What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-03-31 compared with 2024-04-10 · 593 added, 421 removed, 511 unchanged (66% of the section changed)

15 unchanged sentences

In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2024 and 2023 , and the consolidated results of their operations and their cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the financial statements, the Company has incurred recurring operating losses and negative cash flows from operating activities that raise substantial doubt about its ability to continue as a going concern.

Management’s plans in regard to these matters are also described in Note 1.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

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Iselin, New Jersey

April 10, 2024

March 31, 2025

ASP Isotopes Inc.

1 unchanged sentence

Current assets:

Cash and cash equivalents

Accounts receivable

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Operating lease right-of-use assets, net

Deferred tax assets

Other noncurrent assets

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Accrued expenses

Notes payable

Notes payable - current

Finance lease liabilities – current

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Other current liabilities

Share liability

Total current liabilities

Deferred tax liabilities

Convertible notes payable, at fair value

Notes payable - noncurrent

Finance lease liabilities – noncurrent

Operating lease liabilities – noncurrent

Other liabilities

Other noncurrent liabilities

Total liabilities

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Preferred stock, $ 0.01 par value;

10,000,000 shares authorized, no shares issued and outstanding as of December 31, 2023 and 2022

10,000,000 shares authorized, no shares issued and

outstanding as of December 31, 2024 and 2023

Common stock, $ 0.01 par value;

500,000,000 shares authorized, 48,923,276 and 35,907,127 shares issued and outstanding as of December 31, 2023 and 2022, respectively

500,000,000 shares authorized, 72,068,059 and

48,923,276 shares issued and outstanding as of December 31, 2024 and 2023,

Additional paid-in capital

Accumulated deficit

( 23,839,300 )

( 7,553,066 )

Accumulated other comprehensive (loss) income

Accumulated other comprehensive loss

Total ASP Isotopes stockholders’ equity

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Year Ended December 31,

Product revenue

Collaboration revenue

Total revenue

Cost of goods sold

4 unchanged sentences

Loss from operations

( 16,041,999 )

( 5,099,048 )

Other income (expense):

1 unchanged sentence

Change in fair value of share liability

Change in fair value of convertible notes payable

Interest income

Interest expense

Total other (expense) income

Total other expense

Loss before income tax expense

( 16,300,259 )

( 4,945,139 )

Income tax provision

Income tax (expense) benefit

Net loss before allocation to noncontrolling interests

( 16,294,126 )

( 4,945,139 )

Net loss attributable to noncontrolling interests

Net loss attributable to ASP Isotopes Inc.

$ ( 16,286,234 )

$ ( 4,945,139 )

before deemed dividend on inducement warrant for

Deemed dividend on inducement warrant for common stock

Net loss attributable to ASP Isotopes Inc.

Net loss per share attributable to ASP Isotopes Inc.

shareholders, basic and diluted

shareholders, basic and

Weighted average shares of common stock outstanding, basic and diluted

Comprehensive loss:

Comprehensive income (loss):

Net loss before allocation to noncontrolling interests

( 16,294,126 )

( 4,945,139 )

Foreign currency translation

( 1,176,012 )

Total comprehensive loss before allocation to noncontrolling interests

( 17,470,138 )

( 4,708,832 )

Comprehensive loss attributable to noncontrolling interests

Comprehensive (loss) income attributable to noncontrolling interests

Comprehensive loss attributable to ASP Isotopes Inc.

$ ( 17,497,393 )

$ ( 4,708,832 )

The accompanying notes are an integral part of these consolidated financial statements.

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Consolidated Statements of Changes in Stockholders’ Equity

Accumulated Other

Comprehensive

Accumulated Other Comprehensive

Noncontrolling

Total Stockholders’

Balance as of December 31, 2021

$ ( 2,607,927 )

Issuance of common stock, net of issuance costs of $380,747

Issuance of common stock in connection with initial public offering, net of issuance costs of $1,209,496

Issuance of common stock upon exercise of warrants

Issuance of restricted shares

Stock-based compensation

Foreign currency translation

( 4,945,139 )

Stockholders’

(Loss) Income

Balance as of December 31, 2022

( 7,553,066 )

Issuance of common stock, net of issuance costs of $ 563,473

4 unchanged sentences

Cancellation of common stock received in exchange for issuance of convertible preferred stock in subsidiary

( 3,000,000 )

Issuance of restricted shares

3 unchanged sentences

Foreign currency translation

( 1,176,012 )

( 16,286,234 )

( 16,294,126 )

Balance as of December 31, 2023

$ ( 920,982 )

$ ( 23,839,300 )

Issuance of common stock, net of issuance costs of $ 3,648,385

Issuance of common stock from warrant exercise

Issuance of restricted common stock

Issuance of common stock to consultants

Issuance of common stock to board members

Retired unvested restricted shares

Settlement of liabilities with consultant

Board fee liabilities settled with shares

Commission fee liability settled with cash and common stock warrant

Settlement of commission fee liability payable in common stock warrant

Stock-based compensation expense

Contribution from noncontrolling interest in VIE

Distribution to noncontrolling interest of VIE

Foreign currency translation

Balance as of December 31, 2024

The accompanying notes are an integral part of these consolidated financial statements.

