ASP Isotopes Inc

Previous wording

We are a development stage advanced materials company dedicated to the development of technology and processes that, if successful, will allow for the enrichment of natural isotopes into higher concentration products, which could be used in several industries. Our proprietary technology, the Aerodynamic Separation Process (“ASP technology”), originally developed by Klydon Proprietary Ltd (“Klydon”), is designed to enable the production of isotopes used in several industries. Our initial focus is on the production and commercialization of enriched Carbon-14 (“C-14”), Molybdenum-100 (“Mo-100”) and Silicon-28 (“Si-28”). We have commissioned an isotope enrichment plant for the enrichment of C-14 located in Pretoria, South Africa, which will be ready for production upon the final installation of essential components. We anticipate completion and commissioning of a multi-isotope enrichment plant in Pretoria, South Africa in mid-2024. In addition, we have started planning additional isotope enrichment plants. We believe the C-14 we may produce using the ASP technology could be used in the development of new pharmaceuticals and agrochemicals. We believe the Mo-100 we may produce using the ASP technology could have significant potential advantages for use in the preparation of nuclear imaging agents by radiopharmacies and others in the medical industry. We believe the Si-28 we may produce using the ASP technology may be used to create advanced semiconductors and in quantum computing. In addition, we are considering the future development of the ASP technology for the separation of Zinc-68, Xenon-129/136 for potential use in the healthcare end market, Germanium 70/72/74 for possible use in the semiconductor end market, and Chlorine -37 for potential use in the nuclear energy end market.

Current wording

We are a development stage advanced materials company dedicated to the development of technology and processes that, if successful, will allow for the enrichment of natural isotopes into higher concentration products, which could be used in several industries. Our proprietary technology, the Aerodynamic Separation Process (“ASP technology”), originally developed by Klydon Proprietary Ltd (“Klydon”), is designed to enable the production of isotopes used in several industries. Our initial focus is on the production and commercialization of enriched Carbon-14 (“C-14”), Molybdenum-100 (“Mo-100”) and Silicon-28 (“Si-28”). We have commissioned an isotope enrichment plant for the enrichment of C-14 located in Pretoria, South Africa, which will be ready for production upon the final installation of essential components, and we expect to start commercial supply of C-14 during the second half of 2024. We anticipate completion and commissioning of a multi-isotope enrichment plant in Pretoria, South Africa during the second half 2024, and we expect to start initial commercial supply of Si-28 during the second half 2024. In addition, we have started planning additional isotope enrichment plants. We believe the C-14 we may produce using the ASP technology could be used in the development of new pharmaceuticals and agrochemicals. We believe the Mo-100 we may produce using the ASP technology could have significant potential advantages for use in the preparation of nuclear imaging agents by radiopharmacies and others in the medical industry. We believe the Si-28 we may produce using the ASP technology may be used to create advanced semiconductors and in quantum computing. In addition, we are considering the future development of the ASP technology for the separation of Zinc-68, Xenon-129/136 for potential use in the healthcare end market, Germanium 70/72/74 for possible use in the semiconductor end market, and Chlorine -37 for potential use in the nuclear energy end market.

Previous wording

We are also developing Quantum Enrichment technology to produce enriched Ytterbium-176, Nickel-64, Lithium 6, Lithium7 and Uranium-235 (“U-235”). Quantum enrichment is an advanced isotope enrichment technique that is currently in development that uses lasers. We believe that the U-235 we may produce using quantum enrichment technology may be commercialized as a nuclear fuel component for use in the new generation of HALEU- fueled small modular reactors that are now under development for commercial and government uses.

Current wording

We are also developing Quantum Enrichment technology to produce enriched Ytterbium-176, Nickel-64, Lithium 6, Lithium7 and Uranium-235 (“U-235”). Quantum enrichment is an advanced isotope enrichment technique that is currently in development that uses lasers. We believe that the U-235 we may produce using quantum enrichment technology may be commercialized as a nuclear fuel component for use in the new generation of HALEU- fueled small modular reactors that are now under development for commercial and government uses. Our first quantum enrichment facility is expected to complete construction and commissioning during the fourth quarter 2024 with first commercial production of Yb-176 also expected during the fourth quarter 2024.

