants are identical to the Redeemable Warrants and together
represent the Public Warrants.
The
Company had granted the underwriters a 45-day option to purchase up to 2,500,000 Units to cover any over-allotments, at the Public Offering
price less the underwriting discounts and commissions, and such option was exercised in full at the closing of the Public Offering and
included in the 30,000,000 Units sold on January 14, 2021.
The
Company paid an underwriting discount of 2.0% of the per Unit price, $6,000,000, to the underwriters at the closing of the Public Offering,
and there is a deferred underwriting fee of 3.5% of the per Unit price, $10,500,000, which is payable upon the completion of the Company’s
initial Business Combination. During the six months ended June 30, 2024, both of the underwriters agreed to waive their right to the
deferred underwriting fee in connection with the completion of a business combination. As such, the $10,500,000 liability will be reversed
in connection with the closing of an initial business combination.
Shareholders
approved the 2023 Extension Amendment Proposal at the extraordinary general meeting held on January 11, 2023 (the “2023
Extension Meeting”) and on January 11, 2023, in connection with the 2023 Extension Amendment Proposal vote, the holders of
26,068,281 Class A Ordinary Shares of the Company properly exercised their right to redeem their shares for an aggregate price of
approximately $10.167 per share, for an aggregate redemption amount of approximately $265,050,166. In addition, 4,344,714 contingent
redeemable warrants will no longer be available to the former holders of the 26,068,281 Class A Ordinary Shares redeemed and so the
carrying amount of those warrants, approximately $130,000, was removed from the warrant liabilities on the unaudited condensed
consolidated balance sheet.
On
January 9, 2024, in connection with the 2024 Extension Meeting, holders of 2,137,134 Class A Ordinary Shares exercised their right to
redeem their shares for cash at a redemption price of approximately $11.05 per share, for an aggregate redemption amount of approximately
$23,615,331. In addition, 356,189 contingent Distributable Redeemable Warrants will no longer be available to the former holders of the
2,137,134 Class A Ordinary Shares redeemed and so the carrying amount of those warrants has been removed from the warrant liabilities
on the unaudited condensed consolidated balance sheet at June 30 2024.
On
June 27, 2024, in connection with the Shareholder meeting to approve Business Combination and other matters, holders of 1,660,035 Class
A Ordinary Shares exercised their right to redeem their shares for cash at a redemption price of approximately $11.38 per share, for
an aggregate redemption amount of approximately $18,893,209. In addition, 276,673 contingent Distributable Redeemable Warrants will no
longer be available to the former holders of the 1,660,035 Class A Ordinary Shares redeemed and so the carrying amount of those warrants
has been removed from the warrant liabilities on the unaudited condensed consolidated balance sheet at June 30 2024.
Note
4 – Related Party Transactions
Founder
Shares:
During
2020, the Sponsor purchased 7,187,500 Class B Ordinary Shares (the “Founder Shares”) for $25,000 (which amount was paid directly
for organizational costs and costs of the Public Offering by the Sponsor on behalf of the Company), or approximately $0.003 per share.
In January 2021, the Company effected a share capitalization resulting in there being an aggregate of 7,500,000 Founder Shares issued.
The Founder Shares are substantially identical to Class A Ordinary Shares included in the Units sold in the Public Offering except that
the Founder Shares that are currently still Class B Ordinary Shares will automatically convert into Class A Ordinary Shares, on a one-for-one
basis, at the time of the initial Business Combination, or at any time prior thereto at the option of the holder, and are subject to
certain transfer restrictions, as described in more detail below, and the Founder Shares are subject to vesting as follows: 50% upon
the completion of a Business Combination and then 12.5% on each of the attainment of Return to Shareholders (as defined in the agreement)
exceeding 20%, 30%, 40% and 50%. Certain events, as defined in the agreement, could trigger an immediate vesting under certain circumstances.
Founder Shares that do not vest within an eight-year period from the closing of the Business Combination will be cancelled.
The
Sponsor agreed to forfeit up to 625,000 Founder Shares to the extent that the over-allotment option was not exercised in full by the
underwriters. The underwriters exercised their over-allotment option in full and therefore such shares are no longer subject to forfeiture.
In
addition to the vesting provisions of the Founder Shares discussed in Note 7, the Company’s initial shareholders have agreed not
to transfer, assign or sell any of their Founder Shares until the earlier of (A) one year after the completion of the Company’s
initial Business Combination, or (B), subsequent to the Company’s initial Business Combination, if (x) the last sale price of the
Company’s Class A Ordinary Shares equals or exceeds $12.00 per share (as adjusted for share splits, share dividends, reorganizations,
recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Company’s
initial Business Combination or (y) the date on which the Company completes a liquidation, merger, share exchange or other similar transaction
after the initial Business Combination that results in all of the Company’s shareholders having the right to exchange their Ordinary
Shares for cash, securities or other property.
Private
Placement Warrants:
The
Sponsor purchased from the Company an aggregate of 5,566,667 warrants at a price of $1.50 per warrant (a purchase price of $8,350,000)
in a private placement that occurred simultaneously with the completion of the Public Offering (the “Private Placement Warrants”).
Each Private Placement Warrant entitles the holder to purchase one Class A Ordinary Share at $11.50 per share. The purchase price of
the Private Placement Warrants was added to the proceeds from the Public Offering, net of expenses of the offering and working capital
to be available to the Company, to be held in the Trust Account pending completion of the Company’s initial Business Combination.
The Private Placement Warrants (including the Class A Ordinary Shares issuable upon exercise of the Private Placement Warrants) will
not be transferable, assignable or saleable until 30 days after the completion of the initial Business Combination and they will be non-redeemable
so long as they are held by the Sponsor or its permitted transferees. If the Private Placement Warrants are held by someone other than
the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders
on the same basis as the warrants included in the Units being sold in the Public Offering. Otherwise, the Private Placement Warrants
have terms and provisions that are identical to those of the Redeemable Warrants being sold as part of the Units in the Public Offering
and have no net cash settlement provisions.
