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What changed in ASP Isotopes Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of ASP Isotopes Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+452 added−465 removedSource: 10-K (2024-04-10) vs 10-K (2023-03-31)

Top changes in ASP Isotopes Inc.'s 2023 10-K

452 paragraphs added · 465 removed · 314 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

105 edited+51 added−50 removed107 unchanged
Biggest changeThese agreements can be viewed on the website of the IAEA ( https://www.iaea.org/resources/legal/country-factsheets ) and include agreements that govern the physical protection of nuclear material, the notification of nuclear accidents, assistance in the case of nuclear accidents, nuclear safety, civil liability, and technical cooperation.
Biggest changeThese agreements can be viewed on the website of the IAEA ( https://www.iaea.org/resources/legal/country-factsheets ) and include agreements that govern the physical protection of nuclear material, the notification of nuclear accidents, assistance in the case of nuclear accidents, nuclear safety, civil liability, and technical cooperation. 21 Table of Contents The Treaty on the Non-Proliferation of Nuclear Weapons, commonly known as the Non-Proliferation Treaty or NPT, is an international treaty whose objective is to prevent the spread of nuclear weapons and weapons technology, to promote cooperation in the peaceful uses of nuclear energy, and to further the goal of achieving nuclear disarmament and general and complete disarmament.
We subsequently entered into a turnkey contract with Klydon pursuant to which Klydon agreed to provide us a first commercial-scale isotope enrichment plant.
We subsequently entered into a turnkey contract with Klydon, pursuant to which Klydon agreed to provide us with a first commercial-scale isotope enrichment plant.
Mo-100 is stable (non-radioactive) and therefore does not have the same handling and shipping requirements. Isotopically enriched silicon is regarded as a promising material for semiconductor quantum information due to very long coherence times and its compatibility with the readily available industrial platform.
Mo-100 is stable (non-radioactive) and, therefore, does not have the same handling and shipping requirements. Isotopically enriched silicon is regarded as a promising material for semiconductor quantum information due to its very long coherence times and its compatibility with the readily available industrial platform.
Selected isotopes of Silicon Selected isotopes of Molybdenum Selected isotopes of Uranium Nuclide Protons Neutrons Isotopic Mass Half Life Natural abundance Nuclide Protons Neutrons Isotopic Mass Half Life Natural abundance Nuclide Protons Neutrons Isotoopic Mass Half Life Natural abundance 22 14 8 22.036 29 ms 91 42 49 90.912 15.49 min 225 92 133 225.029 62 ms 23 14 9 23.025 42.3 ms 92 42 50 91.907 Stable 14.65% 226 92 134 226.029 269 ms 24 14 10 24.012 140 ms 93 42 51 92.907 4000 y 227 92 135 227.031 1.1 m 25 14 11 25.004 220 ms 94 42 52 93.905 Stable 9.19% 228 92 136 228.031 9.1 m 26 14 12 25.992 2.245 s 95 42 53 94.906 Stable 15.87% 229 92 137 229.034 57.8 m 27 14 13 26.987 4.15 s 96 42 54 95.905 Stable 16.67% 230 92 138 230.034 20.23 d 28 14 14 27.977 Stable 92.22% 97 42 55 96.906 Stable 9.58% 231 92 139 231.036 4.2 d 29 14 15 28.977 Stable 4.69% 98 42 56 97.905 Stable 24.29% 232 92 140 232.037 68.9 y 30 14 16 29.974 Stable 3.09% 99 42 57 98.908 2.75 d 233 92 141 233.04 1.592 e5 y Trace 31 14 17 30.975 157.36 min 100 42 58 99.907 Stable 9.74% 234 92 142 234.041 2.455 e5 y Trace 32 14 18 31.974 153 y trace 101 42 59 100.910 14.61 m 235 92 143 235.044 7.038 e8 y 0.72% 33 14 19 32.978 6.18 s 102 42 60 101.910 11.3 m 236 92 144 236.046 2.342 e7 y Trace 34 14 20 33.979 2.77 s 103 42 61 102.913 67.5 s 237 92 145 237.049 6.752 d Trace 35 14 21 34.985 780 ms 104 42 62 103.914 60 s 238 92 146 238.051 4.468 e9 y 99.27% 36 14 22 35.987 450 ms 105 42 63 104.917 35.6 s 239 92 147 239.054 23.45 m 37 14 23 36.993 90 ms 106 42 64 105.918 8.73 s 240 92 148 240.057 14.1 h Trace 38 14 24 37.996 90 ms 107 42 65 106.922 3.5 s 242 92 150 242.063 16.8 m 10 Methods of Separation and Enrichment of Isotopes Isotope enrichment is the process of concentrating specific isotopes of a chemical element by removing other isotopes.
Selected isotopes of Silicon Selected isotopes of Molybdenum Selected isotopes of Uranium Nuclide Protons Neutrons Isotopic Mass Half Life Natural abundance Nuclide Protons Neutrons Isotopic Mass Half Life Natural abundance Nuclide Protons Neutrons Isotopic Mass Half Life Natural abundance 22 14 8 22.036 29 ms 91 42 49 90.912 15.49 min 225 92 133 225.029 62 ms 23 14 9 23.025 42.3 ms 92 42 50 91.907 Stable 14.65% 226 92 134 226.029 269 ms 24 14 10 24.012 140 ms 93 42 51 92.907 4000 y 227 92 135 227.031 1.1 m 25 14 11 25.004 220 ms 94 42 52 93.905 Stable 9.19% 228 92 136 228.031 9.1 m 26 14 12 25.992 2.245 s 95 42 53 94.906 Stable 15.87% 229 92 137 229.034 57.8 m 27 14 13 26.987 4.15 s 96 42 54 95.905 Stable 16.67% 230 92 138 230.034 20.23 d 28 14 14 27.977 Stable 92.22% 97 42 55 96.906 Stable 9.58% 231 92 139 231.036 4.2 d 29 14 15 28.977 Stable 4.69% 98 42 56 97.905 Stable 24.29% 232 92 140 232.037 68.9 y 30 14 16 29.974 Stable 3.09% 99 42 57 98.908 2.75 d 233 92 141 233.04 1.592 e5 y Trace 31 14 17 30.975 157.36 min 100 42 58 99.907 Stable 9.74% 234 92 142 234.041 2.455 e5 y Trace 32 14 18 31.974 153 y trace 101 42 59 100.910 14.61 m 235 92 143 235.044 7.038 e8 y 0.72% 33 14 19 32.978 6.18 s 102 42 60 101.910 11.3 m 236 92 144 236.046 2.342 e7 y Trace 34 14 20 33.979 2.77 s 103 42 61 102.913 67.5 s 237 92 145 237.049 6.752 d Trace 35 14 21 34.985 780 ms 104 42 62 103.914 60 s 238 92 146 238.051 4.468 e9 y 99.27% 36 14 22 35.987 450 ms 105 42 63 104.917 35.6 s 239 92 147 239.054 23.45 m 37 14 23 36.993 90 ms 106 42 64 105.918 8.73 s 240 92 148 240.057 14.1 h Trace 38 14 24 37.996 90 ms 107 42 65 106.922 3.5 s 242 92 150 242.063 16.8 m Methods of Separation and Enrichment of Isotopes Isotope enrichment is the process of concentrating specific isotopes of a chemical element by removing other isotopes.
These controls comprise requirements that include: · membership of the IAEA and adherence to its protocols; · membership of the Nuclear Suppliers Group (NSG) and adherence to its protocols; 22 · agreement to an “additional protocol” in light of uranium enrichment capabilities; · local laws that require permits for possession, operation and commercialization and regular reporting; · ad hoc inspections by the IAEA on 24 hour and in some cases 2 hours pre-warning; · requirement for proposed patent applications to be approved at ministerial level; and · cross-border technology transfer to be handled by the respective governments and approved by IAEA.
These controls comprise requirements that include: · membership of the IAEA and adherence to its protocols; · membership of the Nuclear Suppliers Group (NSG) and adherence to its protocols; · agreement to an “additional protocol” in light of uranium enrichment capabilities; · local laws that require permits for possession, operation and commercialization and regular reporting; · ad hoc inspections by the IAEA on 24 hour and in some cases 2 hours pre-warning; · requirement for proposed patent applications to be approved at ministerial level; and · cross-border technology transfer to be handled by the respective governments and approved by IAEA.
In addition to isotopes found in nature or nuclear reactors, many isotopes with far shorter half-lives have been produced, ranging from U-214 to U-242 (with the exception of U-220 and U-241). The standard atomic weight of natural uranium is 238.02891 with 99.27% of naturally occurring uranium being the isotope with an atomic mass of 238.051.
In addition to isotopes found in nature or nuclear reactors, many isotopes with far shorter half-lives have been produced, ranging from U-214 to U-242 (with the exception of U-220 and U-241). The standard atomic weight of natural uranium is 238.02891 with 99.27% of naturally occurring uranium being the isotope with an atomic mass of 238.
UF is enriched in a process that increases the concentration of the U isotope in the UF from its natural state of 0.711% up to 5%, or LEU, which is usable as a fuel for current light water commercial nuclear power reactors. Future commercial reactor designs may use uranium enriched up to 20% U, or HALEU. · Fuel Fabrication.
UF is enriched in a process that increases the concentration of the U isotope in the UF from its natural state of 0.711% up to 5%, or LEU, which is usable as a fuel for current light water commercial nuclear power reactors. Future commercial reactor designs may use uranium enriched up to 20% U-235, or HALEU. · Fuel Fabrication .
We believe that the ASP technology is ideally suited to the production of this isotope because ASP technology has the ability to enrich molecules of low molecular mass. Other electronic gasses that can likely be enriched using ASP Technology include disilane and germane. Continue identifying potential offtake customers and strategic partners for our isotopes.
We believe that the ASP technology is ideally suited to the production of this isotope because it has the ability to enrich molecules of low molecular mass. Other electronic gasses that can likely be enriched using ASP Technology include disilane and germane. Continue identifying potential offtake customers and strategic partners for our isotopes.
These stages are referred to as “product”, situated in the so-called “product cascade section”, and their flows are marked with an “H” subscript. (2) A net forward flow of isotope: Xi 13 The red arrows represent the addition or extraction of carrier gas from the process.
These stages are referred to as “product”, situated in the so-called “product cascade section”, and their flows are marked with an “H” subscript. (2) A net forward flow of isotope: Xi The red arrows represent the addition or extraction of carrier gas from the process.
The mining and conversion infrastructure are common to all enrichment levels. 18 In 2020, the Department of Energy (DOE) selected two companies for awards under the Advanced Reactor Demonstration Program (ARDP) Pathway 1: Advanced Reactor Demonstrations. Both reactor designs require HALEU and can be operational in about seven years.
The mining and conversion infrastructure are common to all enrichment levels. In 2020, the Department of Energy (DOE) selected two companies for awards under the Advanced Reactor Demonstration Program (ARDP) Pathway 1: Advanced Reactor Demonstrations. Both reactor designs require HALEU and can be operational in about seven years.
HALEU demand may be during the next 15 years: Estimated Annual Requirements for High Assay Low Enriched Uranium to 2035 (MTU/yr) Company A B C D E F G H I J Total Cumulative Year 2022 0.1 0.4 0.2 1.1 0.0 1.8 1.8 2023 0.1 3.1 4.4 0.1 7.7 9.5 2024 1.0 5.6 0.2 3.0 1.5 6.6 0.1 18.0 27.5 2025 1.0 3.8 0.4 3.0 5.0 11.0 1.6 25.8 53.3 2026 1.0 15.1 4.9 10.0 2.0 24.2 13.2 1.7 72.1 125.4 2027 1.0 26.5 7.9 4.0 24.2 13.2 1.9 78.7 204.1 2028 1.0 37.8 16.6 13.0 23.0 24.2 13.2 2.0 130.8 334.9 2029 1.0 26.3 1.8 30.5 17.0 18.0 14.0 24.2 16.5 2.4 151.7 486.6 2030 1.0 34.4 1.8 40.4 46.0 18.0 30.0 24.2 16.5 2.7 215.0 701.6 2031 23.0 42.5 6.2 53.0 29.0 22.0 33.0 24.2 16.5 2.9 252.3 954.0 2032 35.0 52.9 12.5 67.6 46.0 40.0 50.0 48.4 19.8 3.1 375.3 1329.2 2033 47.0 63.5 32.2 82.1 46.0 32.0 80.0 48.4 19.8 3.2 454.2 1783.4 2034 58.0 76.1 62.4 96.7 46.0 36.0 80.0 48.4 19.8 3.7 527.1 2310.5 2035 70.0 90.9 96.0 112.4 91.0 29.0 50.0 48.4 22.0 4.1 613.8 2924.3 Notes: · The material needs listed above are in metric tons of uranium per year and are a small amount compared to the approximately 2000 MTU used annually by the existing fleet of reactors. · The material needs listed above include enrichments between 10.9 and 19.75% U-235. · The year the material is needed is for fuel fabrication.
HALEU demand may be during the next 15 years by companies denoted A to J: 19 Table of Contents Estimated Annual Requirements for High Assay Low Enriched Uranium to 2035 (MTU/yr) Company A B C D E F G H I J Total Cumulative Year 2022 0.1 0.4 0.2 1.1 0.0 1.8 1.8 2023 0.1 3.1 4.4 0.1 7.7 9.5 2024 1.0 5.6 0.2 3.0 1.5 6.6 0.1 18.0 27.5 2025 1.0 3.8 0.4 3.0 5.0 11.0 1.6 25.8 53.3 2026 1.0 15.1 4.9 10.0 2.0 24.2 13.2 1.7 72.1 125.4 2027 1.0 26.5 7.9 4.0 24.2 13.2 1.9 78.7 204.1 2028 1.0 37.8 16.6 13.0 23.0 24.2 13.2 2.0 130.8 334.9 2029 1.0 26.3 1.8 30.5 17.0 18.0 14.0 24.2 16.5 2.4 151.7 486.6 2030 1.0 34.4 1.8 40.4 46.0 18.0 30.0 24.2 16.5 2.7 215.0 701.6 2031 23.0 42.5 6.2 53.0 29.0 22.0 33.0 24.2 16.5 2.9 252.3 954.0 2032 35.0 52.9 12.5 67.6 46.0 40.0 50.0 48.4 19.8 3.1 375.3 1329.2 2033 47.0 63.5 32.2 82.1 46.0 32.0 80.0 48.4 19.8 3.2 454.2 1783.4 2034 58.0 76.1 62.4 96.7 46.0 36.0 80.0 48.4 19.8 3.7 527.1 2310.5 2035 70.0 90.9 96. 112.4 91.0 29.0 50.0 48.4 22.0 4.1 613.8 2924.3 Notes: · The material needs listed above are in metric tons of uranium per year and are a small amount compared to the approximately 2000 MTU used annually by the existing fleet of reactors. · The material needs listed above include enrichments between 10.9% and 19.75% U-235. · The year the material is needed is for fuel fabrication.
Insertion in the reactor and reactor operations will occur in a later year. 19 · The material needs that are less than 1 MTU/year are for irradiation samples, lead test rods and lead test fuel assemblies. · The material needs represent a few scenarios · The deployment of an advanced fuel design for the existing fleet of light-water reactors. · The deployment of multiple reactors of the same design that will not require refueling for many years. · The deployment of reactors that have annual refueling requirements. · These reactors include a range of sizes from a few Megawatt electric to 100s of Megawatt electric. · The data above does not include utilities that are considering enrichment between 5% and 10%.
Insertion in the reactor and reactor operations will occur in a later year. · The material needs that are less than 1 MTU/year are for irradiation samples, lead test rods and lead test fuel assemblies. · The material needs represent a few scenarios o The deployment of an advanced fuel design for the existing fleet of light-water reactors. o The deployment of multiple reactors of the same design that will not require refueling for many years. o The deployment of reactors that have annual refueling requirements. · These reactors include a range of sizes from a few Megawatt electric to 100s of Megawatt electric. · The data above does not include utilities that are considering enrichment between 5% and 10%.
