アメリカ合衆国
証券取引委員会
ワシントン、DC 20549
フォーム
（表1）
証券取引法第13条または15(d)条に基づく四半期報告書 |
報告期間が終了した2023年6月30日をもって
OR
移行期間： から まで |
__________________から__________________の移行期間中
報告書番号：
（登記事項で指定された）登録者の正式名称 |
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（設立または組織の州またはその他の管轄区域） （I.R.S.雇用者識別番号） |
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(I.R.S. 雇用者 識別番号） |
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(本社の所在地) |
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(郵便番号) |
取引所の電話番号、市外局番を含む： (
法第12条（b）に基づく登録証券
各クラスの名称 |
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取引シンボル |
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登録されている各取引所の名称 |
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（ナスダックキャピタルマーケット） |
本登録者が、前述の12か月間（あるいは登録者が当該報告書を提出しなければならなかった短い期間）において、証券取引法第13条または15条（d）で定められた提出すべき報告書を全て提出したかどうかをチェックマークで示し、(2) 本登録者が過去90日間にわたってその提出要件に従っていたかどうかを示します。
規則405に基づき、本章の§232.405に規定されている対話型データファイルを、過去12か月間（またはそのようなファイルを提出する義務があった期間の短い場合）に電子提出したかどうかをチェックマークで示してください。
規制第1202条における「大口加速申請者」「加速申請者」「小規模報告会社」「新興成長会社」の定義については、チェックマークによって示します。取引所法の定義については、「大口加速申請者」「加速申請者」「小規模報告会社」「新興成長企業」を参照してください。
大型加速ファイラー |
☐ |
加速ファイラー |
☐ |
☒ |
レポート義務のある中小企業 |
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新興成長企業 |
新興成長企業の場合は、証券取引法第13条（a）に基づく新しいまたは改訂された財務会計基準の遵守に対する延長移行期間を使用しないことを選択したかどうかにチェックマークをつけてください。
本登録者が取引所法12b-2条で定義されるシェル企業である場合、はい☐ いいえ
2024年11月13日時点で、登録者は
目次
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ページ |
第一部分 |
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5 |
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項目 1. |
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5 |
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5 |
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6 |
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7 |
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9 |
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10 |
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アイテム2。 |
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27 |
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アイテム3。 |
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37 |
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アイテム4. |
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37 |
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知られているおよび未知の多数のリスクおよび不確定要因の結果として, 当社の実際の結果やパフォーマンスは、これらの前向きの声明によって発表された結果と大きく異なる場合があります。実際の結果が異なる可能性のある要因については、Part II、Item 1Aの「リスクファクター」およびSECへのその他の提出に記載されています。 |
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項目 1. |
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項目1A。 |
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アイテム2。 |
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38 |
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アイテム3。 |
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38 |
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アイテム4. |
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38 |
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項目5。 |
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38 |
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項目6。 |
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39 |
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40 |
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2
将来予測に関する特別注記
この四半期報告書フォーム10-Qには、連邦証券法の意味における将来予測に関する記述が含まれています。この四半期報告書フォーム10-Qに含まれる歴史的事実の記述以外のすべての記述、将来の業績や財務状況、ビジネス戦略、管理者の将来の事業に関する計画や目的に関する記述は、将来予測に関する記述です。これらの記述には、既知および未知のリスク、不確実性、その他の重要な要因が含まれており、これにより実際の結果、業績、または成果が、将来予測に関する記述によって表現または暗示されるいずれかの未来の結果、業績、または成果とは大きく異なる可能性があります。
特定の場合、"may," "should," "would," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential" または "continue" といった用語によって前向きな見通しを特定できることがあります。この四半期報告書の形式10-Qに記載されている前向きな見通しは予測に過ぎません。これらの前向きな見通しは、当社のビジネス、財務状況、および業績に影響を与えると考えられる将来の出来事と財務トレンドについての現在の期待と予測に基づいています。これらの前向きな見通しは、この四半期報告書の形式10-Qの日付に基づいており、"リスク要因"とその他の箇所で説明されているリスク、不確実性、および仮定に影響されます。前向きな見通しは本質的にリスクと不確実性にさらされているため、いくつかは予測や数量化できないものも含まれることから、これらの前向きな見通しを将来の出来事の予測として信頼すべきではありません。当社の前向きな見通しに反映されている出来事や状況が実現されたり発生したりしないこともあり、前向きな見通しで予測されている結果と実際の結果が大きく異なる可能性があります。われわれの期待から実際の結果が異なる要因のいくつかには次のようなものがあります：
3
これらの声明は、将来のイベントまたは将来の財務パフォーマンスに関連しており、実際の結果、パフォーマンス、または成果が、これらの将来の見通しに示された、または示唆されたいかなる将来の結果、パフォーマンス、または成果と実質的に異なる原因となる可能性がある、知られているおよび知られていないリスク、不確実性、その他の要因を含んでいます。現在の期待と実際の結果を実質的に異ならせる要因には、以下のリスクファクターに関する第I部、項目1Aに示されているものを含むその他の要因が含まれます。これらのリスク、不確実性、および我々の事業、業績、業種、そして将来の成長に関連する前提に関するリスクが存在するため、四半期報告書10-Qにおけるいかなる将来の見通しも、将来のイベントに関する我々の現在の見解を反映しており、これらの要因に影響されます。これらの不確実性を考慮に入れると、これらの将来の見通しに対して過度な信頼を置くべきではありません。法律で要求されている場合を除き、新しい情報が将来的に入手可能になった場合でも、これらの将来の見通しを更新または改訂する義務は負いません。
本四半期報告書の10-Qフォームには、業種、ビジネス、および特定の同位体の潜在的な市場に関する見積もり、予測、その他の情報が含まれており、これらの市場の推定規模、その予測成長率、および特定の医療状況に関するデータも含まれています。見積もり、予測、プロジェクション、または類似の手法に基づく情報は、本質的に不確実性にさらされており、実際のイベントや状況は、この情報に反映されるイベントや状況と実質的に異なる場合があります。明示的にその他の場合を述べていない限り、これらの業種、ビジネス、市場、およびその他のデータは、他者が作成した報告書、リサーチ調査、研究、およびそれに類するデータ、業種、医療および一般の出版物、政府のデータなどを通じて入手しています。一部の場合、これらのデータの出典に直接言及していないことがあります。
文脈によって異なる場合を除き、この10-Qフォームに関する四半期報告書では、「私たち」、「私たち」、「私たちの」、「aspアイソトープス」、および「会社」とは、ASP Isotopes Inc.および適切な場合、その連結子会社を指します。
商標
この四半期報告書（Form 10-Q）に含まれるすべての商標、サービスマーク、および取引名は、それぞれの所有者の財産です。便宜上、この報告書内の商標および取引名は、®および™の記号なしで言及される場合がありますが、こうした言及はそれぞれの所有者が適用法のもとでその権利を最大限に主張しないことを示すものではありません。
4
パート I-FINANCIAL INFORMATION
アイテム1。財務財務諸表。
ASPアイソトープス社
凝縮された連結貸借対照表
(未監査)
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9月30日, |
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12月31日、 |
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資産 |
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流動資産: |
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現金 |
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$ |
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$ |
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売掛金 |
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在庫 |
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非支配持分からの債権 |
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前払費用及びその他の流動資産 |
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流動資産合計 |
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有形固定資産 |
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使用中リース資産、正味額 |
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のれん |
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その他の非流動資産 |
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総資産 |
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$ |
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$ |
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負債および株主資本 |
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流動負債： |
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支払い予定の勘定 |
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$ |
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$ |
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未払費用 |
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債務不足額証券 |
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ファイナンスリース負債 - 現在 |
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オペレーティングリース債務-流動 |
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遅延収益 |
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その他の流動負債 |
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シェア負債 |
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合計流動負債 |
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繰延税金負債 |
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公正価値の転換社債 |
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ファイナンスリース負債 - 非流動 |
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非流動的なオペレーティング・リース債務 |
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その他の非流動負債 |
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総負債 |
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株主資本 |
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优先股,每股面值为0.001美元;授权5,000,000股;未发行或未流通股份 |
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普通株式、1株当たり0.001ドルの割額株式、承認済み株式総数900,000,000株、発行済み株式577,806,659株、2023年12月31日時点での流通株式540,387,949株、発行済み株式577,805,623株、2023年3月31日時点での流通株式545,459,814株、追加資本金 |
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追加出資資本 |
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累積欠損 |
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( |
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( |
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その他包括利益/損失差額額 |
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( |
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総ASPアイソトープス株主資本 |
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非支配株主持分 |
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純資産合計 |
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負債および純資産合計 |
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$ |
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$ |
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付随する注記は、これらの簡潔な連結財務諸表の不可欠な部分です。
5
ASPアイソトープス社
総合損益計算書運営の事業と包括損失
(未監査)
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終了した3ヶ月 |
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九ヶ月の終了 |
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2024 |
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2023 |
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2024 |
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2023 |
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収益 |
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$ |
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$ |
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$ |
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$ |
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売上原価 |
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粗利益 |
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営業費用: |
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研究開発 |
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販売、一般および管理 |
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総営業費用 |
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営業損失 |
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その他（費用）収益 |
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外国為替取引の損失 |
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株式負債の公正価値変動 |
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転換社債の公正価値変動 |
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利息収入 |
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利子費用 |
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その他の費用合計 |
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所得税費用前の損失 |
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法人税引当 |
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非支配株主に割り当てる前の純損失 |
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( |
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非支配株主持分に帰属する純損失額 |
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( |
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ASPアイソトープス株主に帰属する純損失 |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
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普通株式に対する誘導ワラントの認定配当金 |
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ASPアイソトープス株主に帰属する純損失 |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
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ASPアイソトープス株主に帰属する一株当たりの純損失 |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
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普通株式の加重平均発行済株式数 |
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包括損失: |
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非支配株主に帰属しない分配前純損失 |
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$ |
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$ |
( |
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$ |
( |
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$ |
( |
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外貨換算 |
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非支配株主に帰属しない前の包括損失合計 |
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( |
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( |
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( |
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非支配に帰属する包括損益（損失）から差し引かれる金額 |
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総綜損益 |
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$ |
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$ |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
6
ASP Isotopes Inc.
