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GREENWICH, Conn. - Stardust Power Inc. (NASDAQ: SDST), a U.S. company specializing in the development of battery-grade lithium products, has set the terms for its public offering. The announcement comes as the company's stock trades near its 52-week low of $1.20, having declined about 90% over the past six months according to InvestingPro data. The company is offering up to 4,792,000 shares of common stock, along with warrants to purchase an equivalent number of shares, at a combined price of $1.20 per share and accompanying warrant. The offering is expected to generate approximately $5.75 million in gross proceeds before deducting fees and expenses, without factoring in any potential warrant exercises.
The warrants are priced at $1.30 per share, can be exercised immediately, and will expire five years from the date of issue. Stardust Power's CEO, Roshan Pujari, expressed confidence in the support from a significant institutional investor and underscored the funding's role in advancing the company's large central lithium refinery project to the final investment decision (FID) stage.
The closing of the offering is anticipated to take place around January 27, 2025, contingent on customary closing conditions. Stardust Power intends to allocate the net proceeds towards working capital, general corporate purposes, and to settle amounts due under certain promissory notes. With a current market capitalization of approximately $59 million and a weak financial health score according to InvestingPro analysis, the company faces challenges with its current ratio at 0.3, indicating potential liquidity concerns.
A.G.P./Alliance Global Partners (NYSE:GLP) is serving as the exclusive placement agent for the offering. The securities are being offered following a registration statement filed with the Securities and Exchange Commission, which became effective on January 23, 2025.
Stardust Power is committed to establishing a resilient supply chain for battery-grade lithium in the United States and is in the process of developing a strategically located refinery in Muskogee, Oklahoma, with a projected production capacity of up to 50,000 metric tons annually.
This news is based on a press release statement and contains forward-looking statements that involve risks and uncertainties, including those related to the closing of the offering and the intended use of proceeds. The company cautions not to place undue reliance on these forward-looking statements, which are subject to various factors and uncertainties. InvestingPro analysis suggests the stock is currently undervalued, with 14 additional ProTips available to subscribers, covering crucial aspects like cash flow metrics and growth potential. Discover more comprehensive insights and financial analysis tools at InvestingPro.
In other recent news, Stardust Power has made significant strides in its lithium project and corporate restructuring. The company's earnings and revenue have been positively evaluated by Roth/MKM and B.Riley, both issuing a Buy rating for Stardust Power. A notable development is the $4.7 million engineering agreement with Primero USA, Inc. for the development of its Muskogee Lithium facility, with services expected to be completed in the first half of 2025.
Stardust Power has also initiated significant corporate restructuring, transitioning from WithumSmith+Brown, PC, to KNAV CPA LLP as its independent registered public accounting firm. Furthermore, the company has appointed Paramita Das as its new Chief Strategy Officer and Senior Advisor.
In a bid to reduce operating costs and capital expenditures, Stardust Power has entered into a 90-day exclusivity agreement with KMX Technologies, Inc. to negotiate the use of a lithium brine concentration technology. This potential licensing arrangement could grant Stardust exclusive rights to this technology in several global jurisdictions. These recent developments underscore Stardust Power's commitment to reshoring lithium processing and production to enhance U.S. energy independence and sustainability in the lithium supply chain.
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