To date, we and Klydon have relied exclusively on trade secrets and other intellectual property laws, non-disclosure agreements with our respective employees, consultants, vendors, potential customers and other relevant persons and other measures to protect our intellectual property, and intend to continue to rely on these and other means.
To date, we have relied exclusively on trade secrets and other intellectual property laws, non-disclosure agreements with our respective employees, consultants, vendors, potential customers and other relevant persons and other measures to protect our intellectual property, and intend to continue to rely on these and other means.
The activities to be undertaken or performed by Klydon include: taking control of the assets acquired by us in the Molybdos Business Rescue Auction; the design of an enrichment facility; the supply of required components, equipment and labor; the installation, testing and commissioning of the enrichment facility; 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.
The activities to be undertaken or performed by Klydon included taking control of the assets acquired by us in the Molybdos Business Rescue Auction; the design of an enrichment facility; the supply of required components, equipment, and labor; the installation, testing, and commissioning of the enrichment facility; 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.
NNSA has implemented this by competitively awarding 50%/50% cost-shared cooperative agreements to commercial entities and providing funds to the Department of Energy’s (DOE) National Laboratories to support development of non-HEU Mo-99 production technologies. 16 NNSA currently manages cooperative agreements with three U.S. companies, all developing diverse Mo-99 production technologies: · NorthStar Medical Radioisotopes, LLC (Beloit, Wisconsin) · Neutron capture technology using molybdenum-98 targets · Accelerator-based technology using molybdenum-100 targets · SHINE Technologies, LLC (Janesville, Wisconsin) · Accelerator with fission technology to produce Mo-99 with an LEU solution target · Niowave, Inc.
NNSA has implemented this by competitively awarding 50%/50% cost-shared cooperative agreements to commercial entities and providing funds to the Department of Energy’s (DOE) National Laboratories to support development of non-HEU Mo-99 production technologies. 16 Table of Contents NNSA currently manages cooperative agreements with three U.S. companies, all developing diverse Mo-99 production technologies: · NorthStar Medical Radioisotopes, LLC (Beloit, Wisconsin) o Neutron capture technology using molybdenum-98 targets o Accelerator-based technology using molybdenum-100 targets · SHINE Technologies, LLC (Janesville, Wisconsin) o Accelerator with fission technology to produce Mo-99 with an LEU solution target · Niowave, Inc.
We plan to begin research and development for the enrichment of uranium to demonstrate our capability to produce HALEU using the ASP technology. We anticipate a future demand for HALEU for the new generation of HALEU-fueled small modular reactors (SMRs) and advanced reactor designs that are now under development for commercial and government uses.
We plan to begin research and development for the enrichment of uranium to demonstrate our capability to produce HALEU using Quantum Enrichment technology. We anticipate a future demand for HALEU for the new generation of HALEU-fueled small modular reactors (SMRs) and advanced reactor designs that are now under development for commercial and government uses.
Item 1. Business Overview We are a pre-commercial 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.
Item 1. Business 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.
Subject to the supply of feedstock from our customer, we intend to start the enrichment of C-14 during 2024. 7 Mo-100 as alternative and potentially more convenient production route for Tc-99m used in nuclear medical diagnostic procedures.
Subject to the supply of feedstock from our customer, we intend to start the enrichment of C-14 during 2024. Mo-100 as an alternative and potentially more convenient production route for Tc-99m used in nuclear medical diagnostic procedures.
Currently, the production, distribution or sale of Mo-100 is not regulated by a healthcare regulator such as the Food and Drug Administration (FDA) in the USA, Health Canada in Canada, the European Medicines Agency in Europe and similar regulators in other countries.
Currently, the production, distribution or sale of Mo-100 or Zn-68 is not regulated by a healthcare regulator such as the Food and Drug Administration (FDA) in the USA, Health Canada in Canada, the European Medicines Agency in Europe and similar regulators in other countries.
While the technology has not yet been used to enrich either Molybdenum or Uranium or heavier isotopes, we believe the success of the enrichment process for oxygen-18 and silicon-28 has demonstrated the efficacy and commercial scalability of the ASP technology from laboratory to commercial.
While the technology has not yet been used to enrich either Molybdenum or Uranium or heavier isotopes, we believe the success of the enrichment process for oxygen-18 and silicon-28 has demonstrated the efficacy and commercial scalability of the ASP technology.
Mo-100 (a stable isotope of molybdenum that does not decay) will not decay in transit, so the supply chain would not be dependent on elapsed time from production of Mo-100 to the delivery of a Tc-99m dose to a hospital or clinic. · Mo-99 (with decay product Tc-99m) must be shipped in shielded transport containers that comply with the regulatory requirements for safe transport of radioactive material.
Mo-100 (a stable isotope of molybdenum) will not decay in transit, so the supply chain would not depend on elapsed time from the production of Mo-100 to the delivery of a Tc-99m dose to a hospital or clinic. · Mo-99 (with decay product Tc-99m) must be shipped in shielded transport containers that comply with the regulatory requirements for the safe transport of radioactive material.
In October 2021, we acquired physical assets, including equipment, of Molybdos (Pty) Limited (Molybdos) located at the plant after having been declared the winner of a competitive auction process under Section 45 of the South Africa Consumer Protection Act, 2008 (the Molybdos Business Rescue Auction) and we licensed the ASP technology for the production of Mo-100 from Klydon Proprietary Ltd (Klydon).
In October 2021, we acquired physical assets, including equipment, of Molybdos (Pty) Limited (Molybdos) located at the plant after having been declared the winner of a competitive auction process under Section 45 of the South Africa Consumer Protection Act, 2008 (the Molybdos Business Rescue Auction). We licensed the ASP technology for the production of Mo-100 from Klydon.
In practice θmin is small enough that it has no influence on the normal operating envelope of the stage. · X is per definition a function of Y via θas indicated. The cut of an ASP stage can be dynamically adjusted to any value larger than θmin, allowing its operating point to be changed online during production.
In practice θmin is small enough that it has no influence on the normal operating envelope of the stage. · X is per definition a function of Y via θ as indicated. 14 Table of Contents The cut of an ASP stage can be dynamically adjusted to any value larger than θmin, allowing its operating point to be changed online during production.
Failure to comply with these laws could subject us to, among other things, penalties and legal expenses, which could harm our reputation and have a material adverse effect on our business, financial condition and results of operations. 23 Compliance with the myriad of export control laws of the various jurisdictions in which we do business is a challenge for any company involved in export activities within the nuclear and defense end markets.
Failure to comply with these laws could subject us to, among other things, penalties and legal expenses, which could harm our reputation and have a material adverse effect on our business, financial condition and results of operations. 22 Table of Contents Compliance with the myriad of export control laws of the various jurisdictions in which we do business is a challenge for any company involved in export activities within the nuclear and defense end markets.
The advantages of ASP technology are as follows: · No moving parts, with low capital and operating costs in comparison to alternatives. · Compact in size and weight. · Easily scaled to industrial level with number of separation devices added in parallel. 12 · The separation process occurs inside a closed cylindrical container and is a volume technology, i.e., the process efficiency is not affected by poisoning of surface contaminates as is the case for surface separation processes. · ASP operates very efficiently at molecular masses below 100 atomic mass units, unlike other separation processes which are more efficient higher masses, which ASP can achieve equally well or to a superior degree. · ASP easily separates hydrogen gas from other gas components, e.g., harvesting hydrogen gas from carbon monoxide and carbon dioxide and altering the ratio of syngas mixture. · With the right material choice ASP handles even the most corrosive gases. · ASP can separate any isotopes that have a gaseous or volatile chemical compound. · Most of the subsystems are procured from off-the-shelf components. · An ASP plant can be constructed in any country that adheres to the International Atomic Energy Agency (IAEA) protocols for the protection of dual use technology.
The advantages of ASP technology are as follows: · No moving parts, with low capital and operating costs in comparison to alternatives. · Compact in size and weight. · Easily scaled to industrial level with number of separation devices added in parallel. · The separation process occurs inside a closed cylindrical container and is a volume technology, i.e., the process efficiency is not affected by poisoning of surface contaminates as is the case for surface separation processes. · ASP operates very efficiently at molecular masses below 100 atomic mass units, unlike other separation processes which are more efficient higher masses, which ASP can achieve equally well or to a superior degree. · ASP easily separates hydrogen gas from other gas components, e.g., harvesting hydrogen gas from carbon monoxide and carbon dioxide and altering the ratio of syngas mixture. · With the right material choice ASP handles even the most corrosive gases. · ASP can separate any isotopes that have a gaseous or volatile chemical compound. · Most of the subsystems are procured from off-the-shelf components. · An ASP plant can be constructed in any country that adheres to the International Atomic Energy Agency (IAEA) protocols for the protection of dual use technology. 13 Table of Contents ASP Plant Configuration The figure below shows a schematic of an ASP cascade in operation.
We estimate that the capital cost of constructing an ASP plant for uranium enrichment is approximately 75% cheaper than that of a traditional gas centrifuge enrichment facility. Our manufacturing plants are modular, so our construction time is likely faster and more flexible than competing technologies.
We estimate that the capital cost of constructing Quantum Enrichment plant for uranium enrichment is approximately 75% cheaper than that of a traditional gas centrifuge enrichment facility. Our manufacturing plants are modular, so our construction time is likely faster and more flexible than competing technologies.
Seven isotopes occur naturally, with atomic masses of 92, 94, 95, 96, 97, 98, and 100. All unstable isotopes of molybdenum decay into isotopes of zirconium, niobium, technetium, and ruthenium. Uranium is a naturally occurring radioactive element that has no stable isotope.
Seven isotopes occur naturally, with atomic masses of 92, 94, 95, 96, 97, 98, and 100. All unstable isotopes of molybdenum decay into isotopes of zirconium, niobium, technetium, and ruthenium. 10 Table of Contents Uranium is a naturally occurring radioactive element that has no stable isotope.
Demonstrate the capability to produce high-assay low-enriched uranium (HALEU) using the ASP technology and meet anticipated demand for the new generation of HALEU-fueled small modular reactors and advanced reactor designs that are now under development for commercial and government uses.
Demonstrate the capability to produce high-assay low-enriched uranium (HALEU) using Quantum Enrichment and meet anticipated demand for the new generation of HALEU-fueled small modular reactors and advanced reactor designs that are now under development for commercial and government uses.
ASP Technology for Uranium Enrichment We believe our ASP technology is also capable of enriching Uranium, which we may be able to commercialize as a nuclear fuel component for use in the new generation of HALEU-fuelled small modular reactors that are now under development for commercial and government uses.
Quantum Enrichment Technology for Uranium Enrichment We believe our Quantum Enrichment technology is capable of enriching Uranium, which we may be able to commercialize 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.
ASP Technology is ideally suited to the production of HALEU We believe that we are in a very different position to many of the entrenched domestic and international enrichers.
Quantum Enrichment Technology is ideally suited to the production of HALEU We believe that we are in a very different position to many of the entrenched domestic and international enrichers.
Customers that could use and stockpile Mo-100 would not have to manage the periodic shortages and supply chain challenges related to Mo-99. · Mo-99 (a radioisotope with a 66-hour half-life) decays and loses activity in transit, so it must be moved through the supply chain quickly to minimize decay losses and it cannot be stockpiled.
Customers that could use and stockpile Mo-100 due to its stable profile when compared to Mo-99 would not have to manage the periodic shortages and supply chain challenges related to Mo-99. · Mo-99 (a radioisotope with a 66-hour half-life) decays and loses activity in transit, so it must be moved through the supply chain quickly to minimize decay losses, and it cannot be stockpiled.
(Lansing, Michigan) · Superconducting electron linear accelerator with fission technology to produce Mo-99 with LEU targets Mo-100 as an Alternative Intermediate to Produce Mo-99 and Tc-99m Mo-100 is a stable isotope of molybdenum that does not decay. Naturally occurring molybdenum contains approximately 9.74% molybdenum-100.
(Lansing, Michigan) o Superconducting electron linear accelerator with fission technology to produce Mo-99 with LEU targets Mo-100 as an Alternative Intermediate to Produce Mo-99 and Tc-99m Mo-100 is a stable isotope of molybdenum. Naturally occurring molybdenum contains approximately 9.74% molybdenum-100.
Our board of directors’ and management team’s experience was gained at leading companies and financial institutions that include, Barclays Capital, Bear Stearns, Deutsche Bank, Highbridge Capital, Investec Bank, Lehman Brothers, LyondellBasell, Morgan Stanley and Soros Fund Management. 9 Technical Background What are Isotopes?
Our board of directors’ and management team’s experience was gained at leading companies and financial institutions that include, Bear Stearns, Deutsche Bank, Highbridge Capital, Investec Bank, Morgan Stanley and Soros Fund Management. Technical Background What are Isotopes?
Currently, it is fairly common practice to purchase both the SWU and uranium components of LEU from the enrichment company. Therefore, LEU prices typically consist of two prices or components: SWU and uranium. The following outlines the steps for converting natural uranium into LEU fuel, commonly known as the nuclear fuel cycle: · Mining and Milling.
Currently, it is fairly common practice to purchase both the SWU and uranium components of LEU from the enrichment company. Therefore, LEU prices typically consist of three components: SWU, Conversion and uranium ore concentrate. The following outlines the steps for converting natural uranium into LEU fuel, commonly known as the nuclear fuel cycle: · Mining and Milling .
In the United States, each of the regulatory agencies administering these laws and regulations has a voluntary disclosure program that offers the possibility of significantly reduced penalties, if any are applicable, and we intend to use these programs as part of our overall compliance program, as necessary. Employees As of December 31, 2022, we employed four full-time employees.
In the United States, each of the regulatory agencies administering these laws and regulations has a voluntary disclosure program that offers the possibility of significantly reduced penalties, if any are applicable, and we intend to use these programs as part of our overall compliance program, as necessary.
This resemblance is used in chemical and biological research, in a technique called carbon labelling: carbon-14 atoms can be used to replace nonradioactive carbon, in order to trace chemical and biochemical reactions involving carbon atoms from any given organic compound. 17 Carbon-14 is produced as a waste product in certain nuclear reactors.
This resemblance is used in chemical and biological research, in a technique called carbon labelling: carbon-14 atoms can be used to replace nonradioactive carbon, in order to trace chemical and biochemical reactions involving carbon atoms from any given organic compound. Carbon-14 could be obtained from waste by-products in certain nuclear reactors.
SMRs are viewed as being cheaper, safer, and more versatile than traditional large scale nuclear reactors and development of the new technology is receiving considerable funding from the U.S. Department of Energy, as well as from the governments of other countries.
SMRs are viewed as being cheaper, safer, and more versatile than traditional large-scale nuclear reactors, and development of the new technology is receiving considerable funding from the U.S. Department of Energy, as well as from the governments of other countries. There is currently no commercial production of HALEU in the United States.
Physiologic/metabolic processes in the body concentrate the tracers in specific tissues and organs; the radioactive emissions from the tracers can be used to noninvasively image these processes or kill cells in regions where radionuclides have concentrated.
These radionuclides are incorporated into radiopharmaceuticals and introduced into the body by injection, swallowing, or inhalation. Physiologic/metabolic processes in the body concentrate the tracers in specific tissues and organs; the radioactive emissions from the tracers can be used to noninvasively image these processes or kill cells in regions where radionuclides have concentrated.
Tc-99m is a particularly useful imaging radionuclide because it: · Has a sufficiently long half-life (~6 hours) to be usable in nuclear medicine procedures. · Emits energetic gamma rays (140 kiloelectron volts [keV]) that can be detected efficiently with widely available camera technologies. · Provides low patient doses for some procedures because of its short half-life and lack of alpha or beta radiations Tc-99m-based radiopharmaceuticals are used to diagnose disease in many tissue and organ systems, including bone, brain, heart, kidneys, liver, and lungs.
Tc-99m is a particularly useful imaging radionuclide because it: · Has a sufficiently long half-life (~6 hours) to be usable in nuclear medicine procedures. · Emits energetic gamma rays (140 kiloelectron volts [keV]) that can be detected efficiently with widely available camera technologies. · Provides low patient doses for some procedures because of its short half-life and lack of alpha or beta radiations.