1 unchanged sentence

Consolidated Statements of Cash Flows

Year Ended December 31,

Cash flows from Operating activities

$ ( 16,294,126 )

$ ( 4,945,139 )

Adjustments to reconcile net loss to cash used in operating activities:

Foreign exchange transaction gain from intercompany

Foreign exchange transaction loss(gain) from intercompany

Loss on disposal of property and equipment

Stock-based compensation

Issuance of common stock to consultant

Convertible note payable for non-cash issuance costs

Shares issued for non-cash consultant expense

Change in fair value of share liability

Change in fair value of convertible notes payable

Change in right-of-use lease assets

Change in deferred tax liability

Change in deferred tax assets, net

Changes in operating assets and liabilities, net of acquisition amounts:

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Accrued expenses

Deferred revenue

Operating lease liability

Tax liability current

Deferred revenue

Other current liabilities

Net cash used in operating activities

( 5,412,392 )

( 2,939,893 )

Cash flows from investing activities

Purchases of property and equipment

( 2,331,343 )

( 4,473,164 )

Cash advance paid for property and equipment

Cash paid for acquisition of business, net of cash acquired

Net cash used in investing activities

( 2,453,191 )

( 4,473,164 )

Cash flows from financing activities

1 unchanged sentence

Common stock issuance costs

( 1,465,461 )

Proceeds from exercise of warrants

Proceeds from noncontrolling interest in VIE

Proceeds from collection of receivable from noncontrolling interest in VIE

Distribution to noncontrolling interest in VIE

Proceeds from issuance of convertible notes payable

Proceeds from issuance of notes payable

3 unchanged sentences

Net cash provided by financing activities

Net change in cash

Effect of exchange rate changes on cash

Cash – beginning of year

Cash – end of y ear

Net change in cash and cash equivalents

Effect of exchange rate changes on cash and cash equivalents

Cash and cash equivalents– beginning of year

Cash and cash equivalents– end of year

Supplemental disclosures of non-cash investing and financing activities:

1 unchanged sentence

Settlement of liabilities with related party

Share liability for non-cash issuance costs

Seller financed portion of investment in PET Labs Pharmaceuticals

Purchase of property and equipment included in accounts payable

Right-of-use assets obtained in exchange for lease liability

Right-of-use assets obtained in exchange for operating lease liability

Right-of-use assets obtained in exchange for financing lease liability

Deemed dividend on inducement warrant

Purchase of property and equipment with bank loans

Board fees settled with common stock

Commission fee settled with common stock warrant

The accompanying notes are an integral part of these consolidated financial statements.

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Notes to Consolidated Financial Statements

Orga nization

Description of Business

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was incorporated in the state of Delaware on September 13, 2021 and has its principal operations in Washington, DC.

ASP Isotopes Inc.’s subsidiary, ASP Isotopes Holdings Limited (“ASP Guernsey”), has its principal operations in Guernsey.

ASP Isotopes Inc.’s subsidiary, ASP Isotopes Guernsey Limited (“ASP Guernsey”), has its principal operations in Guernsey.

ASP Guernsey’s subsidiary, ASP Isotopes Holdings South Africa Proprietary Limited (“ASP South Africa”), has its principal operations in South Africa.

ASP Isotopes UK Ltd, a wholly-owned subsidiary of the Company, was incorporated in July 2022.

Enriched Energy, LLC, a wholly-owned subsidiary of the Company, was incorporated in January 2022.

ASP Rentals Proprietary Limited (“ASP Rentals”), a variable interest entity (“VIE”) of ASP South Africa, has its principal operations in South Africa.

Enlightened Isotopes (Pty) Ltd (“Enlightened Isotopes”), a 80 % owned subsidiary of ASP South Africa, was formed in March 2023 and began operations in January 2024.

ASP Isotopes UK Ltd (“ASP UK”), a subsidiary of ASP Guernsey, was incorporated in July 2022.

ASPI South Africa Asset Finance Proprietary Limited ("ASP SA Asset Finance”), a subsidiary of ASP South Africa, was incorporated in July 2024.

PET Labs Global Nuclear Medicine SEZC (“PET Labs Global”), a subsidiary of ASP Guernsey, was incorporated in June 2024 in the Cayman Islands.

PET Labs Pharmaceuticals Proprietary Limited (“PET Labs”), a 51 % owned subsidiary of ASP Isotopes Inc.

operates in South Africa.

ASP Isotopes Inc.’s subsidiary, Quantum Leap Energy LLC, was formed in the state of Delaware in September 2023 and began operations in February 2024.

Quantum Leap Energy LLC’s subsidiary Quantum Leap Energy Proprietary Limited (“Quantum Leap Energy South Africa”), has its operations in South Africa.

ASP Isotopes Inc., its subsidiaries and ASP Rentals are collectively referred to as “the Company” throughout these consolidated statements.

The Company is 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.

The Company has an exclusive license to use proprietary technology, the Aerodynamic Separation Process (“ASP technology”), originally developed and licensed to the Company by Klydon Proprietary Ltd (“Klydon”), for the production, distribution, marketing and sale of all isotopes.

The Company’s 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 the Company a first commercial-scale isotope enrichment plant located in South Africa.

The Company believes the C-14 it may develop using the ASP technology may be used in the development of new pharmaceuticals and agrochemicals.

The Company believes that the Mo-100 it 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.

The Company believes the Si-28 it may develop using the ASP technology may be used to develop advanced semiconductors and in quantum computing.

The Company also intends to use the ASP technology to produce enriched Uranium-235 (“U-235”).

The Company believes that the U-235 it 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.

In addition, the Company is 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 November 2022, the Company completed its IPO, selling an aggregate of 1,250,000 shares of common stock at a price to the public of $ 4.00 per share.

The Company received net proceeds from the IPO, after deducting underwriting discounts and commissions but before deducting offering costs, of approximately $ 3.8 million.

