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Item 1. Business

2025-03-31 compared with 2024-04-10 · 189 added, 254 removed, 394 unchanged (53% of the section changed)

We are a development stage advanced materials company dedicated to the development of technology and processes that, if successful, will allow for the enrichment of natural isotopes into higher concentration products, which could be used in several industries.

Our proprietary technology, the Aerodynamic Separation Process (“ASP technology”), originally developed by Klydon Proprietary Ltd (“Klydon”), is designed to enable the production of isotopes used in several industries.

Our initial focus is on the production and commercialization of enriched Carbon-14 (“C-14”), Molybdenum-100 (“Mo-100”) and Silicon-28 (“Si-28”).

We have commissioned an isotope enrichment plant for the enrichment of C-14 located in Pretoria, South Africa, which will be ready for production upon the final installation of essential components.

We anticipate completion and commissioning of a multi-isotope enrichment plant in Pretoria, South Africa in mid-2024.

In addition, we have started planning additional isotope enrichment plants.

Our proprietary technologies, the Aerodynamic Separation Process (“ASP technology”) and Quantum Enrichment

technology (“QE technology”), are 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”), Silicon-28 (“Si-28”) and Ytterbium-176 (“Yb-176”).

We have completed the commissioning phase and are commencing commercial production at our C-14 and Si-28 enrichment facilities in Pretoria, South Africa.

We are in the process of commissioning and commencing commercial production at our Yb-176 enrichment facility in Pretoria, South Africa.

Our C-14 and Si-28 enrichment facilities utilize the ASP technology and our Yb-176 enrichment facility utilizes QE technology.

We expect our first three enrichment facilities to generate commercial product during 2025.

In addition, we have started planning additional isotope enrichment plants both in South Africa and in other jurisdictions, including Iceland and the United States.

We believe the C-14 we may produce using the ASP technology could be used in the development of new pharmaceuticals and agrochemicals.

We believe the Mo-100 we may produce using the ASP technology could have significant potential advantages for use in the preparation of nuclear imaging agents by radiopharmacies and others in the medical industry.

We believe the Si-28 we may produce using the ASP technology may be used to create advanced semiconductors and in quantum computing.

In addition, we are considering the future development of the ASP technology for the separation of Zinc-68, Xenon-129/136 for potential use in the healthcare end market, Germanium 70/72/74 for possible use in the semiconductor end market, and Chlorine -37 for potential use in the nuclear energy end market.

We are also developing Quantum Enrichment technology to produce enriched Ytterbium-176, Nickel-64, Lithium 6, Lithium7 and Uranium-235 (“U-235”).

Quantum enrichment is an advanced isotope enrichment technique that is currently in development that uses lasers.

We believe the Yb-176 we may produce using the QE technology may be used to create radiotherapeutics that treat various forms of oncology.

In addition, we are considering the future development of the ASP technology for the separation of Zinc-68 and Xenon-129/136 for potential use in the healthcare end market, Germanium 70/72/74 for potential use in the semiconductor end market, and Chlorine -37 for potential use in the nuclear energy end market.

We are also considering the future development of QE technology for the separation of Nickel-64, Gadolinium-160, Ytterbium-171, Lithium 6 and Lithium7.

We are currently pursuing an initiative to apply our enrichment technologies to the enrichment of Uranium-235 (“U-235”) in South Africa.

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 high-assay low-enriched uranium (HALEU)-fueled small modular reactors that are now under development for commercial and government uses.

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 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.

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.

In furtherance of our uranium enrichment initiative, in October 2024, we entered into a term sheet with TerraPower, LLC which contemplates the parties entering into definitive agreements pursuant to which TerraPower would provide funding for the construction of a HALEU production facility and agree to purchase all HALEU produced at the facility over a 10-year period after the planned completion of the facility in 2027.

In addition, in November 2024, we entered into a memorandum of understanding with The South African Nuclear Energy Corporation (Necsa), a South African state-owned company responsible for undertaking and promoting research and development in the field of nuclear energy and radiation sciences, to collaborate on the research, development and ultimately the commercial production of advanced nuclear fuels.

Subject to the receipt of funding and all required permits and licenses to begin enrichment of U-235 in South Africa, it is anticipated that the research, development and ultimate construction of a HALEU production facility will take place at South Africa’s main nuclear research center at Pelindaba in Pretoria.

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).

ASP Isotopes Guernsey Limited (the holding company of ASP Isotopes South Africa (Proprietary) Limited, Enlightened Isotopes (Pty) Ltd) and ASPI South Africa Asset Finance (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, Si-28 and Yb-176).

In September 2023, we formed a new subsidiary, Quantum Leap Energy LLC, which also has a subsidiary in the United Kingdom (Quantum Leap Energy Ltd), to focus on the development and commercialization of advanced nuclear fuels such as HALEU and Lithium-6.

ASP Isotopes UK Ltd is the owner of our technology.

In addition, in the fourth quarter of 2023, we entered into a strategic relationship with Pet Labs Pharmaceuticals Proprietary Limited (PET Labs) by acquiring a 51% ownership stake in PET Labs.

We anticipate this transaction will allow us to enter the downstream medical isotope production and distribution market.

In addition, we have a 51% ownership stake in PET Labs Pharmaceuticals Proprietary Limited (PET Labs), a South African radiopharmaceutical operations company focused on the production of fluorinated radioisotopes and active pharmaceutical ingredients, through which we entered the downstream medical isotope production and distribution market.

Our corporate structure and ownership of our subsidiaries is set forth in the chart below:

Recent Events and Key Milestones

Offering of Convertible Notes of Quantum Leap Energy LLC

On February 29, 2024, our wholly owned subsidiary, Quantum Leap Energy LLC (“QLE”), entered into a Convertible Note Purchase Agreement (the “Purchase Agreement”) with certain institutional and individual investors (collectively, the “Purchasers”), to issue and sell to the Purchasers convertible promissory notes of QLE (the “QLE Notes”) in an offering to non-U.S.

persons outside of the United States under Regulation S of the Securities Act of 1933, as amended (the “Securities Act”).

The closing of the offering of QLE Notes occurred on March 7, 2024 and resulted in gross proceeds to QLE of approximately $20.5 million.

We intend to use the net proceeds from the QLE Notes offering for planning, development and construction of QLE’s laser enrichment production facilities and for other general corporate purposes.