Condensed Consolidated Statements of Changes in Stockholders’ Equity
(unaudited)
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普通株式 |
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追加 |
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蓄積 |
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蓄積 |
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非支配的 |
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株主総利益 |
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株式 |
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金額 |
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資本 |
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収入 |
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赤字 |
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興味 |
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株式 |
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2023年12月31日現在の残高 |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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$ |
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付与されていない制限付株式の退職 |
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株式報酬費用 |
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— |
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VIEの非支配持分への分配 |
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— |
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外貨換算 |
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— |
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純損失 |
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— |
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( |
) |
|
|
( |
) |
|
|
( |
) |
|||
2024年3月31日時点の残高 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||
ワラントの行使による普通株式の発行 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
制限付き普通株式の発行 |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
コンサルタントへの普通株式の発行 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
コンサルタントとの負債の精算 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
株式で精算される取締役料の負債 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
株式報酬費用 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
VIEにおける非支配持分からの寄付 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
||||||
VIEの非支配持分への配分 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||||
外貨換算 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
純損失 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||||
2024年6月30日の残高 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||
発行された普通株式、発行費用$を差し引いた額 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
制限付き普通株式の発行 |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
コンサルタントへの制限付き普通株式の発行 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
取締役への普通株式の発行 |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
コンサルタントとの負債の清算 |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
手数料の負債は現金と普通株式ワラントで精算されます |
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||
株式報酬費用 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
VIEにおける非支配持分からの寄付 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
VIEの非支配持分への分配 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||||
外貨換算 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
純損失 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|||
2024年9月30日時点の残高 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
付随する注記は、これらの簡潔な連結財務諸表の不可欠な部分です。
7
ASPアイソトープス社
株主資本の構成に関する連結会計報告書
(未監査)
|
|
普通株式 |
|
|
追加 |
|
|
蓄積 |
|
|
蓄積 |
|
|
非支配的 |
|
|
株主総利益 |
|
||||||||||
|
|
株式 |
|
|
金額 |
|
|
資本 |
|
|
収入 |
|
|
赤字 |
|
|
興味 |
|
|
株式 |
|
|||||||
2022年12月31日の残高 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||||||
普通株式およびwarrantsの発行、発行コスト$を除いたもの |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
子会社での优先股の発行に対する引き換えとして受け取った普通株式のキャンセル |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
手数料の代わりに普通株式を発行 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
制限付き普通株式の発行 |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
株式報酬費用 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
外貨換算 |
|
|
— |
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||||
純損失 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||||
2023年3月31日現在の残高 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||
関連当事者との負債の清算 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
株式報酬費用 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
外貨換算 |
|
|
— |
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||||
純損失 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||||
2023年6月30日現在の残高 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||
制限付き普通株式の発行 |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
コンサルタントとの債務の決済 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
株式報酬費用 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
外貨換算 |
|
|
— |
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||||
純損失 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||||
2023年9月30日の残高 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
付随する注記は、これらの簡潔な連結財務諸表の不可欠な部分です。
8
ASPアイソトープス社
総合資本と他の投資（公正価値で計上される2,621ドルおよび2,977ドル） キャッシュ・フロー計算書
(未監査)
|
|
九ヶ月の終了 |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
営業活動によるキャッシュフロー |
|
|
|
|
|
|
||
純損失 |
|
$ |
( |
) |
|
$ |
( |
) |
現金流出し調整項目： |
|
|
|
|
|
|
||
減価償却 |
|
|
|
|
|
|
||
不動産および設備の譲渡損失 |
|
|
|
|
|
|
||
株式報酬費用 |
|
|
|
|
|
|
||
非現金発行コスト用の転換社債 |
|
|
|
|
|
|
||
非現金コンサルタント費用の発行シェア |
|
|
|
|
|
|
||
株式負債の公正価値変動 |
|
|
( |
) |
|
|
|
|
転換社債の公正価値変動 |
|
|
|
|
|
|
||
リース資産の公正価値変動 |
|
|
|
|
|
|
||
繰延税金 passivenの変動 |
|
|
( |
) |
|
|
|
|
営業資産および負債の変動: |
|
|
|
|
|
|
||
売掛金 |
|
|
( |
) |
|
|
|
|
在庫 |
|
|
( |
) |
|
|
|
|
前払費用及びその他の流動資産 |
|
|
( |
) |
|
|
|
|
その他の非流動資産 |
|
|
( |
) |
|
|
( |
) |
支払い予定の勘定 |
|
|
( |
) |
|
|
( |
) |
未払費用 |
|
|
|
|
|
|
||
遅延収益 |
|
|
|
|
|
|
||
運営リース負債 |
|
|
( |
) |
|
|
( |
) |
その他の流動負債 |
|
|
( |
) |
|
|
|
|
営業によるキャッシュフローの純流出 |
|
|
( |
) |
|
|
( |
) |
投資活動からの現金流入 |
|
|
|
|
|
|
||
設備資産の購入 |
|
|
( |
) |
|
|
( |
) |
投資活動における純現金使用額 |
|
|
( |
) |
|
|
( |
) |
財務活動からのキャッシュ・フロー |
|
|
|
|
|
|
||
普通株式の発行による受取金額 |
|
|
|
|
|
|
||
$ |
|
|
( |
) |
|
|
( |
) |
ワラントの行使による収益 |
|
|
|
|
|
|
||
VIEの非支配株主からの出資 |
|
|
|
|
|
|
||
VIEの非支配株主からの債権回収による収益 |
|
|
|
|
|
|
||
VIEの非支配株主への配当 |
|
|
( |
) |
|
|
|
|
転換社債の発行による収益 |
|
|
|
|
|
|
||
支払可能社債の支払い |
|
|
( |
) |
|
|
|
|
ファイナンスリースの元本支払い |
|
|
( |
) |
|
|
|
|
財務活動による純現金流入額 |
|
|
|
|
|
|
||
現金及び現金同等物の純変化 |
|
|
|
|
|
( |
) |
|
為替レート変動の現金および現金同等物への影響 |
|
|
|
|
|
( |
) |
|
現金及び現金同等物 - 期初残高 |
|
|
|
|
|
|
||
現金及び現金同等物 - 期末残高 |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
非現金の投資と財務活動の補完的開示: |
|
|
|
|
|
|
||
関係会社との債務の清算 |
|
$ |
|
|
$ |
|
||
運用リース債務と交換して取得された使用権資産 |
|
$ |
|
|
$ |
|
||
財務リース債務の代わりに取得された使用権資産 |
|
$ |
|
|
$ |
|
||
支払可能な勘定に含まれる有形固定資産の購入 |
|
$ |
|
|
$ |
|
||
誘導ワラントによるみなし配当 |
|
$ |
|
|
$ |
|
||
取締役会報酬を普通株式で決済 |
|
$ |
|
|
$ |
|
||
現金および普通株式ワラントで決済する手数料負債 |
|
$ |
|
|
$ |
|
||
株式債務の決済 |
|
$ |
|
|
$ |
|
||
付随する注記は、これらの簡潔な連結財務諸表の不可欠な部分です。
9
ASPアイソトープス社
監査なしの要約に関する注記連結財務諸表
1。組織
事業内容の説明
ASP Isotopes Inc. は、2021年9月13日にデラウェア州に設立され、主な事業はワシントンDCにあります。ASPアイソトープス社の子会社であるASPアイソトープス・ガーンジー・リミテッド（「ASPガーンジー」）は、ガーンジー島で主な事業を展開しています。ASPガーンジーの子会社であるASPアイソトープス・サウス・アフリカ・プロプライエタリ・リミテッド（「ASP南アフリカ」）は、南アフリカで主な事業を展開しています。ASPレンタルズ・プロプライエタリ・リミテッド（「ASPレンタル」）は、ASP南アフリカの変動持分法人（「VIE」）で、南アフリカで主な事業を行っています。エンライテンド・アイソトープ (Pty) 株式会社 (「エンライテンド・アイソトープ」)、a
同社は開発段階の先端材料会社で、成功すれば天然同位体をより高濃度の製品に濃縮し、複数の産業で使用できるようになる技術とプロセスの開発を専門としています。同社独自の技術である空気力学的分離プロセス（「ASP技術」）は、もともとKlydon Proprietary Ltd（「Klydon」）によって開発され、いくつかの産業で使用される同位体の製造を可能にするように設計されています。当社の当初の焦点は、濃縮炭素-14（「C-14」）、モリブデン100（「Mo-100」）、シリコン28（「Si-28」）の生産と商品化です。当社は、南アフリカのプレトリアにあるC-14濃縮用の同位体濃縮プラントを完成させました。当社の顧客からの原料のタイムリーな配送を前提として、2025年の第1四半期にC-14の商業供給を開始する予定です。同社は、2024年第4四半期に南アフリカのプレトリアにある多同位体濃縮プラントの完成と試運転を見込んでいます。また、2025年初頭にSi-28の最初の商業供給を開始する予定です。さらに、同社は同位体濃縮プラントの追加計画を開始しました。同社は、ASP技術を使用して開発する可能性のあるC-14が、新しい医薬品や農薬の開発に使用される可能性があると考えています。同社は、ASP技術を使用して開発する可能性のあるMo-100は、放射性医薬品やその他の医療業界での核イメージング剤の調製に使用するのに大きな潜在的利点があると考えています。同社は、ASP技術を使用して開発する可能性のあるSi-28は、高度な半導体の開発や量子コンピューティングに使用できると考えています。さらに、当社は、ヘルスケア最終市場での潜在的な使用のための亜鉛68、キセノン-129/136、半導体最終市場での使用の可能性のあるゲルマニウム70/72/74、および原子力エネルギー最終市場での潜在的な使用のための塩素37を分離するためのASP技術の将来の開発を検討しています。
同社はまた、濃縮イッテルビウム-176（「Yb-176」）、ニッケル64、リチウム6、リチウム-7、ウラン235（「U-235」）を製造するための量子濃縮技術を開発しています。量子濃縮は、現在開発中のレーザーを使用する高度な同位体濃縮技術です。同社は、量子濃縮技術を使用して開発する可能性のあるU-235が、商業用および政府用に現在開発中の新世代の高アッセイ低濃縮ウラン（HALEU）燃料小型モジュール式原子炉で使用するための核燃料部品として商品化される可能性があると考えています。同社初の量子濃縮施設の建設は2024年8月に完了し、同社は2024年10月のプラントの試運転段階で、濃縮Yb-176の最初の半製品を製造しました。会社は以下を達成できることを期待しています
流動性
当社は創業以来、営業活動による純損失とマイナスキャッシュフローを経験してきました。会社が被った純損失は $
同社は現在、現金および現金同等物を $
会社が事業や収益性からプラスのキャッシュフローを達成または維持するという保証はありません。当社は、追加の負債およびエクイティファイナンスを検討中です。ただし、そのような資金は、会社が受け入れられる条件で適時に利用できない場合や、まったく利用できない場合があります。必要に応じて、または許容できる条件で追加の資本を調達できない場合、会社は製品候補の開発の縮小または中止、人員削減、再編成、他の事業体との合併、または事業の中止を求められることがあります。
2.プレゼンテーションの基礎と主要な会計方針の概要
未監査の財務情報
本書に含まれる会社の監査されていない要約連結財務諸表は、アメリカ合衆国の一般に認められた会計原則（"U.S. GAAP"）に従って、証券取引委員会（SEC）の規則および規制に基づいて作成されています。会社は、提供された情報が報告された四半期における財務状況および業務結果の公正な提示に必要なすべての調整を反映していると考えています。これらすべての調整は通常かつ定常的な性質のものであります。会社は、バランスシート日付後、財務諸表が発表される前に発生する出来事や取引を、特定の見積もりに関する追加証拠を提供したり、追加開示が必要な事項を特定するためのものと見なしています。四半期の業績は、必ずしも年間または他の四半期の結果を期待して示すものではありません。これらの監査されていない要約連結財務諸表は、監査済み財務諸表および終了した年度の関連注記と併せて読む必要があります。 2023年12月31日.
10
発表の基礎および推定値の使用
会社の要約された連結財務諸表は米国公認会計原則（U.S. GAAP）に準拠して作成されています。会社の要約された連結財務諸表の作成には、管理陣による資産、負債、経費の報告額や開示、およびそれに関連する注記に影響を与える見積りや仮説を行う必要があります。会社の連結財務諸表における最も重要な見積もりは、従業員に対する株式報酬費用、PEt Labsの買収会計、および転換社債とワラントの公正価値測定に関連しています。これらの見積もりは会社が現在の出来事や将来行うかもしれない行動についての知識に基づいているものの、実際の結果はこれらの見積りや仮定と実質的に異なる場合があります。
当社と子会社の財務諸表が連結された簡略化された連結財務諸表に含まれています。当社と子会社間のすべての重要な取引は、統合に際して除去されています。
通貨および通貨翻訳
信用リスクとその他のリスクの収束
米国のファイナンシャルインスティテューションズに維持されている現金残高は、米ドルの報告通貨を超えることがあります。 1口座所有カテゴリーあたりの各保険付き銀行あたりの
The Company's foreign subsidiaries held cash of approximately $
現金および現金同等物
The Company considers all highly liquid investments with original maturities at the date of purchase of three months or less to be cash equivalents. Cash and cash equivalents are stated at fair value and may include money market funds, U.S. Treasury and U.S. government-sponsored agency securities, corporate debt, commercial paper and certificates of deposit. The Company had cash equivalents of $
セグメント情報
現在 2023年12月31日、同社は単一セグメント、専門アイソトープおよび関連サービスとして事業を運営していました。2024年からは、主に子会社であるQuantum Leap Energy LLCの事業活動の増加に伴い、
原子燃料セグメントは、ビジネス向けにハイ-アッセイ低濃縮ウラン（HALEU）やリチウム-6を製造するための技術や方法の研究開発に焦点を当てています。
専門同位体と関連サービスセグメントは、C-14、Mo-100、Si-28など高価値で低容量の同位体を分離するための技術や方法の研究開発に焦点を当てています。
財務情報は最高執行責任者（CODM）によって定期的にレビューされ、リソースの割り当て方法を決定するために使用されます。
会社は、資産をビジネスセグメントごとではなく、総合的に管理しています。
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Select information from the consolidated statements of operations and comprehensive loss as of the three months ended September 30, 2024 and 2023 is as follows:
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Select information from the consolidated statements of operations and comprehensive loss as of the nine months ended September 30, 2024 and 2023 is as follows:
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Fair Value of Financial Instruments
Accounting guidance defines fair value, establishes a consistent framework for measuring fair value, and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
Level 1: Observable inputs such as quoted prices in active markets;
Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
The Company’s share liability (Note 12) is measured as a Level 1 fair value on a recurring basis. There was
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Balance as of December 31, 2023 |
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Fair value at issuance |
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Fair value adjustment |
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The carrying amounts of accounts payable, accrued expenses and notes payable are considered to be representative of their respective fair values because of the short-term nature of those instruments.
Revenue Recognition
The Company’s revenue relates to PET Labs, in which the Company acquired
Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine the appropriate amount of revenue to be recognized for arrangements determined to be within the scope of ASC 606, the Company performs the following five steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect consideration it is entitled to in exchange for the goods or services it transfers to the customer.