Liquidity and Going Concern Uncertainty

The accompanying consolidated financial statements have been prepared on a basis which assumes the Company is a going concern and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from any uncertainty related to the Company’s ability to continue as a going concern.

Such adjustments could be material.

The Company’s 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.

The Company’s initial focus is on the production and commercialization of enriched Carbon-14 (“C-14”), Silicon-28 (“Si-28”) and Ytterbium-176 (“Yb-176”).

The Company has completed the commissioning phase and are commencing commercial production at the C-14 and Si-28 enrichment facilities located 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.

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

In addition, the Company has started planning additional isotope enrichment plants both in South Africa and in other jurisdictions.

The Company believes the C-14 it may produce using the ASP technology may be used in the development of new pharmaceuticals and agrochemicals.

The Company believes the Si-28 it may produce using the ASP technology may be used to develop advanced semiconductors and in quantum computing.

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

In addition, the Company is 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.

The Company is also considering the future development of QE technology for the separation of Nickel-64, Gadolinium-160, Lithium 6 and Lithium-7.

The Company is also pursuing an initiative to apply our enrichment technologies to the enrichment of Uranium-235 (“U-235”).

The Company believes the U-235 that it 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 Company has experienced net losses and negative cash flows from operating activities since its inception.

The Company incurred net losses of $ 16,294,126 and $ 4,945,139 for the years ended December 31, 2023 and 2022, respectively.

The Company anticipates it will need to continue to raise capital through additional equity and/or debt financings and/or collaborative development agreements to fund its operations.

The Company currently expects that its cash of $ 7,908,181 as of December 31, 2023, along with gross proceeds of $20,550,000 received in March 2024 through the issuance of convertible promissory notes and gross proceeds of approximately $5,500,000 received in April 2024 through the issuance of common stock from the exercise of warrants (see Note 16), will not be sufficient to fund its operating expenses and capital requirements for more than 12 months from the date the financial statements are issued.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

Additional funding will be necessary to complete construction of the first enrichment facility and begin operations, and although the Company has plans to seek additional funding, these plans are not currently probable.

The Company incurred net losses of $ 32.4 million and $ 16.3 million for the years ended December 31, 2024 and 2023, respectively.

The Company currently expects that its cash and cash equivalents of $ 61.9 million as of December 31, 2024 will be sufficient to fund its operating expenses and capital requirements for more than 12 months from the date the financial statements are issued.

There can be no assurance that the Company will achieve or sustain positive cash flows from operations or profitability.

The Company is in the process of seeking additional debt and equity financing.

The Company anticipates it will need to continue to raise capital through additional equity and/or debt financings and/or collaborative development agreements to fund its operations beyond the next year.

However, such funding may not be available on a timely basis on terms acceptable to the Company, or at all.

If the Company is unable to raise additional capital when required or on acceptable terms, the Company may be required to further scale back or discontinue the advancement of product candidates, further reduce headcount, reorganize, merge with another entity, or cease operations.

If the Company is unable to raise additional capital when required or on acceptable terms, the Company may be required to scale back or discontinue the advancement of product candidates, reduce headcount, reorganize, merge with another entity, or cease operations.

ASP Isotopes Inc.

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The preparation of the Company’s consolidated financial statements requires management to make estimates and assumptions that impact the reported amounts of assets, liabilities and expenses and disclosure in the Company’s consolidated financial statements and accompanying notes.

The most significant estimates in the Company’s consolidated financial statements relate to stock based compensation and the accounting for the acquisition.

The most significant estimates in the Company’s consolidated financial statements relate to stock-based compensation, fair value of convertible notes, loss contingencies and the accounting for the acquisition, including goodwill.

Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may materially differ from these estimates and assumptions.

Principles of Consolidation

The Company’s consolidated financial statements include the accounts of ASP Isotopes Inc., its subsidiaries and, beginning in 2023, the 80% owned Enlightened Isotopes, the 51% owned PET Labs Pharmaceuticals (see Note 11) and the 24% owned ASP Rentals (see Note 11).

The Company’s consolidated financial statements include the accounts of ASP Isotopes Inc., its wholly-owned subsidiaries, the 80 % owned Enlightened Isotopes, the 51 % owned PET Labs and the 42 % owned VIE ASP Rentals.

All intercompany balances and transactions have been eliminated in consolidation.

For the year ended December 2023, there was no corporate activity for Enlightened Isotopes other than its formation and therefore there was no non-controlling interest to report on the consolidated balance sheet and no net loss attributable to non-controlling interest on the consolidated statement of operations and comprehensive loss to report.

Currency and Currency Translation

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and ASP Guernsey is the U.S.

The functional currency of the Company’s subsidiary ASP South Africa and PET Labs Pharmaceuticals is the South African Rand.

Adjustments that arise from exchange rate changes on transactions of each group entity denominated in a currency other than the functional currency are included in other income and expense in the consolidated statements of operations.

Assets and liabilities of ASP South Africa and PET Labs Pharmaceuticals are recorded in their South African Rand functional currency and translated into the U.S.

The functional currency of the Company’s subsidiaries ASP South Africa and Quantum Leap Energy South Africa is the South African Rand.

The functional currency of the 80 % owned Enlighted Isotopes, the 51 % owned PET Labs and the 42 % owned VIE ASP Rentals is the South African Rand.

Assets and liabilities of the entities with functional currency of South African Rand are recorded in South African Rand and translated into the U.S.

dollar reporting currency of the Company at the exchange rate on the balance sheet date.

Revenue, when recorded, and expenses of ASP South Africa and PET Labs Pharmaceuticals are recorded in their South African Rand functional currency and translated into the U.S.