We engaged Ocean Wall Limited (the “Placement Agent”) to act as QLE’s sole placement agent in connection with the offering of QLE Notes, pursuant to a placement agency agreement (the “Placement Agent Agreement”), dated as of February 29, 2024, between the Company, QLE and the Placement Agent.

Pursuant to the Placement Agent Agreement, QLE agreed to pay the Placement Agent a fee equal to 5.0% of the gross proceeds received by QLE from the sale of QLE Notes, which was paid 50% in cash and 50% in the form of a convertible promissory note in substantially the same form and with substantially the same terms as the QLE Notes.

In connection with the offering of QLE Notes, on February 29, 2024, QLE and the Purchasers entered into a registration rights agreement (the “Registration Rights Agreement”).

Under the Registration Rights Agreement, all units or shares of QLE common equity issuable upon conversion of the QLE Notes will be deemed “Registrable Securities.” Under the Registration Rights Agreement holders of the QLE Notes have been granted certain long-form and short-form demand registration rights with respect to the Registrable Securities, including the right to demand an initial public offering (IPO) if QLE has not gone public within five years of the date of the agreement.

In addition, holders of the QLE Notes have been granted piggyback registration rights with respect to the Registrable Securities.

Certain cash penalties will apply to QLE in the event of registration failures, as described in the Registration Rights Agreement.

Intercompany Agreements between ASP Isotopes Inc.

and Quantum Leap Energy LLC

In anticipation of the closing of the offering of QLE Notes, the Company:

(1) caused ASP Isotopes UK Limited to enter into a License Agreement, dated as of February 16, 2024, among ASP Isotopes UK Limited, as licensor, and QLE and Quantum Leap Energy Limited (QLE’s UK subsidiary), as licensee, pursuant to which, among other things, the licensee has licensed from the Company the rights to technologies and methods used to separate Uranium-235 and Lithium-6 (including but not limited to the quantum enrichment and ASP technologies) in exchange for a royalty payment in the amount of 10% of QLE revenues (the “License Agreement”);

(2) entered into an EPC Services Framework Agreement, dated as of February 16, 2024, with QLE, pursuant to which, among other things, the Company has agreed to provide services for the engineering, procurement and construction of one or more turnkey Uranium-235 and Lithium-6 enrichment facilities in locations to be identified by QLE and owned or leased by QLE, and to commission, start-up and test each such facility, in each case subject to the receipt of all applicable regulatory approvals, permits, licenses, authorizations, registrations, certificates, consents, orders, variances and similar rights (the “EPC Services Agreement”);

and (3) effective as of February 16, 2024, assigned to QLE certain existing memoranda of understandings between the Company and certain small modular reactor companies.

Share Purchase Agreement relating to PET Labs

On October 31, 2023, we entered into a Share Purchase Agreement with Nucleonics Imaging Proprietary Limited, a company incorporated in the Republic of South Africa (the “Seller”), relating to the purchase and sale of ordinary shares in the issued share capital of Pet Labs Pharmaceuticals Proprietary Limited, a company incorporated in the Republic of South Africa (“PET Labs”).

PET Labs is a South African radiopharmaceutical operations company, dedicated to nuclear medicine and the science of radiopharmaceutical production.

Under the Purchase Agreement, we have agreed to purchase from the Seller 51 ordinary shares in the issued share capital of PET Labs (the “Initial Sale Shares”) (representing 51% of the issued share capital of PET Labs) and we have an option to purchase from the Seller the remaining 49 ordinary shares in the issued share capital of PET Labs (the “Option Shares”) (representing the remaining 49% of the issued share capital of PET Labs).

We agreed to pay to the Seller an aggregate of $2,000,000 for the Initial Sale Shares, of which aggregate amount $500,000 was paid on the completion of the sale of the Initial Sale Shares and $1,500,000 is payable on demand after one calendar year from the agreement date.

If we exercise our option to purchase the Option Shares (which option is exercisable from the agreement date until January 31, 2027, provided that the Initial Sale Shares have been paid for in full), we have agreed to pay an additional $2,200,000 for the Option Shares.

Company-Owned ASP Plants

In October 2021 and July 2022, we acquired two incomplete ASP plants in Pretoria, South Africa.

In September 2021, we obtained the required licenses from the nuclear regulators, including the Non-proliferation Council of South Africa, to complete construction of the plants.

We have commissioned the isotope enrichment plant for the enrichment of C-14, 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.

As of December 31, 2023, we employed 47 persons at this facility.

Supply Contracts

In July 2023, we entered into a supply agreement with a U.S.

customer to supply a highly enriched metal.

This contract has an annual sales value of $9 million, which we expect to realize during 2024.

In September 2023, we received a prepayment of approximately $900,000 for this contract.

In July 2023, we entered into a Memorandum of Understanding (MOU) with a U.S.

Small Modular Reactor company to supply HALEU.

The MOU focused on formalizing a collaboration to develop a HALEU production facility with financial support from the customer.

In June 2023, we entered into a multi-year supply agreement with a Canadian Customer for the supply of Carbon-14, which will be produced from our facility that was completed in March 2023.

The customer will supply carbon-14 in the form of carbon-dioxide gas.

We will then convert the carbon dioxide gas into methane under a chemical converting contract entered in June 2023.

We will then enrich the methane to greater than 85% C-14 under a tolling agreement, also entered in June 2023.

Finally, we will convert the enriched methane back into enriched carbon dioxide under a chemical converting contract.

The tolling agreement has a minimum “take or pay” amount of approximately $2.5 million per year, supported by a bank letter of guarantee.

In September 2023, we entered into a Memorandum of Understanding (MOU) with the same customer to separate Deuterium and Tritium currently stored at nuclear sites within Canada.

The timing and commercial implications of this MOU are subject to future agreement between the parties.

In November 2022, our wholly owned subsidiary, ASP Isotopes Guernsey Limited (“ASP Guernsey”), entered into an Amended Agreement with Klydon (Proprietary) Ltd (“Klydon”) related to a 25-year supply agreement for up to $27 million per annum of highly enriched Molybdenum-100 entered into by and between Klydon and Beijing BRICEM Science and Technology Co.

(“Bricem”) in August 2021 (the “August 2021 Purchase Agreement”).

Under the Amended Agreement, Klydon assigned all of its rights under the August 2021 Purchase Agreement to ASP Guernsey.