We have exclusive worldwide licenses from Klydon for the production of all isotopes and, if our research and development is successful (and subject to obtaining applicable regulatory approvals and appropriate licenses), we plan to commercialize many different isotopes produced using the ASP technology.
If our research and development is successful (and subject to obtaining applicable regulatory approvals and appropriate licenses), we plan to commercialize many different isotopes produced using the ASP technology.
We operate principally through subsidiaries: ASP Isotopes Guernsey Limited (the holding company of ASP Isotopes South Africa (Proprietary) Limited and Enlightened Isotopes (Pty) Ltd), which will be 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).; Enriched Energy LLC, which will be focused on the development and commercialization of uranium for the nuclear energy market; and ASP Isotopes UK Ltd, which is the licensee of the ASP technology under the exclusive license agreement with Klydon.
We operate principally through subsidiaries: ASP Isotopes Guernsey Limited (the holding company of ASP Isotopes South Africa (Proprietary) Limited and Enlightened Isotopes (Pty) Ltd), which will be 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).
The aerodynamic separation technique has its origins in the South African uranium enrichment program in the 1980s and the ASP technology has been developed during the last 18 years by the scientists at Klydon. In Klydon’s testing, the ASP technology has demonstrated efficacy and commercial scalability in the enrichment of oxygen-18 and silicon-28.
The aerodynamic separation technique has its origins in the South African uranium enrichment program in the 1980s, and the ASP technology has been developed during the last 18 years by the scientists at Klydon.
The Aerodynamic Separation Process (ASP) Technology ASP technology is proprietary technology licensed from Klydon which succeeds earlier work, first detailed in the scientific media in the mid-1970s, relating to an industrial scale enrichment plant for uranium that was constructed utilizing the so-called “stationary-wall centrifuge”.
The heavier isotopes sink and the lighter isotopes rise, where they are easily collected. 12 Table of Contents The Aerodynamic Separation Process (ASP) Technology ASP technology is proprietary technology licensed from Klydon which succeeds earlier work, first detailed in the scientific media in the mid-1970s, relating to an industrial scale enrichment plant for uranium that was constructed utilizing the so-called “stationary-wall centrifuge”.
However, products that are produced from Mo-100 (such as Mo-99 and Tc-99m in a linear accelerator or cyclotron) are regulated by healthcare regulators and our customers are required to operate under the licensure of these healthcare regulators. Currently, the production and use of Tc-99m from Mo-100 in a cyclotron is only approved in one country (Canada).
However, products that are produced from Mo-100 or Zn-68 (such as Mo-99 and Tc-99m in a linear accelerator or cyclotron and Ga-67 in a cyclotron) are regulated by healthcare regulators and our customers are required to operate under the licensure of these healthcare regulators.
The second facility, which is substantially larger than the first, should have the potential to enrich kilogram quantities of isotopes such as Molybdenum-100 and/or Silicon-28.
The second facility, which is substantially larger than the first, should have the potential to enrich kilogram quantities of relatively heavier isotopes, including but not limited to Molybdenum-100 and Silicon-28.
ASP Plant Configuration The figure below shows a schematic of an ASP cascade in operation. The cascade consists of several enrichment stages, connected in a 1-up-1-down cascade configuration. The stages can be grouped into segments.
The cascade consists of several enrichment stages, connected in a 1-up-1-down cascade configuration. The stages can be grouped into segments.
Diffusion between these opposing flows increases the separation by the principle of countercurrent multiplication. In practice, since there are limits to how tall a single centrifuge can be made, several such centrifuges are connected in series. Each centrifuge receives one input and produces two output lines, corresponding to light and heavy fractions.
In practice, since there are limits to how tall a single centrifuge can be made, several such centrifuges are connected in series. Each centrifuge receives one input and produces two output lines, corresponding to light and heavy fractions. The input of each centrifuge is the output (light) of the previous centrifuge and the output (heavy) of the following stage.
About 88 percent of the decays produce Tc-99m, which subsequently decays to the ground state, Tc-99g, by emitting a gamma ray. About 12 percent of the decays produce Tc-99g directly.
About 88 percent of the decays produce Tc-99m, which subsequently decays to the ground state, Tc-99g, by emitting a gamma ray. About 12 percent of the decays produce Tc-99g directly. Tc-99g decays to stable (i.e., nonradioactive) ruthenium-99 (Ru-99) after emitting a beta particle.
This method has only recently been developed as laser technology has improved, and is currently not used extensively. 11 Chemical Methods Although isotopes of a single element are normally described as having the same chemical properties, this is not strictly true. In particular, reaction rates are very slightly affected by atomic mass.
This method is often abbreviated as AVLIS (atomic vapor laser isotope separation). This method has only recently been developed as laser technology has improved, and is currently not used extensively. Chemical Methods Although isotopes of a single element are normally described as having the same chemical properties, this is not strictly true.
Nuclear power, through the operating light water reactor fleet and the deployment of advanced reactors, is poised to be an increasing contributor to carbon free energy in the U.S. and internationally. The United States leads the world in technology innovation with more developers of advanced reactors than any other country.
Nuclear power, through the operating light water reactor fleet and the deployment of advanced reactors, is poised to be an increasing contributor to carbon free energy in the U.S. and internationally.
Separative work units (“SWU”) are a standard unit of measurement that represents the effort required to transform a given amount of natural uranium into two components: enriched uranium having a higher percentage of U-235 and depleted uranium having a lower percentage of U-235.
Separative work units(“SWU”) is a standard unit of measurement that represents the effort required to transform a given amount of natural uranium into two components: enriched uranium having a higher percentage of U-235 and depleted uranium having a lower percentage of U-235. The SWU contained in LEU is calculated using an industry standard formula based on the physics of enrichment.
Some of our future isotopes may also be regulated by healthcare regulators such as the Food and Drug Administration (FDA) in the USA, Health Canada in Canada, the European Medicines Agency in Europe and similar regulators in other countries.
Currently, the production and use of Tc-99m from Mo-100 in a cyclotron is only approved in one country (Canada). Some of our future isotopes may also be regulated by healthcare regulators such as the Food and Drug Administration (FDA) in the USA, Health Canada in Canada, the European Medicines Agency in Europe and similar regulators in other countries.
We have an exclusive license to use proprietary technology, the Aerodynamic Separation Process (“ASP technology”), originally developed and licensed to us by Klydon Proprietary Ltd (“Klydon”), for the production, distribution, marketing and sale of all isotopes. Our initial focus is on the production and commercialization of enriched Carbon-14 (“C-14”), Molybdenum-100 (“Mo-100”) and Silicon-28 (“Si-28”).
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”).
Klydon has spent the last 18 years and tens of millions of dollars developing the aerodynamic separation technique used in the ASP technology, generating critical trade secrets.
Subject to successful research and development, our ASP technology has the potential to produce many different types of isotopes. Klydon has spent the last 18 years and tens of millions of dollars developing the aerodynamic separation technique used in the ASP technology, generating critical trade secrets.
This is how heavy water is produced commercially Gravity Isotopes of carbon, oxygen, and nitrogen can be purified by chilling these gases or compounds nearly to their liquefaction temperature in very tall (200 to 700 feet (61 to 213 m)) columns. The heavier isotopes sink and the lighter isotopes rise, where they are easily collected.
Gravity Isotopes of carbon, oxygen, and nitrogen can be purified by chilling these gases or compounds nearly to their liquefaction temperature in very tall (200 to 700 feet (61 to 213 m)) columns.
In addition, we are considering future development of the ASP technology for the separation of Zinc-68, Ytterbium-176, Zinc-67, Nickel-64 and Xenon-136 for potential use in the healthcare target end market, and Chlorine -37 and Lithium-6 for potential use in the nuclear energy target end market.
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.
Techniques using this are most effective for light atoms such as hydrogen. Lighter isotopes tend to react or evaporate more quickly than heavy isotopes, allowing them to be separated.
In particular, reaction rates are very slightly affected by atomic mass. Techniques using this are most effective for light atoms such as hydrogen. Lighter isotopes tend to react or evaporate more quickly than heavy isotopes, allowing them to be separated. This is how heavy water is produced commercially.
Mo-99’s decay product, technetium-99m (Tc-99m), is used in medical procedures to diagnose heart disease and cancer, to study organ structure and function, and to perform other important medical applications.
Mo-99’s decay product, technetium-99m (Tc-99m), is used in 80-85% of the world’s single-photon emission computed tomography (SPECT) procedures, which is used to diagnose heart disease and cancer, to study organ structure and function, and to perform other critical medical applications.
To date, we have completed the construction of one isotope enrichment facility, but we have not yet produced any commercial quantities of isotopes and we have not yet demonstrated the ability to produce any isotope in commercial quantities using ASP technology. High barriers to entry. We have exclusive worldwide licenses to the ASP technology for the production of all isotopes.
To date, we have completed the construction of one isotope enrichment facility, but we have not yet produced any commercial quantities of isotopes and we have not yet demonstrated the ability to produce any isotope in commercial quantities using ASP technology. Extensive R&D Experience in Aerodynamic Separation Technology and Processes.
We intend to offer our Mo-100 to customers that may convert Mo-100 into Mo-99 or directly into Tc-99m, and we believe that the use of Mo-100 in this way will be an attractive alternative route to production of Tc-99m for a number of reasons. · Only a small number of major reactors located around the world (e.g., Australia, Belgium, the Netherlands and South Africa) produce large-scale amounts of Mo-99, and these reactors are taken off-line periodically for refueling and maintenance and go off-line on an unscheduled basis due to the need for extended repairs, which results in a global Mo-99 supply chain that is lengthy, complex and prone to interruption and has experienced supply shortages.
We intend to offer our Mo-100 to customers who may convert Mo-100 into Mo-99 or directly into Tc-99m, and we believe that the use of Mo-100 in this way will be an attractive alternative route to the production of Tc-99m for several reasons. · Only a small number of major reactors located around the world (e.g., Australia, Belgium, the Netherlands, and South Africa) produce large-scale amounts of Mo-99.
We recently completed the construction of our first isotope enrichment facility using SP technology located in Pretoria, South Africa. The ASP technology is designed to be scalable, low cost, low energy, and environmentally friendly, with no radioactive waste or hazardous materials produced in the process and planned arrangements to reuse chemical by-products.
ASP technology is designed to be low cost, low energy, and environmentally friendly. We recently completed the construction of our first isotope enrichment facility using ASP technology located in Pretoria, South Africa.
Small modular reactors (SMRs) are advanced nuclear reactors that have a power capacity of up to 300 MW(e) per unit, which is about one-third of the generating capacity of traditional nuclear power reactors.
The United States leads the world in technology innovation with more developers of advanced reactors than any other country. 18 Table of Contents Small modular reactors (SMRs) are advanced nuclear reactors that have a power capacity of up to 300 MW(e) per unit, which is about one-third of the generating capacity of traditional nuclear power reactors.
Additionally, the high capital costs of development of proprietary technologies, significant lead times required to construct new enrichment facilities, as well as stringent regulatory and operating requirements applicable to enrichment facilities, adds to the significant barriers to entry for smaller competing market participants.
Additionally, the high capital costs of development of proprietary technologies, significant lead times required to construct new enrichment facilities, as well as stringent regulatory and operating requirements applicable to enrichment facilities, adds to the significant barriers to entry for smaller competing market participants. 9 Table of Contents ASP technology is a flexible platform with the potential to produce many different isotopes that could serve a large addressable markets.
In July 2022, we licensed intellectual property rights related to the production of all isotopes using the ASP technology.
In January 2022, we also licensed intellectual property rights associated with the production of U-235 using the ASP technology. In July 2022, we licensed intellectual property rights related to the production of all isotopes using the ASP technology. In April 2023, we acquired certain intellectual property assets of Klydon.
Our Strategy Complete development and commissioning of our first enrichment facilities located in Pretoria, South Africa. We intend to complete the development and construction of two enrichment facilities located in Pretoria, South Africa. We currently have two enrichment facilities in Pretoria, South Africa under either construction or commissioning. The first facility is designed to enrich light isotopes such as Carbon-14.
Our Strategy Complete development and commissioning of our enrichment facilities in Pretoria, South Africa. We intend to complete the development and construction of our second enrichment facility located in Pretoria, South Africa, in mid-2024. Our first facility, which will be ready for production upon the final installation of essential components, is designed to enrich light isotopes such as Carbon-14.
The ASP technology also has few moving parts, with low capital and operating costs in comparison to alternatives. The technology is particularly efficient at enriching isotopes of low atomic mass.
ASP technology is a flexible platform, compact in size and weight, and could be easily scaled to an industrial level with number of separation devices added in parallel. The ASP technology also has few moving parts, with low capital and operating costs in comparison to alternatives. The technology is particularly efficient at enriching isotopes of low atomic mass.
We believe that the Mo-100 we may develop using the ASP technology has 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 develop using the ASP technology may be used to develop advanced semiconductors and in quantum computing.
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.
ASP Plant Gas Centrifuge Separation mechanism Stationary Wall Centrifuge Differential diffusion Capital Cost per plant >$800 million Energy use (kWh) per SWU 50-240 Construction time 2-3 years 2-3 years Levelized cost per SWU* $65 $140 * for enrichment from 0.71% U235 to 5% U235 We are currently conducting a feasibility study with respect to constructing an enrichment facility in either the United States or an international location.
Quantum Enrichment Plant Gas Centrifuge Separation mechanism Enhanced resonant multiphoton ionization Differential diffusion Capital Cost per plant >$800 million Energy use (kWh) per SWU 50-240 Construction time 2-3 years 2-3 years Levelized cost per SWU* $140 ___________ * for enrichment from 0.71% U235 to 5% U235 We are currently constructing a Ytterbium-176 enrichment facility using the Quantum Enrichment technology in Pretoria, South Africa.
About 50 percent of Tc-99m utilization in the United States is in nuclear cardiology, predominantly for myocardial perfusion imaging which images blood flow through heart muscle.
Tc-99m-based radiopharmaceuticals are used to diagnose disease in many tissue and organ systems, including bone, brain, heart, kidneys, liver, and lungs. About 50 percent of Tc-99m utilization in the United States is in nuclear cardiology, predominantly for myocardial perfusion imaging which images blood flow through heart muscle.
Technetium generators can contain from 1 to 19 Ci of Mo-99, matched to address the needs and workloads of Tc-99m suppliers It takes 18-24 hours to prepare technetium generators for shipment. Preparation involves loading the molybdate solution onto the columns and sterilizing them; installing the columns, tubing, and filters into the shielded generator package; and packaging the generators for shipment.
This apparatus is installed into radiation-shielded packages for shipment to Tc-99m suppliers. The generator includes both the package and its contained apparatus. Technetium generators can contain from 1 to 19 Ci of Mo-99, matched to address the needs and workloads of Tc-99m suppliers. It takes 18-24 hours to prepare technetium generators for shipment.
For U-235 production, the heavier stream is the waste stream and the lighter stream is the product stream. Modern Zippe-type centrifuges are tall cylinders spinning on a vertical axis, with a vertical temperature gradient applied to create a convective circulation rising in the center and descending at the periphery of the centrifuge.
Modern Zippe-type centrifuges are tall cylinders spinning on a vertical axis, with a vertical temperature gradient applied to create a convective circulation rising in the center and descending at the periphery of the centrifuge. Diffusion between these opposing flows increases the separation by the principle of countercurrent multiplication.
Our enrichment facilities are smaller than traditional gas centrifuges which means we can place them near fuel fabrication facilities for enhanced security of production and transportation. Our operating costs of enriching uranium to 15.5% - 19.75% U-235 should be comparable to or cheaper than costs for other methods of uranium enrichment.
Our enrichment facilities are smaller than traditional gas centrifuges which means we can place them near fuel fabrication facilities for enhanced security of production and transportation.
The scientific team at Klydon combined has decades of experience in research and development of isotopes enrichment and amassed deep knowledge in the field. Our board of directors and our management team also has broad experience and successful track records in biopharmaceutical research, chemicals, manufacturing and commercialization, as well as in business, operations, and finance.
