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Stardust Power Inc.(SDST) - 2024 Q4 - Annual Report

Financial Incentives and Funding - Stardust Power has received an illustrative incentives package of up to 257millionfromtheStateofOklahoma,contingentonmeetingspecificmilestones[181].TheOklahomaQualityJobsProgramcouldprovide257 million from the State of Oklahoma, contingent on meeting specific milestones [181]. - The Oklahoma Quality Jobs Program could provide 100,332,936 based on an annual payroll of 99,562,000over10years,requiringanaveragewageof99,562,000 over 10 years, requiring an average wage of 120,071 and the creation of at least 10 new jobs [186]. - The Company has engaged industry experts to assist in applying for government grants, with potential grants totaling up to 27.5millionfromtheDepartmentofDefenseand27.5 million from the Department of Defense and 150 million from the Department of Energy [188]. - The Company has entered into binding term sheets for a private placement to raise 550,000forcapitalexpendituresandworkingcapital[183].ProductionandSupplyChainTheCompanyhasnotyetcommencedproductionandhasnoexistingcustomers,buthasreceivednonbindinglettersofintentfromindustryparticipants[192].TheCompanyhasenteredintoanonbindingletteragreementwithSumitomoforapotentiallongtermcommercialofftakeagreementtosupply20,000metrictonsoflithiumcarbonateperyear,withthepossibilitytoincreaseto25,000metrictons[193].TheDepartmentofEnergyplanstoinvestover550,000 for capital expenditures and working capital [183]. Production and Supply Chain - The Company has not yet commenced production and has no existing customers, but has received non-binding letters of intent from industry participants [192]. - The Company has entered into a non-binding letter agreement with Sumitomo for a potential long-term commercial offtake agreement to supply 20,000 metric tons of lithium carbonate per year, with the possibility to increase to 25,000 metric tons [193]. - The Department of Energy plans to invest over 7 billion in the battery supply chain from fiscal years 2022 to 2026, focusing on sustainable sourcing and processing of critical minerals [187]. - The Company intends to utilize brine feedstock to reduce dependency on imported raw materials, potentially lowering costs and speeding up time to market [196]. Environmental and Regulatory Compliance - The company has received a general permit for stormwater discharges and is under technical review for its air emissions permit application submitted on January 20, 2025 [202]. - Stardust Power is engineering its facility based on Zero Liquid Discharge (ZLD) technologies, minimizing environmental impact [218]. - The company has submitted an air emissions permit application, which is currently under technical review, indicating progress in regulatory compliance [202]. - Compliance with environmental regulations may impose substantial costs and affect operational results [201]. Workforce and Human Capital - As of December 31, 2024, Stardust Power has eight employees, indicating a small workforce [214]. - The company intends to focus hiring efforts on local communities near project areas, promoting social responsibility [219]. - The company intends to offer competitive compensation and educational opportunities to retain human capital [513]. - Human capital risks are present if the company fails to attract and retain qualified individuals, particularly in specialized technical roles [513]. Risk Management - The company is exposed to market risks, including interest rate risk and liquidity risk, which could impede growth plans [509][510]. - The company is currently operating in a volatile inflationary environment, which has led to higher costs impacting its business [518]. - The company is subject to credit risk with cash balances exceeding the FDIC insured amount of $250,000 [517]. - The company has only one financial banking institution, which contributes to its credit risk exposure [517]. - Legal and regulatory risks include potential non-compliance with extensive regulations across various jurisdictions [515]. - The company has established procedures to ensure compliance with statutory and regulatory requirements, including public company reporting obligations [515]. - The company is developing policies to manage operational risk and ensure compliance with corporate policies and limits [512]. - The company has implemented business continuity plans to cover critical processes on a company-wide basis [512]. Management and Strategy - The management team has decades of experience in lithium-ion technology and capital raising, which is expected to support the Company's growth strategy [196]. - The Company plans to optimize its refinery for multiple inputs, which is expected to reduce risks and costs, differentiating it in the industry [196]. - Stardust Power is competing with established companies in lithium production, which may affect product pricing due to market fluctuations [198]. - The company plans to source energy for its refinery from sustainable sources, including solar and wind power [217]. - Stardust Power is committed to transparency and has established various corporate governance policies [220].