As of December 31, 2023, we managed our operations as a single segment, specialist isotopes and related services.

Beginning in 2024, primarily as a result of the increased business activities of our subsidiary, Quantum Leap Energy LLC, we will have two operating segments:

Beginning in 2024, primarily as a result of the increased business activities of our subsidiary, Quantum Leap Energy LLC, we manage our operations as two operating segments:

(i) nuclear fuels, and (ii) specialist isotopes and related services:

• Nuclear Fuels.

This segment is focused on research and development of technologies and methods used to produce high-assay low-enriched uranium (HALEU) and Lithium-6 for the advanced nuclear fuels target end market.

This segment is focused on research and development of technologies and methods used to produce HALEU and Lithium-6 for the advanced nuclear fuels target end market.

• Specialist Isotopes and Related Services.

This segment is focused on research and development of technologies and methods used to separate high-value, low-volume isotopes (such as C-14, Mo-100 and Si-28) for highly specialized target end markets other than advanced nuclear fuels, including pharmaceuticals and agrochemicals, nuclear medical imaging and semiconductors, as well as services related to these isotopes, and this segment includes PET Labs.

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 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.

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.

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.

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.

Klydon was also 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 enrichment plant complied with international laws and guidelines.

In July 2022, we acquired a pilot plant previously used by Klydon to enrich Silicon-28 up to an abundance of 96.6%.

This enriched Silicon-28 was then used for experimental work in the solar and electronics industries.

Since then we have been refurbishing and upgrading the facility to produce commercial quantities of Carbon-14.

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%.

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 intend to demonstrate the capability to produce C-14, Mo-100, and Si-28 at a scale that can support anticipated customer demand for all three isotopes.

Commence commercial production at each of our enrichment facilities in Pretoria, South Africa.

We commenced commercial production of enriched isotopes at our ASP enrichment facilities located in Pretoria, South Africa during the first quarter of 2025.

Our first ASP enrichment facility is designed to enrich light isotopes, such as Carbon-14.

The second ASP enrichment 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 Silicon-28 and Molybdenum-100.

We anticipate shipping the first commercial batches of enriched Carbon-14 in mid-2025 and enriched Silicon-28 during the second quarter of 2025.

We are in the process of commissioning and commencing commercial production at our third enrichment facility, a QE technology facility, which will be our first laser-based enrichment plant and is expected to be able to achieve a 99.75% enrichment for Ytterbium-176.

We expect to commence commercial production of Ytterbium-176 during the second quarter of 2025.

Demonstrate the capability to produce commercial quantities of enriched C-14, Si-28 and Yb-176 using the ASP and QE technologies and capitalize on the opportunity to solve many supply chain challenges that currently exist.

We intend to demonstrate the capability to produce C-14, Si-28 and Yb-176 at a scale that can support anticipated customer demand for all three isotopes.

Historically, Russia has been the sole supplier of C-14, which is used as a tracer in the development of new pharmaceuticals and agrochemicals.

The supply chain has been inherently fragile with inconsistent service.

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.

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.

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.

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.

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.

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.

Mo-100 is stable (non-radioactive) and, therefore, does not have the same handling and shipping requirements.

We have received an initial supply of feedstock from our customer and have started the enrichment of C-14.

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.

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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 have already seen significant interest from potential offtake customers for the isotopes that we intend to produce.

In November 2022, we entered a 25-year supply agreement for highly enriched Mo-100 with BRICEM (Beijing Research Institute of Chemical Engineering Metallurgy).

The contract has a value of up to $27.0 million per annum.

In July 2023, we entered into a supply agreement for a highly enriched metal with a U.S.

This contract has an annual sales value of $9 million.

We have had or are currently in active dialogue with many other potential customers who could use the entire anticipated annual capacity of an initial plant.

Enriched Ytterbium-176 can be irradiated to produce Lutetium-177, which has been identified for use in oncology, particularly in targeted radionuclide therapy ("TRT").

TRT is used in the treatment of various types of cancers, including neuroendocrine tumors, prostate cancer, and bone metastases, among others.

There are numerous ongoing clinical trials studying Lutetium-177 PSMA-617 in patients with metastatic castration-resistant prostate cancer.

We have obtained all necessary licenses within South Africa to proceed with the commercial development of this product.

Continue identifying potential offtake customers and strategic partners for our enriched isotopes.

We have significant interest from potential offtake customers for the enriched isotopes that we intend to produce.

In June 2023, we entered into a tolling agreement with a Canadian customer for the entire capacity of our C-14 production facility.

In April and June 2024, we entered into purchase orders with a US semiconductor company and a global industrial gas company for the supply of highly enriched silicon-28.

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.

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.

We intend to identify additional potential customers and strategic partners for isotopes that we may produce at our existing and planned enrichment facilities.

Demonstrate the capability to produce high-assay low-enriched uranium (HALEU) using our enrichment technologies 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.

We plan to begin research and development for the enrichment of uranium to demonstrate our capability to produce HALEU using Quantum Enrichment technology.

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There is currently no commercial production of HALEU in the United States.

We are currently conducting a feasibility study with respect to constructing an enrichment facility in either South Africa or the United Kingdom.

We are currently in discussions with both the UK Atomic Energy Authority, UK Office of Nuclear Regulation (ONR), Nuclear Energy Corporation of South Africa (NECSA) as well as the South African Department of Mineral Resources and Energy (DMRE) pursuing an approval to conduct nuclear research in either of these countries.

We would need to obtain approval from one of these regulatory bodies in order to proceed with our nuclear research.

Alongside our talks with regulators, we are currently discussing with multiple counterparties involved in the SMR space to produce HALEU to further their research efforts and, later, their commercial endeavors.

Initiate the R&D efforts of the Quantum Enrichment Process via the Company’s subsidiary, Enlightened Isotopes, for the enrichment of Ytterbium 176

We anticipate furthering our commercial development of the Quantum Enrichment process through the development of enriching Ytterbium-176 for the medical oncology market.

Enriched Ytterbium-176 can be irradiated to produce Lutetium-177, which has been identified for use in oncology, particularly in targeted radionuclide therapy (TRT).

TRT is used in the treatment of various types of cancers, including neuroendocrine tumors, prostate cancer, and bone metastases, among others.

There are 11 ongoing clinical trials studying Lutetium-177 PSMA-617 in patients with metastatic castration-resistant prostate cancer.

