Lender forces debt-for-stock swap at Stardust Power (NASDAQ: SDST)
Rhea-AI Filing Summary
Stardust Power Inc. (SDST) reports that a prior event of default under its $4,800,000 Senior Secured Convertible Promissory Note with Lind Global Asset Management XIII LLC has led Lind to force a partial conversion of the note. The default was triggered when the company’s market capitalization stayed below $15.0 million for ten consecutive trading days, which allows Lind to require conversion of principal into common stock.
On August 17, 2026, Lind elected to convert $150,000 of principal at a conversion price of $0.492 per share, and on August 20, 2026 the company issued 304,878 shares of common stock to Lind. After this conversion, $3,430,000 of principal remained outstanding under the note and the company had 14,523,933 common shares issued and outstanding. The conversion generated no cash proceeds for Stardust Power and may result in additional amounts becoming due, including any mandatory default amount.
Positive
- None.
Negative
- Event of default on convertible note triggered when market capitalization stayed below $15.0 million for ten consecutive trading days, giving the lender enhanced remedies including forced conversions.
- Large remaining debt balance of $3,430,000 principal still outstanding under the Senior Secured Convertible Promissory Note after the conversion, with potential additional default-related amounts.
- Equity dilution with no cash inflow from issuing 304,878 shares to Lind on conversion, as the company received no cash proceeds from this transaction.
Filing Explained
The August 20 issuance completed Lind’s
8-K Event Classification
Item 8.01 — Other Events
1 item
Item 8.01
Other Events
Other
Voluntary disclosure of events the company deems important to shareholders but not covered by other items.
Key Figures
Original principal of 2025 Convertible Note: $4,800,000
Market capitalization default threshold: $15.0 million
Principal converted on August 17, 2026: $150,000
+5 more
8 metrics
Original principal of 2025 Convertible Note
$4,800,000
Senior Secured Convertible Promissory Note issued to Lind Global Asset Management XIII LLC
Market capitalization default threshold
$15.0 million
Market cap remaining below this level for ten consecutive trading days triggered an event of default
Principal converted on August 17, 2026
$150,000
Portion of the 2025 Convertible Note principal converted into common stock
Conversion price
$0.492 per share
Price used to convert $150,000 principal into common stock for Lind
Conversion Shares issued
304,878 shares
Common stock issued to Lind on August 20, 2026 to satisfy converted principal
Remaining principal after conversion
$3,430,000
Aggregate principal amount still outstanding under the 2025 Convertible Note
Shares outstanding after conversion
14,523,933 shares
Stardust Power common stock issued and outstanding after giving effect to the conversion
Warrant exercise terms (SDSTW)
10 warrants for one share at $115.00
Listed redeemable warrants exercisable into common stock on The Nasdaq Capital Market
Key Terms
Senior Secured Convertible Promissory Note, event of default, Triggering Event, Section 3(a)(9) of the Securities Act, +2 more
6 terms
Senior Secured Convertible Promissory Note financial
"issued to Lind a Senior Secured Convertible Promissory Note in the original principal"
A senior secured convertible promissory note is a formal IOU a company issues that is backed by specific assets (secured), given higher priority for repayment than other debts (senior), and can be exchanged for company shares instead of cash (convertible). For investors this means the loan is safer than unsecured debt because it has collateral and repayment priority, but it also carries the potential for dilution if the lender converts the note into equity — like holding a mortgage-backed IOU that can later be swapped for ownership stakes.
event of default financial
"resulting in an event of default under the 2025 Convertible Note (the “Triggering Event”)"
An event of default is a specific breach of a loan or bond agreement—such as missed payments or breaking agreed rules—that gives lenders the legal right to act, for example by demanding immediate repayment, seizing collateral, or accelerating other obligations. For investors, it’s a red flag because it can sharply reduce a company’s ability to operate or raise money, like a car lender repossessing a vehicle after missed payments, and often leads to falling share or bond prices.
Triggering Event financial
"resulting in an event of default under the 2025 Convertible Note (the “Triggering Event”)"
Section 3(a)(9) of the Securities Act regulatory
"issued in reliance upon the exemption from the registration requirements afforded by Section 3(a)(9)"
mandatory default amount financial
"does not reflect the mandatory default amount or any other additional amounts"
Emerging growth company regulatory
"405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 Emerging growth company"
An emerging growth company is a recently public or smaller public firm that qualifies for temporary, lighter regulatory and disclosure rules to reduce the cost and effort of being public. For investors, it means the company may provide less historical financial detail and face fewer reporting requirements than larger firms, so it can grow more quickly but also carries higher uncertainty—like buying a promising early-stage product with fewer user reviews.
FAQ
What default did Stardust Power Inc. (SDST) disclose in this 8-K?
Stardust Power disclosed an event of default under its 2025 Senior Secured Convertible Promissory Note after its market capitalization remained below $15.0 million for ten consecutive trading days, allowing the lender to require conversion of principal into common stock.
How much of the Lind convertible note did SDST convert on August 17, 2026?
On August 17, 2026, Lind elected to convert $150,000 of the outstanding principal of the 2025 Convertible Note into Stardust Power common stock at a $0.492 per share conversion price.
What principal remains outstanding on SDST’s 2025 Convertible Note after the conversion?
After the August 2026 conversion, $3,430,000 in aggregate principal amount remained outstanding under Stardust Power’s 2025 Senior Secured Convertible Promissory Note, excluding any mandatory default amount or other default-related amounts.
What are the key terms of SDST’s listed warrants (SDSTW)?
Stardust Power’s listed redeemable warrants, trading under symbol SDSTW, have terms under which 10 warrants are exercisable for one share of common stock at an exercise price of $115.00 per share.
AI-generated analysis. How Rhea-AI works. Not financial advice.