Previous wording

We will need to raise substantial additional capital in the future. In addition, we cannot forecast which future isotopes may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.

Current wording

We may need to raise substantial additional capital in the future. In addition, we cannot forecast which future isotopes may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.

Previous wording

Effective with the acquisition of 51% of PET Labs Pharmaceuticals, the Company has recognized revenue from the sale of nuclear medical doses for PET scanning for the two month period since the acquisition was effective on October 31, 2023 and December 31, 2023 and the three months ended March 31, 2024. In addition, the Company has recognized the related cost of goods sold, operating expenses and other income and expenses of PET Labs Pharmaceuticals for the same periods. No revenue or cost of goods sold was recognized for the three months ended March 31, 2023.

Current wording

Effective with the acquisition of 51% of PET Labs Pharmaceuticals, the Company has recognized revenue from the sale of nuclear medical doses for PET scanning for the two month period since the acquisition was effective on October 31, 2023 and December 31, 2023 and the three and six months ended June 30, 2024. In addition, the Company has recognized the related cost of goods sold, operating expenses and other income and expenses of PET Labs Pharmaceuticals for the same periods. No revenue or cost of goods sold was recognized for the three months ended June 30, 2023.

Previous wording

Other expense for the three months ended March 31, 2024 was $1,197,653, which includes a $218,000 change in the fair value of the share liability related to the shares issuable to a consultant and a $953,710 change in fair value of the convertible notes payable issued in March 2024.

Current wording

Other expense for the three months ended June 30, 2024 was $1,410,217, which includes a $164,000 change in the fair value of the share liability related to the shares issuable to a consultant and a $1,574,816 change in fair value of the convertible notes payable issued in March and June 2024.

Previous wording

Other income for the three months ended March 31, 2023 was $109,746, which includes a $110,285 change in the fair value of the share liability related to the shares issuable to a placement agent and other consultants.

Current wording

Other income for the three months ended June 30, 2023 was $61,198, which includes a $60,100 change in the fair value of the share liability related to the shares issuable to a placement agent and other consultants.

Previous wording

The increase in personnel-related costs is due to an increase in headcount and salaries. The decrease in stock-based compensation is due to number of new awards decreasing compared to previous periods. The increase in professional services and legal related fees is mainly due to the issuance costs for the convertible notes issued in March 2024. The increase in facility and other corporate expenses is mainly due to the expansion of our operations in 2024.

Current wording

The increase in personnel-related costs is due to an increase in headcount and salaries. The increase in stock-based compensation is due to the timing of the vesting of awards. The increase in professional services and legal related fees is mainly due to the timing of corporate activity. The increase in facility and other corporate expenses is mainly due to the expansion of our operations in 2024 and commission and fee expenses related to the issuance of convertible notes payable.

Previous wording

We have incurred net losses and negative cash flows from operations since our inception, and we expect to continue to incur significant and increasing net losses for the foreseeable future. We have principally financed our operations to date through the issuance of our common stock, including our IPO and the issuance of convertible notes payable. On April 9, 2024, the Company received approximately $5.5 million from the issuance of 3,164,557 shares of common stock upon the exercise of warrants.

Current wording

We have incurred net losses and negative cash flows from operations since our inception, and we expect to continue to incur significant and increasing net losses for the foreseeable future. We have principally financed our operations to date through the issuance of our common stock, including our IPO, subsequent common stock offerings and the issuance of convertible notes payable. In July 2024, the Company issued 13,800,000 in a public offering at a public offering price of $2.50 per share resulting in net proceeds of approximately $32.3 million after deducting underwriting discounts, commissions and offering expenses.

Previous wording

As of March 31, 2024, we had cash of $23.9 million. We have not generated any revenue from the sale of our enriched isotopes, and our ability to generate product revenue from the sale of enriched isotopes sufficient to achieve profitability will depend on the successful development and eventual commercialization of one or more of our current or future enriched isotopes.

Current wording

As of June 30, 2024, we had cash and cash equivalents of $28.3 million. We have not generated any revenue from the sale of our enriched isotopes, and our ability to generate product revenue from the sale of enriched isotopes sufficient to achieve profitability will depend on the successful development and eventual commercialization of one or more of our current or future enriched isotopes.