Revenue and expenses of the entities with functional currency of South African Rand are recorded in South African Rand and translated into the U.S.

dollar reporting currency of the Company at the average exchange rate prevailing during the reporting period.

Resulting translation adjustments are recorded to other comprehensive income (loss).

Resulting translation adjustments are recorded separately in stockholders’ equity as a component of accumulated other comprehensive (loss) income.

Concentration of Credit Risk and other Risks

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The Company has not experienced any credit losses associated with its balances in such accounts for the years ended December 31, 2024 and 2023.

Our foreign subsidiaries held cash of approximately $ 1,963,000 and $ 38,000 as of December 31, 2023 and 2022, respectively, which is included in cash on the consolidated balance sheets.

The Company's foreign subsidiaries held cash of approximately $ 1,512,000 and $ 1,963,000 as of December 31, 2024 and 2023, respectively, which is included in cash and cash equivalents on the consolidated balance sheets.

Our strategic plan does not require the repatriation of foreign cash in order to fund our operations in the U.S., and it is our current intention to indefinitely reinvest our foreign cash outside of the U.S.

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tax rules and regulations as a result of the repatriation.

The Company is potentially subject to concentrations of credit risk in accounts receivable as the following customer balances exceed 10% of accounts receivable in the consolidated balance sheet as December 31, 2024 and 2023.

As of December 31, 2024

As of December 31, 2023

Accounts Receivable

% of Total Accounts Receivable

Accounts Receivable

% of Total Accounts Receivable

Although the Company is directly affected by the financial condition of its customers, management does not believe significant credit risks exist at December 31, 2024.

Generally, we do not require collateral or other securities to support its accounts receivable.

ASP Isotopes Inc.

Notes to Consolidated Financial Statements (continued)

Revenues from one customer of the Company’s specialist isotopes and related services segment represents approximately 14 % or $ 592,000 the Company’s consolidated revenues.

for the year ended December 31, 2024.

For the year ended December 31, 2023 , there were no customers representing 10 % or more of revenues.

Cash and cash equivalents

The Company considers all highly liquid investments with original maturities at the date of purchase of three months or less to be cash equivalents.

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The Company had no cash equivalents as of December 31, 2024 and 2023 .

ASP Isotopes Inc.

Notes to Consolidated Financial Statements (continued)

Segment Information

As of December 31, 2023, the Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions, specialist isotopes and related services.

The financial information is regularly reviewed by the chief operating decision maker (“CODM”) in deciding how to allocate resources.

The Company’s CODM is its chief executive officer.

Fair Value of Financial Instruments

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Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

There was no share liability as of December 31, 2023.

The Company’s share liability (Note 12) measured at Level 3 fair value on a recurring basis was $ 140,455 as of December 31, 2022.

There was a transfer of the share liability from Level 3 to Level 1 as a result of our IPO in the year ended December 31, 2022.

The following table provides a reconciliation of the Company’s liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 1):

Balance as of December 31, 2021

Additional liability for issuance of common stock

Fair value adjustment

The Company’s share liability (Note 12) is measured at Level 1 fair value on a recurring basis.

There was no share liability as of December 31, 2024 and 2023.

The Company’s convertible notes payable (Note 6) is measured as a Level 3 fair value on a recurring basis and was $ 33,433,184 as of December 31, 2024 .

There were no transfers among Level 1, Level 2 or Level 3 categories in the year ended December 31, 2024 .

The following table provides a reconciliation of the Company’s liabilities measured as a Level 3 at fair value on a recurring basis using significant unobservable inputs:

Notes Payable

Balance as of December 31, 2023

Additional liability for issuance of common stock

Settlement of share liability with issuance of common stock

( 1,004,695 )

Fair value at issuance

Fair value adjustment

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Revenue Recognition

The Company’s revenue relates to PET Labs Pharmaceuticals, in which the Company acquired 51% ownership on October 31, 2023 (Note 11).

The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”).

The Company’s product revenue relates to PET Labs, in which the Company acquired 51 % ownership on October 31, 2023 (Note 11).

The Company recognizes revenue in accordance with Financial Accounting Standards Board ("FASB”) Accounting Standards Codification ("ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”).

The Company enters into transactions with radiopharmacy companies that are within the scope of ASC 606.

The terms of these transactions include payment for delivery of nuclear medical doses for PET scanning in South Africa.

ASP Isotopes Inc.

Notes to Consolidated Financial Statements (continued)

Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services.

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The Company only applies the five-step model to contracts when it is probable that the entity will collect consideration it is entitled to in exchange for the goods or services it transfers to the customer.

ASP Isotopes Inc.

Notes to Consolidated Financial Statements (continued)

The Company’s evaluates a transaction’s performance obligations to determine if promised goods or services in a contract to transfer a distinct good or service to the customer and are considered distinct when (i) the customer can benefit from the good or service on its own or together with other readily available resources and (ii) the promised good or service is separately identifiable from other promises in the contract.

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Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional.

The Company’s collaboration revenue relates to TerraPower LLC ("TerraPower") (Note 10).

At contract execution, the Company analyzes its collaborative arrangements and license agreements to assess whether both parties are active participants in the activities and are exposed to significant risks and rewards and therefore are within the scope of ASC 808, Collaborative arrangements (“ASC 808”).

ASC 808 does not address the recognition and measurement of payments from collaborative arrangements and instead refers companies to use other authoritative accounting literature.

For collaboration arrangements within the scope of ASC 808 that contain multiple elements, the Company first determines which elements of the collaboration reflect a vendor-customer relationship and therefore are within the scope of ASC 606, Revenue from Contracts with Customers.