If
the Company does not complete a Business Combination, then the proceeds from the sale of the Private Placement Warrants will be part
of the liquidating distribution from the Trust Account to the Public Shareholders and the Private Placement Warrants issued to the Sponsor
will expire worthless.
Registration
Rights:
The
Company’s initial shareholders and the holders of the Private Placement Warrants are entitled to registration rights pursuant to
a registration and shareholder rights agreement. These holders will be entitled to make up to three demands, excluding short form registration
demands, that the Company registers such securities for sale under the Securities Act. In addition, these holders will have piggyback
registration rights to include their securities in other registration statements filed by the Company. The Company will bear the expenses
incurred in connection with the filing of any such registration statements. There will be no penalties associated with delays in registering
the securities under the registration and shareholder rights agreement.
Related
Party Loans:
Sponsor
loans - In November 2020, the Sponsor agreed to loan the Company up to an aggregate of $300,000 by drawdowns of not less than $1,000
each against the issuance of an unsecured promissory note (the “Note” or “Notes payable – related party”)
to cover expenses related to the Public Offering. The Note was non-interest bearing and payable on the earlier of December 31, 2021 or
the completion of the Public Offering. As of the closing date of the Public Offering, the Company had drawn down approximately $199,000
under the Note, including approximately $49,000 of costs paid directly by the Sponsor, for costs related to costs of the Public Offering.
On January 14, 2021, upon closing of the Public Offering, all amounts outstanding under the Note were repaid and the Note is no longer
available to the Company.
Sponsor
working capital loans - On August 1, 2022, the Company issued a promissory note (the “August 1, 2022 Note” or “August
1, 2022 Notes payable – related party”) in the principal amount of up to $2,000,000 to its Sponsor. The August 1, 2022 Note
was issued in connection with advances the Sponsor may make to the Company for expenses reasonably related to its business and the consummation
of the Business Combination. The August 1, 2022 Note bears no interest and is due and payable upon the earlier to occur of (i) January
14, 2023 and (ii) the effective date of a merger, capital share exchange, asset acquisition, share purchase, reorganization or similar
Business Combination. As of June 30, 2024 and December 31, 2023, the outstanding principal balance under the August 1, 2022 Note was
$755,000 and $755,000, respectively.
On
January 13, 2023, the Company and the Sponsor agreed to extend the date of maturity of the August 1, 2023 Note (as defined below) to
the earlier of (i) the Termination Date, (ii) the consummation of a Business Combination of the Company and (iii) the liquidation of
the Company.
On
January 3, 2023, the Company issued a promissory note (the “January 3, 2023 Note”) in the principal amount of up to $250,000
to its Sponsor. The January 3, 2023 Note was issued in connection with advances the Sponsor may make to the Company for expenses reasonably
related to its business and the consummation of the Business Combination. The January 3, 2023 Note bears no interest and is due and payable
upon the Business Combination. As of June 30, 2024, no amounts have been drawn down and there was no outstanding principal balance under
the January 3, 2023 Note. At the election of the Sponsor or its registered assigns or successors in interest (the “Payee”),
$250,000 of the unpaid principal amount of the January 3, 2023 Note may be converted into warrants of the Company,
at a price of $1.50 per warrant, each warrant exercisable for one Class A Ordinary Share, of the Company. The warrants shall be identical
to the Private Placement Warrants issued to the Sponsor at the time of the Company’s Public Offering.
On
January 13, 2023, the Company issued the promissory note (the “January 13, 2023 Note”) in the principal amount of up to $4,000,000,
as amended on February 13, 2024, to its Sponsor. The January 13, 2023 Note was issued in connection with advances the Sponsor may make
to the Company for contributions to the Trust Account in connection with the Extension and other expenses reasonably related to its business
and the consummation of the Business Combination. The January 13, 2023 Note bears no interest and is due and payable upon the Business
Combination. At the election of the Payee, up to $1,750,000 of the January 13, 2023 Note may be converted, at the option of the lender,
into Warrants, at a price of $1.50 per warrant, each warrant exercisable for one Class A Ordinary Share of the Company. The Warrants
shall be identical to the Private Placement Warrants issued to the Sponsor at the time of the Public Offering.
During
the three and six months ended June 30, 2024, the Company made drawdowns aggregating approximately $185,000 and $646,000, respectively,
under the January 13, 2023 Note, for working capital and in order to pay extension payments. During
the three and six months ended June 30, 2023, the Company made drawdowns aggregating approximately $506,000 and $1,454,000, respectively,
under the January 13, 2023 Note in order to pay extension payments and for working capital. The Company records such notes at
par value and believes that the fair value of the conversion feature is not material based upon the trading price of the similarly termed
Public Warrants. At June 30, 2024 and December 31, 2023, the outstanding principal balance under the January 13, 2023 Note was approximately
$3,372,000 and $2,726,000, respectively.
Subsequent to June 30, 2024, as part of the Closing
of the Business Combination, the Sponsor forgave the repayment of the promissory notes payable - related party (including the extension
promissory note).
Administrative
Services Agreement:
The
Company has agreed to pay $25,000
a month to the Sponsor for office space and rent and for the services to be provided by one or more investment professionals,
creation and maintenance of the Company’s website, and miscellaneous additional services. Services commenced on the date the
securities are first listed on Nasdaq and will terminate upon the earlier of the consummation by the Company of an initial Business
Combination or the liquidation of the Company. On June 30, 2024, the Sponsor waived the administrative fee payable. General and administrative
expenses include a credit of $350,000
and $275,000
for the three and six months ended June 30, 2024, respectively for this waiver. General and administrative expenses include a charge
of $75,000
and $150,000
for the three and six months ended June 30, 2023, respectively for this agreement. As at June 30, 2024 and December 31, 2023, $ 0
and $ 275,000,
respectively, were due to the Sponsor.