The Company evaluates a transaction’s performance obligations to determine if promised goods or services in a contract to transfer a distinct good or service to the customer and are considered distinct when (i) the customer can benefit from the good or service on its own or together with other readily available resources and (ii) the promised good or service is separately identifiable from other promises in the contract. In assessing whether promised goods or services are distinct, the Company considers whether the goods or services are integral or dependent to other goods or services in the contract.
The Company determines the transaction price based on the agreed government rates for the promised goods in the contract.
12
The consideration is recognized as revenue when control is transferred for the related goods.
The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. The Company receives payments from its customers based on billing schedules established in each contract. Upfront payments and fees are recorded as deferred revenue upon receipt or when due until the Company performs its obligations under these arrangements. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional.
Accounts Receivable
Accounts receivable are stated at the amount management expects to collect from outstanding balances. An allowance for expected credit losses is estimated for those accounts receivable considered to be uncollectible based upon historical experience and management's evaluation of outstanding accounts receivable. The Company maintains an allowance for expected credit losses for accounts receivable, which is recorded as an offset to accounts receivable, and changes in such are classified as selling, general and administrative expense in the Consolidated Statements of Operations and Comprehensive Loss. The Company assesses collectability by reviewing accounts receivable on a collective basis where similar characteristics exist and on an individual basis when the Company identifies specific customers with known disputes or collectability issues. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status and make judgments about the creditworthiness of customers based on ongoing credit evaluations. The Company also considers customer-specific information, current market conditions, and reasonable and supportable forecasts of future economic conditions. Bad debts are written off against the allowance when identified. As of September 30, 2024, December 31, 2023 and January 1, 2023 there was
Inventory
The Company uses the first in, first out inventory method to account for its inventory. As of September 30, 2024, inventory consists of raw materials and is stated at the lower of cost or net realizable value. There was
Property and Equipment
Property and equipment include costs of assets constructed, purchased or leased under a finance lease, related delivery and installation costs and interest incurred on significant capital projects during their construction periods. Expenditures for renewals and betterments also are capitalized, but expenditures for normal repairs and maintenance are expensed as incurred. Costs associated with yearly planned major maintenance are generally deferred and amortized over 12 months or until the same major maintenance activities must be repeated, whichever is shorter. The cost and accumulated depreciation applicable to assets retired or sold are removed from the respective accounts, and gains or losses thereon are included in the statement of operations and comprehensive loss.
The Company assigns the useful lives of its property and equipment based upon its internal engineering estimates, which are reviewed periodically. The estimated useful lives of the Company's property and equipment range from
Construction in progress (Note 4) is carried at cost and consists of specifically identifiable direct and indirect development and construction costs. While under construction, costs of the property are included in construction in progress until the property is placed in service, at which time costs are transferred to the appropriate property and equipment account, including, but not limited to, leasehold improvements or other such accounts.
Property and equipment acquired in the acquisition of PET Labs was measured at fair value on October 31, 2023. The fair value forms the new basis of these assets and is depreciated over the remaining estimated useful lives of the related assets.
Business Combination and Asset Acquisitions
The Company evaluates acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen is met, the transaction is accounted for as an asset acquisition. If the screen is not met, further determination is required as to whether or not the Company has acquired inputs and processes that have the ability to create outputs, which would meet the requirements of a business. If determined to be a business combination, the Company accounts for the transaction under the acquisition method of accounting in accordance with ASC Topic 805 Business Combinations ("ASC 805"), which requires the acquiring entity in a business combination to recognize the fair value of all assets acquired, liabilities assumed, and any non-controlling interest in the acquiree and establishes the acquisition date as the fair value measurement point. Accordingly, the Company recognizes assets acquired and liabilities assumed in business combinations, including contingent assets and liabilities, and non-controlling interest in the acquiree based on the fair value estimates as of the date of acquisition. In accordance with ASC 805, the Company recognizes and measures goodwill as of the acquisition date, as the excess of the fair value of the consideration paid over the fair value of the identified net assets acquired.
The consideration for the Company’s business acquisitions may include future payments that are contingent upon the occurrence of a particular event or events. The obligations for such contingent consideration payments are recorded at fair value on the acquisition date. The contingent consideration obligations are then evaluated each reporting period. Changes in the fair value of contingent consideration, other than changes due to payments, are recognized as a gain or loss and recorded within change in the fair value of deferred and contingent consideration liabilities in the consolidated statements of comprehensive loss.
If determined to be an asset acquisition, the Company accounts for the transaction under ASC 805-50, which requires the acquiring entity in an asset acquisition to recognize assets acquired and liabilities assumed based on the cost to the acquiring entity on a relative fair value basis, which includes transaction costs in addition to consideration given.
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Contingent consideration payments in asset acquisitions are recognized when the contingency is resolved and the consideration is paid or becomes payable (unless the contingent consideration meets the definition of a derivative, in which case the amount becomes part of the basis in the asset acquired). Upon recognition of the contingent consideration payment, the amount is included in the cost of the acquired asset or group of assets.
Goodwill
Goodwill represents the amount of consideration paid in excess of the fair value of net assets acquired as a result of the Company’s business acquisitions accounted for using the acquisition method of accounting. Goodwill is not amortized and is subject to impairment testing at a reporting unit level on an annual basis or when a triggering event occurs that may indicate the carrying value of the goodwill is impaired. An entity is permitted to first assess qualitative factors to determine if a quantitative impairment test is necessary. Further testing is only required if the entity determines, based on the qualitative assessment, that it is more likely than not that the fair value of the reporting unit is less than its carrying amount. The Company will perform its annual test for goodwill as of October 31.
Variable Interest Entities
The Company accounts for the investments it makes in certain legal entities in which equity investors do not have (1) sufficient equity at risk for the legal entity to finance its activities without additional subordinated financial support, or (2) as a group, the holders of the equity investment at risk do not have either the power, through voting or similar rights, to direct the activities of the legal entity that most significantly impact the entity’s economic performance, or (3) the obligation to absorb the expected losses of the legal entity or the right to receive expected residual returns of the legal entity. These certain legal entities are referred to as “variable interest entities” or “VIEs.”
The Company would consolidate the results of any such entity in which it determined that it had a controlling financial interest. The Company would have a “controlling financial interest” in such an entity if the Company had both the power to direct the activities that most significantly affect the VIE’s economic performance and the obligation to absorb the losses of, or right to receive benefits from, the VIE that could be potentially significant to the VIE. On a quarterly basis, the Company will reassess whether it has a controlling financial interest in any investments it has in these certain legal entities.
Convertible Notes Payable
Convertible notes payable are accounted for in accordance with ASC Topic 825, Financial Instruments ("ASC 825"). Upon issuance the Company has elected the fair value option to account for the convertible notes payable. Changes in fair value during the reporting period are recognized in other income (expense) in the consolidated statement of operations and comprehensive loss.
Leases
Leases are accounted for in accordance with ASC Topic 842, Leases ("ASC 842"). At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on specific facts and circumstances, the existence of an identified asset(s), if any, and the Company’s control over the use of the identified asset(s), if applicable. Operating lease liabilities and their corresponding right-of-use ("ROU") assets are recorded based on the present value of future lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company will utilize the incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment, and considering the region in which the ROU asset and liabilities are located.
The Company has elected to combine lease and non-lease components as a single component. Operating leases are recognized on the balance sheet as ROU lease assets, lease liabilities current and lease liabilities non-current. Fixed rents are included in the calculation of the lease balances, while variable costs paid for certain operating and pass-through costs are excluded. Lease expense is recognized over the expected term on a straight-line basis.
Finance leases are recognized on the balance sheet as property and equipment, finance lease liabilities current and finance lease liabilities non-current. Finance lease ROU assets and the related lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The finance lease ROU assets are amortized on a straight-line basis over the lease term with the related interest expense of the lease liability payment recognized over the lease term using the effective interest method.
Impairment of Long-lived Assets
Long-lived assets consist primarily of property and equipment. The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset is not recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds the fair value of the assets. The Company did
Research and Development Costs
Research and development costs consist primarily of fees paid to consultants, license fees and facilities costs. Nonrefundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received rather than when the payment is made. All research and development costs are expensed as incurred.
Selling, General and Administrative Costs
Selling, general and administrative expenses consist primarily of salaries and related benefits, including stock-based compensation expense, related to the Company's executive, finance, business development, legal, human resources and support functions. Other
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general and administrative expenses include professional fees for auditing, tax, consulting and patent-related services, rent and utilities and insurance.
Stock-based Compensation Expense
Stock-based compensation expense represents the cost of the grant date fair value of employee stock awards recognized over the requisite service period of the awards (usually the vesting period) on a straight-line basis. The Company estimates the fair value of each stock-based award on the date of grant using the Black-Scholes option pricing model. The Black-Scholes option pricing model incorporates various assumptions, such as the value of the underlying common stock, the risk-free interest rate, expected volatility, expected dividend yield, and expected life of the options. Forfeitures are recognized as a reduction of stock-based compensation expense as they occur.
The Company also awards restricted stock to employees and directors. Restricted stock is generally subject to forfeiture if employment terminates prior to the completion of the vesting restrictions. The Company expenses the cost of the restricted stock, which is determined to be the fair market value of the shares of common stock underlying the restricted stock at the date of grant, ratably over the period during which the vesting restrictions lapse.
Stock-based compensation expense is classified in the statement of operations and comprehensive loss in the same manner in which the award recipients’ payroll costs are classified or in which the award recipients’ service payments are classified.
Income Taxes
Deferred income tax assets and liabilities arise from temporary differences associated with differences between the financial statements and tax basis of assets and liabilities, as measured by the enacted tax rates, which are expected to be in effect when these differences reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.
Prior to the acquisition of
The Company follows the provisions of ASC 740-10, Uncertainty in Income Taxes, or ASC 740-10. The Company has
The Company has identified the United States, South Africa and Guernsey as its major tax jurisdictions. Refer to Note 15 for further details.
Comprehensive Loss
Comprehensive loss is defined as a change in equity during a period from transactions and other events and circumstances from non-owner sources. The Company’s comprehensive loss is comprised of net loss and the effect of currency translation adjustments.
Recently Issued Accounting Pronouncements
The Company has reviewed recently issued accounting pronouncements and plans to adopt those that are applicable to it. The Company does not expect the adoption of any recently issued pronouncements to have a material impact on its results of operations or financial position.
In November 2023, the Financial Accounting Standards Board (“FASB") issued Accounting Standards Update (“ASU") 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"). ASU 2023-07 will improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses on an interim and annual basis. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods after December 15, 2024, with early adoption permitted. The adoption of this standard is not expected to have a material impact on the Company’s condensed financial statements at adoption date.
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (“ASU 2024-03”) and is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. ASU 2024-03 requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. The Company is still assessing the impact of adopting this standard.
3. Revenue
In connection with the Company's acquisition of
The following table presents changes in the Company’s accounts receivable for the nine months ended September 30, 2024:
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4. Property and Equipment
Property and equipment as of September 30, 2024 and December 31, 2023 consisted of the following:
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|
|
|
|
|
|||
Software |
|
|
|
|
|
|
|
|||
Office furniture |
|
|
|
|
|
|
|
|||
Leasehold improvements |
|
|
|
|
|
|
|
|||
Property and equipment, at cost |
|
|
|
|
|
|
|
|
||
Less accumulated depreciation |
|
|
|
|
( |
) |
|
|
( |
) |
Property and equipment, net |
|
|
|
$ |
|
|
$ |
|
||
The Carbon-14 plant (which is included within tools, machinery and equipment) was completed in June 2024 and depreciation began in July 2024. The Company is currently building two other plants in Pretoria, South Africa: a multi-isotope plant and a laser isotope separation plan using quantum enrichment technology. Costs incurred for the other two plants are considered construction in progress because the work is not complete as of September 30, 2024. Costs incurred for the plants as of December 31, 2023 are considered construction in progress. There was no depreciation expense as it relates to the construction in progress for the three and nine months ended September 30, 2024 and 2023. Depreciation expense for all other asset categories was $
5. Accrued Expenses
Accrued expenses as of September 30, 2024 and December 31, 2023 consisted of the following:
|
|
September 30, |
|
|
December 31, |
|
||
Accrued professional |
|
$ |
|
|
$ |
|
||
Accrued salaries and other employee costs |
|
|
|
|
|
|
||
Accrued other |
|
|
|
|
|
|
||
Total accrued expenses |
|
$ |
|
|
$ |
|
||
6. Notes Payable
Convertible Notes Payable
In March 2024, the Company issued convertible notes payable (“March 2024 Convertible Notes”) totaling $
In June 2024, the Company issued additional convertible notes payable (“June 2024 Convertible Notes”) totaling $
The Convertible Notes are recorded on the condensed consolidated balance sheet at their fair values. The fair value of the March Convertible Notes on the date of issuance was $
Promissory Note Payable
During 2021, the Company executed a promissory note payable with an aggregate principal balance of $
In November 2023, the Company executed a promissory note payable with a finance company to fund its directors and officers insurance policy for $
16
7. Deferred Revenues
In June 2023, the Company entered into a Supply Agreement with a customer for the delivery of Molybdenum-100 and Molybdenum-98 beginning in 2024. In conjunction with the Supply Agreement, the Company received $
8. Commitments and Contingencies
Purchase of Cyclotron
In November 2023, the cyclotron that the Company ordered was shipped. As of December 31, 2023, the equipment had not been delivered; however, the Company was obligated to purchase this equipment and recorded the full cost of $
In March 2024, the cyclotron was received by the Company and is recorded as property and equipment. The financing company has paid the vendor. The Company financed the cost of this equipment and it is recorded in finance lease liabilities as of September 30, 2024.