We have obtained all necessary licenses within South Africa to proceed with the commercial development of this product.

We anticipate that this continued R&D and later clinical applicability will help to refine the Quantum Enrichment process for broader commercial applicability in the future.

Demonstrate the effectiveness and value in the use of Mo-100 and other stable isotopes in the downstream radiopharmacy market, after acquiring 51% ownership interest in PET Labs, the leading radiopharmacy in South Africa.

We are currently conducting a feasibility study with respect to constructing an enrichment facility in South Africa, the U.S.

and the United Kingdom.

We are currently in discussions with nuclear regulatory authorities in multiple countries, including the UK Atomic Energy Authority, UK Office of Nuclear Regulation (ONR), Nuclear Energy Corporation of South Africa (NECSA), the South African Department of Mineral Resources and Energy (DMRE), United States Department of Energy (DOE) and the United States Nuclear Regulatory Commission (NRC), regarding the construction of a nuclear fuel plant in these countries.

We intend to progress our uranium enrichment initiative first in South Africa.

In November 2024, we entered into a Memorandum of Understanding ("MOU") with The South African Nuclear Energy Corporation (Necsa) to collaborate on the research, development and ultimately the commercial production of advanced nuclear fuels.

Necsa is a state-owned company established by the Republic of South Africa Nuclear Energy Act in 1999 with a mandate to undertake and promote research and development in the field of nuclear energy and radiation sciences.

Necsa is also responsible for processing source material, and co-operating with other institutions on nuclear and related matters.

The proposed structure under discussion for the delivery of the objectives of the MOU contemplates the formation of a new entity in South Africa with a board of directors consisting of at least two representatives from ASPI and Necsa.

It is anticipated that the research, development and ultimate construction of a HALEU production facility will take place at South Africa’s main nuclear research center located at Pelindaba, Pretoria.

Alongside our talks with regulators, we are currently discussing with multiple counterparties engaged in the development of SMR reactors to produce HALEU to further their research efforts and future commercial endeavors.

We have entered into two MOUs with US-based SMR companies for the supply of HALEU.

For example, our term sheet with TerraPower, LLC which contemplates the parties entering into definitive agreements pursuant to which TerraPower would provide funding for the construction of a HALEU production facility and agree to purchase all HALEU produced at the facility over a 10-year period after the planned completion of the facility in 2027.

Demonstrate the effectiveness and value in the use of stable isotopes in the downstream radiopharmacy market, after acquiring 51% ownership interest in PET Labs, the leading radiopharmacy in South Africa.

This investment will address the radioisotope needs of South Africa as well as certain neighboring countries.

Under the terms of a Share Purchase Agreement, dated October 30, 2023, we acquired 51% of the issued share capital of PET Labs Pharmaceuticals Proprietary Limited, a company incorporated in the Republic of South Africa (“PET Labs”).

PET Labs is a South African radiopharmaceutical operations company, dedicated to nuclear medicine and the science of radiopharmaceutical production.

PET Labs is a South African radiopharmaceutical operations company, dedicated to nuclear medicine and the science of radiopharmaceutical

As a result of this transaction, we entered into the downstream radiopharmacy market that we intend to service in the future.

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Our Strengths

ASP technology initially developed by Klydon and further developed by ASPI (S.Africa).

To date, the scientists at Klydon have constructed two ASP plants for the enrichment of oxygen-18 and silicon-28 in Pretoria, South Africa, which were commissioned in October 2015 and July 2018, respectively.

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.

ASP technology initially developed by Klydon and further developed by ASP Isotopes Inc..

The aerodynamic separation technique has its origins in the South African uranium enrichment program in the 1980s, and the ASP technology had been developed during the last two decades by the scientists at Klydon.

The scientists at Klydon had constructed two ASP plants for the enrichment of oxygen-18 and silicon-28 in Pretoria, South Africa, which were commissioned in October 2015 and July 2018, respectively.

While the technology has not yet been used to enrich either 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.

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.

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.

To date, we have not produced commercial quantities of any enriched isotopes and we have not demonstrated the ability to produce any enriched isotopes in commercial quantities using ASP technology.

Extensive Research and Development Experience in Aerodynamic Separation Technology and Processes.

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.

Klydon had spent the last two decades and tens of millions of dollars developing the aerodynamic separation technique used in the ASP technology, generating critical trade secrets.

We believe our competitors lag behind us in terms of the technical expertise of our senior management and the know-how contained in the aerodynamic separation technique and will be unable to replicate the expected results of the ASP technology, even as we expect to continue to improve the existing technology and processes.

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.

ASP technology is a flexible platform with the potential to produce many different isotopes that could serve a large addressable markets.

ASP technology is a flexible platform with the potential to produce many different isotopes that could serve large addressable markets.

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.

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We believe that, assuming receipt of required regulatory approvals and governmental permits, the ASP technology can be deployed quickly and with a relatively minimal capital cost, to enrich many different isotopes that we believe consumers require both today and in the future in end markets such as healthcare, technology and energy.

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.

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.

QE technology has the potential to produce many different enriched isotopes that cannot be enriched using ASP Technology.

Our QE technology is potentially a highly efficacious enrichment technology with the greatest enrichment factor of any enrichment process.

In laboratory tests our scientists have achieved enrichment factors of up to 678 which compares to enrichment factors of less than 50 for AVLIS and 1.15 for a traditional centrifuge.

QE can also be used to enrich elements where there is no known gaseous form of that element.

We have completed the construction of our first QE enrichment facility in Pretoria, South Africa where we intend to produce 99.75% enriched Ytterbium-176.

Experienced team

Our board of directors and advisers have specialized expertise in isotope enrichment, R&D, technology, plant development, and manufacturing.

Einar Ronander, who serves as Chief Scientific Adviser to our board of directors, and Dr Hendrik Strydom, one of our directors, previously co-founded Klydon.

The scientific team at Klydon combined has decades of experience in research and development of isotope enrichment and amassed deep knowledge in the field.

Our board of directors and advisers have specialized expertise in isotope enrichment, research and development, technology, plant development, and manufacturing.

Dr Hendrik Strydom, our chief technology officer and one of our directors, previously co-founded Klydon and has over 40 years of experience in isotope enrichment and laser design and manufacture.