Note
5 – Accounting for Warrant Liability
At
June 30, 2024 and December 31, 2023, there were 10,557,453
and 11,221,954
warrants, respectively, outstanding including 4,990,786
Public Warrants and 5,566,667
Private Placement Warrants outstanding at June 30, 2024 and 5,655,286
Public Warrants and 5,566,667
Private Placement Warrants outstanding at December 31, 2023. An aggregate of 4,977,576
of the original 5,000,000
contingent redeemable warrants that would have been exercisable by the former holders of the 1,660,035 Class A Ordinary Shares
redeemed in June 2024, the 2,137,134
Class A Ordinary Shares redeemed in January 2024 and the 26,068,281
Class A Ordinary Shares redeemed in January 2023 are no longer available for exercise.
The
Company’s warrants are not indexed to the Company’s Ordinary Shares in the manner contemplated by ASC Section 815-40-15 because
the holder of the instrument is not an input into the pricing of a fixed-for-fixed option on equity shares. As such, the Company’s
warrants are accounted for as warrant liabilities which are required to be valued at fair value at each reporting period.
The
following tables present information about the Company’s warrant liabilities that are measured at fair value on a recurring basis
at June 30, 2024 and December 31, 2023 and indicate the fair value hierarchy of the valuation inputs the Company utilized to determine
such fair value:
Schedule of Warrant Liabilities that are Measured at Fair Value on a Recurring Basis
Description | |
At June 30,
2024 | | |
Quoted price in active markets (level 1) | | |
Significant other observable input (level 2) | | |
Significant other unobservable input (level 3) | |
Warrant liabilities | |
| | | |
| | | |
| | | |
| | |
Public warrants | |
$ | 904,000 | | |
$ | 904,000 | | |
$ | - | | |
$ | - | |
Private placement warrants | |
| 1,002,000 | | |
| - | | |
| 1,002,000 | | |
| - | |
Warrant liability | |
$ | 1,906,000 | | |
$ | 904,000 | | |
$ | 1,002,000 | | |
$ | - | |
Description | |
At December 31,
2023 | | |
Quoted price in active markets (level 1) | | |
Significant other observable input (level 2) | | |
Significant other unobservable input (level 3) | |
Warrant liabilities | |
| | | |
| | | |
| | | |
| | |
Public warrants | |
$ | 150,000 | | |
$ | 150,000 | | |
$ | - | | |
$ | - | |
Private placement warrants | |
| 187,000 | | |
| - | | |
| 187,000 | | |
| - | |
Warrant liability | |
$ | 337,000 | | |
$ | 150,000 | | |
$ | 187,000 | | |
$ | - | |
Warrant liability | |
$ | 337,000 | | |
$ | 150,000 | | |
$ | 187,000 | | |
$ | - | |
At
June 30, 2024 and December 31, 2023 the Company valued its Public Warrants by reference to the publicly traded price of the Public Warrants.
The Company valued its Private Placement Warrants based on the closing price of the Public Warrants since they are similar instruments.
The
warrant liabilities are not subject to qualified hedge accounting.
The
Company’s policy is to record transfers at the end of the reporting period. During the three months ended June 30, 2024 the
Company transferred its Public Warrants from Level 2 to Level 1 based on the trading of the Public Warrants. During the three months
ended March 31, 2024 the Company transferred its Public Warrants from Level 1 to Level 2 based on the trading of the Public
Warrants. There were no transfers during the year ended December 31, 2023.
Note
6 – Trust Account and Fair Value Measurement
The
Company complies with FASB ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting
period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.
Upon
the closing of the Public Offering and the private placement, a total of $300,000,000 was deposited into the Trust Account.
As
further discussed in these notes to unaudited condensed consolidated financial statements, on June 27, 2024, in connection with the Special Meeting to approve Business Combination and other matters, holders of 1,660,035 Class A Ordinary Shares exercised their right to redeem
their shares for cash at a redemption price of approximately $11.38 per share, for an aggregate redemption amount of approximately $18,893,209.
Further, on January 9, 2024, in connection with the 2024 Extension Meeting, holders of 2,137,134 Class A Ordinary Shares exercised their
right to redeem their shares for cash at a redemption price of approximately $11.05 per share, for an aggregate redemption amount of
approximately $23,615,000. Further, on January 11, 2023, in connection with the 2023 Extension Meeting, holders of 26,068,281 Class A
Ordinary Shares exercised their right to redeem their shares for cash at $10.16 per share, for an aggregate redemption amount of approximately
$265,050,000.
The
Company classifies its U.S. government treasury bills and equivalent securities (when it owns them) as held to maturity in accordance
with FASB ASC 320, “Investments – Debt and Equity Securities.” Held-to-maturity securities are those securities which
the Company has the ability and intent to hold until maturity. Money market funds are valued at market.
The
funds in the Trust Account were held in an interest-bearing cash account at June 30, 2024 and December 31, 2023.
Note
7 – Shareholders’ Deficit
Ordinary
Shares:
The
authorized Ordinary Shares include 500,000,000 Class A Ordinary Shares and 50,000,000 Class B Ordinary Shares or 550,000,000 Ordinary
Shares in total. The Company may (depending on the terms of the Business Combination) be required to increase the authorized number of
shares at the same time as its shareholders vote on the Business Combination to the extent the Company seeks shareholder approval in
connection with its Business Combination. Except with respect to matters pertaining to directors prior to the Business Combination, holders
of the Company’s Class A Ordinary Shares and Class B Ordinary Shares vote together as a single class and are entitled to one vote
for each Class A Ordinary Shares and Class B Ordinary Shares.