When the Company determines elements of a collaboration agreement do not reflect a vendor-customer relationship, the Company consistently applies a reasonable and rational policy election made by analogizing to authoritative accounting literature.

The Company evaluates the income statement classification for presentation of amounts due from or owed to other participants in a collaboration arrangement based on the nature of each separate activity.

Accounts Receivable

Accounts receivable are stated at the amount management expects to collect from outstanding balances.

We maintain an allowance for expected credit losses for accounts receivable, which is recorded as an offset to accounts receivable, and changes in such are classified as selling, general and administrative expense in the Consolidated Statements of Operations and Comprehensive Loss.

We assess collectibility by reviewing accounts receivable on a collective basis where similar characteristics exist and on an individual basis when we identify specific customers with known disputes or collectibility issues.

In determining the amount of the allowance for credit losses, we consider historical collectibility based on past due status and make judgments about the creditworthiness of customers based on ongoing credit evaluations.

We also consider customer-specific information, current market conditions, and reasonable and supportable forecasts of future economic conditions.

An allowance for expected credit losses is estimated for those accounts receivable considered to be uncollectible based upon historical experience and management's evaluation of outstanding accounts receivable.The Company assesses collectibility by reviewing accounts receivable on a collective basis where similar characteristics exist and on an individual basis when the Company identifies specific customers with known disputes or collectibility issues.

In determining the amount of the allowance for credit losses, the Company considers historical collectibility based on past due status and makes judgments about the creditworthiness of customers based on ongoing credit evaluations.

The Company also considers customer-specific information, current market conditions, and reasonable and supportable forecasts of future economic conditions.

Bad debts are written off against the allowance when identified.

At December 31, 2024 and 2023 there was no allowance for expected credit losses.

ASP Isotopes Inc.

Notes to Consolidated Financial Statements (continued)

The Company uses the first in, first out inventory method to account for its inventory.

As of December 31, 2024 , inventory consists of raw materials and is stated at the lower of cost or net realizable value.

There was no inventory as of December 31, 2023 .

Property and Equipment

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Costs associated with yearly planned major maintenance are generally deferred and amortized over 12 months or until the same major maintenance activities must be repeated, whichever is shorter.

The cost and accumulated depreciation applicable to assets retired or sold are removed from the respective accounts, and gains or losses thereon are included in the statement of operations.

We assign the useful lives of our property and equipment based upon our internal engineering estimates, which are reviewed periodically.

The estimated useful lives of our property and equipment range from 3 to 8 years, or the shorter of the useful life or remaining life of the lease for leasehold improvements.

The cost and accumulated depreciation applicable to assets retired or sold are removed from the respective accounts, and gains or losses thereon are included in the statement of operations and comprehensive loss.

The Company assigns the useful lives of our property and equipment based upon our internal engineering estimates, which are reviewed periodically.

The estimated useful lives of the Company's property and equipment range from 3 to 10 years, or the shorter of the useful life or remaining life of the lease for leasehold improvements.

Depreciation is recorded using the straight-line method.

Construction in progress (see Note 4) is carried at cost and consists of specifically identifiable direct and indirect development and construction costs.

Construction in progress (Note 4) is carried at cost and consists of specifically identifiable direct and indirect development and construction costs.

While under construction, costs of the property are included in construction in progress until the property is placed in service, at which time costs are transferred to the appropriate property and equipment account, including, but not limited to, leasehold improvements or other such accounts.

Property and equipment acquired from the PET Labs Pharmaceutical Acquisition was measured at fair value on October 31, 2023.

ASP Isotopes Inc.

Notes to Consolidated Financial Statements (continued)

Property and equipment acquired in the acquisition of PET Labs was measured at fair value on October 31, 2023.

The fair value forms the new basis of these assets and is depreciated over the remaining estimated useful lives of the related assets.

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If the screen is not met, further determination is required as to whether or not the Company has acquired inputs and processes that have the ability to create outputs, which would meet the requirements of a business.

If determined to be a business combination, the Company accounts for the transaction under the acquisition method of accounting in accordance with ASC 805 Business Combinations, which requires the acquiring entity in a business combination to recognize the fair value of all assets acquired, liabilities assumed, and any non-controlling interest in the acquiree and establishes the acquisition date as the fair value measurement point.

If determined to be a business combination, the Company accounts for the transaction under the acquisition method of accounting in accordance with ASC Topic 805 Business Combinations ("ASC 805"), which requires the acquiring entity in a business combination to recognize the fair value of all assets acquired, liabilities assumed, and any non-controlling interest in the acquiree and establishes the acquisition date as the fair value measurement point.

Accordingly, the Company recognizes assets acquired and liabilities assumed in business combinations, including contingent assets and liabilities, and non-controlling interest in the acquiree based on the fair value estimates as of the date of acquisition.

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Upon recognition of the contingent consideration payment, the amount is included in the cost of the acquired asset or group of assets.

ASP Isotopes Inc.

Notes to Consolidated Financial Statements (continued)

Goodwill represents the amount of consideration paid in excess of the fair value of net assets acquired as a result of the Company’s business acquisitions accounted for using the acquisition method of accounting.

2 unchanged sentences

Further testing is only required if the entity determines, based on the qualitative assessment, that it is more likely than not that the fair value of the reporting unit is less than its carrying amount.

The Company will perform its annual test for goodwill as of October 31.

The Company accounts for leases in accordance with ASC 842, Leases .

The Company performs its annual test for goodwill as of October 31.

The result of the analysis performed as of October 31, 2024 did not indicate an impairment of goodwill.