Our board of directors and our management team also have broad experience and successful track records in fusion technology and fusion materials, biopharmaceutical research, chemicals, manufacturing and commercialization, as well as in business, operations, and finance.
The difference in speeds is proportional to the square root of the mass ratio, so the amount of separation is small and many cascaded stages are needed to obtain high purity. This method is expensive due to the work needed to push gas through a membrane and the many stages necessary.
The lighter atoms (or the molecules containing them) will travel more quickly and be more likely to diffuse through a membrane. The difference in speeds is proportional to the square root of the mass ratio, so the amount of separation is small, and many cascaded stages are needed to obtain high purity.
The lower the concentration of Si-29, the better a silicon quantum processor will perform in terms of computational power, accuracy and reliability. Unlike traditional centrifuges, which are suited to enriching gases with a high molecular mass, ASP Technology is highly suited to of enriching gases with a low molecular mass such as silane (SiH4).
Unlike traditional centrifuges, which are suited to enriching gases with a high molecular mass, ASP Technology is highly suited to of enriching gases with a low molecular mass such as silane (SiH4).
The MOU states that the customer will supply the feedstock and we will enrich it under a tolling agreement. Demonstrate the capability to produce C-14, Mo-100 and Si-28 using the ASP technology and capitalize on the opportunity to solve many supply chain challenges that currently exist.
In June 2023, we entered into a tolling agreement with a North American customer for the entire capacity of this facility, under which we will supply the customer with C-14 enriched to 85%. 7 Table of Contents Demonstrate the capability to produce C-14, Mo-100, and Si-28 using the ASP technology and capitalize on the opportunity to solve many supply chain challenges that currently exist.
We are currently in discussions with potential customers that have interest in entering into long term supply agreements for kilogram quantities of Si-28 and larger quantities of Zn-68 and Cl-37.
In June 2023, we entered into a tolling agreement with a Canadian customer for the entire capacity of our C-14 production facility. We are currently in discussions with potential customers that have an interest in entering into long-term supply agreements for kilogram quantities of Si-28 and larger quantities of Xe-129, Ge 72, Ge-74, Zn-68, and Cl-37.
ASP Isotopes Inc. was incorporated in Delaware in September 2021 to acquire assets and license intellectual property rights related to the production of Mo-100 using the ASP technology. In January 2022 we also licensed intellectual property rights related to the production of U-235 using the ASP technology.
In Klydon’s testing, the ASP technology has demonstrated efficacy and commercial scalability in enriching oxygen-18 and silicon-28. ASP Isotopes Inc. was incorporated in Delaware in September 2021 to acquire assets and license intellectual property rights related to the production of Mo-100 using the ASP technology.
Importantly, subject to licensure, we can produce commercial quantities of HALEU by 2026 that would satisfy the anticipated demand from all the advanced reactor currently in development.
Importantly, subject to licensure, we believe we can produce commercial quantities of HALEU by 2027 that would satisfy the anticipated demand from all the advanced reactor currently in development. We believe that we can supply HALEU at a price lower than the HALEU currently imported from international enrichers and considerably lower than any potential domestic supply that may evolve.
As of March 23, 2023, we employ approximately 31 people on a full-time basis, 27 of whom work at our newly completed plant in South Africa. Of the total employees, 7 are in Research and Development, 15 are in construction and manufacturing and 5 are in general management. None of our employees are subject to collective bargaining agreements.
Employees As of December 31, 2023, we employed 76 people on a full-time basis. Of the total employees, 6 employees are in research and development, 33 employees are in engineering, construction and manufacturing, 20 employees are in plant operations and 17 employees are in general management. None of our employees are subject to collective bargaining agreements.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf we are unable to advance our future isotopes in development, obtain applicable regulatory approval and ultimately commercialize our future isotopes, or experience significant delays in doing so, our business will be materially harmed. · We depend on our agreements with Klydon, the termination of which could result in the loss of significant rights, which would harm our business. · Obtaining and maintaining our patent protection depends on compliance with various procedures, document submissions, fee payments and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements. · There has been no prior public market for our common stock, the stock price of our common stock may be volatile or may decline regardless of our operating performance and you may not be able to resell your shares at or above the initial public offering, or IPO, price. · If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud.
Biggest changeAs a result, we will not be able to enter into the nuclear energy space utilizing our technology. · Obtaining and maintaining our patent protection depends on compliance with various procedures, document submissions, fee payments and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements. · Since our listing on the Nasdaq Capital Market in November 2022, there has been only a limited prior public market for our Common Stock, the stock price of our Common Stock may be volatile or may decline regardless of our operating performance and you may not be able to resell your shares quickly or at the market price if trading in shares of our common stock is not active. · If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud.
We face competition with respect to all the isotopes that we may produce using our ASP technology from established biotechnology and nuclear medicine technology companies and will face competition with respect to enriched uranium that we may seek to develop or commercialize in the future from innovative technology and energy companies.
We face competition with respect to all the enriched isotopes that we may produce using our ASP technology from established biotechnology and nuclear medicine technology companies and will face competition with respect to enriched uranium that we may seek to develop or commercialize in the future from innovative technology and energy companies.
Risks inherent in international operations include the following: · fluctuations in foreign currency exchange rates may affect product demand and may adversely affect the profitability in U.S. dollars of products and services we provide in international markets where payment for our products and services is made in the local currency; · transportation and other shipping costs may increase, or transportation may be inhibited; · increased cost or decreased availability of raw materials; 47 · changes in foreign laws and tax rates or U.S. laws and tax rates with respect to foreign income may unexpectedly increase the rate at which our income is taxed, impose new and additional taxes on remittances, repatriation or other payments by subsidiaries, or cause the loss of previously recorded tax benefits; · foreign countries in which we do business may adopt other restrictions on foreign trade or investment, including currency exchange controls; · trade sanctions by or against these countries could result in our losing access to customers and suppliers in those countries; · unexpected adverse changes in foreign laws or regulatory requirements may occur; · our agreements with counterparties in foreign countries may be difficult for us to enforce and related receivables may be difficult for us to collect; · compliance with the variety of foreign laws and regulations may be unduly burdensome; · compliance with anti-bribery and anti-corruption laws (such as the Foreign Corrupt Practices Act) as well as anti-money- laundering laws may be costly; · unexpected adverse changes in export duties, quotas and tariffs and difficulties in obtaining export licenses may occur; · general economic conditions in the countries in which we operate could have an adverse effect on our earnings from operations in those countries; · our foreign operations may experience staffing difficulties and labor disputes; · termination or substantial modification of international trade agreements may adversely affect our access to raw materials and to markets for our products outside the U.S.; · foreign governments may nationalize or expropriate private enterprises; · increased sovereign risk (such as default by or deterioration in the economies and creditworthiness of local governments) may occur; and · political or economic repercussions from terrorist activities, including the possibility of hyperinflationary conditions and political instability, may occur in certain countries in which we do business.
Risks inherent in international operations include the following: · fluctuations in foreign currency exchange rates may affect product demand and may adversely affect the profitability in U.S. dollars of products and services we provide in international markets where payment for our products and services is made in the local currency; · transportation and other shipping costs may increase, or transportation may be inhibited; · increased cost or decreased availability of raw materials; · changes in foreign laws and tax rates or U.S. laws and tax rates with respect to foreign income may unexpectedly increase the rate at which our income is taxed, impose new and additional taxes on remittances, repatriation or other payments by subsidiaries, or cause the loss of previously recorded tax benefits; · foreign countries in which we do business may adopt other restrictions on foreign trade or investment, including currency exchange controls; · trade sanctions by or against these countries could result in our losing access to customers and suppliers in those countries; · unexpected adverse changes in foreign laws or regulatory requirements may occur; · our agreements with counterparties in foreign countries may be difficult for us to enforce and related receivables may be difficult for us to collect; · compliance with the variety of foreign laws and regulations may be unduly burdensome; · compliance with anti-bribery and anti-corruption laws (such as the Foreign Corrupt Practices Act) as well as anti-money- laundering laws may be costly; · unexpected adverse changes in export duties, quotas and tariffs and difficulties in obtaining export licenses may occur; · general economic conditions in the countries in which we operate could have an adverse effect on our earnings from operations in those countries; · our foreign operations may experience staffing difficulties and labor disputes; · termination or substantial modification of international trade agreements may adversely affect our access to raw materials and to markets for our products outside the U.S.; · foreign governments may nationalize or expropriate private enterprises; · increased sovereign risk (such as default by or deterioration in the economies and creditworthiness of local governments) may occur; and · political or economic repercussions from terrorist activities, including the possibility of hyperinflationary conditions and political instability, may occur in certain countries in which we do business.
Our amended and restated certificate of incorporation provides that, subject to the court’s having personal jurisdiction over the indispensable parties named as defendants, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for the following types of actions or proceedings: · any derivative action or proceeding brought on our behalf; · any action asserting a claim of breach of fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders; 53 · any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law, our certificate of incorporation or bylaws; · any action as to which the Delaware General Corporation Law confers jurisdiction to the Court of Chancery of the State of Delaware; and · any action asserting a claim that is governed by the internal affairs doctrine.
Our amended and restated certificate of incorporation provides that, subject to the court’s having personal jurisdiction over the indispensable parties named as defendants, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for the following types of actions or proceedings: · any derivative action or proceeding brought on our behalf; · any action asserting a claim of breach of fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders; · any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law, our certificate of incorporation or bylaws; · any action as to which the Delaware General Corporation Law confers jurisdiction to the Court of Chancery of the State of Delaware; and · any action asserting a claim that is governed by the internal affairs doctrine.
Among other things, our amended and restated certificate of incorporation and amended and restated bylaws: · permit our board of directors to issue up to 10,000,000 shares of preferred stock, with any rights, preferences and privileges as they may designate (including the right to approve an acquisition or other change in our control); · provide that the authorized number of directors may be changed only by resolution of the board of directors; · provide that our board of directors or any individual director may only be removed with cause and the affirmative vote of the holders of at least 66-2/3% of the voting power of all of our then-outstanding shares of the capital stock entitled to vote generally in the election of directors, voting together as a single class; · provide that all vacancies, including newly created directorships, may, except as otherwise required by law, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum; · divide our board of directors into three classes; · require that any action to be taken by our stockholders must be effected at a duly called annual or special meeting of stockholders and not be taken by written consent; · provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide notice in writing in a timely manner and also specify requirements as to the form and content of a stockholder’s notice; 52 · do not provide for cumulative voting rights (therefore allowing the holders of a majority of the shares of common stock entitled to vote in any election of directors to elect all of the directors standing for election, if they should so choose); · provide that special meetings of our stockholders may be called only by the chair of our board of directors, our Chief Executive Officer or by the board of directors pursuant to a resolution adopted by a majority of the total number of authorized directors; and · provide that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for the following types of actions or proceedings under state, statutory and common law: (i) any derivative action or proceeding brought on our behalf; (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders; (iii) any action asserting a claim pursuant to any provision of the Delaware General Corporation Law, our certificate of incorporation or our bylaws; (iv) any action as to which the Delaware General Corporation Law confers jurisdiction to the Court of Chancery of the State of Delaware; and (vi) any action governed by the internal affairs doctrine, in all cases subject to the court’s having personal jurisdiction over the indispensable parties named as defendants; provided these provisions of our amended and restated certificate of incorporation and amended and restated bylaws will not apply to suits brought to enforce a duty or liability created by the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction; and provided that, unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended (Securities Act), including all causes of action asserted against any defendant to such complaint.
Among other things, our amended and restated certificate of incorporation and amended and restated bylaws: · permit our board of directors to issue up to 10,000,000 shares of preferred stock, with any rights, preferences and privileges as they may designate (including the right to approve an acquisition or other change in our control); · provide that the authorized number of directors may be changed only by resolution of the board of directors; · provide that our board of directors or any individual director may only be removed with cause and the affirmative vote of the holders of at least 66-2/3% of the voting power of all of our then-outstanding shares of the capital stock entitled to vote generally in the election of directors, voting together as a single class; · provide that all vacancies, including newly created directorships, may, except as otherwise required by law, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum; · divide our board of directors into three classes; · require that any action to be taken by our stockholders must be effected at a duly called annual or special meeting of stockholders and not be taken by written consent; · provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide notice in writing in a timely manner and also specify requirements as to the form and content of a stockholder’s notice; · do not provide for cumulative voting rights (therefore allowing the holders of a majority of the shares of common stock entitled to vote in any election of directors to elect all of the directors standing for election, if they should so choose); · provide that special meetings of our stockholders may be called only by the chair of our board of directors, our Chief Executive Officer or by the board of directors pursuant to a resolution adopted by a majority of the total number of authorized directors; and · provide that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for the following types of actions or proceedings under state, statutory and common law: (i) any derivative action or proceeding brought on our behalf; (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders; (iii) any action asserting a claim pursuant to any provision of the Delaware General Corporation Law, our certificate of incorporation or our bylaws; (iv) any action as to which the Delaware General Corporation Law confers jurisdiction to the Court of Chancery of the State of Delaware; and (v) any action governed by the internal affairs doctrine, in all cases subject to the court’s having personal jurisdiction over the indispensable parties named as defendants; provided these provisions of our amended and restated certificate of incorporation and amended and restated bylaws will not apply to suits brought to enforce a duty or liability created by the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction; and provided that, unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended (Securities Act), including all causes of action asserted against any defendant to such complaint.
Enrichment is among the most sensitive nuclear technologies because it can produce weapon-grade materials. The ASP technology may be considered dual use and could be subject to export control, for example, under the Wassenaar Arrangement. Risks Related to Our Intellectual Property Our intellectual property is not protected through patents or formal copyright registration.
Enrichment is among the most sensitive nuclear technologies because it can produce weapon-grade materials. The ASP technology and the Quantum Enrichment technology may be considered dual use and could be subject to export control, for example, under the Wassenaar Arrangement. Risks Related to Our Intellectual Property Our intellectual property is not protected through patents or formal copyright registration.
In such an event, potential competitors might be able to enter the market and this circumstance could harm our business. 42 Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a negative impact on the success of our business.
In such an event, potential competitors might be able to enter the market and this circumstance could harm our business. Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a negative impact on the success of our business.
We also cannot be certain that, following a strategic transaction or license, we will achieve the revenue or specific net income that justifies such transaction or such other benefits that led us to enter into the arrangement. 40 In addition, we face significant competition in seeking appropriate strategic partners and the negotiation process is time-consuming and complex.
We also cannot be certain that, following a strategic transaction or license, we will achieve the revenue or specific net income that justifies such transaction or such other benefits that led us to enter into the arrangement. In addition, we face significant competition in seeking appropriate strategic partners and the negotiation process is time-consuming and complex.
In such an instance, our competitors could produce products that are nearly identical to ours, resulting in us selling less products or generating less revenue from our sales. 36 We may be unable to adequately protect our intellectual property and proprietary rights and prevent others from making unauthorized use of our products and technology.
In such an instance, our competitors could produce products that are nearly identical to ours, resulting in us selling less products or generating less revenue from our sales. We may be unable to adequately protect our intellectual property and proprietary rights and prevent others from making unauthorized use of our products and technology.
Our research and development of isotope enrichment is dedicated not only to producing isotopes for use in nuclear medical diagnostic procedures and concentrating uranium in the isotope uranium-235 for use in nuclear energy, but also to safeguarding any information with broad, dual-use potential that could be inappropriately applied.
Our research and development of isotope enrichment is dedicated not only to producing enriched isotopes for use in nuclear medical diagnostic procedures and concentrating uranium in the isotope uranium-235 for use in nuclear energy, but also to safeguarding any information with broad, dual-use potential that could be inappropriately applied.
Failure to meet our own obligations to our licensor or upstream licensors, including such government agencies, may result in the loss of our rights to such intellectual property, which could harm our business. Government agencies may provide funding, facilities, personnel or other assistance in connection with the development of the intellectual property rights owned by or licensed to us.