The
Founder Shares are subject to vesting as follows: 50% upon the completion of a Business Combination and then an additional 12.5% on the
attainment of each of a series of certain “shareholder return” targets exceeding 20%, 30%, 40% and 50%, as further defined
in the agreement. Certain events, as defined in the agreement, could trigger an immediate vesting under certain circumstances. Founder
Shares that do not vest within an eight-year period from the closing of the Business Combination will be cancelled.
At
June 30, 2024 and December 31, 2023, there were 100,000 and 7,500,000, respectively, Class B Ordinary Shares issued and outstanding,
and 7,400,000 and 0, respectively, Class A Ordinary Shares issued and outstanding (after deducting 134,550 and 3,931,719, respectively,
Class A Ordinary Shares subject to possible redemption at June 30, 2024 and December 31, 2023).
Preference
Shares:
The
Company is authorized to issue 5,000,000 preference shares, par value $0.0001 (the “Preference shares”), with such designations,
voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. At June 30,
2024 and December 31, 2023, there were no Preference shares issued or outstanding.
Note
8 – Commitments and Contingencies
Business
Combination Costs:
In
connection with identifying an initial Business Combination candidate and negotiating an initial Business Combination, the Company has
entered into, and may enter into additional, engagement letters or agreements with various consultants, advisors, professionals and others.
The services under these engagement letters and agreements are material in amount and in some instances include contingent or success
fees. Contingent or success fees (but not deferred underwriting commission) would be charged to operations in the quarter that an initial
Business Combination is consummated. In most instances (except with respect to the Company’s independent registered public accounting
firm), these engagement letters and agreements are expected to specifically provide that such counterparties waive their rights to seek
repayment from the funds in the Trust Account.
Risks
and Uncertainties:
COVID-19
— Management continues to evaluate the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably
possible that the pandemic could have an effect on the Company’s unaudited condensed financial position, results of operations
and/or search for a target company and/or a target company’s unaudited condensed financial position and results of its operations,
the specific impact is not readily determinable as of the date of these unaudited condensed consolidated financial statements. These
unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Bank
Closures — Management acknowledges that the Company depends on a variety of U.S. and multi-national financial institutions for
banking services. Market conditions can impact the viability of these institutions, which in effect will affect the Company’s ability
to maintain and provide assurances that it can access its cash and cash equivalents in a timely manner or at all. Any inability to access
or delay in accessing these funds could adversely affect the Company’s liquidity, business and financial condition.
Ongoing
Conflicts — The impact of ongoing and evolving military conflicts, including the invasion of Ukraine by Russia and the Israel-Hamas
war, and economic sanctions and countermeasures on domestic and global economic and geopolitical conditions in general is not determinable
as of the date of these condensed consolidated financial statements.
PIPE
Investment
On
June 20, 2024, GPAC II entered into subscription agreements (the “PIPE Subscription Agreements”) with a large institutional
investor and two other investors (the “PIPE Investors”) pursuant to which the PIPE Investors agreed to purchase in a private
placement, 1,077,541 shares of GPAC II common stock at a price of $9.35 per share, for an aggregate commitment amount of $10,075,000
(the “PIPE Investment”). The PIPE Subscription Agreements provide, among other things, that the PIPE Investment is conditioned
upon the consummation of the transactions contemplated by the Business Combination Agreement. The
purpose of the PIPE Investment is to raise additional capital for use by the Company following the consummation of the transactions contemplated
by the Business Combination (the “Closing”). The PIPE Subscription Agreements contain customary representations and warranties
for each of GPAC II and the PIPE Investors, and customary conditions to closing, including the consummation of the transactions contemplated
by the Business Combination Agreement.
ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The
following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction
with the financial statements and the notes thereto contained elsewhere in this report.
Cautionary
Note Regarding Forward-Looking Statements
All
statements other than statements of historical fact included in this section and elsewhere in this Quarterly Report on Form 10-Q (this
“Quarterly Report”) regarding the Company’s financial position, business strategy and the plans and objectives of management
for future operations, are forward-looking statements. When used in this Quarterly Report, words such as “anticipate,” “believe,”
“estimate,” “expect,” “intend” and similar expressions, as they relate to us or the Company’s
management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions
made by, and information currently available to, the Company’s management. Actual results could differ materially from those contemplated
by the forward looking statements as a result of certain factors detailed in our filings with the SEC.
Overview
and Recent Developments
We
are a blank check company incorporated on November 3, 2020 as a Cayman Islands exempted company for the purpose of effecting a merger,
share exchange, asset acquisition, share purchase, reorganization or similar Business Combination with one or more businesses or entities.
On
July 8, 2024, we completed our Business Combination with Stardust Power.
All
activity from our formation through June 30, 2024 relates to our formation and our initial public offering (“Initial Public Offering”),
and subsequent to the Initial Public Offering, identifying a target company for a Business Combination and consummating the Business
Combination with Stardust. We will not generate any operating revenues until after the completion of our initial Business Combination,
at the earliest.
Results
of Operations
For
the period from November 3, 2020 (date of inception) to June 30, 2024, our activities consisted of formation and preparation for the
Public Offering and, subsequent to completion of the public offering on January 14, 2021, identifying and completing a suitable initial
Business Combination. As such, we had no operations or significant operating expenses until after the completion of the Public Offering
in January 2021.
Our
normal operating costs since January 14, 2021 include costs associated with our search for an initial Business Combination (see below),
costs associated with our governance and public reporting (see below), and a charge of $25,000 per month from our Sponsor for administrative
services. During the three months ended June 30, 2024, the Sponsor waived the administrative fee payable. Costs for such Sponsor provided
administrative services aggregate approximately ($350,000) and ($275,000) respectively for the three and six months ended June 30, 2024
and approximately $75,000 and $150,000 respectively for the three and six months ended June 30, 2023. Costs associated with our governance and public
reporting have increased since the Public Offering and were approximately $194,000 and $353,000, respectively, for the three and six
months ended June 30, 2024 and approximately $135,000 and $241,000, respectively, for the three and six months ended June 30, 2023.