Variable Interest Entities

The Company accounts for the investments it makes in certain legal entities in which equity investors do not have (1) sufficient equity at risk for the legal entity to finance its activities without additional subordinated financial support, or (2) as a group, the holders of the equity investment at risk do not have either the power, through voting or similar rights, to direct the activities of the legal entity that most significantly impact the entity’s economic performance, or (3) the obligation to absorb the expected losses of the legal entity or the right to receive expected residual returns of the legal entity.

These certain legal entities are referred to as “variable interest entities” or “VIEs.”

The Company would consolidate the results of any such entity in which it determined that it had a controlling financial interest.

The Company would have a “controlling financial interest” in such an entity if the Company had both the power to direct the activities that most significantly affect the VIE’s economic performance and the obligation to absorb the losses of, or right to receive benefits from, the VIE that could be potentially significant to the VIE.

On a quarterly basis, the Company will reassess whether it has a controlling financial interest in any investments it has in these certain legal entities.

ASP Isotopes Inc.

Notes to Consolidated Financial Statements (continued)

Convertible Notes Payable

Convertible notes payable are accounted for in accordance with ASC Topic 825, Financial Instruments ("ASC 825").

Upon issuance the Company has elected the fair value option to account for the convertible notes payable.

Changes in fair value during the reporting period are recognized in other income (expense) in the consolidated statement of operations and comprehensive loss.

The Company accounts for leases in accordance with ASC Topic 842, Leases ("ASC 842").

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on specific facts and circumstances, the existence of an identified asset(s), if any, and the Company’s control over the use of the identified asset(s), if applicable.

Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of future lease payments over the expected lease term.

Operating lease liabilities and their corresponding right-of-use ("ROU") assets are recorded based on the present value of future lease payments over the expected lease term.

The interest rate implicit in lease contracts is typically not readily determinable.

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The Company has elected to combine lease and non-lease components as a single component.

Operating leases are recognized on the balance sheet as ROU lease assets, operating lease liabilities current and operating lease liabilities non-current.

Operating leases are recognized on the balance sheet as ROU lease assets, lease liabilities current and lease liabilities non-current.

Fixed rents are included in the calculation of the lease balances, while variable costs paid for certain operating and pass-through costs are excluded.

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Fair value would be assessed using a discounted cash flows or other appropriate measures of fair value.

The Company did not recognize any impairment losses for the years ended December 31, 2023 and 2022.

The Company did no t recognize any impairment losses for the years ended December 31, 2024 and 2023 .

Research and Development Costs

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Other general and administrative expenses include professional fees for auditing, tax, consulting and patent-related services, rent and utilities and insurance.

ASP Isotopes Inc.

Notes to Consolidated Financial Statements (continued)

Stock-based Compensation

The Company accounts for stock-based compensation in accordance with ASC 718, Compensation-Stock Compensation ("ASC 718").

Stock-based compensation expense represents the cost of the grant date fair value of employee stock awards recognized over the requisite service period of the awards (usually the vesting period) on a straight-line basis.

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Restricted stock is generally subject to forfeiture if employment terminates prior to the completion of the vesting restrictions.

The Company expenses the cost of the restricted stock, which is determined to be the fair market value of the shares of common stock underlying the restricted stock at the date of grant, ratably over the period during which the vesting restrictions lapse.

Equity-based compensation expense is classified in the statement of operations in the same manner in which the award recipients’ payroll costs are classified or in which the award recipients’ service payments are classified.

The Company expenses the cost of the restricted stock,

ASP Isotopes Inc.

Notes to Consolidated Financial Statements (continued)

which is determined to be the fair market value of the shares of common stock underlying the restricted stock at the date of grant, ratably over the period during which the vesting restrictions lapse.

Stock-based compensation expense is classified in the statement of operations and comprehensive loss in the same manner in which the award recipients’ payroll costs are classified or in which the award recipients’ service payments are classified.

Prior to the Company’s IPO, there was no public market of the Company’s common stock.

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Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

Prior to the acquisition of 51% of PET Labs Pharmaceuticals, the Company had generated net losses since inception and accordingly had not recorded a provision for income taxes.

Subsequent to the acquisition of 51% of PET Labs Pharmaceuticals, the Company records the provision for income taxes for the activity from PET Labs Pharmaceuticals operations.

The Company follows the provisions of ASC 740-10, Uncertainty in Income Taxes, or ASC 740-10.

The Company has not recognized a liability for any uncertain tax positions.

Prior to the acquisition of 51 % of PET Labs in October 2023, the Company had generated net losses since inception and accordingly had no t recorded a provision for income taxes.

Subsequent to the acquisition of 51 % of PET Labs, the Company records the provision for income taxes for the activity from PET Labs operations.

The Company follows the provisions of ASC 740-10, Uncertainty in Income Taxes, ( " ASC 740-10").

The Company has no t recognized a liability for any uncertain tax positions.

A reconciliation of the beginning and ending amount of unrecognized tax benefits has not been provided since there is no unrecognized benefit since the date of adoption.

The Company has not recognized interest expense or penalties as a result of the implementation of ASC 740-10.

The Company has no t recognized interest expense or penalties as a result of the implementation of ASC 740-10.

If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized tax benefits and penalties in income tax expense.

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The Company’s comprehensive loss is comprised of net loss and the effect of currency translation adjustments.

Recently Adopted Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB") issued Accounting Standards Update (“ASU") 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures ("ASU 2023-07").

ASU 2023-07 will improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses on an interim and annual basis.

The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods after December 15, 2024, with early adoption permitted.