Failure to meet our own obligations to any licensor or upstream licensors, including such government agencies, may result in the loss of our rights to such intellectual property, which could harm our business. Government agencies may provide funding, facilities, personnel or other assistance in connection with the development of the intellectual property rights owned by or licensed to us.
Research and development collaborations are subject to numerous risks, which may include the following: · collaborators have significant discretion in determining the efforts and resources that they will apply to a collaboration and may not commit sufficient efforts and resources or may misapply those efforts and resources; · collaborators may not pursue development and commercialization of future isotopes or may elect not to continue or renew development or commercialization programs; · collaborators may delay, provide insufficient resources to, or modify or stop development activities for future isotopes; · collaborators could develop or acquire products outside of the collaboration that compete directly or indirectly with our future isotopes; · collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability; · disputes may arise between us and a collaborator that cause the delay or termination of the research, development or commercialization of our future isotopes, or that result in costly litigation or arbitration that diverts management attention and resources; · collaborations may be terminated and, if terminated, may result in a need for additional capital and personnel to pursue further development or commercialization of the applicable future isotopes; and · collaborators may own or co-own intellectual property covering our products that results from our collaborating with them, and in such cases, we may not have the exclusive right to commercialize such intellectual property.
Research and development collaborations are subject to numerous risks, which may include the following: · collaborators have significant discretion in determining the efforts and resources that they will apply to a collaboration and may not commit sufficient efforts and resources or may misapply those efforts and resources; · collaborators may not pursue development and commercialization of future isotopes or may elect not to continue or renew development or commercialization programs; · collaborators may delay, provide insufficient resources to, or modify or stop development activities for future isotopes; · collaborators could develop or acquire products outside of the collaboration that compete directly or indirectly with our future isotopes; 35 Table of Contents · collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability; · disputes may arise between us and a collaborator that cause the delay or termination of the research, development or commercialization of our future isotopes, or that result in costly litigation or arbitration that diverts management attention and resources; · collaborations may be terminated and, if terminated, may result in a need for additional capital and personnel to pursue further development or commercialization of the applicable future isotopes; and · collaborators may own or co-own intellectual property covering our products that results from our collaborating with them, and in such cases, we may not have the exclusive right to commercialize such intellectual property.
Even if we or Klydon filed patent applications and patents were granted, we cannot assure you we would be fully protected against third parties as those patents may not be sufficiently broad in their coverage, may not be economically significant, or may not provide us with any competitive advantage.
Even if we filed patent applications and patents were granted, we cannot assure you we would be fully protected against third parties as those patents may not be sufficiently broad in their coverage, may not be economically significant, or may not provide us with any competitive advantage.
If we are not able to compete effectively against existing and potential competitors, our business and financial condition may be harmed. 32 As a result of these factors, our competitors may complete development of isotopes before we are able to, which may limit our ability to develop or commercialize our future isotopes.
If we are not able to compete effectively against existing and potential competitors, our business and financial condition may be harmed. As a result of these factors, our competitors may complete development of isotopes before we are able to, which may limit our ability to develop or commercialize our future isotopes.
If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline. Item 1B. Unresolved Staff Comments None. 56
If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline. Item 1B. Unresolved Staff Comments None.
In addition, in an infringement proceeding, a court or tribunal may decide that our asserted intellectual property is not valid or is unenforceable. An adverse determination in any litigation, arbitration or defense proceedings could put our licensed intellectual property at risk of being invalidated or interpreted narrowly.
In addition, in an infringement proceeding, a court or tribunal may decide that our asserted intellectual property is not valid or is unenforceable. An adverse determination in any litigation, arbitration or defense proceedings could put our intellectual property at risk of being invalidated or interpreted narrowly.
The price of our stock may be volatile, and you could lose all or part of your investment. The trading price of our common stock is highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control, including limited trading volume.
The price of our stock may be volatile, and you could lose all or part of your investment. The trading price of our Common Stock is volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control, including limited trading volume.
To date, we and Klydon have relied exclusively on trade secrets and other intellectual property laws, non-disclosure agreements with our respective employees, consultants, vendors, potential customers and other relevant persons and other measures to protect our intellectual property, and intend to continue to rely on these and other means.
To date, we have relied exclusively on trade secrets and other intellectual property laws, non-disclosure agreements with our respective employees, consultants, vendors, potential customers and other relevant persons and other measures to protect our intellectual property, and intend to continue to rely on these and other means.
To date, we and Klydon have relied exclusively on trade secrets and other intellectual property laws, non-disclosure agreements with our respective employees, consultants, vendors, potential customers and other relevant persons and other measures to protect our intellectual property, and intend to continue to rely on these and other means.
To date, we have relied exclusively on trade secrets and other intellectual property laws, non-disclosure agreements with our respective employees, consultants, vendors, potential customers and other relevant persons and other measures to protect our intellectual property, and intend to continue to rely on these and other means.
There is no assurance that all of the potentially relevant prior art relating to our (or Klydon’s) patents and patent applications has been found, which can invalidate a patent or prevent a patent from being issued from a pending patent application.
There is no assurance that all of the potentially relevant prior art relating to our patents and patent applications has been found, which can invalidate a patent or prevent a patent from being issued from a pending patent application.
If the patent applications we hold or have in-licensed with respect to our development programs fail to issue, if their breadth or strength of protection is threatened, or if they fail to provide meaningful exclusivity for the ASP technology, it could dissuade companies from collaborating with us, and threaten our ability to commercialize, isotopes produced using the ASP technology.
If the patent applications we hold or have in-licensed with respect to our development programs fail to issue, if their breadth or strength of protection is threatened, or if they fail to provide meaningful exclusivity for the ASP technology or the Quantum Enrichment technology, it could dissuade companies from collaborating with us, and threaten our ability to commercialize, isotopes produced using the ASP technology or the Quantum Enrichment technology.
Our common stock was only recently listed on the NASDAQ Stock Exchange on November 10, 2022. Prior to listing, we were a privately-held company, we were not required to evaluate our internal control over financial reporting in a manner that meets the standards of publicly traded companies required by Section 404(a) of the Sarbanes-Oxley Act, or Section 404.
Our Common Stock was listed on the Nasdaq Stock Exchange on November 10, 2022. Prior to listing, we were a privately-held company, we were not required to evaluate our internal control over financial reporting in a manner that meets the standards of publicly traded companies required by Section 404(a) of the Sarbanes-Oxley Act, or Section 404.
We plan to seek additional capital through a combination of public and private equity offerings, debt financings, strategic partnerships and alliances and licensing arrangements.
We may plan to seek additional capital through a combination of public and private equity offerings, debt financings, strategic partnerships and alliances and licensing arrangements.
The Company maintains cash balances at many financial institutions in multiple geographies. While the majority of cash balances are currently held in US$ at U.S. financial institutions, our cash balances at those institutions may exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance limit of $250,000 per depositor, per insured bank for each account ownership category.
The Company maintains cash balances at many financial institutions in multiple geographies. While the majority of cash balances are currently held in USD at U.S. financial institutions, our cash balances at those institutions may exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance limit of $250,000 per depositor, per insured bank for each account ownership category.
Our international operations subject us to risks of doing business in foreign countries, which could adversely affect our business, financial condition and results of operations. Our primary operations are located outside the U.S. (primarily the construction of the isotope enrichment plant in South Africa), and we plan to sell our isotopes to customers outside the U.S.
Our international operations subject us to risks of doing business in foreign countries, which could adversely affect our business, financial condition and results of operations. Our primary operations are located outside the U.S. (primarily the construction of isotope enrichment plants in South Africa), and we plan to sell our isotopes to customers outside the U.S.
Our success and competitiveness depend, in significant part, on our ability to protect our intellectual property rights, including the ASP technology and certain other practices, tools, technologies and technical expertise we utilize in designing, developing, implementing and maintaining processes used in the development of our future isotopes.
Our success and competitiveness depend, in significant part, on our ability to protect our intellectual property rights, including the ASP technology and the Quantum Enrichment technology and certain other practices, tools, technologies and technical expertise we utilize in designing, developing, implementing and maintaining processes used in the development of our future isotopes.
In accordance with the provisions of the JOBS Act, we and our independent registered public accounting firm were not required to, and did not, perform an evaluation of our internal control over financial reporting as of December 31, 2022 nor any period subsequent in accordance with the provisions of the Sarbanes-Oxley Act.
In accordance with the provisions of the JOBS Act, we and our independent registered public accounting firm were not required to, and did not, perform an evaluation of our internal control over financial reporting as of December 31, 2023 nor any period subsequent in accordance with the provisions of the Sarbanes-Oxley Act.
Any such outcome could have a negative effect on our business. Even if we obtain patents covering the ASP technology or our methods, we may still be barred from making, using and selling such technology or methods because of the patent rights of others.
Any such outcome could have a negative effect on our business. Even if we obtain patents covering the ASP technology or the Quantum Enrichment technology or our methods, we may still be barred from making, using and selling such technology or methods because of the patent rights of others.
To become and remain profitable, we must succeed in developing and eventually commercializing isotopes that generate significant revenue.
To become and remain profitable, we must succeed in developing and eventually commercializing enriched isotopes that generate significant revenue.
Although we believe that Klydon’s procedures for using, handling, storing and disposing of these materials comply with legally prescribed standards, we cannot completely eliminate the risk of contamination or injury resulting from radioactive or hazardous materials.
Although we believe that our procedures for using, handling, storing and disposing of these materials comply with legally prescribed standards, we cannot completely eliminate the risk of contamination or injury resulting from radioactive or hazardous materials.
If any infringement or other intellectual property claim made against us by any third party (including NMS or Radfarma) is successful, or if we fail to develop non-infringing technology or license the proprietary rights on commercially reasonable terms and conditions, our business, operating results and financial condition could be materially adversely affected.
If any infringement or other intellectual property claim made against us by any third party is successful, or if we fail to develop non-infringing technology or license the proprietary rights on commercially reasonable terms and conditions, our business, operating results and financial condition could be materially adversely affected.
If we do not have sufficient funds, we may not be able to further develop our future isotopes or bring them to market and generate product revenue. We may be dependent on intellectual property licensed or sublicensed to us from, or for which development was funded or otherwise assisted by, government agencies, for development of our technology and future isotopes.
If we do not have sufficient funds, we may not be able to further develop our future isotopes or bring them to market and generate product revenue. 36 Table of Contents We may be dependent on intellectual property licensed or sublicensed to us from, or for which development was funded or otherwise assisted by, government agencies, for development of our technology and future isotopes.
Even if patents are successfully issued and even if such patents cover the ASP technology, third parties may challenge their scope, validity, or enforceability, which may result in such patents being narrowed, invalidated, or held unenforceable.
Even if patents are successfully issued and even if such patents cover the ASP technology and the Quantum Enrichment technology, third parties may challenge their scope, validity, or enforceability, which may result in such patents being narrowed, invalidated, or held unenforceable.
Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management. 43 In addition, while it is our policy to require our employees and contractors who may be involved in the conception or development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who, in fact, conceives or develops intellectual property that we regard as our own.
Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management. 38 Table of Contents In addition, while it is our policy to require our employees and contractors who may be involved in the conception or development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who, in fact, conceives or develops intellectual property that we regard as our own.
Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial may also materially adversely affect our business, prospects, financial condition and results of operations. 25 Risks Related to Our Limited Operating History, Financial Position and Need for Additional Capital We have a very limited operating history, and we have incurred losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future.
Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial may also materially adversely affect our business, prospects, financial condition and results of operations. 24 Table of Contents Risks Related to Our Limited Operating History, Financial Position and Need for Additional Capital We have a very limited operating history, and we have incurred losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future.
As a result, if we enter into acquisition or in-license agreements or strategic partnerships, we may not be able to realize the benefit of such transactions if we are unable to successfully integrate them with our existing operations and company culture, or if there are materially adverse impacts on our or the counterparty’s operations resulting from COVID-19, which could delay our timelines or otherwise adversely affect our business.
As a result, if we enter into acquisition or in-license agreements or strategic partnerships, we may not be able to realize the benefit of such transactions if we are unable to successfully integrate them with our existing operations and company culture, or if there are materially adverse impacts on our or the counterparty’s operations, which could delay our timelines or otherwise adversely affect our business.
If the ASP technology that we license from Klydon infringes the proprietary rights of other parties (including NMS or Radfarma), we could incur substantial costs, and we may have to take certain actions, including the following: · obtain licenses, which may not be available on commercially reasonable terms, if at all; · redesign our technology or processes to avoid infringement; · stop using the subject matter claimed to be held by others; · pay damages; or · defend arbitration, litigation or administrative proceedings which may be costly whether we win or lose (and may be prohibitively expensive, particularly for a company of our size), and which could result in a substantial diversion of our financial and management resources.
If the ASP technology infringes the proprietary rights of other parties, we could incur substantial costs, and we may have to take certain actions, including the following: · obtain licenses, which may not be available on commercially reasonable terms, if at all; · redesign our technology or processes to avoid infringement; · stop using the subject matter claimed to be held by others; · pay damages; or · defend arbitration, litigation or administrative proceedings which may be costly whether we win or lose (and may be prohibitively expensive, particularly for a company of our size), and which could result in a substantial diversion of our financial and management resources.
The degree of market acceptance of Mo-100 that we may produce using the ASP technology, or the Tc-99m or Mo-99 that our future customers may produce, will depend on a number of factors, including but not limited to: · the potential advantages compared to alternative radioisotopes; · the timing of market introduction of the product as well as competitive products; · effectiveness of sales and marketing efforts; · the strength of our relationships with radiopharmacies, hospitals, clinics and others in the medical community; · the cost in relation to alternative radioisotopes; · our ability to offer Mo-100 that we may produce using the ASP technology for sale at competitive prices; · the convenience and ease of use compared to alternative radioisotopes; · the willingness of radiopharmacies, hospitals, clinics and others in the medical community to try an innovative radioisotope; and · the strength of marketing and distribution support.
The degree of market acceptance of isotopes that we may produce using the ASP technology, or the radioisotopes that our future customers may produce, will depend on a number of factors, including but not limited to: · the potential advantages compared to alternative radioisotopes; · the timing of market introduction of the product as well as competitive products; · effectiveness of sales and marketing efforts; · the strength of our relationships with radiopharmacies, hospitals, clinics and others in the medical community; · the cost in relation to alternative radioisotopes; · our ability to offer isotopes that we may produce using the ASP technology for sale at competitive prices; · the convenience and ease of use compared to alternative radioisotopes; · the willingness of radiopharmacies, hospitals, clinics and others in the medical community to try an innovative radioisotope; and · the strength of marketing and distribution support.
If we are unable to succeed in these activities, we may not be able to generate sufficient revenue to continue our business. 29 We rely on a limited number of suppliers to provide us components and a material interruption in supply could prevent or limit our ability to execute our strategic plan and development programs in the expected timeframe.
If we are unable to succeed in these activities, we may not be able to generate sufficient revenue to continue our business. 28 Table of Contents We rely on a limited number of suppliers to provide us components and a material interruption in supply could prevent or limit our ability to execute our strategic plan and development programs in the expected timeframe.
Potential competitors also include academic institutions, government agencies and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and commercialization. More established companies may have a competitive advantage over us due to their greater size, resources and institutional experience.
Potential competitors also include academic institutions, government agencies and other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research, development, manufacturing and commercialization. 30 Table of Contents More established companies may have a competitive advantage over us due to their greater size, resources and institutional experience.
Our future financial performance, our ability to commercialize future isotopes, develop a scalable infrastructure and compete effectively will depend, in part, on our ability to effectively manage any future growth. Our employees, consultants and commercial partners may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements and insider trading.
Our future financial performance, our ability to commercialize future isotopes, develop a scalable infrastructure and compete effectively will depend, in part, on our ability to effectively manage any future growth. 40 Table of Contents Our employees, consultants and commercial partners may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements and insider trading.
Other isotopes that we intend to produce in the future may also require approvals from healthcare regulators such as FDA, EMA or comparable foreign regulatory authorities. Our success depends on our future customers’ ability to successfully commercialize products that are produced from our isotopes. Our customers operate in a competitive environment.