Klydon Proprietary Limited
In November 2021, the Company entered into an agreement with Klydon Proprietary Limited (“Klydon”) to design and build a plant to enrich Molybdenum in South Africa (the "Turnkey Contract"). The initial phase of the project included the building of a plant that can support the production of at least 5kgs of Mo-100. The contracted cost for this phase was $
Klydon performed a portion of the services required under the Turnkey Contract; however, some services were incomplete and many of the services were not completed within the time frame required. As a result, Klydon and ASP South Africa entered into an Acknowledgement of Debt Agreement dated November 30, 2022, whereby Klydon (i) agreed to pledge its assets (the “Pledged Assets”) to ASP South Africa to secure its performance of the Turnkey Contract by December 31, 2022, and (ii) acknowledged that ASP South Africa would suffer damages in the amount of $
On April 4, 2023, the Company perfected its interest under the Acknowledgement of Debt Agreement, pursuant to which the Company acquired certain intellectual property from Klydon (“Klydon Settlement”). In addition, the Company acquired Klydon's interest in four entities which are inactive and in the process of being dissolved. The Company has concluded that the Klydon Settlement is accounted for as an asset acquisition under ASC 805 since the assets acquired were concentrated in a single identifiable asset from a related party. In conjunction with the Klydon Settlement, the Company recorded an increase to additional paid-in capital for the settlement of all liabilities owed to Klydon at the time of settlement totaling $
Two individuals who are officers and board members of Klydon, one who is now an officer of ASP Isotopes Inc. and the other who is now a scientific advisor of ASP Isotopes Inc., received warrants to purchase common stock of the Company and therefore are considered related parties. See Notes 10 and 12.
Share Purchase Agreement relating to PET Labs
On October 31, 2023, the Company entered into a Share Purchase Agreement with Nucleonics Imaging Proprietary Limited, a company incorporated in the Republic of South Africa (the “Seller”), relating to the purchase and sale of ordinary shares in the issued share capital of Pet Labs. PET Labs is a South African radiopharmaceutical operations company, dedicated to nuclear medicine and the science of radiopharmaceutical production.
Under the Purchase Agreement, the Company has agreed to purchase from the Seller
PET Labs Global
In August 2024, PET Labs Global entered into a three-year service agreement with Cayman Enterprise City and is licensed to operate from within the Cayman Islands’ Special Economic Zone (“SEZ”). The service fee includes among other things the right to use certain office space and associated facilities within the SEZ. The Company has applied the guidance in ASC 842 and determined that this agreement is not a leasing arrangement. Management has determined that based on the nature of the combined services the expense
17
should be recognized as incurred. The Company recorded fees under this agreement totaling $
Contingencies
From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of its business activities. The Company accrues liabilities for such matters when future expenditures are probable and such expenditures can be reasonably estimated.
On October 25, 2022, the Company received a letter from a law firm acting on behalf of Norsk medisinsk syklotronsenter AS (“NMS”), asserting, among other things, that the grant of a license to the ASP technology to the Company by Klydon violates a pre-existing exclusive sub-license to the ASP technology granted to Radfarma. The asserted claims, arbitration and/or litigation could include claims against the Company, the Company’s licensor (Klydon), or Klydon’s present or former sub-licensors alleging infringement of intellectual property rights with respect to the ASP technology on which our company relies. The Company recorded legal costs totaling $
9. Leases
The Company accounts for facility leases in accordance with ASC 842 (Note 2). The Company is party to five facility leases in South Africa for office, manufacturing and laboratory space.
A lease for office and laboratory space in Pretoria, South Africa commenced in October 2021 with the initial term set to expire in
A lease for additional production space in Pretoria, South Africa commenced in April 2023 with the initial term set to expire in March 2024. Effective February 1, 2024, this lease was amended such that the new term begins on February 1, 2024 and expires in
A lease for laboratory space in Pretoria, South Africa commenced in November 2023 with the initial term set to expire in
A lease for office and production space in Pretoria, South Africa commenced prior to October 31, 2023 with the initial term set to expire in
A summary of long leases in the condensed consolidated balance sheet as of September 30, 2024 is as follows:
|
|
ROU Asset |
|
|
Operating Lease Liability - Current |
|
|
Operating Lease Liability – Non-Current |
|
|
Total Operating Lease Liability |
|
||||
Lease: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Office and laboratory, Pretoria, South Africa |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Additional production, Pretoria, South Africa |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Laboratory, Pretoria, South Africa |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Office and production, Pretoria, South Africa |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
A summary of long-term leases in the condensed consolidated balance sheet as of December 31, 2023 is as follows:
|
|
ROU Asset |
|
|
Operating Lease Liability - Current |
|
|
Operating Lease Liability – Non-Current |
|
|
Total Operating Lease Liability |
|
||||
Lease: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Office and laboratory, Pretoria, South Africa |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Laboratory, Pretoria, South Africa |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Office and production, Pretoria, South Africa |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
A lease for additional production space in Pretoria, South Africa commenced prior to October 31, 2023 with the initial term expiring in March 2024 and the Company is maintaining the lease under the agreed upon monthly extensions. The Company has applied the guidance in ASC 842 and has determined that this lease is a short term lease effective on the date of ASP Isotopes acquisition of
18
Quantitative information regarding the Company’s operating lease liabilities is as follows:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Operating Lease Cost |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating lease cost |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Other Information |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating cash flows paid for amounts included in the |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Operating lease liabilities arising from obtaining right-of- |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Weighted average remaining lease term (years) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average discount rate |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
||||
Future lease payments under noncancelable operating lease liabilities as of September 30, 2024 are as follows:
|
|
Operating |
|
|
Future Lease Payments |
|
|
|
|
2024 (remaining three months) |
|
$ |
|
|
2025 |
|
|
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
Thereafter |
|
|
|
|
Total lease payments |
|
$ |
|
|
Less: imputed interest |
|
|
( |
) |
Total lease liabilities |
|
$ |
|
|
The Company records the expense from short term leases as incurred. The Company recorded lease expense from its short term leases of $
The Company accounts for finance leases in accordance with ASC 842 (Note 2). Subsequent to the acquisition of
Quantitative information regarding the Company’s finance lease liabilities is as follows:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Finance Lease Cost |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest on lease liabilities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Other Information |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating cash flows paid for amounts included in the |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Amortization of right-of-use assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Weighted average remaining lease term (years) |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Weighted average discount rate |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
||||
Future lease payments under noncancelable finance lease liabilities are as follows as of September 30, 2024:
|
|
Finance |
|
|
Future Lease Payments |
|
|
|
|
2024 (remaining three months) |
|
$ |
|
|
2025 |
|
|
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
Thereafter |
|
|
|
|
Total lease payments |
|
$ |
|
|
Less: imputed interest |
|
|
( |
) |
Total lease liabilities |
|
$ |
|
|
19
10. License Agreements
In September 2021, ASP South Africa licensed certain intellectual property from Klydon for the development, production distribution, marketing and sale of Mo-100. The license had a term of 999 years, unless terminated earlier by either party under certain provisions. Two individuals who are officers and board members of Klydon received warrants to purchase common stock of the Company (See Note 12). Effective July 26, 2022, the parties agreed to terminate the Mo-100 license, which was superseded and replaced by a new license agreement (described below).
In January 2022, ASP South Africa licensed certain intellectual property from Klydon for the development, production distribution, marketing and sale of uranium isotope U-235 (“U-235”). The license had a term of 999 years, unless terminated earlier by either party under certain provisions. The Company paid an upfront fee of $
In July 2022, ASP UK entered into a license agreement with Klydon, as licensor, pursuant to which ASP Isotopes UK Ltd acquired from Klydon an exclusive license to use, develop, modify, improve, subcontract and sublicense certain intellectual property rights relating to the ASP technology for the production, distribution, marketing and sale of all isotopes produced using the ASP technology (the “Klydon license agreement”). The Klydon license agreement superseded and replaced the Mo-100 license and U-235 license described in Note 8 above. The Klydon license agreement is royalty-free, has a term of 999 years and is worldwide for the development of the ASP technology and the distribution, marketing and sale of isotopes. Future production of isotopes is limited to member countries of the Nuclear Suppliers Group. In connection with the Klydon license agreement the Company agreed to make an upfront payment of $
In July 2022, ASP South Africa acquired assets comprising a dormant Silicon-28 aerodynamic separation processing plant from Klydon for ZAR
On April 4, 2023, the Company perfected its interest under the Acknowledgement of Debt Agreement (see Note 8), pursuant to which the Company acquired certain intellectual property from Klydon (“Klydon Settlement”). The Company concluded that the Klydon Acquisition is accounted for under ASC 805, Business Combinations as an asset acquisition since the assets acquired were concentrated in a single identifiable asset from a related party. In conjunction with the Klydon Settlement, the Company recorded an increase to additional paid-in capital for the settlement of all liabilities owed to Klydon at the time of settlement totaling $
11. Acquisitions
PET Labs
In October 2023, the Company completed the acquisition of PET Labs. The acquisition is intended to accelerate the distribution of the Company’s pipeline. The acquisition of PET Labs has been accounted for as a business combination in accordance with ASC 805.
Pursuant to the terms of the agreement, the Company acquired
In addition to the purchase consideration, the Company has an option to purchase the remaining
Dr. Gerdus Kemp is an officer of PET Labs and, effective November 1, 2023, an employee of ASP UK. In addition, Dr. Kemp controls the remaining
The following table summarizes the preliminary allocation of the purchase consideration to the fair value of the assets acquired and liabilities assumed:
Consideration |
|
|
|
|
Cash |
|
$ |
|
|
Present value of balance due |
|
|
|
|
|
|
$ |
|
|
Recognized amounts of identifiable assets acquired and liabilities assumed |
|
|
|
|
Cash and cash equivalents |
|
$ |
|
|
Accounts receivable |
|
|
|
|
Other current assets |
|
|
|
|
Property and equipment |
|
|
|
|
Right of use assets |
|
|
|
|
Financial liabilities |
|
|
( |
) |
Right of use liabilities |
|
|
( |
) |
Total identifiable net assets |
|
|
|
|
Noncontrolling interest |
|
|
( |
) |
Goodwill |
|
|
|
|
|
|
$ |
|
|
20
Goodwill arising from the acquisition as of October 31, 2023 of $
The Company considered the contractual value of accounts receivable to be the same as the fair value and the full amount was collected.
The results of PET Labs have been included in the consolidated financial statements from the date of the acquisition.
The Company accounts for business combinations in accordance with ASU No. 2015-16, Business Combinations (Topic 805), which requires an acquirer to retrospectively adjust provisional amounts recognized in a business combination during the measurement period (which represents a period not to exceed one year from the date of the acquisition), in the reporting period in which the adjustment is determined, as well as present separately on the face of the income statement or as a disclosure in the notes to the consolidated financial statements, the portion of the amount recorded in current period earnings that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date.
The changes to the carrying value of goodwill is as follows:
Balance as of October 31, 2023 (acquisition date) |
|
$ |
|
|
Translation adjustment |
|
|
|
|
Balance as of December 31, 2023 |
|
|
|
|
Translation adjustment |
|
|
|
|
Balance as of September 30, 2024 |
|
$ |
|
ASP Rentals
In December 2023, ASP South Africa entered into a Shareholders Agreement (“ASP Rentals Shareholders Agreement”) with ASP Rentals, a newly formed equipment financing service provider formed for the sole purpose of providing financing to ASP South Africa for its significant asset purchases in South Africa. In accordance with the terms of the ASP Rentals Shareholders Agreement,
In June 2024, ASP Rentals issued additional capital stock to support additional financing to ASP South Africa and PET Labs. Per the terms of the ASP Rentals Shareholder Agreement,
In August 2024, ASP Rentals issued additional capital stock to support additional financing to PET Labs. Per the terms of the ASP Rentals Shareholder Agreement, ASP Rentals issued 20% of the new capital to ASP South Africa for total consideration of ZAR 369,965 (which at the exchange rate as of September 30, 2024 was $21,421) and the remaining 80% of the new capital to one of the two original third party entities for a combined consideration of ZAR 1,849,826 (which at the exchange rate as of September 30, 2024 was $104,925).
