Stardust Power Inc. (NASDAQ: SDST), a pre-revenue lithium refining company, carries a dilution risk grade of 9 out of 10 — the highest tier — driven by two simultaneous share-creation mechanisms that dwarf its existing share count.
The company has approximately 40.6 million shares outstanding and a public float — shares available for trading by non-insiders — of about 38.1 million. It has 700 million shares authorized, leaving vast room for issuance. What makes the structure unusual is not just the headroom but the speed at which it is being consumed.
The Two Channels
Lind Global convertible note in default. Structured-debt lender Lind Global Asset Management holds a senior secured convertible note that entered default on August 11, 2026, when the company's market capitalization stayed below $15 million for ten consecutive trading days. In default, Lind can convert roughly $4.22 million — the Mandatory Default Amount, meaning 110% of principal plus accrued default interest — at 80% of the average of the three lowest volume-weighted average prices over the prior 20 trading days. At recent levels that works out to approximately 49.8 million shares, or about 131% of the current float. A 4.99% beneficial-ownership cap limits each tranche to roughly 2 million shares, but resets every time Lind sells, so the cap only paces delivery rather than preventing it.
B. Riley at-the-market program. An ATM facility — a standing arrangement that lets the company sell newly issued shares directly into daily trading — still has $6.08 million of capacity. That figure was sized when the stock was much higher. At recent levels it translates to roughly 57.3 million shares, or about 150% of shares outstanding. Two amendments to the prospectus supplement were filed five days apart in September, a cadence consistent with active selling.
Together, these two channels represent approximately 107 million potential new shares against a float of 38.1 million — a pending overhang of roughly 289% of the float.
Share Count Trajectory
The pace of issuance is already visible in SEC filings. Shares outstanding stood at 10.58 million on May 13, 2026, rose to 14.05 million by August 12, climbed to 26.32 million around September 16, and reached 40.58 million by September 22. That is nearly a four-fold increase in about four and a half months, layered on top of a 1-for-10 reverse split — a consolidation of every ten shares into one — completed in September 2025.
Other Structural Details
A smaller equity line of credit with B. Riley Principal Capital II, which buys shares at a 3% discount to VWAP — meaning the buyer pays below the prevailing market price — has about 1.47 million shares remaining under its exchange cap. The company has also executed more than 15 dilutive financing transactions since July 2024, including PIPEs, warrant inducements, and two separate equity line facilities. Meanwhile, roughly 1.14 million warrant shares carry a $115 exercise price, making them more than 1,000 times out of the money and structurally irrelevant to near-term supply.
A Nasdaq minimum-market-value compliance deadline falls on October 21, 2026. If the company cannot meet the threshold, another reverse split is a likely remedy — which would reset per-share arithmetic without changing the dilution dynamics.
The Lind note is secured by substantially all of Stardust Power's assets, and forbearance discussions are ongoing according to the company's most recent 10-Q filed August 13, 2026. The note's conversion price falls as the stock falls — a structure sometimes called a death-spiral convertible — because each new lower VWAP resets the discount floor downward, increasing the number of shares Lind is entitled to receive per dollar converted.