Other isotopes that we intend to produce in the future may also require approvals from healthcare regulators such as FDA, EMA or comparable foreign regulatory authorities. 29 Table of Contents Our success depends on our future customers’ ability to successfully commercialize products that are produced from our isotopes. Our customers operate in a competitive environment.
If we are unable to obtain patent protection for our future isotopes, or if the scope of the patent protection obtained is not sufficiently broad, we may not be able to compete effectively in our markets. We anticipate that either Klydon or ourselves will file patent applications both in the United States and in other countries, as appropriate.
If we are unable to obtain patent protection for our future isotopes, or if the scope of the patent protection obtained is not sufficiently broad, we may not be able to compete effectively in our markets. We anticipate that we may file patent applications both in the United States and in other countries, as appropriate.
If the research and development processes or the results of the development programs prior to the in-licensing of the ASP technology for development of isotopes prove to be unreliable, this could result in increased costs and delays in the development of our future isotopes, which could adversely affect any future revenue from these future isotopes (assuming receipt of applicable regulatory approvals).
If the research and development processes or the results of the development programs associated with the ASP technology for development of isotopes prove to be unreliable, this could result in increased costs and delays in the development of our future isotopes, which could adversely affect any future revenue from these future isotopes (assuming receipt of applicable regulatory approvals).
Our efforts to educate radiopharmacies, hospitals, clinics and others in the medical community on the benefits of Mo-100 that we may produce using the ASP technology may require significant resources and may never be successful.
Our efforts to educate radiopharmacies, hospitals, clinics and others in the medical community on the benefits of our isotopes that we may produce using the ASP technology may require significant resources and may never be successful.
Such sales may also result in material dilution to our existing stockholders, and new investors could gain rights, preferences and privileges senior to the holders of our common stock, including shares of common stock sold in our IPO. Pursuant to our 2022 Plan, our management is authorized to grant stock options to our employees, directors and consultants.
Such sales may also result in material dilution to our existing stockholders, and new investors could gain rights, preferences and privileges senior to the holders of our Common Stock. Pursuant to our 2022 Plan, our management is authorized to grant stock options to our employees, directors and consultants.
We concluded that the material weakness in our internal control over financial reporting occurred because, prior to our IPO, we were a private company and did not have the necessary business processes, systems, personnel, and related internal controls necessary to satisfy the accounting and financial reporting requirements of a public company.
We concluded that the material weaknesses in our internal control over financial reporting information technology occurred because, prior to our IPO, we were a private company and did not have the necessary business processes, systems, personnel, and related internal controls necessary to satisfy the accounting and financial reporting requirements of a public company.
In addition to the factors discussed in this “Risk Factors” section and elsewhere in this Form 10-K, these factors include: · adverse results or delays in our development activities; · adverse regulatory decisions, including failure to receive regulatory approval for our future isotopes; · changes in laws or regulations applicable to our future isotopes, including but not limited to requirements for approvals; · any changes to our relationship with any manufacturers, suppliers, licensors, future collaborators or other strategic partners; · our inability to obtain adequate product supply for any future isotope or inability to do so at acceptable prices; · our inability to establish collaborations if needed; · our failure to commercialize our future isotopes; · additions or departures of key scientific or management personnel; · unanticipated serious safety concerns related to the use of our future isotopes; · introduction of new products or services offered by us or our competitors; · announcements of significant acquisitions, strategic partnerships, joint ventures, or capital commitments by us or our competitors; · our ability to effectively manage our growth; · actual or anticipated variations in quarterly operating results; · our cash position; · our failure to meet the estimates and projections of the investment community or that we may otherwise provide to the public; · publication of research reports about us or our industry or positive or negative recommendations or withdrawal of research coverage by securities analysts; · changes in the market valuations of similar companies; · overall performance of the equity markets; · issuances of debt or equity securities; · sales of our common stock by us or our stockholders in the future or the perception that such sales may occur; · trading volume of our common stock; · changes in accounting practices; · ineffectiveness of our internal controls; · disputes or other developments relating to proprietary rights, including patents, litigation matters, and our ability to obtain patent protection for our technologies; · significant lawsuits, including patent or stockholder litigation; · general political and economic conditions, including the COVID-19 pandemic; and · other events or factors, many of which are beyond our control. 49 In addition, the stock market in general, and biopharmaceutical companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies.
In addition to the factors discussed in this “Risk Factors” section and elsewhere in this Annual Report on Form 10-K, these factors include: · adverse results or delays in our development activities; · adverse regulatory decisions, including failure to receive regulatory approval for our future isotopes; · changes in laws or regulations applicable to our future isotopes, including but not limited to requirements for approvals; · any changes to our relationship with any manufacturers, suppliers, licensors, future collaborators or other strategic partners; · our inability to obtain adequate product supply for any future isotope or inability to do so at acceptable prices; · our inability to establish collaborations if needed; · our failure to commercialize our future isotopes; · additions or departures of key scientific or management personnel; · unanticipated serious safety concerns related to the use of our future isotopes; · introduction of new products or services offered by us or our competitors; · announcements of significant acquisitions, strategic partnerships, joint ventures, or capital commitments by us or our competitors; · our ability to effectively manage our growth; · actual or anticipated variations in quarterly operating results; · our cash position; · our failure to meet the estimates and projections of the investment community or that we may otherwise provide to the public; 43 Table of Contents · publication of research reports about us or our industry or positive or negative recommendations or withdrawal of research coverage by securities analysts; · changes in the market valuations of similar companies; · overall performance of the equity markets; · issuances of debt or equity securities; · sales of our Common Stock by us or our stockholders in the future or the perception that such sales may occur; · trading volume of our Common Stock; · changes in accounting practices; · ineffectiveness of our internal controls; · disputes or other developments relating to proprietary rights, including patents, litigation matters, and our ability to obtain patent protection for our technologies; · significant lawsuits, including patent or stockholder litigation; · general political and economic conditions, including military conflict or the COVID-19 pandemic; and · other events or factors, many of which are beyond our control.
We depend upon a limited number of third-party suppliers located for certain components required to construct the centrifuges and other equipment for the enrichment plant that is being constructed in South Africa. To date, we have been able to obtain the required components for our centrifuges without any significant delays or interruptions, except for certain delays related to COVID-19.
We depend upon a limited number of third-party suppliers for certain components required to construct the centrifuges and other equipment for the enrichment plants that are being constructed in South Africa. To date, we have been able to obtain the required components for our centrifuges without any significant delays or interruptions, except for certain delays related to COVID-19.
This uncertain supply of electricity could impact our ability to operate and produce commercial products and could negatively affect the financial position of the Company. 30 Risks associated with the in-licensing of the ASP technology for development of isotopes could cause substantial delays in the development of our future isotopes.
This uncertain supply of electricity could impact our ability to operate and produce commercial products and could negatively affect the financial position of the Company. Risks associated with the development of ASP technology for enrichment of isotopes could cause substantial delays in production of our future isotopes.
On October 25, 2022, we received a letter (the “NMS 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 us by Klydon violates a pre-existing exclusive sub-license to the ASP technology granted to Radfarma.
For example, on October 25, 2022, we received a letter (the “NMS Letter”) from a law firm acting on behalf of Norsk Medisinsk Syklotronsenter AS (“NMS”), asserting, among other things, that the grant of the former license to the ASP technology to us by Klydon violated a pre-existing exclusive sub-license to the ASP technology granted to Radfarma.
Therefore, we plan seek additional funds through public or private equity or debt financings, third-party funding, marketing and distribution arrangements, as well as other collaborations, strategic alliances and licensing arrangements, or any combination of these approaches.
Therefore, we may need to seek additional funds through public or private equity or debt financings, third-party funding, marketing and distribution arrangements, as well as other collaborations, strategic alliances and licensing arrangements, or any combination of these approaches.
Our research and development activities involve the controlled use of potentially hazardous substances, including chemical materials. Klydon is subject to international and local laws and regulations in South Africa governing the use, manufacture, storage, handling and disposal of radioactive and hazardous materials.
Our research and development activities involve the controlled use of potentially hazardous substances, including chemical materials. We are subject to international and local laws and regulations in South Africa governing the use, manufacture, storage, handling and disposal of radioactive and hazardous materials.
We may never generate any revenue or become profitable or, if we achieve profitability, we may not be able to sustain it. We were incorporated in September 2021, and we have a very limited operating history upon which you can evaluate our business and prospects.
We may never generate any revenue attributable to sales of enriched isotopes or become profitable or, if we achieve profitability, we may not be able to sustain it. We were incorporated in September 2021, and we have a very limited operating history upon which you can evaluate our business and prospects.
Prior to our IPO in November of 2022, there was no public market for shares of our common stock. Although our common stock is listed on the Nasdaq Capital Market (Nasdaq), an active trading market for our shares has not yet developed, and may never develop or if developed be sustained in the future.
Prior to our IPO in November of 2022, there was no public market for shares of our Common Stock. Although our Common Stock is listed on the Nasdaq Capital Market (Nasdaq), only a limited trading market for our shares has developed, and an active market may never develop or if developed be sustained in the future.
The permit issued to ASP Isotopes South Africa (Proprietary) Limited includes additional specific information requirements related to (i) the progress on the design and construction of the Mo-100 separation plant, (ii) the progress on the manufacturing of Molybdenum separation elements, and (iii) the commissioning of the plant.
The permit issued to ASP Isotopes South Africa (Proprietary) Limited includes additional specific information requirements related to (i) the progress on the design and construction of the isotope separation plant, (ii) the progress on the manufacturing of isotope separation elements, and (iii) the commissioning of the plant.
In addition, we are required, pursuant to Section 404, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting in the second annual report. This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting.
In addition, we are required, pursuant to Section 404, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting in the annual report. This assessment includes disclosure of any material weaknesses identified by our management in our internal control over financial reporting.
Our principal stockholders and management own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval. Our executive officers, current directors, greater than 5% holders, and their affiliates beneficially own, in the aggregate, approximately 53.7% of our common stock as of December 31, 2022.
Our principal stockholders and management own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval. Our executive officers, current directors, greater than 5% holders, and their affiliates beneficially own, in the aggregate, approximately 43.3% of our Common Stock as of December 31, 2023 .
If we are unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell our products, we may not be able to generate product revenue. We have no internal sales, marketing or distribution capabilities, nor have we commercialized a product.
If we are unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell our products, we may not be able to generate product revenue. We have no internal sales, marketing or distribution capabilities for our future isotopes, nor have we commercialized any isotopes.
We expect Klydon to seek to protect its proprietary position by filing patent applications in the United States and abroad related to its current and future development programs and future isotopes to the extent permitted by applicable law.
We may seek to protect our proprietary position by filing patent applications in the United States and abroad related to its current and future development programs and future isotopes to the extent permitted by applicable law.
If we are unable to prevent unauthorized material disclosure of our intellectual property to third parties, or misappropriation of our intellectual property by third parties, we may not be able to establish or maintain a competitive advantage in our market, which could materially adversely affect our business, operating results, and financial condition. 44 Risks Related to Our Dependence on Third Parties If we use hazardous and chemical materials in a manner that causes injury or violates applicable law, we may be liable for damages.
If we are unable to prevent unauthorized material disclosure of our intellectual property to third parties, or misappropriation of our intellectual property by third parties, we may not be able to establish or maintain a competitive advantage in our market, which could materially adversely affect our business, operating results, and financial condition. 39 Table of Contents If we use hazardous and chemical materials in a manner that causes injury or violates applicable law, we may be liable for damages.
As we intend to transition into the commercialization of Mo-100, we envision our intellectual property and its security becoming more vital to our future.
As we intend to transition into the commercialization of isotopes, we envision our intellectual property and its security becoming more vital to our future.
If a court were to find either exclusive forum provision in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving the dispute in other jurisdictions, all of which could seriously harm our business.
If a court were to find either exclusive forum provision in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving the dispute in other jurisdictions, all of which could seriously harm our business. We are currently listed on The Nasdaq Capital Market.
Laws and regulations at the South African and foreign, federal, state and local levels frequently change, especially in relation to new and emerging industries, and we cannot always reasonably predict the impact of, or the ultimate cost of compliance with, current or future regulatory or administrative changes. In South Africa, our Mo-100 enrichment facility is heavily regulated.
Laws and regulations at the South African and foreign, federal, state and local levels frequently change, especially in relation to new and emerging industries, and we cannot always reasonably predict the impact of, or the ultimate cost of compliance with, current or future regulatory or administrative changes. In South Africa, our isotope enrichment facilities are heavily regulated.
As a result, we do not have the full benefit of patent or copyright laws to prevent others from replicating the ASP technology. Neither we nor Klydon have yet protected our respective intellectual property rights through patents or formal copyright registration, and neither we nor Klydon currently have any patent applications pending.
As a result, we do not have the full benefit of patent or copyright laws to prevent others from replicating the ASP technology. We have not yet protected our intellectual property rights through patents or formal copyright registration, and we currently have no patent applications pending.
In addition, the prevalent use of mobile devices increases the risk of data security incidents. 46 Significant disruptions of our, our third-party vendors’ and/or our business partners’ information technology systems or other similar data security incidents could adversely affect our business operations and/or result in the loss, misappropriation, and/or unauthorized access, use or disclosure of, or the prevention of access to, sensitive information, which could result in financial, legal, regulatory, business and reputational harm to us.
Significant disruptions of our, our third-party vendors’ and/or our business partners’ information technology systems or other similar data security incidents could adversely affect our business operations and/or result in the loss, misappropriation, and/or unauthorized access, use or disclosure of, or the prevention of access to, sensitive information, which could result in financial, legal, regulatory, business and reputational harm to us.
Prior to October 2021, as a company we had no involvement with or control over the research and development of the ASP technology. We have relied and continue to rely on Klydon to conduct such research and development in accordance with the applicable legal, regulatory and scientific standards prior to the in-licensing of the ASP technology for development of isotopes.
Prior to October 2021, as a company, we had no involvement with or control over the research and development of the ASP technology. We relied on Klydon to conduct such research and development in accordance with the applicable legal, regulatory and scientific standards.
We have not yet demonstrated an ability to overcome many of the risks and uncertainties frequently encountered by companies in the medical, technology and energy industries, including an ability to obtain applicable regulatory approvals, manufacture any isotopes at commercial scale (or arrange for a third party to do so on our behalf), or conduct sales and marketing activities necessary for successful isotope commercialization.
We have not yet demonstrated an ability to overcome many of the risks and uncertainties frequently encountered by companies in the medical, technology and energy industries, including an ability to obtain applicable regulatory approvals, manufacture any isotopes at commercial scale, or conduct sales and marketing activities necessary for successful isotope commercialization.
For strategic reasons, neither we nor Klydon have yet protected our intellectual property by filing patent applications related to our technology, inventions and improvements.
For strategic reasons, we have not yet protected our intellectual property by filing patent applications related to our technology, inventions and improvements.
We will rely on our outside counsel, patent annuity service providers, or our licensing partners to pay these fees due to non-U.S. patent agencies. The USPTO and various non-U.S. government patent agencies require compliance with several procedural, documentary, and other similar provisions during the patent application process.
We will rely on our outside counsel, patent annuity service providers, or our licensing partners to pay these fees due to non-U.S. patent agencies. The USPTO and various non-U.S. government patent agencies require compliance with several procedural, documentary, and other similar provisions during the patent application process. We will employ reputable law firms and other professionals to help us comply.
We believe we have already and will continue to make progress in our remediation plan during the year ending December 31, 2022, but cannot assure you that we will be able to fully remediate the material weakness by such time.
We believe we have already and will continue to make progress in our remediation plan but cannot assure you that we will be able to fully remediate the material weakness by such time.
In addition, 2,949,611 shares of common stock that are either subject to outstanding options or reserved for future issuance under our employee benefit plans will become eligible for sale in the public market to the extent permitted by the provisions of various vesting schedules, the lock-up agreements, and Rule 144 and Rule 701 under the Securities Act.