Professional
costs for work associated with reviewing potential Business Combinations as well as with the January 2024 and 2023 proxy and Extension
Meetings was approximately $1,618,000 and $3,475,000 respectively, in the three and six months ended June 30, 2024 and approximately
$96,000 and $840,000 for the three and six months ended June 30, 2023.
During
the six months ended June 30, 2024, the Company negotiated settlement and release agreements with various creditors in exchange for
certain payments made and resulting in the reversal of accruals totaling approximately $2,961,000 which is included as a credit to operating
expenses in the accompanying unaudited condensed consolidated statements of operations.
Other
income (expense) includes both interest income and the change in the fair value of the Public Warrants and Private Placement
Warrants at each reporting date. Interest income was approximately $215,000 and 488,000 respectively, for the three and six months
ended June 30, 2024 and approximately $471,000 and 1,392,000 respectively, for the three and six months ended June 30, 2023. The
variation in interest income reflects market conditions as well as changing Trust Account balances due to redemptions. The Company
is required to measure the fair value of the Public Warrants and Private Placement Warrants at the end of each reporting period and
recognize changes in the fair value from the prior period in the Company’s operating results for each current period. The
change in fair value of warrants was item of other expense of an aggregate of approximately $928,000 and $1,569,000, respectively in
the three and six months ended June 30, 2024 and was an item of other income of approximately $1,964,000 and other expenses of
$56,000, respectively in the three and six months ended June 30, 2023.
There
were no income tax expenses for the three and six months ended June 30, 2024 or 2023 because we are a Cayman Islands exempted
company and are not subject to income tax in the United States or in the Cayman Islands. We did not withdraw any interest from the
Trust Account in the three and six months ended June 30, 2024 or 2023.
Liquidity
and Capital Resources
On
January 14, 2021, we consummated the Public Offering of an aggregate of 30,000,000 Units at a price of $10.00 per unit generating gross
proceeds of approximately $300,000,000 before underwriting discounts and expenses. Simultaneously with the consummation of the Public
Offering, we consummated the private placement of 5,566,667 Private Placement Warrants, each exercisable to purchase one share of our
Class A Ordinary Shares at $11.50 per share, to the Sponsor, at a price of $1.50 per Private Placement Warrant, generating gross proceeds,
before expenses, of approximately $8,350,000. At that time, the proceeds in the Trust Account were initially invested in cash. At June 30, 2024 and December 31, 2023, the proceeds in the Trust Account were invested in cash.
The
net proceeds from the Public Offering and private placement were approximately $301,471,000, net of the non-deferred portion of the underwriting
commissions of $6,000,000 and offering costs and other expenses of approximately $904,000 (including approximately $554,000 of offering
expenses and approximately $350,000 of insurance that is accounted for as prepaid expense). $300,000,000 of the proceeds of the Public
Offering and the private placement have been deposited in the Trust Account and are not available to us for operations (except certain
amounts to pay taxes, if any). At June 30, 2024 and December 30, 2023, we had approximately $0 and $22,000, respectively, of cash available
outside of the Trust Account to fund our activities until we consummate an initial Business Combination.
On
January 11, 2023, certain shareholders elected to redeem 26,068,281 Class A Ordinary Shares at $10.167 per share, approximately $265,050,000,
from the Trust Account following the 2023 Extension Meeting.
On
January 9, 2024, in connection with the 2024 Extension Meeting, holders of 2,137,134 Class A Ordinary Shares exercised their right to
redeem their shares for cash at a redemption price of approximately $11.05 per share, for an aggregate redemption amount of approximately
$23,615,331. Following the redemptions, 1,794,585 Class A Ordinary Shares remain outstanding. Further, in connection with the 2024 Extension
Meeting, the Company entered into Non-Redemption Agreements with holders of 1,503,254 Class A Ordinary Shares in exchange for the transfer
of 127,777 shares.
On
June 27, 2024, in connection with the shareholder meeting to approve the Business Combination and other related matters, the holders
of 1,660,035 Class A Ordinary Shares of the Company exercised their right to redeem their shares for cash at a redemption price of approximately
$11.38 per share for an aggregate redemption amount of approximately $18,893,209 reducing the number of Class A Ordinary Shares from
1,794,585 to 134,550. Subsequently on July 3, 2024 holders of 2,877 GPAC II Class A Ordinary Shares
reversed their redemptions, resulting in a total of 137,427
GPAC II Class A Ordinary Shares outstanding as of July 3, 2024.
Until
the consummation of the Public Offering, the Company’s only sources of liquidity were an initial purchase of our Class B Ordinary
Shares for $25,000 by the Sponsor, and the availability of loans to us of up to $300,000 by our Sponsor under the Note, a total of $199,000
was actually loaned by the Sponsor against the issuance of the Note. The Note was non-interest bearing and was paid in full on January
14, 2021 in connection with the closing of the Public Offering, accordingly, no amounts are available or were outstanding under the Note
at June 30, 2024 and December 31, 2023.
Going
Concern:
At
June 30, 2024, the Company had approximately $0 in cash and approximately $11,389,000 in working capital deficit. The Company has incurred
significant costs and expects to continue to incur additional costs in pursuit of its Business Combination. Until June 30, 2024, and
through the closing date, the Company used the funds from Sponsor loans in connection with consummating the Business Combination with
Stardust.
Upon
completion of the Business Combination with Stardust Power Inc. on July 8, 2024, the Company’s consolidated cash balance increased
due to the PIPE investments of $10,075,000, and $1,481,835 of trust account proceeds, net of redemptions and related fees. The combined
company is also required to make various payments including SPAC transaction costs incurred upon the close of the Business Combination.
As
of the date on which the accompanying unaudited condensed consolidated financial statements were available to be issued, we believe
that the cash on hand and additional investments obtained through the Business Combination will be inadequate to satisfy
Company’s working capital and capital expenditure requirements for at least the next twelve months. 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 over the next year. Management intends to finance operations over the next twelve months through
additional issuance of equity or borrowings. 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.