The scientific team that joined our company from Klydon combined has decades of experience in research and development of isotope enrichment and amassed deep knowledge in the field.

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.

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The atomic number of carbon is 6, which means that every carbon atom has 6 protons so that the neutron numbers of these isotopes are 6, 7, and 8 respectively.

There are 23 isotopes of Silicon, all of which have 14 protons and 14 neutrons but have between 8 and 30 neutrons.

There are 23 isotopes of Silicon, all of which have 14 protons and between 8 and 30 neutrons.

The table below shows a selection of those isotopes.

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Selected isotopes of Uranium

Isotopic Mass

Methods of Separation and Enrichment of Isotopes

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During the last century, a number of different methods have been developed to separate and enrich isotopes.

The current separation or enrichment processes are based either on the atomic weight of the isotope, small differences in chemical reaction rates produced by different atomic weights or are based on properties not directly connected to atomic weight such as nuclear resonances.

The current separation or

enrichment processes are based either on the atomic weight of the isotope, small differences in chemical reaction rates produced by different atomic weights or are based on properties not directly connected to atomic weight such as nuclear resonances.

Often performed on gases, but also on liquids, the diffusion method relies on the fact that in thermal equilibrium, two isotopes with the same energy will have different average velocities.

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The dense (heavier) molecules move towards the wall and the lighter ones remain close to the center.

The centrifuge consists of a rigid body rotor rotating at full period at high speed.

The centrifuge consists of a rigid body rotor rotating at high speed.

Concentric gas tubes located on the axis of the rotor are used to introduce feed gas into the rotor and extract the heavier and lighter separated streams.

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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.

The input of each centrifuge is the output (light) of the previous centrifuge and the input of the following stage.

This produces an almost pure light fraction from the output (light) of the last centrifuge and an almost pure heavy fraction from the output (heavy) of the first centrifuge.

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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”.

ASP technology is proprietary technology originally 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 original technology was highly energy consuming and was not able to compete on an economic basis with other methods of isotope separation.

The innovative development of the ASP technology over the past 18 years has culminated in a more advanced separation device that we believe can compete on a commercial scale with other methods of isotope separation.

The innovative development of the ASP technology over the past two decades has culminated in a more advanced separation device that we believe can compete on a commercial scale with other methods of isotope separation.

The ASP separation device separates both gas species and isotopes in a volatile state via an approximate flow pattern as shown below.

Gas flow pattern inside ASP separation device.

The ASP enrichment process uses an aerodynamic technique similar to a stationary wall centrifuge.

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• 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 operates very efficiently at molecular masses below 100 atomic mass units, unlike other separation processes which are more efficient at 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.

• With the right material choice ASP can handle even the most corrosive gases.

• ASP can separate any isotopes that have a gaseous or volatile chemical compound.

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• FX is the feed into the product stream of an adjoining stage.

FY is the feed into the tails stream of an adjoin

• FY is the feed into the tails stream of an adjoining stage.

Each stage in the cascade is operated in one of two configurations:

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ASP Technology In Use

The scientists at Klydon had constructed two ASP plants for the enrichment of oxygen-18 and silicon-28 in Pretoria, South Africa, which were commissioned in October 2015 and July 2018, respectively.

We believe the success of the enrichment of oxygen-18 and silicon-28 has demonstrated the efficacy and commercial scalability of the ASP technology.

We are currently constructing two enrichment plants, which, if successful, will be able to produce a range of isotopes, including but not limited to C-14, Mo-100 and Si-28.

We have completed the commissioning phase and are commencing commercial production at our Carbon-14 enrichment facility and our “multi-isotope” enrichment plant, which has its initial production run designated for enriched Silicon-28.

We anticipate shipping the first commercial batches of enriched Carbon-14 in mid-2025 and enriched Silicon-28 during the second quarter of 2025.

Quantum Enrichment Technology

Isotopes of every element have unique spectroscopic “signatures” defined by the electromagnetic radiation or “light” absorbed by their atoms from electron transitions.

QE separates two isotopes by taking advantage of the slight differences in the transition energy between two isotopes.

This method is described as a “quantum mechanics” method.

In principle, Quantum Enrichment can separate isotopes of most elements, achieving desired enrichment in a single step.

The atomic vapor laser isotope separation method (“AVLIS”), which is the forerunner of the QE technology, proposed by Letokhov et al.

(1977)], has been in progress during the last 45 years.

The main efforts during these years were devoted to attempts to get a nuclear fuel for industrial nuclear reactors.

Laser based isotope selective excitation followed by ionization and collection using electro-magnetic fields offers one of the most efficient techniques for isotope enrichment/denaturing.

In the laser isotope separation (LIS) process, atoms of the target isotope in vapor stream get ionized after interaction with a tuned laser beam.

Ionized atoms are separated from the main vapor stream by electrostatic field.

In our Quantum Enrichment facility, a resistive heating system has been designed to evaporate Ytterbium by sublimation at temperature in the range of 500 oC to 700 oC to provide adequate Yb vapor atoms for laser interaction.

During the process, the vapor jet comes out from the source to reach sonic speed at the exit plane, then it expands supersonically into vacuum.

A thickness monitor reading gives average arrival rate of atomic vapor in terms of thickness per unit time (A/sec).

At the heart of laser-based isotope enrichment lies a proficient multi-step isotope selective photoionization scheme giving optimum selectivity and product yield.

Yb has two valence electrons and very few transitions originating from its ground level.

Its ionization potential is 6.254eV.

This necessitates selection of a three-step photoionization scheme for selective photoionization of its isotopes using the available laser infrastructure supporting visible range of spectrum.

Dye lasers offer the best suitable choice for enrichment process as they suffice to all the requirements of the process like wavelength tunability, high power generation at high repetition rates.

Diode Pumped Solid State Green Lasers (DPSSGLs) with ~3GHz line width in multi-mode operation are used to pump the dye lasers.

The temporal delays between the pulses from the three lasers were arranged to ensure their sequential arrival in the interaction region with delay of several ns.

We believe Quantum Enrichment technology is superior to AVLIS with optimized spectroscopy utilization and superior laser beam shaping.

The key advantages include:

• high selectivity,

• suitability for vaporized metals,

• relatively low capital cost, and

• modular design which limits scalability risk.

Nuclear Medicine

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110 minutes), so they must be produced close to their point of use.