See Note 3 (Revenue and Segment Information) for additional disclosure.

Recently Issued Accounting Pronouncements

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The Company does not expect the adoption of any recently issued pronouncements to have a material impact on its results of operations or financial position.

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740):

Improvements to Income Tax Disclosures" ("ASU 2023-09"), which enhances the transparency and decision usefulness of income tax disclosures.

Adjustments to the annual disclosure of income taxes include:

(1) A tabular rate reconciliation comprised of eight specific categories, (2) Incomes taxes paid, disaggregated between significant national, state, and foreign jurisdictions, (3) Eliminates requirements to disclose the nature and estimate of reasonably possible changes to unrecognized tax benefits in the next 12 months or that an estimated range cannot be made, and (4) Adds a requirement to disclose income (or loss) from continuing operations before income tax expense (or benefit) and income tax expense (or benefit) from continuing operations disaggregated between domestic and foreign.

The ASU is effective for public business entities for fiscal years beginning on or after December 15, 2024 with early adoption permitted.

The amendments in ASU 2023-09 should be applied on a prospective basis and retrospective application is permitted.

The Company is in the process of evaluating the impact of adoption of ASU 2023-09 on the Company's consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (“ASU 2024-03”) and is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December

ASP Isotopes Inc.

Notes to Consolidated Financial Statements (continued)

In connection with our acquisition of 51 % ownership of PET Labs Pharmaceuticals, we manufacture and sell nuclear medical doses for PET scanning in South Africa.

During the period October 31, 2023 through December 31, 2023, the Company recognized revenue of $ 443,026 .

The following table presents changes in the Company’s accounts receivable from the PET Labs Pharmaceuticals acquisition date of October 31, 2023 through December 31, 2023:

Balance as of October 31, 2023

Balance as of December 31, 2023

ASU 2024-03 requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses.

The Company is in the process of evaluating the impact of adopting ASU 2024-03 on the Company's consolidated financial statements.

Revenue and Segment Information

In connection with our acquisition of 51 % ownership of PET Labs in October 2023, the Company manufactures and sells nuclear medical doses for PET scanning in South Africa.

The Company recognized product revenue of $ 3,944,226 and $ 433,026 , for the years ended December 31, 2024 and 2023, respectively.

The following tables present changes in the Company’s accounts receivable for the years ended December 31, 2024 and 2023:

Balance as of

December 31, 2023

Balance as of

December 31, 2024

Accounts receivable

$ ( 676,687 )

Balance as of

October 31, 2023

Balance as of

December 31, 2023

Accounts receivable

Segment Information

As of December 31, 2023 , the Company managed its operations as a single segment, specialist isotopes and related services.

Beginning in 2024, primarily as a result of increased business activities of its subsidiary, Quantum Leap Energy LLC, the Company has two operating segments:

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

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

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

The Company’s chief operating decision maker (“CODM”) is its chief executive officer .

The segment revenue and segment net loss is regularly reviewed by the CODM in deciding how to allocate resources.

The Company manages assets on a total company basis, not by operating segment, as the assets are shared or commingled.

Therefore, the CODM does not regularly review any asset information by operating segment and, accordingly, asset information is not reported on a segment basis.

Select information from the consolidated statements of operations and comprehensive loss as of the years ended December 31, 2024 and 2023 is as follows:

Net Loss Before

Allocation to Noncontrolling Interest

Year Ended December 31,

Specialist isotopes and related services

Nuclear fuels

ASP Isotopes Inc.

Notes to Consolidated Financial Statements (continued)

A reconciliation of total segment revenue to total consolidated revenue and of total segment gross profit and segment operating income to total consolidated income before income taxes, for the years ended December 31, 2024 and 2023, is as follows:

Year Ended December 31, 2024

Specialist isotopes and related services

Nuclear fuels

Sales from external customers

Collaboration revenue

cost of sales

Segment gross profit

Personnel expenses

Professional fees

Other segment expenses

Segment operating loss

Foreign exchange transaction gain

Change in fair value of share liability

Change in fair value of convertible notes payable

Interest income (expense), net

Loss before income tax expense

Year Ended December 31, 2023

Specialist isotopes and related services

Nuclear fuels

Sales from external customers

cost of sales

Segment gross profit

Personnel expenses

Professional fees

Other segment expenses

Segment operating loss

Foreign exchange transaction gain

Change in fair value of share liability

Interest income (expense), net

Loss before income tax expense

ASP Isotopes Inc.

Notes to Consolidated Financial Statements (continued)

Property and Equipment

Property and equipment as of December 31, 2024 and 2023 consisted of the following:

Useful Lives (Years)

Construction in progress

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Property and equipment, net

The Company is currently building out plants in Pretoria, South Africa and all costs incurred are considered construction in progress because the work is not complete as of December 31, 2023 and 2022.

There was no depreciation expense as it relates to the construction in progress for the year ended December 31, 2023 and 2022.

Depreciation expense for all other asset categories was $ 37,433 for the year ended December 31, 2023.

No depreciation expense was recorded for the year ended December 31, 2022.

The Carbon-14 plant was completed in June 2024 and depreciation began in July 2024.

The Company is currently building two other plants in Pretoria, South Africa:

a multi-isotope plant and a laser isotope separation plant using quantum enrichment technology.

Costs incurred for the other two plants are considered construction in progress because the work is not complete as of December 31, 2024.

Costs incurred for the plants as of December 31, 2024 and 2023 are considered construction in progress.

There was no depreciation expense as it relates to the construction in progress for the years ended December 31, 2024 and 2023.