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 the business, operations and financial
performance.
Off-balance
sheet financing arrangements
We
have no obligations, assets or liabilities which would be considered off-balance sheet arrangements. We do not participate in transactions
that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which
would have been established for the purpose of facilitating off-balance sheet arrangements.
We
have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or
commitments of other entities, or entered into any agreements for non-financial assets.
Contractual
obligations
At
June 30, 2024, we did not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities. In
connection with the Public Offering, we entered into an Administrative Support Agreement with the Sponsor, pursuant to which the Company
pays the Sponsor $25,000 per month for office space, utilities and secretarial and administrative support. During the three months ended
June 30, 2024, the Sponsor waived the administrative fees.
In
connection with identifying an initial Business Combination candidate and negotiating an initial Business Combination, the Company may
enter into engagement letters or agreements with various consultants, advisors, professionals and others in connection with an initial
Business Combination. The services under these engagement letters and agreements can be material in amount and in some instances can
include contingent or success fees. Contingent or success fees (but not deferred underwriting compensation) would be charged to operations
in the quarter that an initial Business Combination is consummated. In most instances (except with respect to our independent registered
public accounting firm), these engagement letters and agreements are expected to specifically provide that such counterparties waive
their rights to seek repayment from the funds in the Trust Account.
JOBS
Act
The
JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We will
qualify as an “emerging growth company” and under the JOBS Act will be allowed to comply with new or revised accounting pronouncements
based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or revised accounting
standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which adoption of such
standards is required for non-emerging growth companies. As a result, our financial statements may not be comparable to companies that
comply with new or revised accounting pronouncements as of public company effective dates.
Additionally,
we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject
to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions
we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over
financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, (ii) provide all of the compensation disclosure that may be required
of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement
that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s
report providing additional information about the audit and the financial statements (auditor discussion and analysis) and (iv) disclose
certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of
the Chief Executive Officer’s compensation to median employee compensation. These exemptions will apply for a period of five years
following the completion of our Public Offering or until we are no longer an “emerging growth company,” whichever is earlier.
Critical
Accounting Estimates
The
requirement under 229.303 (Item 303) Management’s discussion and analysis of financial condition and results of operations is:
Critical accounting estimates. Critical accounting estimates are those estimates made in accordance with generally accepted accounting
principles that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact
on the financial condition or results of operations of the registrant. Critical accounting estimates provide qualitative and quantitative
information necessary to understand the estimation uncertainty and the impact the critical accounting estimate has had or is reasonably
likely to have on financial condition or results of operations to the extent the information is material and reasonably available. This
information should include why each critical accounting estimate is subject to uncertainty and, to the extent the information is material
and reasonably available, how much each estimate and/or assumption has changed over a relevant period, and the sensitivity of the reported
amount to the methods, assumptions and estimates underlying its calculation.
The
preparation of financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial
statements, and income and expenses during the periods reported.
Actual
results could materially differ from those estimates. Management has determined that the Company has no critical accounting estimates.
ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The
net proceeds of our Public Offering and a portion of the proceeds of our concurrent sale of Private Placement Warrants are held in a
Trust Account invested in cash or U.S. Government Treasury obligations with a maturity of 185 days or less or in money market funds meeting
certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended, and which invest only in direct U.S. Government
Treasury obligations. On January 11, 2023, we liquidated the U.S. government treasury obligations or money market funds held in the Trust
Account. The funds in the Trust Account will be maintained in cash in an interest-bearing demand deposit account at a bank until the
earlier of our initial Business Combination and our liquidation. Interest on such deposit account is currently approximately 4.5% per
annum, but such deposit account carries a variable rate, and we cannot assure you that such rate will not decrease or increase significantly.
ITEM
4. CONTROLS AND PROCEDURES
Evaluation
of Disclosure Controls and Procedures
We
are required to comply with the internal control requirements of the Sarbanes-Oxley Act for the period ending December 31, 2021 and thereafter.
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.
We
expect to assess the internal controls of our Target Business or businesses prior to the completion of our initial Business Combination
and, if necessary, to implement and test additional controls as we may determine are necessary in order to state that we maintain an
effective system of internal controls. A Target Business may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding
the adequacy of internal controls. Many small and mid-sized Target Businesses we may consider for our initial Business Combination may
have internal controls that need improvement in areas such as:
➤ |
staffing
for financial, accounting and external reporting areas, including segregation of duties; |
|
|
➤ |
reconciliation
of accounts; |
|
|
➤ |
proper
recording of expenses and liabilities in the period to which they relate; |
|
|
➤ |
evidence
of internal review and approval of accounting transactions; |
|
|
➤ |
documentation
of processes, assumptions and conclusions underlying significant estimates; and |
|
|
➤ |
documentation
of accounting policies and procedures. |
Management
assessed the effectiveness of our internal control over financial reporting on June 30, 2024. In making these assessments, management
used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control — Integrated
Framework (2013). Based on that assessment, management concluded that our disclosure controls and procedures were effective. Accordingly,
our management believes that the financial statements included in this report present fairly in all material respects our financial position,
results of operations and cash flows for the periods presented.
This
report does not include an attestation report of internal controls from our independent registered public accounting firm due to our
status as an emerging growth company under the JOBS Act.
Because
it will take time, management involvement and perhaps outside resources to determine what internal control improvements are necessary
for us to meet regulatory requirements and market expectations for our operation of a Target Business, we may incur significant expenses
in meeting our public reporting responsibilities, particularly in the areas of designing, enhancing, or remediating internal and disclosure
controls. Doing so effectively may also take longer than we expect, thus increasing our exposure to financial fraud or erroneous financing
reporting.
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.
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 also is 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.