As a result of the additional financings in 2024, ASP South Africa now controls 42% of ASP Rentals.
In addition to issuance of these shares, future ASP South Africa and PET Labs Pharmaceutical equipment purchases may also be financed by ASP Rentals through the issuance of additional shares. ASP South Africa will only be entitled to dividend distributions upon the two third party entities receiving a designated return on their investment.
In conjunction with the ASP Rental Shareholders Agreement, ASP South Africa and PET Labs have both entered into an Asset Sale Agreement and an Asset Rental Agreement with ASP Rentals in order to facilitate the financing of equipment recently purchased by ASP South Africa and PET Labs. As a result of the transactions contemplated by these agreements, collectively, ASP Rentals is considered a variable interest entity. In addition, since the only function of ASP Rentals is to provide financing to ASP South Africa and PET Labs, ASP Isotopes is considered to be the primary beneficiary of ASP Rentals. Therefore, ASP Rentals has been consolidated in accordance with ASC 810.
As of December 31, 2023, ASP Rentals had a receivable and an obligation to issue
In January 2024,
21
12. Stockholders’ Equity
Preferred stock
ASP Isotopes Inc. has
Common stock
The Company has
As of December 31, 2022, the Company owed a placement agent, as amended,
In November 2022, the Company was required to issue shares of common stock with a then fair value totaling $
In February 2023, the Company was required to issue an aggregate of
In March 2023, the Company was required to issue an aggregate of
In March 2023, an officer and scientific advisor of the Company exchanged an aggregate of
In May 2023, the Company was required to issue an aggregate of
In May 2023, the Company was required to issue an aggregate of
In July 2023, the Company was required to issue an aggregate of
In August 2023, the Company was required to issue an aggregate of
The Company’s non-employee board members agreed to receive the 2022 and 2023 director fees totaling $
In March 2023, the Company issued
22
In October 2023, the Company entered into Securities Purchase Agreements with certain institutional and other accredited investors and certain directors of the Company to issue and sell an aggregate of
In January 2024, the Company was required to issue an aggregate of
In April 2024, the Company was required to issue an aggregate of
In June 2024, the Company issued an aggregate of
In July 2024, the Company issued an aggregate of
Activity of the share liabilities for the nine months ended September 30, 2024 is as follows:
|
|
Share Liability as of December 31, |
|
|
New Share |
|
|
Mark to |
|
|
Liabilities |
|
|
Share Liabilities as of September 30, |
|
|||||
Share liabilities originated in 2024 |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||
Commission fee liability to be settled in common stock warrants |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
||||
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||
Activity of the share liabilities for the nine months ended September 30, 2023 is as follows:
|
|
Share Liability as of December 31, |
|
|
New Share |
|
|
Mark to |
|
|
Liabilities |
|
|
Share Liabilities as of September 30, |
|
|||||
Share liabilities originated in 2022 |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||
Share liabilities originated in 2023 |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
In July 2024, the Company issued
In November 2024, the Company issued an additional
Common Stock Warrants
In September 2023, the Company issued
Expected volatility |
|
|
% |
|
Weighted-average risk-free rate |
|
|
% |
|
Expected term in years |
|
|
|
|
Expected dividend yield |
|
|
% |
In April 2024, a warrant to purchase
The fair value of the Inducement Warrant was determined to be $
23
Expected volatility |
|
|
% |
|
Weighted-average risk-free rate |
|
|
% |
|
Expected term in years |
|
|
|
|
Expected dividend yield |
|
|
% |
The fair value of the Inducement Warrant is considered a deemed dividend and the amount is reflected in the calculation of earnings (loss) per share on a basic and diluted basis.
In conjunction with the exercise of the warrant in April 2024, the Company is now obligated to issue to an underwriter, a warrant to purchase
Expected volatility |
|
|
% |
|
Weighted-average risk-free rate |
|
|
% |
|
Expected term in years |
|
|
|
|
Expected dividend yield |
|
|
% |
As of September 30, 2024, neither the cash payment nor the issuance of the Commission Warrant has been settled and therefore the cash payment due is included in accrued expenses and the fair value of the warrant is included in share liability on the consolidated balance sheet. The fair value of the Commission Warrant as of September 30, 2024 was $
In October 2024, a warrant to purchase
13. Stock Compensation Plan
Equity Incentive Plan
In October 2021, the Company adopted the 2021 Stock Incentive Plan (“2021 Plan”) that provided for the issuance of common stock to employees, nonemployee directors, and consultants. Recipients of incentive stock options are eligible to purchase shares of common stock at an exercise price equal to no less than the estimated fair market value of such stock on the date of grant. The 2021 Plan provided for the grant of incentive stock options, non-statutory stock options, restricted stock, restricted stock units, stock awards and stock appreciation rights. The maximum contractual term of options granted under the 2021 Plan is
In November 2022, the Company adopted the 2022 Equity Incentive Plan (“2022 Plan”) that provides for the issuance of common stock to employees, nonemployee directors, and consultants. Recipients of incentive stock options are eligible to purchase shares of common stock at an exercise price equal to no less than the estimated fair market value of such stock on the date of grant. The 2022 Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock, restricted stock units, stock awards and stock appreciation rights. The maximum contractual term of options granted under the 2022 Plan is
In June 2024, the Company adopted the 2024 Inducement Equity Incentive Plan (“2024 Plan”). The 2024 Plan will be used exclusively for the grant of equity awards to individuals who were not previously employees or directors of the Company, or following a bona fide period of non-employment, as an inducement material to such individuals entering into employment with the Company, pursuant to Nasdaq Listing Rule 5635(c)(4). Recipients of stock options are eligible to purchase shares of common stock at an exercise price equal to no less than the estimated fair market value of such stock on the date of grant. The 2024 Plan provides for the grant of non-statutory stock options, restricted stock, restricted stock units, stock awards and stock appreciation rights. The maximum contractual term of options granted under the 2024 Plan is
Stock Options
The following table sets forth the activity for the Company’s stock options during the periods presented:
|
|
Number of |
|
|
Weighted- |
|
|
Weighted |
|
|
Aggregate |
|
||||
Outstanding as of December 31, 2023 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Granted |
|
|
— |
|
|
$ |
|
|
|
|
|
|
|
|||
Forfeited |
|
|
( |
) |
|
$ |
|
|
|
|
|
|
|
|||
Outstanding as of September 30, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
|
|
|
|
|
|
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Exercisable as of September 30, 2024 |
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$ |
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$ |
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Vested or expected to vest as of September 30, 2024 |
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$ |
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$ |
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For the nine months ended September 30, 2024,
24
The Company recorded stock-based compensation expense from options of $
Stock Awards
In October 2021, the Company issued
The Company recorded stock-based compensation expense from stock awards totaling $
The following table summarizes vesting of restricted common stock:
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Number of |
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Weighted |
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||
Unvested as of December 31, 2023 |
|
|
|
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$ |
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||
Granted |
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|
$ |
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||
Vested |
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|
( |
) |
|
$ |
|
|
Forfeited and retired |
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|
( |
) |
|
$ |
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|
Unvested as of September 30, 2024 |
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|
|
|
$ |
|
||
Stock-based Compensation Expense
Stock-based compensation expense for all stock awards recognized in the accompanying consolidated statements of operations and comprehensive loss is as follows:
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2024 |
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2023 |
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2024 |
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2023 |
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Selling, general and administrative |
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$ |
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$ |
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$ |
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$ |
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Research and development |
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Total |
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$ |
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$ |
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$ |
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$ |
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14. Net Loss Per Share
The Company has reported losses since inception and has computed basic net loss per share attributable to common stockholders by dividing net loss attributable to common stockholders by the weighted-average number of shares of Common Stock outstanding for the period, without consideration for potentially dilutive securities. The Company computes diluted net loss per share of Common Stock after giving consideration to all potentially dilutive shares of common stock, including options to purchase common stock and warrants to purchase common stock, outstanding during the period determined using the treasury-stock and if-converted methods, except where the effect of including such securities would be antidilutive. Because the Company has reported net losses since inception, these potential shares of Common Stock have been anti-dilutive and basic and diluted loss per share were the same for all periods presented.
The following table sets forth the computation of basic and diluted net loss per share for the three and nine months ended September 30, 2024 and 2023:
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Three Months Ended September 30, |
|
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Nine Months Ended September 30, |
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2024 |
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2023 |
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2024 |
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2023 |
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Numerator: |
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Net loss attributable to ASP Isotopes Inc. shareholders |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Deemed dividend on warrant to purchase common stock |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Net loss attributable to ASP Isotopes Inc. shareholders |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Denominator: |
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Weighted average common stock outstanding, basic and |
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||||
Net loss per share, basic and diluted |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
25
The following table sets forth the potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because to include them would be anti-dilutive:
|
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As of September 30, |
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2024 |
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2023 |
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||
Options to purchase common stock |
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Warrants to purchase common stock |
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Unvested restricted stock |
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Total shares of common stock equivalents |
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15. Income Taxes
The Company’s effective tax rate for the three months ended September 30, 2024 was
The Company’s effective tax rate for the nine months ended September 30, 2024 was
The Company recognizes a tax benefit from an uncertain tax position when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more likely than not recognition threshold to be recognized. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual for interest and penalties on the Company’s balance sheets and has not recognized interest and/or penalties in the consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2024. Uncertain tax positions are evaluated based upon the facts and circumstances that exist at each reporting period. Subsequent changes in judgment based upon new information may lead to changes in recognition, derecognition, and measurement. Adjustments may result, for example, upon resolution of an issue with the taxing authorities or expiration of a statute of limitations barring an assessment for an issue. As of September 30, 2024, there were no uncertain tax positions.
As of September 30, 2024, the Company did not recognize any interest and penalties associated with unrecognized tax benefits. Due to net operating losses incurred, tax years from inception remain open to examination by the Federal and State taxing jurisdictions to which the Company is subject. The Company is not currently under Internal Revenue Services (IRS), state or local tax examination.
Ownership changes, as defined in the IRC, may limit the amount of net operating loss carryforwards that can be utilized annually to offset future taxable income pursuant to IRC Section 382 or similar provisions. Subsequent ownership changes could further affect the limitation in future years. The Company has not completed a study to assess whether a change of control has occurred or whether there have been multiple changes of control since the Company’s formation due to the significant complexity and cost associated with such study and because there could be additional changes in control in the future. As a result, the Company is not able to estimate the effect of the change in control, if any, on the Company’s ability to utilize net operating loss and research and development credit carryforwards in the future.
16. Subsequent Events
The Company has evaluated subsequent events through November 13, 2024, the date on which the accompanying condensed consolidated financial statements were issued and concluded that no subsequent events have occurred that require disclosure except as noted in Note 12.
26
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the section entitled “Risk Factors,” our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. You should carefully read the section entitled “Risk Factors” to gain an understanding of the important factors that could cause actual results to differ materially from our forward- looking statements. Please also see the section entitled “Cautionary Note Regarding Forward-Looking Statements.”
Overview
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 completed an isotope enrichment plant for the enrichment of C-14 located in Pretoria, South Africa and we expect to start commercial supply of C-14 in the first quarter of 2025 assuming timely delivery of the feedstock from the Company’s customer. We anticipate completion and commissioning of a multi-isotope enrichment plant in Pretoria, South Africa in the fourth quarter of 2024, and we expect to start initial commercial supply of Si-28 in early 2025. 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.
We are also developing Quantum Enrichment technology to produce enriched Ytterbium-176 (“Yb-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. The construction of our first quantum enrichment facility was completed in August 2024, and we produced the first semi-finished material of enriched Yb-176 during the commissioning phase of the plant in October 2024. We expect to be able to achieve a 99.75% enrichment for Yb-176 and offer highly enriched Yb-176 for commercial sale during 2025. We also expect to proceed with the plans to construct Nickel-64 and Lithium- 6/7 quantum enrichment plants with targeted production during 2025.
Our Subsidiaries
We operate principally through our subsidiaries. ASP Isotopes Guernsey Limited (the holding company for subsidiaries in the Cayman Islands, South Africa, Iceland and the United Kingdom) is focused on the development and commercialization of high-value, low-volume isotopes for highly specialized end markets (such as C-14, Mo-100, and Si-28). ASP Isotopes UK Ltd is the owner of our technology.
In September 2023, we formed Quantum Leap Energy LLC, or “QLE,” which also has subsidiaries in the United Kingdom (Quantum Leap Energy Limited) and South Africa (Quantum Leap Energy (Pty) Limited), to focus on the development and commercialization of advanced nuclear fuels such as HALEU and Lithium-6.