Technetium-99m (Tc-99m)–the most widely used radioisotope in Nuclear Imaging

Tc-99m is used in approximately 80 percent of all nuclear medicine procedures performed worldwide each year.

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.

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.

Because Tc-99m has a half life of just 6 hours, it cannot be stored or shipped long distances and it is currently produced using a technetium generator, which contains Molybdenum-99 which has a half-life of about 66-hours.

In the reactor, Mo-99 decays to Tc-99m by emitting a beta particle (an electron).

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.

Technetium generators are systems that store Mo-99 and allow its decay product, Tc-99m, to be recovered for use.

Most technetium generators are designed to be used with high-specific-activity Mo-99 (>1,000 Ci/g) produced by U-235 fission.

The generator consists of an alumina (Al2O3) column having the diameter of a large pencil along with associated filters and tubing for obtaining Tc-99m.

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.

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.

Tc-99m generators are typically shipped to Tc-99m suppliers within a day of their manufacture.

Generators are shipped in regulatory-compliant boxes.

The delivery methods can be air, ground, or a combination of both depending on customer location and contracted transportation network.

The Mo-99 Market

The global medical community depends on a reliable supply of the radioisotope Mo-99 for nuclear medical diagnostic procedures.

As previously described, Mo-99’s decay product, technetium-99m (Tc-99m), is used in over 40,000 medical procedures in the United States each day to diagnose heart disease and cancer, to study organ structure and function, and to perform other important medical applications.

In 2020, it is estimated (by Future Market Insights Inc, a global market research firm), that the Molybdenum 99 market generated revenues of approximately $3.8 billion.

North America accounted for almost half of the Mo-99 demand.

Approximately 62% of Mo-99 was used in hospitals while approximately 38% of Mo-99 use was in diagnostic centers.

The Mo-99 Supply Chain

The global Mo-99 supply chain is inherently fragile.

The fragility stems primarily from two factors:

Mo-99 and its daughter isotope Tc-99m have short half-lives (66 and 6 hours, respectively) and therefore cannot be stockpiled.

These radioisotopes need to be produced and delivered to the supply chain on a weekly or more frequent basis.

Global supply of Mo-99 currently relies on a small number of aging reactors worldwide and a small number of suppliers.

The current Mo-99 supply chain is also lengthy and prone to interruption throughout its course.

Recent Government Efforts to Increase Mo-99 Availability

Given the regular supply side shortages in the Mo-99 market, and widely anticipated shutdown of many of the current reactors, there is considerable focus on alternative methods of Tc-99m production.

In 2012, Congress passed the American Medical Isotopes Production Act (AMIPA), which directed the National Nuclear Security Administration (NNSA) to establish a technology-neutral program to support the establishment of domestic supplies of Mo-99 without the use of HEU.

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.

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.

(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.

Naturally occurring molybdenum contains approximately 9.74% molybdenum-100.

When highly enriched so that the Molybdenum contains >95% of the Mo-100 isotope, it can be used to produce either Mo-99 or Tc-99 via either photon-induced transmutation of Mo-100 into Mo-99 or via proton bombardment of Mo-100 into Tc-99m.

The use of particle accelerators for the production of Mo-99 and direct production of Tc-99m has been studied extensively and the use of a particle accelerator conveys certain advantages and disadvantages.

Accelerators produce ion beams and accelerate ions to higher energies by using oscillating electromagnetic fields.

The accelerated particle beams have the capability of irradiating specific targets to produce Mo-99 and/or Tc-99m.

We intend to offer our Mo-100 to customers that may convert Mo-100 into Mo-99 or Mo-100 directly into Tc-99m.

We believe that customers will be able to convert Mo-100 into Mo-99 using a cyclotron or a linear accelerator.

The Mo-99 can then be converted into Tc-99m using a technetium generator.

The technetium generators that are currently available will likely require some modifications in order to use the Mo-99 that has been produced via a cyclotron or a linear accelerator.

These modifications will likely mean that new generator will require approval by healthcare regulators such as the Food and Drug Administration (FDA) in the United States and the European Medicines Agency (EMA) in Europe.

Customers may convert Mo-100 directly into Tc-99m using a cyclotron, which would eliminate the need for a technetium generator.

To date, only one healthcare regulator (Health Canada) has approved the use of Tc-99m that has been directly produced from Mo-100 in a low powered cyclotron.

We believe it is likely that healthcare regulators in other countries will also require clinical data to support the use of Tc-99m that is produced directly from Mo-100.

Radionuclide therapy can be used to treat conditions such as hyperthyroidism, thyroid cancer, prostate cancer, skin cancer and blood disorders.

In nuclear medicine therapy, the radiation treatment dose is administered internally (e.g.

intravenous or oral routes) or externally direct above the area to treat in form of a compound (e.g.

in case of skin cancer).

The radiopharmaceuticals used in nuclear medicine therapy emit ionizing radiation that travels only a short distance, thereby minimizing unwanted side effects and damage to noninvolved organs or nearby structures.

Most nuclear medicine therapies can be performed as outpatient procedures since there are few side effects from the treatment and the radiation exposure to the general public can be kept within a safe limit.

ASP Technology for Carbon-14 Enrichment

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In June 2023, we entered into a multi-year supply agreement with a Canadian Customer for the supply of Carbon-14, which will be produced from our facility that was completed in March 2023.

The customer will supply carbon-14 in the form of carbon-dioxide gas.

The customer agreed to supply carbon-14 in the form of carbon-dioxide gas as feedstock.

We will then convert the carbon dioxide gas into methane under a chemical converting contract entered in June 2023.

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Finally, we will convert the enriched methane back into enriched carbon dioxide under a chemical converting contract.

We have received an initial supply of feedstock from our customer and have started the enrichment of C-14.

The tolling agreement has a minimum “take or pay” amount of approximately $2.5 million per year, supported by a bank letter of guarantee.

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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), a gaseous compound that contains silicon.

Quantum computers are expected to be thousands or millions of times more powerful than the most advanced of today’s conventional computers, opening new frontiers and opportunities in many industries, including medicine, artificial intelligence, cybersecurity, global logistics and global financial systems.

We have entered into two purchase agreements for highly enriched Silicon-28.

The first is with a U.S.

semiconductor company.

The second is with a global industrial gas company.