PART
II — OTHER INFORMATION
ITEM
1. LEGAL PROCEEDINGS
None.
ITEM
1A. RISK FACTORS
Investing
in our Common Stock involves a high degree of risk. These risks are more fully described in the section titled “Risk Factors”
included in our prospectus filed with the SEC pursuant to Rule 424(b) under the Securities Act on August 9, 2024 (the “Prospectus”)
in addition to the information in this Quarterly Report. Any of these factors could result in a material adverse effect on our results
of operations or financial condition. A summary of these risk factors that could materially and adversely affect our business, financial
condition, operating results and prospectus include the following:
● | Our
limited history makes it difficult to evaluate our business and prospects and may increase
the risks associated with your investment. |
● | Our
management has identified conditions that raise substantial doubt about our ability to continue
as a going concern. |
● | We
are a development stage company, and there is no guarantee that our development will result
in the commercial production of lithium from brine sources. |
● | Pipeline
of lithium feedstock may prove to be non-viable, which could have material adverse impact
on our business and operations. |
● | Even
if we are successful in completing all initial phases and the first commercial production
at our large central refinery optimized for multiple inputs of lithium brine inputs (the
“Facility”) in Oklahoma and consistently produce battery-grade lithium on a commercial
scale, we may not be successful in commencing and expanding commercial operations to support
the growth of our business. |
● | Our
products may not qualify for use for our intended customers. |
● | Delays
and other obstacles may prevent the successful completion of our Facility. |
● | Lithium
can be highly combustible, and if we have incidences, it could adversely impact us. |
● | The
lithium brine industry includes well capitalized players. |
● | Low-cost
producers could disrupt the market and be able to provide products cheaper than the Company. |
● | We
may be unable to qualify for existing federal and state level grants and incentives and the
grants and incentives may not be released to us as quickly or efficiently as we anticipate
or at all. |
● | Our
success as a company producing battery-grade lithium and related products depends to a great
extent on the capabilities of our partners for lithium extraction from brine and our ability
to secure capital for the implementation of brine processing plants. |
● | Changes
in technology or other developments could adversely affect demand for lithium compounds or
result in preferences for substitute products. |
● | The
development of our lithium refinery is highly dependent upon the currently projected demand
for and uses of lithium-based end products. |
● | Our
future growth and success are dependent upon consumers’ demand for electric vehicles
in an automotive industry that is generally competitive, cyclical and volatile. |
● | We
may be unable to successfully negotiate final, binding terms related to our current non-binding
memoranda of understanding and letters of intent for supply and offtake agreements, which
could harm our commercial prospects. |
● | Our
future business prospects could be adversely affected if we are unable to enter into definitive
agreements relating to contemplated joint ventures with Usha Resources Inc. and IGX Minerals
and, if such agreements are in fact completed, there can be no assurance that the required
financing for such joint ventures will be available, that their respective projects will
be completed in a timely manner, or that they will ultimately be successful. |
● | If
we fail to adequately protect our intellectual property or technology (including any later
developed or acquired intellectual property or technology), our competitive position could
be impaired and we may lose valuable assets, generate reduced revenue and incur costly litigation
to protect our rights. |
● | The
reduction or elimination of government subsidies and economic incentives for alternative
energy technologies, or the failure to renew such subsidies and incentives, could reduce
demand for our products, lead to a reduction in our revenues, and adversely impact our operating
results and liquidity. |
● | We
identified material weaknesses in our internal control over financial reporting. If we are
unable to remediate these material weaknesses or if we experience additional material weaknesses
or other deficiencies in the future or otherwise fail to maintain an effective system of
internal control over financial reporting, we may not be able to accurately or timely report
our financial results, which could result in loss of investor confidence and adversely impact
our stock price. |
● | An
active trading market for Common Stock may never develop or be sustained, which may make
it difficult to sell the shares of Common Stock you receive. |
● | The
Company’s certificate of incorporation and bylaws, which became effective on July 8,
2024, provide for a classified board of directors, with directors serving staggered three-year
terms, which could make it more difficult for stockholders to replace a majority of the directors. |
● | There
is no guarantee that the Warrants will ever be in the money, and they may expire worthless. |
● | We
may redeem your unexpired Warrants prior to their exercise at a time that is disadvantageous
to you, thereby making your warrants worthless. |
There
have been no material changes to the risk factors set forth in the Prospectus, which are incorporated herein by reference. However, the
risk factors described in this report and in the Prospectus are not the only risks that we face. Additional risk factors not presently
known to us or that we currently deem immaterial may also impair our business or results of operations. If any such risks materialize,
it could have a material adverse effect on our business, financial condition, results of operations, and growth prospects and cause the
trading price of our Common Stock to decline. We may disclose changes to such risk factors or disclose additional risk factors from time
to time in our future filings with the SEC.
ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None
ITEM
3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM
4. MINE SAFETY DISCLOSURES
None.
ITEM
5. OTHER INFORMATION
None.