In addition, in the fourth quarter of 2023, we entered into a strategic relationship with Pet Labs Pharmaceuticals (Pty) Limited (PET Labs) by acquiring a 51% ownership stake in PET Labs. We anticipate this transaction will allow us to enter the downstream medical isotope production and distribution market. Beginning in 2024, primarily as a result of the increased business activities of QLE, we have two operating segments: (i) nuclear fuels, and (ii) specialist isotopes and related services.
Although no assurance can be given, we plan to spin-out QLE as a separate public company and list the shares of QLE on a U.S. national exchange and distribute a portion of QLE’s common equity to ASPI’s stockholders as of a to-be-determined future record date, in each case subject to obtaining applicable approvals and consents and complying with applicable rules and regulations and public market trading and listing requirements. The regulatory landscape and supply chain for nuclear fuel production differs significantly from that of medical isotopes, hence we and QLE have different business models and we believe that both companies would benefit if QLE is independently managed and financed.
In connection with the anticipated spin-out, in February 2024, we entered into a number of agreements with QLE, including a License Agreement, pursuant to which QLE has licensed from us the rights to technologies and methods used to separate Uranium 235 and Lithium 6 (including but not limited to the quantum enrichment and ASP technologies) in exchange for a perpetual royalty in the amount of 10% of all future QLE revenues, and an EPC Services Framework Agreement, pursuant to which we will provide services for the engineering, procurement and construction of one or more turnkey Uranium-235 and Lithium-6 enrichment facilities in locations to be identified by QLE and owned or leased by QLE, and commissioning, start-up and test services for each such facility, subject to the receipt of all applicable regulatory approvals, permits, licenses, authorizations, registrations, certificates, consents, orders, variances and similar rights. In addition, in February 2024, we assigned to QLE certain existing memoranda of understanding with U.S.-based small modular reactor companies for the use of Quantum Enrichment for the production of High-Assay Low Enriched Uranium (HALEU). The MOUs provide for substantial financial support for the development of HALEU production facilities that should be capable of supplying metric ton quantities of HALEU by 2027.
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High-Assay Low-Enriched Uranium (HALEU) Production
In October 2024, we entered into a term sheet with TerraPower, LLC related to the construction of a uranium enrichment facility capable of producing HALEU and the future supply of HALEU to TerraPower. The term sheet contemplates the parties entering into a definitive agreement, pursuant to which TerraPower would provide funding for the construction of a HALEU production facility. In addition, the parties anticipate entering into a long-term supply agreement for HALEU expected to be produced at this facility, pursuant to which the customer would purchase all HALEU produced at the facility over a 10-year period after the expected completion of the facility in 2027. It is anticipated that the definitive agreements will be assigned to QLE. Except for binding periods of exclusivity, during which we will not negotiate with third parties for the supply of HALEU or work on another ASP technology-based uranium enrichment facility, the term sheet is non-binding and there is no assurance that the parties will enter into definitive agreements.
In November 2024, we entered into a memorandum of understanding (“MOU”) with The South African Nuclear Energy Corporation (Necsa) to collaborate on the research, development and ultimately the commercial production of advanced nuclear fuels. Necsa is a state-owned company established by the Republic of South Africa Nuclear Energy Act in 1999 with a mandate to undertake and promote research and development in the field of nuclear energy and radiation sciences. Necsa is also responsible for processing source material, and co-operating with other institutions on nuclear and related matters. The proposed structure under discussion for the delivery of the objectives of the MOU contemplates the formation of a new entity in South Africa with a board of directors consisting of at least two representatives from the Company and Necsa. Discussions between the parties during the last three years have focused on advancing new nuclear fuel to cater especially for small modular reactors as a start and eventually the construction of a nuclear fuel facility for the production of HALEU. It is anticipated that the research, development and ultimate construction of a HALEU production facility will take place at Pelindaba in Pretoria, South Africa. Pelindaba is South Africa’s main nuclear research center and is the home of the 20MW research nuclear reactor, SAFARI-1, which over the last several years has become one of the world’s largest suppliers of Molybdenum-99 and other radioisotopes.
Financings
On November 15, 2022, we completed an IPO of our common stock and issued and sold 1,250,000 shares of common stock at a public offering price of $4.00 per share, resulting in net proceeds of $3.8 million after deducting underwriting discounts and commissions and offering expenses.
In March 2023, we issued 3,164,557 shares of our common stock at a purchase price of $1.58 per share and warrants to purchase up to an aggregate of 3,164,557 shares of our common stock with an exercise price of $1.75 per share for gross proceeds of $5.0 million. We incurred $506,390 in cash issuance costs and issued warrants to purchase up to an aggregate of 221,519 shares of common stock with an exercise price of $1.975 per share to the placement agent with an initial fair value of $179,116.
In October 2023, we entered into Securities Purchase Agreements with certain institutional and other accredited investors and certain directors of ours to issue and sell an aggregate of 9,952,510 shares of our common stock, for aggregate cash consideration of $9,129,495, as follows: (i) 8,459,093 shares to investors at a purchase price per share of $0.9105, (ii) 1,190,239 shares to investors at a purchase price per share of $0.9548, and (iii) 303,178 shares to directors at a purchase price per share of $0.96. We incurred issuance costs equivalent to 5% of the gross proceeds from new investors which was settled in stock through the issuance of 472,582 shares to the placement agent and additional cash issuance costs totaling $57,083.
In March 2024, our wholly owned subsidiary Quantum Leap Energy received gross proceeds of $20,550,000 through the issuance of Convertible Promissory Notes with a stated interest rate of 6% for the first year and 8% thereafter. The maturity date of the Convertible Promissory Notes is March 7, 2029. The Convertible Promissory Notes automatically convert into common shares upon Quantum Leap Energy’s closing of an IPO or other qualifying public transaction at 80% of the share price taking into consideration a valuation cap.
In April 2024, we received approximately $5.5 million from the issuance of 3,164,557 shares of common stock upon the exercise of warrants.
In July 2024, we 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.
In October 2024, a warrant to purchase 151,741 shares of common stock was exercised and the Company received gross proceeds of $299,688.
In November 2024, the Company issued an additional 2,754,250 shares of common stock in a public offering at a public offering price of $6.75 per share for aggregate gross proceeds totaling approximately $18,600,000. The estimated issuance costs, including commissions and expenses, are expected to be approximately $1,455,000.
Acquisition of 51% of PET Labs
In October 2023, we entered into a Share Purchase Agreement with Nucleonics Imaging Proprietary Limited, a company incorporated in South Africa, to purchase 51% of the ordinary shares in Nucleonics’ wholly-owned subsidiary, Pet Labs Pharmaceuticals Proprietary Limited ("Pet Labs"), a company incorporated in South Africa and dedicated to nuclear medicine and the science of radiopharmaceutical production.
Per the Share Purchase Agreement, we have agreed to pay a total of $2,000,000 for the shares in two installments. The first installment of $500,000 was paid in November 2023. In January 2024, we paid $264,750 towards the balance due. The remaining balance of $1,235,250 is due upon demand any time after October 31, 2024 and is expected to be paid in November 2024.
Acquisition of Assets and Agreements with Klydon
To date, we have purchased certain assets of Molybdos Proprietary Limited, a South Africa company (Molybdos), and entered into a number of agreements with Klydon (Pty) Limited, a South Africa company (Klydon). Below is a summary of the key terms for our former licenses and other agreements with Klydon.
28
Acquisition of Molybdos Assets. On September 30, 2021, our subsidiary, ASP Isotopes South Africa (Proprietary) Limited (“ASP South Africa”), participated in and was declared the winner of a competitive auction process under Section 45 of the South Africa Consumer Protection Act, 2008 related to the sale and assignment of the assets of Molybdos (the “Molybdos Business Rescue Auction”). On October 12, 2021, ASP South Africa acquired the assets of Molybdos for ZAR 11,000,000 (which at the then current exchange rate was approximately $734,000), plus value added tax (VAT) levied by the government of South Africa at the rate of 15% and auctioneers’ commission at the rate of 10%.
Acquisition of Silicon-28 Plant Assets. On July 26, 2022, we acquired assets comprising a dormant Silicon-28 aerodynamic separation processing plant from Klydon for ZAR 6,000,000 (which at the then current exchange rate was approximately $364,000), which will be payable to Klydon on the later of 180 days of the acquisition and the date on which the assets generate any revenues of any nature.
Exclusive Mo-100 License (superseded and replaced by new license (see “Omnibus Klydon License” below)). On September 30, 2021, ASP South Africa, as licensee, entered into a license with Klydon, as licensor, pursuant to which ASP South Africa acquired from Klydon an exclusive license to use, subcontract and sublicense certain intellectual property rights relating to the ASP technology for the development and/or otherwise disposing of the ASP technology and production, distribution, marketing and or sale of Mo-100 isotope produced using the ASP technology (as amended on June 8, 2022, the “Mo-100 license”). The intellectual property rights granted to us through the Mo-100 license included all existing and/or future proprietary rights of Klydon relating to the ASP technology, whether or not such rights have been registered, including the copyright, designs, know-how, patents and trademarks (although Klydon currently has no such patents, patent applications or copyrights). The exclusive Mo-100 license was royalty-free, had a term of 999 years and was for the global development of the ASP Technology and production of the Mo-100 Isotope and global for the distribution, marketing and sale of the Mo-100 Isotope. No upfront or other payment was made or is owed in connection with the Mo-100 license. Klydon had the right to terminate the exclusivity of the Mo-100 license in the event that the licensee ceased carrying on activities of Mo-100 enrichment for a period longer than 24 consecutive months. Klydon had no other rights to terminate the Mo-100 license. Effective July 26, 2022, the parties agreed to terminate the Mo-100 license, which was superseded and replaced by a new license agreement (described under the heading “Omnibus Klydon License” below).
Exclusive U-235 License (superseded and replaced by new license (see “Omnibus Klydon License” below)). On January 25, 2022, ASP South Africa, as licensee, entered into a license with Klydon, as licensor, pursuant to which ASP South Africa acquired from Klydon an exclusive license to use, subcontract and sublicense certain intellectual property rights relating to the ASP technology for the development and/or otherwise disposing of the ASP technology and production, distribution, marketing and or sale of U-235 produced using the ASP (as so amended, the “U-235 license”). The intellectual property rights granted to us through the U-235 license included all existing and/or future proprietary rights of Klydon relating to the ASP technology, whether or not such rights have been registered, including the copyright, designs, know-how, patents and trademarks (although Klydon currently has no such patents, patent applications or copyrights). The exclusive U-235 license had a term of 999 years and was for the global development of the ASP technology and production of U-235 and global for the distribution, marketing and sale of U-235. In connection with the U-235 license we made an upfront payment of $100,000 and agreed to pay certain royalties (the greater of $50 per k.g. of U-235 and 10% of profits) and a 33% sublicensing revenue share of any cash consideration we may receive for any sublicenses we may grant. Klydon had the right to terminate the exclusivity of the U-235 license in the event that the licensee ceased carrying on activities of U-235 enrichment for a period longer than 24 consecutive months. Klydon had no other rights to terminate the U-235 license. Effective July 26, 2022, the parties agreed to terminate the U-235 license, which was superseded and replaced by a new license agreement (described under the heading “Omnibus Klydon License” below).
Omnibus Klydon License. On July 26, 2022, ASP Isotopes UK Ltd ("ASP UK"), as licensee, entered into a license agreement with Klydon, as licensor, pursuant to which ASP UK acquired from Klydon an exclusive license to use, develop, modify, improve, subcontract and sublicense certain intellectual property rights relating to the ASP technology for the production, distribution, marketing and sale of all isotopes produced using the ASP technology (the “Klydon license agreement”). The intellectual property rights granted to us through the Klydon license agreement included all existing and/or future proprietary rights of Klydon relating to the ASP technology, whether or not such rights have been registered, including the copyright, designs, know-how, patents and trademarks (although Klydon currently has no such patents, patent applications or copyrights). The Klydon license agreement was royalty-free, had a term of 999 years and was worldwide for the development of the ASP technology and the distribution, marketing and sale of isotopes. Future production of isotopes is limited to member countries of the Nuclear Suppliers Group. In connection with the Klydon license agreement, we agreed to make an upfront payment of $100,000 (to be included within the payments we made under the Turnkey Contract (described below) and deferred payments of $300,000 over 24 months. Effective April 4, 2023, pursuant to the Acknowledgement of Debt Agreement described below, we acquired the ASP technology, among other things, from Klydon, and the Klydon license agreement is no longer in effect.
Turnkey Contract. On November 1, 2021, ASP South Africa and Klydon, as the contractor, entered into a contract under which Klydon has been appointed to supply to ASP South Africa a complete turnkey isotope enrichment plant (the “Turnkey Contract”). The activities to be undertaken or performed by Klydon include: taking control of the assets acquired in the Molybdos Business Rescue Auction; the design of an isotope enrichment facility; the supply of components, equipment and labor required for the construction; the installation, testing and commissioning of the isotope enrichment plant; securing all required approvals, regulatory authorizations and other required consents for the operation of the plant; providing training to local ASP Isotopes South Africa (Proprietary) Limited personnel to enable them to operate the plant going forward; and providing warranties in relation to the performance targets of the plant which are required to be met. Klydon was responsible for liaising with the relevant South African authorities, including the South African Non Proliferation Council, the Nuclear Suppliers Group and International Atomic Energy Agency to ensure that the Turnkey Contract and the isotope enrichment plant are compliant with international laws and guidelines.