In addition, 3,254,606 shares of Common Stock that are either subject to outstanding options or reserved for future issuance under our employee benefit plans will become eligible for sale in the public market to the extent permitted by the provisions of various vesting schedules, and Rule 144 and Rule 701 under the Securities Act.
Provisions of our amended and restated certificate of incorporation and amended and restated bylaws, which became effective upon the closing of our IPO, may delay or discourage transactions involving an actual or potential change in our control or change in our management, including transactions in which stockholders might otherwise receive a premium for their shares or transactions that our stockholders might otherwise deem to be in their best interests.
Provisions of certificate of incorporation and bylaws as amended may delay or discourage transactions involving an actual or potential change in our control or change in our management, including transactions in which stockholders might otherwise receive a premium for their shares or transactions that our stockholders might otherwise deem to be in their best interests.
We expect our expenses to increase substantially in connection with our ongoing and planned activities, particularly as we continue our research and development activities, seek applicable regulatory approvals for any future isotopes that we may successfully develop, and expand our organization by hiring additional personnel. In addition, we expect to incur additional costs associated with operating as a public company.
We expect our expenses to increase substantially in connection with our ongoing and planned activities, particularly as we continue our research and development activities, seek applicable regulatory approvals for any future isotopes that we may successfully develop, and expand our organization by hiring additional personnel.
A Delaware corporation may opt out of this provision by express provision in its original certificate of incorporation or by amendment to its certificate of incorporation or bylaws approved by its stockholders. However, we have not opted out of this provision.
A Delaware corporation may opt out of this provision by express provision in its original certificate of incorporation or by amendment to its certificate of incorporation or bylaws approved by its stockholders.
Unless we can begin to generate material revenue or raise capital through equity offerings, we may not be able to remain in business. We cannot assure you that we will raise enough money or generate sufficient sales to meet our future working capital needs.
Unless we can begin to generate material revenue from production and sale of enriched isotopes or raise capital from equity offerings, we may not be able to remain in business. We cannot assure you that we will raise enough money or generate sufficient sales to meet our future working capital needs.
Our operating results could be adversely affected by a reduction in business with our future significant customers. We currently have no sales. However, we expect to rely on a limited number of customers outside of the United States to purchase any isotopes that we develop using the ASP technology under long-term contracts.
Our operating results could be adversely affected by a reduction in business with our future significant customers. We currently have no sales attributable to enriched isotopes. However, we expect to rely on a limited number of customers to purchase any isotopes that we produce using the ASP technology or quantum enrichment under long-term contracts.
Even if the Mo-100 that we may produce using the ASP technology, or Tc-99m or Mo-99 that we expect our future customers to produce using the Mo-100 that we plan to offer, receives regulatory approval, the isotopes may fail to gain sufficient market acceptance by radiopharmacies, hospitals, clinics and others in the medical community.
Even if the isotopes that we may produce using the ASP technology for the medical industry, or the radioisotopes that we expect our future customers to produce using the stable isotopes that we plan to offer, receives regulatory approval, the isotopes may fail to gain sufficient market acceptance by radiopharmacies, hospitals, clinics and others in the medical community.
Our success will depend in large part on our (or Klydon, as our licensor) ability to obtain and maintain patent protection in the United States and other countries with respect to the ASP technology.
Our success will depend in large part on our ability to obtain and maintain patent protection in the United States and other countries with respect to the ASP technology and the Quantum Enrichment technology.
The patent prosecution process is expensive and time-consuming, and we may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner, including as a result of the COVID-19 pandemic impacting our or our licensors’ operations. 41 It is possible that we (or Klydon, as our licensor) will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection.
The patent prosecution process is expensive and time-consuming, and we may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. It is possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties As of December 31, 2022, we lease one facility in Pretoria, South Africa for office and laboratory space. The lease commenced in October 2021 with the initial term set to expire in December 2030.
Biggest changeItem 2. Properties As of December 31, 2023, we lease five facilities in Pretoria, South Africa for office, production and laboratory space. One lease commenced in October 2021 with the initial term set to expire in December 2030. This space is used for office, production and laboratory activities.
Added
The second lease commenced in April 2023 with the initial term expired in March 2024. The Company plans to remain in this space under the monthly renewal terms of the agreement. This space is used for production and laboratory activities. The third lease commenced in November 2023 with the initial term set to expire in October 2026.
Added
This space is used for laboratory activities. 50 Table of Contents The fourth lease commenced with our acquisition of PET Labs Pharmaceuticals in October 2023 and has an initial term set to expire in March 2026 with automatic monthly extensions thereafter. This space is used for office and production activities.
Added
The fifth lease commenced with our acquisition of PET Labs Pharmaceuticals in October 2023 and had an initial term which expired in December 2023 with automatic monthly extensions thereafter. This space is used for production activities.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe cannot predict the outcome of any such legal matters or claims, and despite the potential outcomes, the existence thereof may have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. Item 4. Mine Safety Disclosures Not applicable. 57 PART II
Biggest changeWe cannot predict the outcome of any such legal matters or claims, and despite the potential outcomes, the existence thereof may have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. Item 4. Mine Safety Disclosures Not applicable. 51 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeStock Performance Graph As a smaller reporting company, we are not required to provide the information requested by this item pursuant to Item 201 of Regulation S-K. Unregistered Sales of Equity Securities and Use of Proceeds Unregistered sales of equity securities Set forth below is information regarding unregistered securities issued by us since our inception on September 13, 2021.
Biggest changeStock Performance Graph As a smaller reporting company, we are not required to provide the information requested by this item pursuant to Item 201 of Regulation S-K. Unregistered Sales of Equity Securities and Use of Proceeds Unregistered sales of equity securities None.
Through December 31, 2022, we have used approximately $1.5 million of the net proceeds from our IPO for matters described in our final IPO prospectus filed with the SEC on November 14, 2022, or our IPO prospectus. There has been no material change in the planned use of proceeds from our IPO, as described in our IPO prospectus.
Through December 31, 2023, we have used all of the net proceeds from our IPO for matters described in our final IPO prospectus filed with the SEC on November 14, 2022, or our IPO prospectus. There has been no material change in the planned use of proceeds from our IPO, as described in our IPO prospectus.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information and Holders of Record Our common stock has been listed on the Nasdaq Global Select Market under the symbol “ASPI” since November 10, 2022. As of March 29, 2023, we had 55 record holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information and Holders of Record Our common stock has been listed on the Nasdaq Global Select Market under the symbol “ASPI” since November 10, 2022. As of April 8, 2024, we had 30 record holders of record of our common stock.
Repurchases of equity securities by the issuer None.
Repurchases of equity securities by the issuer None. 52 Table of Contents Item 6. [Reserved]
Removed
Also included is the consideration received by us for such securities and information relating to the section of the Securities Act, or rule of the SEC, under which exemption from registration was claimed. None of the following transactions involved any underwriters, underwriting discounts or commissions, or any public offering, except as noted in paragraph 6 below. 1.
Removed
On September 13, 2021, we closed stock purchase agreements with our founders to issue an aggregate of 2,000,000 shares of common stock in consideration for the purchasers’ transfer to the company of all of the purchaser’s rights in certain business concepts and technology. 2.
Removed
On September 15, 2021, we issued two consultants each a warrant to purchase 3,615,411 shares of common stock, with an exercise price per share of $0.01 and a term of two (2) years, for services. On January 28, 2022, the holders of the warrants exercised their warrants, and the company issued an aggregate of 7,194,847 shares of common stock. 3.
Removed
In late September 2021, we sold and issued an aggregate of 8,300,000 shares of common stock to a total of 9 accredited investors at a purchase price of $0.25 per share, for an aggregate purchase price of $2,075,000. 58 4.
Removed
In October 2021 through early November 2021, we sold and issued an aggregate of 6,800,000 shares of common stock to a total of 14 accredited investors at a purchase price of $0.25 per share, for an aggregate purchase price of $1,700,000. 5.
Removed
In October 2021, we issued an aggregate of 1,500,000 shares of our common stock pursuant to a performance share award grant notice to Paul Mann, our Chairman, Chief Executive Officer and director, as consideration for his services to us.
Removed
In addition, in October 2021, we sold and issued 600,000 shares of our common stock pursuant to a restricted stock award grant notice to a consultant (an entity owned by Sergey Vasnetsov, our director), as consideration for services to us as contemplated by the advisory agreement with us. 6.
Removed
In late November 2021 through April 2022, we sold and issued an aggregate of 3,012,280 shares of common stock to a total of 74 accredited investors at a purchase price of $2.00 per share, for an aggregate purchase price of $6,024,560.
Removed
Revere Securities LLC acted as placement agent in connection with such offering of shares of our common stock and in connection therewith we agreed to pay to Revere Securities LLC (i) a cash fee equal to 8.0% of the aggregate gross proceeds raised in such offering and (ii) 57,250 shares of our common stock. 7.
Removed
In July 2022, we issued (i) 600,000 shares of our common stock pursuant to a restricted stock award grant notice to a consultant (an entity owned by Sergey Vasnetsov, our director), as consideration for services to us as contemplated by the advisory agreement (as amended) with us and (ii) 100,000 shares of our common stock pursuant to a restricted stock award grant notice to a consultant as consideration for services to us. 8.
Removed
In October 2022, we issued to our executive officers, directors and consultants 3,000,000 shares of restricted stock that we executed on November 15, 2022 upon consummation of our IPO. 9.
Removed
From September 13, 2021, through July 2022, we granted stock options under our 2021 equity incentive plan, as amended (the Prior Plan), to purchase up to an aggregate of 3,151,000 shares of our common stock to our employees, directors and consultants, at a weighted-average exercise price of $1.78 per share. 10.
Removed
On March 14, 2023, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with a single institutional investor (the “Purchaser”), pursuant to which we issued, in a private placement (the “Offering”), an aggregate of (i) 3,164,557 shares (the “Shares”) of our common stock, par value $0.01 per share (the “Common Stock”); and (ii) warrants (the “Common Warrants”) to purchase up to an aggregate of 3,164,557 shares of Common Stock (the “Common Warrant Shares”), at a purchase price of $1.58 per one (1) share of Common Stock and accompanying Common Warrant, for a total gross proceeds of approximately $5.0 million, before deducting placement agent fees and other offering expenses.
Removed
The Common Warrants have an exercise price of $1.75 per share, are exercisable on or after September 17, 2023 and will expire on September 18, 2028. The Offering closed on March 17, 2023 (the “Closing”). We engaged H.C.
Removed
Wainwright & Co., LLC (the “Placement Agent”) to act as its exclusive placement agent in connection with the Offering, pursuant to the engagement letter (the “Engagement Letter”), dated as of February 15, 2023, between the Company and the Placement Agent.
Removed
Pursuant to the Engagement Letter, we paid the Placement Agent (i) a total cash fee equal to 7.0% of the aggregate gross proceeds of the Offering; (ii) a management fee of 1.0% of the aggregate gross proceeds of the Offering; and (iii) reimbursement of certain expenses.
Removed
In addition, we issued to the Placement Agent, or its designees warrants (the “PA Warrants”) to purchase up to 221,519 shares of Common Stock (the “PA Warrant Shares”) at an exercise price of $1.975 per share. The PA Warrants are exercisable on or after September 17, 2023, and will expire on September 18, 2028. 11.
Removed
On March 15, 2023, Tianne Holdings (Pty) Ltd, a company controlled by Henrik Strydom, our director, and Carlein Investments (Pty) Ltd, a company controlled by Einar Ronander, a consultant to the Company, each exchanged 1,500,000 shares of our common stock which they held for 1,250 shares of preferred stock of our newly formed subsidiary, Enlightened Isotopes (Pty) Ltd.
Removed
The 3 million shares were cancelled pursuant to the exchange.
Removed
None of the foregoing transactions involved any underwriters, underwriting discounts or commissions, or our public offering, except as noted in paragraph 6 above. 59 Except as described in the following paragraph, we believe that the transactions described above were exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act (and Regulation D promulgated thereunder).
Removed
The recipients of the securities in each of these transactions represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof. The sales of these securities were made without any general solicitation or advertising.
Removed
The offers, sales and issuances of the securities described in paragraphs (2), (5), (7) and (8) were deemed to be exempt from registration under the Securities Act in reliance on either Rule 701 in that the transactions were under compensatory benefit plans and contracts relating to compensation as provided under Rule 701 or Section 4(a)(2) in that the issuance of securities to the accredited investors did not involve a public offering.
Removed
The recipients of such securities were our employees, directors or bona fide consultants and received the securities under the Prior Plan.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOur future capital requirements will depend on many factors, including: · the type, number, scope, progress, expansions, results, costs and timing of, our development activities for our future isotopes; · the outcome, timing and costs of regulatory review of our future isotopes; · the costs and timing of manufacturing for our future isotopes; · our efforts to enhance operational systems and hire additional personnel to satisfy our obligations as a public company, including enhanced internal controls over financial reporting; · the costs associated with hiring additional personnel and consultants as our preclinical and clinical activities increase; · the costs and timing of establishing or securing sales and marketing and distribution capabilities, whether alone or with third parties, to commercialize future isotopes for which we may obtain regulatory approval, if any; · our ability to achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payors and adequate market share and revenue for any approved products; · the terms and timing of establishing and maintaining collaborations, licenses and other similar arrangements; · the costs of obtaining, expanding, maintaining and enforcing our patent and other intellectual property rights; · costs associated with any products or technologies that we may in-license or acquire; and · if we experience any delays or encounter any issues with any of the above, including the risk of each of which may be exacerbated by the ongoing COVID-19 pandemic. 66 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).
Biggest changeOur future capital requirements will depend on many factors, including: · the type, number, scope, progress, expansions, results, costs and timing of, our development activities for our future isotopes; · the outcome, timing and costs of regulatory review of our future isotopes; · the costs and timing of manufacturing for our future isotopes; · our efforts to enhance operational systems and hire additional personnel to satisfy our obligations as a public company, including enhanced internal controls over financial reporting; · the costs associated with hiring additional personnel and consultants as our preclinical and clinical activities increase; · the costs and timing of establishing or securing sales and marketing and distribution capabilities, whether alone or with third parties, to commercialize future isotopes for which we may obtain regulatory approval, if any; · our ability to achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payors and adequate market share and revenue for any approved products; · the terms and timing of establishing and maintaining collaborations, licenses and other similar arrangements; · the costs of obtaining, expanding, maintaining and enforcing our patent and other intellectual property rights; and · costs associated with any products or technologies that we may in-license or acquire.
We do not have any isotopes approved for sale, we have not generated any revenue from the sale of isotopes, and our ability to generate product revenue sufficient to achieve profitability will depend on the successful development and eventual commercialization of one or more of our current or future isotopes.
We do not have any isotopes approved for sale, we have not generated any revenue from the sale of isotopes, and our ability to generate product revenue from the sale of isotopes sufficient to achieve profitability will depend on the successful development and eventual commercialization of one or more of our current or future isotopes.
Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of financial condition and results of operations is provided to enhance the understanding of, and should be read in conjunction with Part I, Item I, “Business” and Item 8, ‘Financial Statements and Supplementary Data.” For information on risks and uncertainties related to our business that may make past performance not indicative of future results or cause actual results to differ materially from any forward-looking statements, see “Special Note Regarding Forward-Looking Statements,” and Part I, Item 1A, ‘Risk Factors.” Overview We are a pre-commercial 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.
Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of financial condition and results of operations is provided to enhance the understanding of, and should be read in conjunction with Part I, Item I, “Business” and Item 8, ‘Financial Statements and Supplementary Data.” For information on risks and uncertainties related to our business that may make past performance not indicative of future results or cause actual results to differ materially from any forward-looking statements, see “Special Note Regarding Forward-Looking Statements,” and Part I, Item 1A, ‘Risk Factors.” 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.
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 licenses and other agreements with Klydon. Acquisition of Molybdos Assets.
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. Acquisition of Molybdos Assets.
The intellectual property rights granted to us through the Klydon license agreement include 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 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).