ITEM
6. EXHIBITS
Exhibit
Number |
|
Description |
2.1† |
|
Business Combination Agreement, dated as of November 21, 2023, by and among Global Partner Acquisition Corp., Strike Merger Sub I, Inc., Strike Merger Sub II, LLC., and Stardust Power Inc. (incorporated by reference to Exhibit 2.1 to the Company’s current report on Form 8-K filed with the SEC on November 21, 2023). |
2.2 |
|
Amendment No. 1 to the Business Combination Agreement, dated as of April 24, 2024, by and among Global Partner Acquisition Corp II, Strike Merger Sub I, Inc., Strike Merger Sub II, LLC, and Stardust Power Inc. (incorporated by reference to Exhibit 2.1 to Global Partner Acquisition Corp II’s Current Report on Form 8-K, filed with the SEC on April 24, 2024). |
2.3 |
|
Amendment No. 2 to the Business Combination Agreement, dated as of June 20, 2024, by and among Global Partner Acquisition Corp II, Strike Merger Sub I, Inc., Strike Merger Sub II, LLC, and Stardust Power Inc. (incorporated by reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K, filed with the SEC on June 21, 2024). |
3.1 |
|
Certificate of Incorporation of Global Partner Acquisition Corp II (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K, filed with the SEC on July 12, 2024). |
3.2 |
|
Bylaws of Global Partner Acquisition Corp II (incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K, filed with the SEC on July 12, 2024). |
10.1 |
|
Form of PIPE Subscription Agreement (incorporated by reference to Exhibit 10.1 to the Company’s current report on Form 8-K filed with the SEC on June 21, 2024). |
31.1* |
|
Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002. |
31.2* |
|
Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002. |
32.1** |
|
Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002. |
32.2** |
|
Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002. |
101.INS |
|
Inline
XBRL Instance Document. |
101.SCH |
|
Inline
XBRL Taxonomy Extension Schema Document. |
101.CAL |
|
Inline
XBRL Taxonomy Extension Calculation Linkbase Document. |
101.DEF |
|
Inline
XBRL Taxonomy Extension Definition Linkbase Document. |
101.LAB |
|
Inline
XBRL Taxonomy Extension Label Linkbase Document. |
101.PRE |
|
Inline
XBRL Taxonomy Extension Presentation Linkbase Document. |
104 |
|
Cover
Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
† |
Schedules and exhibits to this Exhibit omitted pursuant to Regulation S-K Item 601(b)(2). The Combined Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request. |
SIGNATURE
In
accordance with the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
|
STARDUST POWER INC. |
|
|
|
Dated:
August 14, 2024 |
|
/s/
Udhaychandra Devasper |
|
Name: |
Udhaychandra
Devasper |
|
Title: |
Chief
Financial Officer |
|
|
(Principal
Financial and Accounting Officer) |
Exhibit
31.1
CERTIFICATION
OF THE PRINCIPAL EXECUTIVE OFFICER
PURSUANT
TO RULE 13a-14(a) AND RULE 15d-14(a)
UNDER
THE SECURITIES EXCHANGE ACT OF 1934,
AS
ADOPTED PURSUANT TO
SECTION
302 OF THE SARBANES-OXLEY ACT OF 2002
I
Roshan Pujari, certify that:
1. |
I
have reviewed this Quarterly Report on Form 10-Q of Stardust Power Inc.; |
|
|
2. |
Based
on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
the period covered by this report; |
|
|
3. |
Based
on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in
this report; |
|
|
4. |
The
registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) |
Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this report is being prepared; |
|
|
b) |
Designed
such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles; |
|
|
c) |
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
and |
|
|
d) |
Disclosed
in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. |
The
registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing
the equivalent functions): |
(a) |
All
significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
and |
|
|
(b) |
Any
fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting. |
August
14, 2024 |
By: |
/s/
Roshan Pujari |
|
|
Roshan
Pujari |
|
|
Chief
Executive Officer and Chairman |
|
|
(Principal
Executive Officer) |
Exhibit
31.2
CERTIFICATION
OF THE PRINCIPAL FINANCIAL OFFICER
PURSUANT
TO RULE 13a-14(a) AND RULE 15d-14(a)
UNDER
THE SECURITIES EXCHANGE ACT OF 1934,
AS
ADOPTED PURSUANT TO
SECTION
302 OF THE SARBANES-OXLEY ACT OF 2002
I,
Udaychandra Devasper, certify that:
1. |
I
have reviewed this Quarterly Report on Form 10-Q of Stardust Power Inc.; |
|
|
2. |
Based
on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
the period covered by this report; |
|
|
3. |
Based
on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in
this report; |
|
|
4. |
The
registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) |
Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this report is being prepared; |
|
|
b) |
Designed
such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles; |
|
|
c) |
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
and |
|
|
d) |
Disclosed
in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. |
The
registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing
the equivalent functions): |
(a) |
All
significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
and |
|
|
(b) |
Any
fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting. |
August
14, 2024 |
By: |
/s/
Udaychandra Devasper |
|
|
Udaychandra
Devasper |
|
|
Chief
Financial Officer |
|
|
(Principal
Financial and Accounting Officer) |
Exhibit
32.1
CERTIFICATION
OF THE PRINCIPAL EXECUTIVE OFFICER
PURSUANT
TO 18 U.S.C. SECTION 1350,
AS
ADOPTED PURSUANT TO
SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002
In
connection with the Quarterly Report on Form 10-Q of Stardust Power Inc. (the “Company”) for the quarter ended June 30, 2024,
as filed with the Securities and Exchange Commission (the “Report”), I, Roshan Pujari, Chief Executive Officer of the Company,
certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
|
1. |
The
Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
|
|
|
|
2. |
To
my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results
of operations of the Company as of and for the period covered by the Report. |
August
14, 2024 |
By: |
/s/
Roshan Pujari |
|
|
Roshan
Pujari |
|
|
Chief
Executive Officer and Chairman |
|
|
(Principal
Executive Officer) |
Exhibit
32.2
CERTIFICATION
OF THE PRINCIPAL FINANCIAL OFFICER
PURSUANT
TO 18 U.S.C. SECTION 1350,
AS
ADOPTED PURSUANT TO
SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002
In
connection with the Quarterly Report on Form 10-Q of Stardust Power Inc. (the “Company”) for the quarter ended June 30, 2024,
as filed with the Securities and Exchange Commission (the “Report”), I, Udaychandra Devasper, Chief Financial Officer of
the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
|
1. |
The
Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
|
|
|
|
2. |
To
my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results
of operations of the Company as of and for the period covered by the report. |
August
14, 2024 |
By: |
/s/
Udaychandra Devasper |
|
|
Udaychandra
Devasper |
|
|
Chief
Financial Officer |
|
|
(Principal
Financial Officer) |
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