Acknowledgement of Debt Agreement. Klydon performed a portion of the services required under the Turnkey Contract described above; however, services were incomplete and many of the services were not completed within the time frame required. As a result, Klydon and ASP South Africa entered into an Acknowledgement of Debt Agreement dated November 30, 2022, whereby Klydon (i) agreed to pledge its assets (the “Pledged Assets”) to ASP South Africa to secure its performance of the Turnkey Contract by December 31, 2022, and (ii) acknowledged that ASP South Africa would suffer damages in the amount of $6,050,000 (“Damage Amount”) should it fail to perform. Under the Acknowledgement of Debt Agreement, the Pledged Assets would serve as collateral for Klydon’s obligation to pay the Damage Amount should Klydon fail to perform. In connection therewith, also on November 30, 2022, ASP South Africa and Klydon entered into a Deed of Security Agreement whereby, if Klydon failed to complete its obligations under the Turnkey Contract by December 31, 2022, all of Klydon’s rights of any nature to and interests of any nature in the Pledged Assets would be transferred to ASP South Africa. Klydon failed to complete its obligations under the Turnkey Contract by December 31, 2022.
29
On April 4, 2023, we perfected our interests in the assets under the Acknowledgement of Debt Agreement, pursuant to which we acquired the Pledged Assets, including certain intellectual property, from Klydon and settled all amounts due to Klydon, including the ZAR 6,000,000 for the acquisition of the Silicon-28 plant assets.
Other Commercial Agreements
Below is a summary of the key terms of our other commercial agreements.
Lease for Molybdenum Processing Plant. On October 12, 2021, ASP South Africa entered into an agreement of lease with the landlord of the facility located at 33 Eland Street, Koedoespoort Industrial, Pretoria where we operate our Molybdenum processing plant where gaseous Molybdenum compound will be treated (which process comprises several stages of compression and expansion during which the product is purified). The term of the lease ends on December 31, 2030.
Lease for additional production space. On April 1, 2023, ASP South Africa entered into an agreement of lease with the landlord of facility located in Pretoria where we plan to perform production activities. The initial term of the lease was set to end on March 31, 2024. We entered into a new agreement of lease with the landlord. The terms of the new lease ends on February 28, 2026.
Lease for additional laboratory space. On November 1, 2023, ASP South Africa entered into an agreement of lease with the landlord of the facility located in Pretoria where we perform research and development activities. The term of the lease ends on October 30, 2026.
Lease for PET Labs operations. Commencing with our acquisition of PET Labs in October 2023, this facility has an initial term set to expire in March 2026 with automatic monthly extensions thereafter. This space is used for office and production activities.
Lease for additional PET Labs operations. Commencing with our acquisition of PET Labs in October 2023, this facility had an initial term which expired in December 2023 and is currently under automatic monthly extensions. This space is used for production activities.
Political Risk Insurance Policy with Optio Group. On October 25, 2021, ASP Guernsey entered into a contract of insurance to cover against political risk and expropriation, to off-set the risk of events detrimental to the company occurring in the Republic of South Africa for a period of three years. The insurer is Optio Group Limited which is 100% underwritten by one or more syndicates at Lloyd’s of London. The specific risks covered in the policy are: (i) permanent and total abandonment of operations, (ii) deprivation of assets or shareholding, (iii) physical damage due to political violence, (iv) non-transfer or inconvertibility, (v) business interruption, (vi) non-honouring of arbitration award, and (vii) crisis management support. The limit of cover is equal to or in excess of the projected amount of investment required to complete the initial stage of the first planned Molybdenum enrichment plant. The limit of cover is capable of being increased and extended by mutual agreement with the insurer.
Components of Results of Operations
Revenue
Effective with the acquisition of 51% of PET Labs, the Company recognizes revenue from the sale of nuclear medical doses for PET scanning.
Cost of Goods Sold
Cost of goods sold associated with the sale of nuclear medical doses for PET scanning consist of labor, delivery and materials.
Operating Expenses
Our operating expenses consist of (i) research and development expenses and (ii) selling, general and administrative expenses.
Research and Development
Our research and development expenses consist primarily of direct and indirect costs incurred in connection with the development activities for our future isotopes.
Direct costs include:
Indirect costs include:
Research and development expenses are recognized as incurred and payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods or services are received.
As described above, Klydon charged us for expenses associated with these research and development functions under the Turnkey Contract. We expect that our research and development expenses will increase substantially for the foreseeable future as we continue the development of our future isotopes. We cannot determine with certainty the timing of initiation, the duration or the completion costs of development activities. Actual development timelines, the probability of success and development costs can differ materially from expectations.
30
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.
Our research and development expenses may vary significantly based on a variety of factors, such as:
A change in the outcome of any of these variables with respect to the development of any of our future isotopes could significantly change the costs and timing associated with the development of that future isotope.
Selling, General and Administrative
Selling, general and administrative expenses consist primarily of personnel-related costs, which include salaries, payroll taxes, employee benefits, and other employee-related costs, including stock-based compensation expense, for personnel in executive, sales, finance and other administrative functions. Other significant costs include legal fees relating to corporate matters, professional fees for accounting and consulting services and facility-related costs.
We expect that our ongoing selling, general and administrative expenses will increase substantially for the foreseeable future to support our increased research and development activities and increased costs of operating as a public company and in building our internal resources. These increased costs will include increased expenses related to audit, legal, regulatory and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance premiums and investor and public relations costs associated with operating as a public company.
Segment Information
As of December 31, 2023, we managed our operations as a single segment, specialist isotopes and related services. Beginning in 2024, primarily as a result of the increased business activities of our subsidiary, Quantum Leap Energy LLC, we have two operating segments: (i) nuclear fuels, and (ii) specialist isotopes and related services.
The nuclear fuels segment is focused on research and development of technologies and methods used to produce high-assay low-enriched uranium (HALEU) and Lithium-6 for the advanced nuclear fuels target end market.
The specialist isotopes and related services segment is focused on research and development of technologies and methods used to separate high-value, low-volume isotopes (such as C-14, Mo-100 and Si-28) for highly specialized target end markets other than advanced nuclear fuels, including pharmaceuticals and agrochemicals, nuclear medical imaging and semiconductors, as well as services related to these isotopes, and this segment includes PET Labs.
The financial information is regularly reviewed by the chief operating decision maker (“CODM”) in deciding how to allocate resources. Our CODM is our chief executive officer.
We manage assets on a total company basis, not by operating segment, as the assets are shared or commingled. Therefore, the chief operating decision maker does not regularly review any asset information by operating segment and, accordingly, asset information is not reported on a segment basis.
Select information from the consolidated statements of operations and comprehensive loss as of the three months ended September 30, 2024 and 2023 is as follows:
|
|
Revenues |
|
|
Net Loss Before Allocation to Noncontrolling Interest |
|
||||||||||
|
|
Three Months Ended September 30, |
|
|
Three Months Ended September 30, |
|
||||||||||
Segment |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Specialist isotopes and related services |
|
$ |
1,087,695 |
|
|
$ |
— |
|
|
$ |
(3,722,764 |
) |
|
$ |
(4,222,483 |
) |
Nuclear fuels |
|
|
— |
|
|
|
— |
|
|
|
(3,632,625 |
) |
|
|
— |
|
|
|
$ |
1,087,695 |
|
|
$ |
— |
|
|
$ |
(7,355,389 |
) |
|
$ |
(4,222,483 |
) |
Select information from the consolidated statements of operations and comprehensive loss as of the nine months ended September 30, 2024 and 2023 is as follows:
|
|
Revenues |
|
|
Net Loss Before Allocation to Noncontrolling Interest |
|
||||||||||
|
|
Nine Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
Segment |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Specialist isotopes and related services |
|
$ |
2,950,348 |
|
|
$ |
— |
|
|
$ |
(14,637,771 |
) |
|
$ |
(12,123,907 |
) |
Nuclear fuels |
|
|
— |
|
|
|
— |
|
|
|
(8,563,904 |
) |
|
|
— |
|
|
|
$ |
2,950,348 |
|
|
$ |
— |
|
|
$ |
(23,201,675 |
) |
|
$ |
(12,123,907 |
) |
31
Results of Operations
Comparison of the Three Months Ended September 30, 2024 and 2023
The following table summarizes our results of operations for the three months ended September 30, 2024 and 2023:
|
|
Three Months Ended September 30, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Revenue |
|
$ |
1,087,695 |
|
|
$ |
— |
|
Cost of goods sold |
|
|
793,714 |
|
|
|
— |
|
Gross profit |
|
|
293,981 |
|
|
|
— |
|
Operating expenses: |
|
|
|
|
|
|
||
Research and development |
|
|
1,034,446 |
|
|
|
239,199 |
|
Selling, general and administrative |
|
|
4,693,158 |
|
|
|
3,707,311 |
|
Total operating expenses |
|
|
5,727,604 |
|
|
|
3,946,510 |
|
Other (expense) income: |
|
|
|
|
|
|
||
Foreign exchange transaction loss |
|
|
(131,247 |
) |
|
|
— |
|
Change in fair value of share liability |
|
|
381,969 |
|
|
|
(279,425 |
) |
Change in fair value of convertible notes payable |
|
|
(2,692,073 |
) |
|
|
— |
|
Interest income |
|
|
602,181 |
|
|
|
3,452 |
|
Interest expense |
|
|
(90,966 |
) |
|
|
— |
|
Total other (expense) income |
|
|
(1,930,136 |
) |
|
|
(275,973 |
) |
Loss before income tax expense |
|
$ |
(7,363,759 |
) |
|
$ |
(4,222,483 |
) |
Revenue and Cost of Goods Sold
Effective with the acquisition of 51% of PET Labs, we have 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 nine months ended September 30, 2024. In addition, we have recognized the related cost of goods sold, operating expenses and other income and expenses of PET Labs for the same periods. No revenue or cost of goods sold was recognized for the three months ended September 30, 2023.
Research and Development Expenses
The following table summarizes our research and development expenses for the three months ended September 30, 2024 and 2023:
|
|
Three Months Ended September 30, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Indirect costs: |
|
|
|
|
|
|
||
Personnel-related costs |
|
$ |
368,515 |
|
|
$ |
113,336 |
|
Consulting and professional |
|
|
316,157 |
|
|
|
50,000 |
|
Facility and other expenses |
|
|
349,774 |
|
|
|
75,863 |
|
Total research and development expenses |
|
$ |
1,034,446 |
|
|
$ |
239,199 |
|
Research and development expenses were $1,034,446 for the three months ended September 30, 2024. These expenses include $368,515 of personnel-related costs, including $82,619 in stock-based compensation expense, $316,157 in consulting and professional costs and $349,774 in facility and other expenses.
Research and development expenses were $239,199 for the three months ended September 30, 2023. These expenses include $113,336 of personnel-related costs, including $92,886 in stock-based compensation expense, and $50,000 in consulting and professional costs, and $75,863 in facility and other expenses.
The increase in personnel-related costs is primarily attributable to the increase in headcount. The increase in consulting and professional costs is due to increased outsourced development activity for new specialty isotopes. The increase in facility and other is due to increase in space dedicated to development.
Selling, General and Administrative Expenses
Selling, general and administrative expenses were $4,693,158 for the three months ended September 30, 2024. These expenses include $2,985,744 of personnel-related costs, including $1,985,471 in stock-based compensation expense, $1,063,595 of professional services and legal related fees and $643,819 in facility and other corporate expenses.
Selling, general and administrative expenses were $3,707,311 for the three months ended September 30, 2023. These expenses include $2,484,637 of personnel-related costs, including $1,978,904 in stock-based compensation expense, $669,118 of professional services and legal related fees and $553,556 in facility and other corporate expenses.
The increase in personnel-related costs is due to an increase in headcount and salaries. The increase in professional services and legal related fees is primarily attributable to the timing of corporate activity. The increase in facility and other corporate expenses is primarily attributable to the expansion of our operations in 2024.
Other Income and Expense
Other expense for the three months ended September 30, 2024 was $1,930,136, which includes a loss of $2,692,073 due to change in fair value of the convertible notes payable issued in March and June 2024, partially offset by interest income of $602,181.and a gain of $381,969 due to change in fair value of share liability.
32
Other expense for the three months ended September 30, 2023 was $275,973, which includes a $279,425 change in the fair value of the share liability related to the shares issuable to a placement agent and other consultants.