Other income and expense Other income for the year ended December 31, 2022 was $153,909, which includes a $150,527 change in the fair value of the share liability related to the shares issuable to a placement agent.
Other income for the year ended December 31, 2022 was $153,909, which includes a $150,527 change in the fair value of the share liability related to the shares issuable to a placement agent.
Klydon performed a portion of the services required under the Turnkey Contract; however, services were incomplete and many of the services were not completed within the time frame required.
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.
Contractual obligations and commitments We lease our research and development facility in Pretoria, South Africa under a lease with base monthly rent payment of approximately $8,000 with a term expiring on December 31, 2030.
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.
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.
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.
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 Klydon and its scientists and engineers will operate on our behalf the 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).
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).
Our research and development expenses may vary significantly based on a variety of factors, such as: · the scope, rate of progress, expense and results of our development activities; · the phase of development of our future isotopes; · the timing, receipt, and terms of any approvals from applicable regulatory authorities including the FDA and foreign regulatory authorities; · significant and changing government regulation and regulatory guidance; · the cost and timing of designing the development processes of isotope production; · the extent to which we establish additional strategic collaborations or other arrangements; and · the impact of any business interruptions to our operations or to those of the third parties with whom we work, including Klydon, particularly in light of the current COVID-19 pandemic environment.
Our research and development expenses may vary significantly based on a variety of factors, such as: · the scope, rate of progress, expense and results of our development activities; · the phase of development of our future isotopes; · the timing, receipt, and terms of any approvals from applicable regulatory authorities including the FDA and foreign regulatory authorities; · significant and changing government regulation and regulatory guidance; · the cost and timing of designing the development processes of isotope production; · the extent to which we establish additional strategic collaborations or other arrangements; and · the impact of any business interruptions to our operations or to those of the third parties with whom we work.
We believe that the U-235 we may develop using the ASP 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.
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.
Until such time as we can generate significant revenue from sales of our future isotopes, 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.
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.
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.
We will need to raise substantial additional capital in the future. In addition, we cannot forecast which future isotopes may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.
In March 2023, we received gross proceeds of $5.0 million through the issuance of 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 at a purchase price of $1.58 per share with an exercise price of $1.75 per share.
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.
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 private placements of our common stock and, most recently, our IPO and private placement.
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.
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. 61 Exclusive Mo-100 License (superseded and replaced by new license (see “Omnibus Klydon License” below)).
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.
The term of the lease ends on December 31, 2030. 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.
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 Klydon license agreement superseded and replaced the Mo-100 license and U-235 license described 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.
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.
These expenses include $6,645 in consulting expenses related to advancing development activities for Mo-100, $429,270 of personnel-related costs, including $201,270 in stock-based compensation, $495,503 in license fees and $342,118 in consulting, facility and other expenses. Research and development expenses were $41,610 for the period from September 13, 2021 (Inception) through December 31, 2021.
These expenses include $6,645 in consulting expenses related to advancing development activities for Mo-100, $429,270 of personnel-related costs, including $201,270 in stock-based compensation, $495,503 in license fees and $342,118 in consulting, facility and other expenses.
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.
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.
We expect that our ongoing 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.
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.
Direct costs include: · external research and development expenses incurred under the Turnkey Contract; and · costs related to designing the development processes of isotope production. 63 Indirect costs include: · personnel-related costs, which include salaries, payroll taxes, employee benefits, and other employee-related costs, including stock-based compensation, for personnel engaged in research and development functions; and · facilities and other various expenses.
Indirect costs include: · personnel-related costs, which include salaries, payroll taxes, employee benefits, and other employee-related costs, including stock-based compensation, for personnel engaged in research and development functions; and · facilities and other various expenses.
These expenses include $560,789 of personnel-related costs, $1,798,043 in stock-based compensation, $1,010,187 of professional services and legal related fees and $456,493 in facility and other corporate expenses. 65 General and administrative expenses were $2,566,432 for the period from September 13, 2021 (Inception) through December 31, 2021.
These expenses include $560,789 of personnel-related costs, $1,798,043 in stock-based compensation, $1,010,187 of professional services and legal related fees and $456,493 in facility and other corporate expenses.
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. We will need to raise substantial additional capital in the future.
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.
As of December 31, 2022, we had cash of $2.4 million.
As of December 31, 2023, we had cash of $7.9 million.
Future Funding Requirements Based on our current operating plan, we estimate that our existing cash, together with the net proceeds from our IPO, will not be sufficient to fund our operating expenses and capital expenditure requirements through at least the next 12 months from the date the financial statements are issued.
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. 58 Table of Contents Future Funding Requirements Based on our current operating plan, we estimate that our existing cash, will not be sufficient to fund our operating expenses and capital expenditure requirements through at least the next 12 months from the date the financial statements are issued.
Components of Results of Operations Operating Expenses Our operating expenses consist of (i) research and development expenses and (ii) 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.
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: · external research and development expenses; and · costs related to designing the development processes of isotope production.
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 from the ongoing COVID-19 pandemic and otherwise.
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.
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.
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.
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. We expect that our research and development expenses will increase substantially for the foreseeable future as we continue the development of our future isotopes.
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.
Net cash used in investing activities was $4,473,164 and $2,988,210 for the year ended December 31, 2022 and the period from September 13, 2021 (inception) through December 31, 2021, respectively, and was comprised of construction in progress. Financing Activities.
Net cash used in investing activities was $4,473,164 for the year ended December 31, 2022 and was comprised of construction in progress. Financing Activities Net cash provided by financing activities was $13,385,491 for the year ended December 31, 2023 and was comprised primarily of net proceeds of $13,566,022 from the sale and issuance of 13,117,067 shares of our common stock.
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.
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. 56 Table of Contents 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, for personnel in executive, sales, finance and other administrative functions.
Klydon failed to complete its obligations under the Turnkey Contract by December 31, 2022, and the Company plans to perfect its interests in the assets as soon as practicable. 62 Letter of Intent for Klydon Shares or Assets.
Klydon failed to complete its obligations under the Turnkey Contract by December 31, 2022.
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. Recent accounting pronouncements See Note 2 to our consolidated financial statements which discusses new accounting pronouncements 68
Payments due upon cancellation consist only of payments for services provided and expenses incurred up to the date of cancellation. 60 Table of Contents 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.
Our initial focus is on the production and commercialization of enriched Carbon-14 (“C-14”), Molybdenum-100 (“Mo-100”) and Silicon-28 (“Si-28”). Klydon has agreed to provide us a first commercial-scale isotope enrichment plant located in South Africa We also intend to use the ASP technology to produce enriched Uranium-235 (“U-235”).
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 believe that the Klydon license agreement provides us with the requisite intellectual property rights and personnel (through Klydon’s workforce) that we need to conduct our business as currently proposed to be conducted. Other Commercial Agreements Below is a summary of the key terms of our other commercial agreements. Lease for Molybdenum Processing Plant.
Other Commercial Agreements Below is a summary of the key terms of our other commercial agreements. Lease for Molybdenum Processing Plant.
These expenses include $9,360 in consulting expenses related to advancing development activities for Mo-100 and $32,250 in facility and related expenses. General and administrative expenses General and administrative expenses were $3,825,512 for the year ended December 31, 2022.
These expenses include $10,422,994 of personnel-related costs, including $8,378,875 in stock-based compensation, $2,747,486 of professional services and legal related fees and $2,245,909 in facility and other corporate expenses. Selling, general and administrative expenses were $3,825,512 for the year ended December 31, 2022.
Removed
We were incorporated in Delaware in September 2021 to acquire assets and license intellectual property rights related to the production of isotopes using Aerodynamic Separation Process (“ASP technology”), originally developed and licensed to us by Klydon Proprietary Ltd (“Klydon”). We have an exclusive license to use the ASP technology for the production, distribution, marketing and sale of all isotopes.
Added
We have commissioned an isotope enrichment plant for the enrichment of C-14 located in Pretoria, South Africa, which will be ready for production upon the final installation of essential components. We anticipate completion and commissioning of a multi-isotope enrichment plant in Pretoria, South Africa in mid-2024. In addition, we have started planning additional isotope enrichment plants.
Removed
We operate principally through subsidiaries: ASP Isotopes Guernsey Limited (the holding company of ASP Isotopes South Africa (Proprietary) Limited), which will be 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); Enriched Energy LLC, which will be focused on the development and commercialization of uranium for the nuclear energy market; and ASP Isotopes UK Ltd, which is the licensee of the ASP technology under the exclusive license agreement with Klydon.
Added
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.
Removed
Klydon has the right to terminate the exclusivity of the Klydon license agreement in the event that the licensee ceases to carry on activities related to isotope enrichment for a period longer than 24 consecutive months. Turnkey Contract.
Added
We believe the Si-28 we may produce using the ASP technology may be used to create advanced semiconductors and in quantum computing.
Removed
On September 30, 2021, ASP South Africa entered into a letter of intent with Klydon and Isotope Separation Technology (Pty) Ltd (Klydon’s largest shareholder which is owned by Dr Ronander and Dr Strydom) with respect to the acquisition of all of the outstanding shares or substantially all of the assets of Klydon.
Added
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.
Removed
Under the letter of intent (as amended), Klydon has agreed to negotiate with us on an exclusive basis.
Added
We are also developing Quantum Enrichment technology to produce enriched Ytterbium-176, Nickel-64, Lithium 6, Lithium7 and Uranium-235 (“U-235”). Quantum enrichment is an advanced isotope enrichment technique that is currently in development that uses lasers.
Removed
We are in the process of preparing, and negotiating with Klydon, the share purchase agreement and related agreements with respect to the Klydon acquisition, but such transaction documents are not yet in agreed form and as of the date hereof, several issues remain open that, if not resolved, will prevent us from entering into a definitive agreement with respect to the Klydon acquisition.
Added
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.
Removed
In addition, the resolution of the Acknowledgement of Debt Agreement pertaining to the non performance by Klydon under the Turnkey Contract may significantly alter the outcome of these negotiations.
Added
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 9,952,510 shares of the Company’s common stock, for aggregate cash consideration of $9,129,461, 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.
Removed
We do not expect the timing or success of the Klydon acquisition to have a material effect on either our business or our financial results in the future because of the existing commercial agreements that we have with Klydon.
Added
The Company 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.
Removed
General and Administrative 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, for personnel in executive, 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.
Added
Acquisition of 51% of PET Labs Pharmaceuticals In October 2023, the Company 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, a company incorporated in South Africa and dedicated to nuclear medicine and the science of radiopharmaceutical production. 53 Table of Contents Per the Share Purchase Agreement, the Company has agreed to pay a total of $2,000,000 for the shares in two installments.
Removed
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. 64 Results of operations Comparison of the year ended December 31, 2022 and the period from September 13, 2021 (Inception) through December 31, 2021 Year ended December 31, 2022 Period from September 13, 2021 (Inception) through December 31, 2021 Operating expenses: Research and development $ 1,273,536 $ 41,610 General and administrative 3,825,512 2,566,432 Total operating expenses 5,099,048 2,608,042 Other income: Interest income 3,382 115 Change in fair value of share liability 150,527 — Total other income 153,909 115 Net loss $ (4,945,139 ) $ (2,607,927 ) Research and development expenses Year ended December 31, Period from September 13, 2021 (Inception) through December 31, 2022 2021 Direct costs: Mo-100 $ 6,645 $ 9,360 Indirect costs: Personnel-related costs 429,270 — License fees 495,503 — Consulting, facility and other expenses 342,118 32,250 Total research and development expenses $ 1,273,536 $ 41,610 Research and development expenses were $1,273,536 for the year ended December 31, 2022.
Added
The first installment of $500,000 was paid in November 2023. The remaining balance of $1,500,000 is due upon demand any time after October 31, 2024 and is expected to be paid in November 2024.
Removed
These expenses include $1,735,841 of expenses for past services for the issuance of warrants to purchase common shares, $513,227 in stock-based compensation, $127,500 of personnel-related costs, $137,209 of professional services and legal related fees, $21,025 in facility and related expenses and $31,630 in other corporate expenses.
Added
In March 2024, the Company’s 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.
Removed
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 estimated offering expenses.
Added
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, the Company received approximately $5.5 million from the issuance of 3,164,557 shares of common stock upon the exercise of warrants.
Removed
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.
Added
Exclusive Mo-100 License (superseded and replaced by new license (see “Omnibus Klydon License” below)).
Removed
Cash flows The following table summarizes our sources and uses of cash for each of the periods presented: Year ended December 31, Period from September 13, 2021 (Inception) through December 31, 2022 2021 Net cash provided by (used in): Operating activities $ (2,939,893 ) $ (577,692 ) Investing activities (4,473,164 ) (2,988,210 ) Financing activities 6,641,052 6,500,900 Net (decrease) increase in cash and cash equivalents $ (772,005 ) $ 2,934,998 67 Operating Activities.
Added
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. 54 Table of Contents Turnkey Contract.
Removed
Net cash used in operating activities was $577,692 for the period from September 13, 2021 (inception) through December 31, 2021, and was primarily due to our net loss of $2,607,927, adjusted for stock-based compensation expense of $513,227, the issuance of warrants to purchase common stock of $1,735,841 and a $218,833 change in our operating assets and liabilities. Investing activities.
Added
On April 4, 2023, the Company perfected its interests in the assets under the Acknowledgement of Debt Agreement, pursuant to which the Company 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.
Removed
Net cash provided by financing activities was $6,500,900 for the period from September 13, 2021 (inception) through December 31, 2021 and was comprised primarily of net proceeds of $6,454,000 from the sale and issuance of 20,652,500 shares of our common stock in 2021.
Added
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 ended on March 31, 2024.
Removed
As of December 31, 2022, we had commitments of approximately $5.6 million with Klydon for the ongoing development activities under the Turnkey Contract due within approximately 15 months. Klydon performed a portion of the services required under the Turnkey Contract; however, services were incomplete and many of the services were not completed within the time frame required.
Added
The Company intends to maintain the monthly extensions allowed in the lease. 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.
Removed
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.
Added
Lease for PET Labs Pharmaceutical operations . Commencing with our acquisition of PET Labs Pharmaceuticals 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 Pharmaceutical operations .
Removed
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.
Added
Commencing with our acquisition of PET Labs Pharmaceuticals 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.
Removed
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.
Added
The limit of cover is capable of being increased and extended by mutual agreement with the insurer. 55 Table of Contents Components of Results of Operations Revenue Effective with the acquisition of 51% of PET Labs Pharmaceuticals, the Company recognizes revenue from the sale of nuclear medical doses for PET scanning.
Removed
Klydon failed to complete its obligations under the Turnkey Contract by December 31, 2022, and the Company plans to perfect its interests in the assets as soon as practicable. In addition, we enter into contracts in the normal course of business with vendors for services and products for operating purposes.
Added
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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeEffects of Inflation Inflation generally affects us by increasing our cost of labor and research and development costs. We do not believe that inflation and changing prices had a significant impact on our results of operations for the period presented herein. 69
Biggest changeEffects of Inflation Inflation generally affects us by increasing our cost of labor and research and development costs. We do not believe that inflation and changing prices had a significant impact on our results of operations for the period presented herein. 61 Table of Contents
As of December 31, 2022 and 2021, we had no bank debt outstanding and are therefore not exposed to interest rate risk with respect to debt. We believe a hypothetical 100 basis point increase or decrease in interest rates during the period presented would not have had a material impact on our financial results.
As of December 31, 2023 and 2022, we had no bank debt outstanding and are therefore not exposed to interest rate risk with respect to debt. We believe a hypothetical 100 basis point increase or decrease in interest rates during the period presented would not have had a material impact on our financial results.
Item 7A. Quantitative and qualitative disclosures about market risk Interest Rate Risk As of December 31, 2022 and 2021, our cash consists of cash in readily available checking accounts. We do not hold any short-term investments. As a result, the fair value of our portfolio is relatively insensitive to interest rate changes.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Interest Rate Risk As of December 31, 2023 and 2022, our cash consists of cash in readily available checking accounts. We do not hold any short-term investments. As a result, the fair value of our portfolio is relatively insensitive to interest rate changes.

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