Quantum Enrichment Technology for Ytterbium-176 Enrichment

Ytterbium-176 (“Yb-176”) is a stable isotope of ytterbium, that is commonly used to produce Lutetium-177 (“Lu-177”).

Lu-177 is a medical isotope used in targeted radionuclide therapy for treating neuroendocrine tumors and prostate cancer.

Lu-177 is a medium energy beta emitter (Eβ = 0.149 keV).

It is quite damaging, but only deposits its energy within a short range, decreasing collateral damaging effects to normal tissues.

It has a half-life of 6.7 days and is compatible with various targeting agents, ranging from short peptides to large biomolecules.

The half-life also allows for transport over longer distances and on-site preparation of pharmaceuticals.

Lu-177 can be produced in two ways, either directly by irradiation of lutetium-176 (“Lu-176”) or indirectly by irradiation of ytterbium-176 (“Yb-176”).

The irradiation of Lu-176 leads directly to Lu-177, while irradiation of Yb-176 will lead to the production of the short-lived intermediate radioisotope ytterbium-177 (“Yb-177”), which decays to Lu-177.

Using the direct method in which Lu-176 is irradiated, the Lu-177 is produced in a matrix (‘carrier’) of Lu-176, because only part of the Lu-176 is converted to Lu-177.

This form of Lu-177 is called carried added.

Also, the direct method leads to small amounts of the radioactive impurity Lu-177m.

This lowers the radionuclide purity of Lu-177 and complicates the radiation protection and disposal of Lu-177 waste in hospitals.

The advantage of the direct production route is that it can create Lu-177 in high quantities by irradiating as little as 1 mg of Lu-176.

On the other hand, the desired Lu-177 cannot be chemically isolated from the target material Lu-176, as they are isotopes of the same element.

This is problematic as the lutetium administered to the patient should preferably only contain the ‘useful’ Lu-177.

If it contains largely ‘useless’ Lu-176, the effectiveness of the treatment will diminish.

The indirect method, where ytterbium-176 is irradiated, does not generate this extra isotope.

The Lu-177 is produced in a matrix of ytterbium, which is separated from the lutetium by a chemical process after irradiation.

Therefore, it leads to Lu-177 no carrier added.

In the indirect production route, Lu-177 differs from the target material Yb-176 and can be isolated chemically in no carrier added (“n.c.a.”) form.

Quantum Enrichment Technology for Uranium Enrichment

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The concentration of U-235 in natural uranium is only 0.711% by weight.

Most commercial nuclear power reactors require LEU fuel with a U-235 concentration greater than natural uranium and up to 5% by weight.

Future reactor designs currently under development will likely require higher U-235 concentration levels of up to 20%.

Most commercial nuclear power reactors require Low Enriched Uranium (“LEU”) fuel which has a U-235 concentration greater than natural uranium and up to 5% by weight.

Future reactor designs currently under development will likely require higher U-235 concentration levels of greater than 5% and below 20% (referred to as HALEU – High Assay Low Enriched Uranium).

Uranium enrichment is the process by which the concentration of U-235 is increased (see discussion on HALEU demand below).

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Natural, or unenriched, uranium is removed from the earth in the form of ore and then crushed and concentrated.

• Conversion .

Uranium ore concentrates (“UO”) are combined with fluorine gas to produce uranium hexafluoride (“UF”), a solid at room temperature and a gas when heated.

UF is shipped to an enrichment plant.

• Enrichment .

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.

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As the world transitions to a decarbonized electric grid, society is gradually decreasing its reliance on fossil fuels and increasing its reliance on “clean energy”.

There appears to be bipartisan support for the growth of nuclear energy and the Biden Administration has identified carbon-free nuclear power as an essential part of achieving a net-zero CO2 economy by 2050.

There appears to be bipartisan support for the growth of nuclear energy.

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.

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The United States leads the world in technology innovation with more developers of advanced reactors than any other country.

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.

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.

SMRs, which can produce a large amount of low-carbon electricity, are:

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Some SMRs are designed to operate for up to 30 years without refueling.

SMRs are under construction or in the licensing stage in Argentina, Canada, China, Russia, South Korea and the United States of America.

SMRs are under construction or in the licensing stage in many countries including Argentina, Canada, China, Russia, South Korea and the United States of America.

Within the last five years significant legislation supporting the development and deployment of advanced reactors has been enacted:

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SMRs will require a different grade of enriched Uranium

Many advanced reactors, including the majority of the Advanced Reactor Demonstration Program awardees, will require High Assay Low Enriched Uranium (HALEU), and fuel forms very different from those manufactured for the current Light Water Reactors (LWRs).

Many advanced reactors, including the majority of the Advanced Reactor Demonstration Program awardees, will require HALEU, and fuel forms very different from those manufactured for the current Light Water Reactors (LWRs).

For example, the current generation of LWRs uses fuel enriched to less than 5% uranium-235.

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has mining, conversion, enrichment, fabrication, and transportation capability.

However, the infrastructure for producing and utilizing HALEU, in particular enrichments above 10%, is not established in the U.S.

However, the infrastructure for

producing and utilizing HALEU, in particular enrichments above 10%, is not established in the U.S.

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:

In 2020, the 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.

Today, it is estimated that the companies selected for the demonstration pathway will require HALEU for their reactors beginning in 2024 to support fuel fabrication ahead of reactor startup.

Today, it is estimated that the companies selected for the demonstration pathway will require HALEU for their reactors beginning in the late 2020's to support fuel fabrication ahead of reactor startup.

In addition, one of the companies under Pathway 2:

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• 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.

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.

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Our innovative isotope enrichment process has a number of advantages over traditional gas centrifuges and other novel approaches currently being explored by other companies:

cheaper in Capex, faster in construction, more flexible in design and location.

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.

cheaper in capital expenditures, faster in construction, more flexible in design and location.

We estimate that the capital cost of constructing a Quantum Enrichment technology 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.

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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.

The table below represents management’s estimated comparison of the Quantum Enrichment process with a traditional gas centrifuge.

Quantum Enrichment Plant

The table below represents management’s estimated comparison of the Quantum Enrichment technology with a traditional gas centrifuge.

Quantum Enrichment Technology Plant

Gas Centrifuge

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* 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.

We received a manufacturing permit for this facility from the South African Department of Mineral Resources and Energy (DMRE) during 3Q 2023.

The construction of this plant will provide us with valuable experience in the construction of Quantum Enrichment facilities in the future.