Comparison of the Nine Months Ended September 30, 2024 and 2023
The following table summarizes our results of operations for the nine months ended September 30, 2024 and 2023:
|
|
Nine Months Ended September 30, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Revenue |
|
$ |
2,950,348 |
|
|
$ |
— |
|
Cost of goods sold |
|
|
1,956,473 |
|
|
|
— |
|
Gross profit |
|
|
993,875 |
|
|
|
— |
|
Operating expenses: |
|
|
|
|
|
|
||
Research and development |
|
|
1,722,882 |
|
|
|
699,413 |
|
Selling, general and administrative |
|
|
17,976,882 |
|
|
|
11,319,465 |
|
Total operating expenses |
|
|
19,699,764 |
|
|
|
12,018,878 |
|
Other (expense) income: |
|
|
|
|
|
|
||
Foreign exchange transaction loss |
|
|
(129,443 |
) |
|
|
(935 |
) |
Change in fair value of share liability |
|
|
327,969 |
|
|
|
(109,040 |
) |
Change in fair value of convertible notes payable |
|
|
(5,220,599 |
) |
|
|
— |
|
Interest income |
|
|
657,899 |
|
|
|
4,946 |
|
Interest expense |
|
|
(173,832 |
) |
|
|
— |
|
Total other (expense) income |
|
|
(4,538,006 |
) |
|
|
(105,029 |
) |
Loss before income tax expense |
|
$ |
(23,243,895 |
) |
|
$ |
(12,123,907 |
) |
Revenue and Cost of Goods Sold
Effective with the acquisition of 51% of PET Labs, we have 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 nine months ended September 30, 2024. In addition, we have recognized the related cost of goods sold, operating expenses and other income and expenses of PET Labs for the same periods. No revenue or cost of goods sold was recognized for the nine months ended September 30, 2023.
Research and Development Expenses
The following table summarizes our research and development expenses for the nine months ended September 30, 2024 and 2023:
|
|
Nine Months Ended September 30, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Indirect costs: |
|
|
|
|
|
|
||
Personnel-related costs |
|
$ |
673,140 |
|
|
$ |
369,136 |
|
License fees |
|
|
— |
|
|
|
— |
|
Consulting and professional |
|
|
490,647 |
|
|
|
150,000 |
|
Facility and other expenses |
|
|
559,095 |
|
|
|
180,277 |
|
Total research and development expenses |
|
$ |
1,722,882 |
|
|
$ |
699,413 |
|
Research and development expenses were $1,722,882 for the nine months ended September 30, 2024. These expenses include $673,140 of personnel-related costs, including $247,403 in stock-based compensation expense, $490,647 in consulting and professional, and $559,095 in facility and other expenses.
Research and development expenses were $699,413 for the nine months ended September 30, 2023. These expenses include $369,136 of personnel-related costs, including $278,686 in stock-based compensation expense, $150,000 in consulting expenses and $180,277 in facility and other expenses.
The increase in personnel-related costs is mainly due to the increase in headcount and related costs. The increase in consulting and professional is due to increased outsourced development activity for new specialty isotopes. The increase in facility is due to increase in space dedicated to development.
Selling, General and Administrative Expenses
Selling, general and administrative expenses were $17,976,882 for the nine months ended September 30, 2024. These expenses include $9,048,993 of personnel-related costs, including $6,052,357 in stock-based compensation expense, $4,720,772 of professional services and legal related fees and $4,207,117 in facility and other corporate expenses.
Selling, general and administrative expenses were $11,319,465 for the nine months ended September 30, 2023. These expenses include $7,720,997 of personnel-related costs, including $6,311,890 in stock-based compensation expense, $2,165,926 of professional services and legal related fees and $1,432,542 in facility and other corporate expenses.
The increase in personnel-related costs is due to an increase in headcount and salaries. 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.
Other Income and Expense
Other expense for the nine months ended September 30, 2024 was $4,538,006, which includes a loss of $5,220,599 due to change in fair value of the convertible notes payable issued in March and June 2024, partially offset by $657,899 of interest income and a gain of $327,969 due to change in fair value of share liability.
33
Other expense for the nine months ended September 30, 2023 was $105,029, which includes a $109,040 change in the fair value of the share liability related to the shares issuable to a placement agent and other consultants.
Liquidity and Capital Resources
Sources of Liquidity
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, we 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. In November 2024, we issued an additional 2,754,250 shares of common stock in a public offering at a public offering price of $6.75 per share resulting in net proceeds of approximately $17.1 million after deducting underwriting discounts, commissions and offering expenses.
As of September 30, 2024, we had cash and cash equivalents of $51,571,540. 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.
Effective with the acquisition of 51% of PET Labs Pharmaceuticals on October 31, 2023, we have begun to recognize revenue from the sale of nuclear medical doses for PET scanning in South Africa. Our ability to generate product revenue from the sale of nuclear medical doses for PET scanning sufficient to achieve profitability will depend on the successful expansion of production capabilities and commercialization of the results of that expansion.
Future Funding Requirements
Based on our current operating plan, we estimate that our existing cash and cash equivalents 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.
Our future capital requirements will depend on many factors, including:
Developing isotopes is a time-consuming, expensive and uncertain process that takes years to complete, and we may never achieve the necessary results required or obtain applicable regulatory approval for any isotopes or generate revenue from the sale of any future isotopes (assuming applicable regulatory approval is received). In addition, our future isotopes (assuming applicable regulatory approval is received) may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of isotopes that we expect to be commercially available in substantial quantities in the last quarter of 2024. If we receive permits and licenses to enrich U-235 (which in itself is highly uncertain), we do not expect U-235 to be commercially available for at least several years, if ever. As a result, we may need substantial additional financing to support our continuing operations and further the development of and commercialization of our future isotopes.
Expansion of the production and distribution of nuclear medical doses for PET scanning is a time-consuming, expensive and uncertain process that may take years to complete. As a result, we may need substantial additional financing to support our continuing operations and further the development of and commercialization of future nuclear medical doses for PET scanning.
Until such time as we can generate significant revenue from sales of our future isotopes or nuclear medical doses for PET scanning, if ever, we expect to finance our cash needs through public or private equity or debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting severely diminished liquidity and credit availability, increased interest rates, inflationary pressures, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. The financial markets and the global economy may also be adversely affected by the current or anticipated impact of military conflict. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences
34
that adversely affect the rights of our common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise funds through collaborations, or other similar arrangements with third parties, we may have to relinquish valuable rights to our future isotopes, future revenue streams or research programs or may have to grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market our future isotopes even if we would otherwise prefer to develop and market such isotopes ourselves.
Cash Flows
The following table summarizes our sources and uses of cash for each of the periods presented:
|
|
Nine Months Ended September 30, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Net cash provided by (used in): |
|
|
|
|
|
|
||
Operating activities |
|
$ |
(12,935,554 |
) |
|
$ |
(3,355,171 |
) |
Investing activities |
|
|
(8,352,422 |
) |
|
|
(1,190,157 |
) |
Financing activities |
|
|
64,841,207 |
|
|
|
4,493,610 |
|
Net increase in cash and cash equivalents |
|
$ |
43,553,231 |
|
|
$ |
(51,718 |
) |
Operating Activities
Net cash used in operating activities was $12,935,554 for the nine months ended September 30, 2024 and was primarily due to our net loss of $23,201,675, adjusted for stock-based compensation expense of $6,299,760, non-cash issuance costs for the convertible notes payable of $621,915, amortization of right-of-use asset of $343,473, depreciation expense of $425,630, issuance of common stock to a consultant with a fair value of $783,200, change in fair values for the convertible notes payable of $5,220,599 and a $3,071,004 change in our operating assets and liabilities.
Net cash used in operating activities was $3,355,171 for the nine months ended September 30, 2023, and was primarily due to our net loss of $12,123,907, adjusted for stock-based compensation expense of $6,590,576, expense related to the issuance of common stock to consultants of $669,700, a change in fair value of share liability of $109,040 and amortization of right-of-use asset of $49,173, partially offset by a $1,349,278 change in our operating assets and liabilities.
Investing Activities
Net cash used in investing activities was $8,352,422 for the nine months ended September 30, 2024 and was comprised of the purchases of machinery and equipment, vehicles and construction in progress.
Net cash used in investing activities was $1,190,157 for the nine months ended September 30, 2023 and was comprised of additional construction in progress.
Financing Activities
Net cash provided by financing activities was $64,841,207 for the nine months ended September 30, 2024 and was comprised primarily of gross proceeds of $34,500,000 from issuance of common stock, 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 $891,479, proceeds from collection of receivable from noncontrolling interest in VIE of $706,774, partially offset by costs to issue common stock of $2,194,041, payments of $438,569 on the note payable related to a financed corporate insurance policy, payment of principal portion of finance leases of $38,347 and distribution to noncontrolling interest in VIE of $60,292.
Net cash provided by financing activities was $4,493,610 for the nine months ended September 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.
35
Contractual Obligations and Commitments
We lease our main facility in Pretoria, South Africa under a lease with a base monthly rent payment of approximately $8,000 with a term expiring on December 31, 2030. We also lease additional space in Pretoria, South Africa under a lease with a base monthly rent payment of approximately $16,000 with a term that expires on February 28, 2026. We also lease additional space in Pretoria, South Africa under a lease with a base monthly rent payment of approximately $2,000 with a term expiring on October 30, 2026.
PET Labs operates in a facility in Pretoria, South Africa is under a lease with a base monthly rent payment of approximately $28,000 with a term expiring on March 30, 2026 with automatic monthly extension afterwards. PET Labs also rents space at a local hospital in Pretoria, South Africa for which there was a lease with a base monthly rent payment of approximately $5,000 which expired on December 31, 2023 and is currently in automatic monthly extensions.
In addition, we enter into contracts in the normal course of business with vendors for services and products for operating purposes. These contracts do not contain any minimum purchase commitments and generally provide for termination after a notice period and, therefore, are not considered long-term contractual obligations. Payments due upon cancellation consist only of payments for services provided and expenses incurred up to the date of cancellation.
Off-balance Sheet Arrangements
We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.
Critical Accounting Policies and Significant Judgments and Estimates
See Note 2 to our consolidated financial statements which discusses new accounting pronouncements.
36
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are a smaller reporting company as defined by Item 10 of Regulation S-K and are not required to provide the information otherwise required under this item.
Item 4. Controls and Procedures.
Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2024. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, mean controls and other procedures of a company that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company on the reports that it files or submits under the Exchange Act is accumulated and communicated to management, including our principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure.
Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgement in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of September 30, 2024, our Chief Executive Officer and Chief Financial Officer concluded that, as a result of a material weakness identified in our internal control over financial reporting, as previously disclosed in our Annual Report on Form 10-K (as amended) for the year ended December 31, 2023, our disclosure controls and procedures were not effective as of September 30, 2024. In order to remediate the material weakness, management expects to hire additional accounting and finance resources or consultants with public company experience.
Changes in Internal Control
There has been no change in our internal control over financial reporting as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act during our most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Effective July 1, 2024, we hired a new Chief Financial Officer in order to address the internal control environment.
37
PART II-OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we may be a party to litigation or subject to claims incident to the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, we currently believe that the final outcome of these ordinary course matters will not have a material adverse effect on our business. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. We are not currently a party to any material legal proceedings.
Item 1A. Risk Factors.
In addition to the other information set forth in this Form 10-Q, including under the heading “Cautionary Note Regarding Forward-Looking Statements,” the risks and uncertainties which could adversely affect our business, financial condition, results of operations and future growth prospects that we believe are most important for you to consider are discussed in “Part II, Item 1A—Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on April 10, 2024 and as amended by Forms 10-K/A filed with the SEC on April 29, 2024 and July 1, 2024. The risks described in our Annual Report on Form 10-K for the year ended December 31, 2023 (as amended) are not the only risks we face. Additional risks and uncertainties not presently known to us or that we presently deem less significant may also impair our business operations. There are no material changes to the Risk Factors described in our Annual Report on Form 10-K for the year ended December 31, 2023 (as amended).
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
None.
Item 5. Other Information.
During the three months ended September 30, 2024,
38
Item 6. Exhibits.
Exhibit Number |
|
Description |
|
||
|
||
|
||
|
||
101.INS |
|
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. |
101.SCH |
|
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents |
104 |
|
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Exhibits filed herewith.
** Exhibits furnished herewith.
+ Management contract or compensatory plan or arrangement.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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ASP Isotopes Inc. |
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Date: November 19, 2024 |
By: |
/s/ Paul E. Mann |
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Paul E. Mann |
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Executive Chairman and Chief Executive Officer |
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(Principal Executive Officer) |
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Date: November 19, 2024 |
By: |
/s/ Heather Kiessling |
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Heather Kiessling |
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Chief Financial Officer |
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(Principal Financial and Accounting Officer) |
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