Previous wording

Based on our current operating plan, we estimate that our existing cash, will not be sufficient to fund our operating expenses and capital expenditure requirements through at least the next 12 months from the date the financial statements are issued. However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect. Additionally, the process of developing isotopes is costly, and the timing of progress and expenses in these development activities is uncertain.

Current wording

Based on our current operating plan, we estimate that our existing cash and cash equivalents, along with gross proceeds of $34.5 million received in July 2024 from the issuance of common stock, will be sufficient to fund our operating expenses and capital expenditure requirements through at least the next 12 months from the date the financial statements are issued. However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect. Additionally, the process of developing isotopes is costly, and the timing of progress and expenses in these development activities is uncertain.

Previous wording

Net cash used in operating activities was $2,970,469 for the three months ended March 31, 2024 and was primarily due to our net loss of $6,964,844, adjusted for stock-based compensation expense of $1,713,654, non-cash issuance costs for the convertible notes payable of $513,748, amortization of right-of-use asset of $98,658, issuance of common stock to a consultant with a fair value of $195,000, change in fair values of $1,171,710, change in deferred tax liabilities of $49,771 and a $274,553 change in our operating assets and liabilities.

Current wording

Net cash used in operating activities was $8,095,256 for the six months ended June 30, 2024 and was primarily due to our net loss of $15,846,286, adjusted for stock-based compensation expense of $4,231,670, non-cash issuance costs for the convertible notes payable of $621,915, amortization of right-of-use asset of $217,997, issuance of common stock to a consultant with a fair value of $619,200, change in fair values of $2,582,526, change in deferred tax liabilities of $39,068 and a $734,590 change in our operating assets and liabilities.

Previous wording

Net cash used in operating activities was $1,444,965 for the three months ended March 31, 2023 and was primarily due to our net loss of $3,615,078, adjusted for stock-based compensation expense of $2,144,099, amortization of right-of-use asset of $17,034, issuance of common stock to a consultant with a fair value of $266,200 and change in fair value of share liability of $110,285, and a $146,935 change in our operating assets and liabilities.

Current wording

Net cash used in operating activities was $2,701,890 for the six months ended June 30, 2023, and was primarily due to our net loss of $7,901,424, adjusted for stock-based compensation expense of $4,518,785, expense related to the issuance of common stock to consultants of $496,300 and amortization of right-of-use asset of $32,553, partially offset by a change in fair value of share liability of $170,385 and partially offset by a $294,165 change in our operating assets and liabilities.

Previous wording

Net cash used in investing activities was 1,245,825 for the three months ended March 31, 2024 and was comprised of the purchase of machinery and equipment and construction in progress.

Current wording

Net cash used in investing activities was $3,867,903 for the six months ended June 30, 2024 and was comprised of the purchase of machinery and equipment, vehicles and construction in progress.

Previous wording

Net cash used in investing activities was $362,056 for the three months ended March 31, 2023 and was comprised of additional construction in progress.

Current wording

Net cash used in investing activities was $508,607 for the six months ended June 30, 2023 and was comprised of additional construction in progress.

Previous wording

Net cash provided by financing activities was $20,263,995 for the three months ended March 31, 2024 and was comprised primarily of gross proceeds of $20,550,000 from the issuance of convertible notes payable, partially offset by payments of $263,141 on the note payable related to a financed corporate insurance policy.

Current wording

Net cash provided by financing activities was $32,414,967 for the six months ended June 30, 2024 and was comprised primarily of gross proceeds of $25,936,228 from the issuance of convertible notes payable, proceeds of $5,537,975 from the issuance of common stock for a warrant exercise, contributions from noncontrolling interest in VIE of $807,975, proceeds from collection of receivable from noncontrolling interest in VIE of $705,403, partially offset by payments of $438,569 on the note payable related to a financed corporate insurance policy, payment of principal portion of finance leases of $61,929 and distribution to noncontrolling interest in VIE of $27,116.

Previous wording

Net cash provided by financing activities was $4,493,610 for the three months ended March 31, 2023 and was comprised of net proceeds from the issuance of 3,164,557 shares of our common stock.

Current wording

Net cash provided by financing activities was $4,493,610 for the six months ended June 30, 2023, and was comprised primarily of net proceeds of $4,493,610 from the sale and issuance of 3,164,557 shares of our common stock in March 2023.