We are in the process of commissioning and commencing commercial production at our Ytterbium-176 enrichment facility using the Quantum Enrichment technology in Pretoria, South Africa.

We received a manufacturing permit for this facility from the South African DMRE during 3Q 2023.

The construction of this plant will provide us with valuable experience in the construction of Quantum Enrichment technology facilities in the future.

Many of the control systems, compressors, lasers and hardware used in a uranium enrichment facility would be similar to parts used in this ytterbium-176 enrichment facility.

We expect the construction of a Uranium Enrichment facility would take approximately 30 months and the production volume would gradually ramp up to the final capacity of 20 metric tons per year.

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.

Importantly, subject to licensure, we believe we can produce commercial quantities of HALEU by 2027 to meet the anticipated demand from the advanced reactors 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.

Intellectual Property

Our business will depend on the proprietary ASP technology that was developed by and originally licensed to us from Klydon.

Our business will depend on our proprietary ASP technology and QE technology.

Enrichment is among the most sensitive nuclear technologies because it can produce weapons-grade materials, and our technology is highly controlled and subject to limitations on public disclosure or export.

We believe patent protection in the United States for such sensitive nuclear technology developed in South Africa would be unusual, if even possible.

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.

As we intend to transition into the commercialization of isotopes, we envision our intellectual property and its security becoming more vital to our future.

As we transition into the commercialization of isotopes, we envision our intellectual property and its security becoming more vital to our future.

Pursuing patent protection remains part of the intellectual property protection philosophy and strategy and the advisability of establishing provisional patent rights is continuously assessed on a case-by-case basis in respect of both conceptual aspects and the specific applications thereof.

Such assessments are made in consultation with regulatory bodies and with due consideration to the prospects of successfully obtaining patent protection in light of any disclosure constraints that are imposed by such bodies.

To date, we have not determined that patent protection is appropriate or viable in light of these considerations.

Regulatory Environment

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There are a number of regulators and treaties that govern and control our business and industry.

The two principal ones that control and regulate the manufacturing of isotopes at our isotope enrichment facility in South Africa are the International Atomic Energy Agency (IAEA) and the Nuclear Non-Proliferation Treaty (NPT).

The two principal ones that control and regulate the manufacturing of isotopes at our isotope enrichment facility in South Africa are the IAEA and the Nuclear Non-Proliferation Treaty (NPT).

The IAEA is an international organization that seeks to promote the peaceful use of nuclear energy, and to inhibit its use for any military purpose, including nuclear weapons.

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Our South African subsidiary is registered with the South African Council for the Non-Proliferation of Weapons of Mass Destruction in terms of the Non-Proliferation of Weapons of Mass Destruction Act, 1993.

Our registration certificate is valid until September 3, 2023.

Representatives from the South African Council for the Non-Proliferation of Weapons of Mass Destruction regularly inspect our facility and conduct tests to monitor the activities that are taking place at our facilities.

In South Africa, government Notice 493 relates to nuclear-related dual-use equipment, materials and software and related technologies which can be used in their entirety or in part for the separation of uranium isotopes.

ASP is classified as a dual use technology under the protocols of the IAEA and, as such, is subject to the controls that are implemented under these protocols.

ASP technology is classified as a dual use technology under the protocols of the IAEA and, as such, is subject to the controls that are implemented under these protocols.

These controls comprise requirements that include:

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Security measures at our production facility and our offices are stringent.

Access to our manufacturing plant is highly controlled.

Access to our manufacturing plants are highly controlled.

All employees and all visitors to the manufacturing plant are pre-screened by the South African Council for the Non-Proliferation of Weapons of Mass Destruction before being allowed employment or entry into the facility.

1 unchanged sentence

Many of our computer systems are not connected to the external internet and confidential information is secured at a controlled location.

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.

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.

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.

Some of our future isotopes may be regulated by healthcare regulators such as the FDA in the USA, Health Canada in Canada, the European Medicines Agency in Europe and similar regulators in other countries.

laws restrict the ability of U.S.

14 unchanged sentences

restrictions or from facilitating transactions by non-U.S.

persons if those activities are forbidden to U.S.

those activities are forbidden to U.S.

Penalties for violating provisions such as these can include significant civil and criminal fines, imprisonment and loss of tax credits or export privileges.

13 unchanged sentences

Thus far, as part of our compliance system, for instance, we have developed a Code of Ethics and Conduct that informs all of our employees of their compliance obligations.

Furthermore, we have developed an ethics and conduct training program that all of our employees are required to undertake, as well as other targeted compliance training relevant to their position, such as specific FCPA training for all of our worldwide controllers.

Violations of any of the various U.S.

7 unchanged sentences

We lease five facilities in Pretoria, South Africa for production, research and development and offices.

One lease is under automatic monthly extensions, another lease which expired on March 31, 2024 is now under automatic monthly extensions and the other three leases have terms that expire between March 30, 2026 and December 31, 2030.

One lease is under automatic monthly extensions and the other four leases have terms that expire between February 28, 2026 and December 31, 2030.

We believe that our existing facilities are adequate to meet our current needs.

Legal Proceedings

We are currently not a party to any material legal proceedings.

Except as described herein, we are currently not party to, and our property is not currently the subject of any material pending legal matters or claims.

On December 4, 2024, a purported stockholder of the Company filed a putative securities class action on behalf of purchasers of the Company’s securities between October 30, 2024 through November 26, 2024 against ASP Isotopes Inc.

and certain of its executive officers in the United States District Court for the Southern District of New York ( Corredor v.

ASP Isotopes Inc., et al.

1:24-cv-09253 (S.D.N.Y)) (the “Securities Class Action”).

The Securities Class Action alleges that the Company, its chief executive officer and chief financial officer (“Defendants”) made materially misleading or false statements or omissions regarding

the Company’s business and asserts purported claims under §§ 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 promulgated thereunder.

The complaint seeks unspecified compensatory damages, attorney’s fees and costs.

Defendants intend to vigorously defend against the Securities Class Action;

however, we cannot be certain of the outcome and, if decided adversely to us, our business and financial condition may be adversely affected.

In addition to the matters described above, from time to time, we may become subject to arbitration, litigation or claims arising in the ordinary course of business.

The results of any current or future claims or proceedings cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and litigation costs, diversion of management resources, reputational harm and other factors.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business