Depreciation expense for all other asset categories was $ 471,421 and $ 37,433 for the years ended December 31, 2024 and 2023 , respectively.

Accrued Expenses

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Total accrued expenses

ASP Isotopes Inc.

Notes to Consolidated Financial Statements (continued)

Notes Payable

During 2021, the Company executed promissory notes payable with two individuals with an aggregate principal balance of approximately $ 46,900 (35,000 GBP).

The notes were due after a period of two months, followed by mutually agreed upon monthly extensions, and do not bear interest.

Subsequent to the issuance of the notes payable, one of the individuals became an officer of the Company.

In March 2022, one of the promissory notes totaling $ 13,046 (10,000 GBP) was repaid in full.

As of December 31, 2022, the total promissory notes payable balance was $ 33,854 and have been automatically extended on a monthly basis.

As of December 31, 2023, the total promissory notes payable balance was $ 31,827 .

In conjunction with the acquisition of 51 % of PET Labs Pharmaceuticals, ASP assumed a liability to a bank.

Debt consisted of the following as of December 31, 2024 and 2023:

Promissory note

Motor vehicle and equipment loans

Total notes payable

less current portion of notes payable

Long term portion of notes payable

Promissory Note Payable

During 2021, the Company executed a promissory note payable with an aggregate principal balance of $ 33,500 ( 25,000 GBP).

The note was due after a period of two months, followed by mutually agreed upon monthly extensions, and does not bear interest.

As of December 31, 2024 and 2023 , the promissory note payable balance was $ 31,380 and $ 31,827 , respectively, and continues to be automatically extended on a monthly basis.

In conjunction with the acquisition of 51 % of PET Labs, ASP assumed a liability to a bank.

Prior to December 31, 2023, the bank loan balance of $ 609,500 was paid off entirely.

In November 2023, the Company executed a promissory note payable with a finance company for $ 526,282 .

This note bears interest at an annual rate of 8.74 % and six monthly installment payments which began in December 2023.

The Company recorded interest expense of $ 2,249 for the year ended December 31, 2023.

ASP Isotopes Inc.

Notes to Consolidated Financial Statements (continued)

In November 2024, the Company executed a promissory note payable with a finance company to fund its directors and officers’ insurance policy for $ 500,923 .

This note bears interest at an annual rate of 8.45 % with seven monthly payments beginning in December 31, 2024 .

In November 2023, the Company executed a promissory note payable with a finance company to fund its directors and officers' insurance policy for $ 526,282 .

This note bore interest at an annual rate of 8.74 % with six monthly payments beginning in December 2023 .

The note was repaid in full in May 2024.

For the years ended December 31, 2024 and 2023 , the Company recorded interest expense of $ 17,872 and $ 2,249 , respectively.

As of December 31, 2024 and 2023 , the promissory note payable balance was $ 378,316 and $ 438,569 , respectively.

Motor Vehicle and Equipment Loans

During 2024 , the Company entered into several loans to purchase motor vehicles and certain equipment totaling $ 2,020,511 .

These loans are secured by the underlying assets included in property and equipment.

The loans have variable interest rates ranging from 10.40 % to 12.25 % and mature from September 2028 to December 2029 .

Minimum monthly payments total $ 40,120 .

Interest expense under the outstanding loans was $ 70,975 for the year ended December 31, 2024.

As of December 31, 2024 , motor vehicle and equipment loans totaled $ 1,970,700 .

Convertible Notes Payable

In March 2024, the Company issued convertible notes payable (“March 2024 Convertible Notes”) totaling $ 21,063,748 and received aggregate cash of $ 20,550,000 .

One of the notes totaling $ 513,748 was issued to the placement agent in lieu of cash issuance costs.

Issuance costs paid in cash totaling $ 521,423 and the value of the note issued upon issuance to the placement agent were expensed in selling, general and administrative costs in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2024.

In June 2024, the Company issued additional convertible notes payable (“June 2024 Convertible Notes”) totaling $ 5,494,395 and received aggregate cash of $ 5,386,228 .

One of the notes totaling $ 108,167 was issued to the placement agent in lieu of cash issuance costs and was expensed in selling, general and administrative costs in the condensed consolidated statement of operations and comprehensive loss for the year ended December 31, 2024.

Issuance costs paid in cash were negligible.

The March 2024 Convertible Notes and the June 2024 Convertible Notes are collectively the “Convertible Notes”.

The Convertible Notes are payable on demand in March 2029 and bear an annual interest rate of 6 % through March 7, 2025 and 8 % thereafter.

Upon a qualified financing event the Convertible Notes convert into the shares issued in that qualified financing event at a price per share equal to 80 % of the share price issued subject to a valuation cap.

Upon a qualified transaction, the noteholders may elect to receive either 1.5x the principal and accrued interest balance in cash or convert into common shares.

The Convertible Notes are recorded on the consolidated balance sheet at their fair values.

The fair value of the March Convertible Notes on the date of issuance was $ 21,063,748 .

The fair value of the June Convertible Notes on the date of issuance was $ 5,494,395 .

The fair value of the Convertible Notes as of December 31, 2024 has been determined to be $ 33,433,184 and the resultant change in fair value of $ 6,875,041 has been recorded in other income and expense in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2024.

As of December 31, 2024, the total principal and accrued interest of the Convertible Notes is $ 27,782,210 of which $ 1,224,067 is from the interest.

Deferred Revenues

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In conjunction with the Supply Agreement, the Company received $ 882,000 in September 2023, as an advance towards future revenue.

The Company has recorded $ 882,000 as deferred revenue on the balance sheet as of December 31, 2023.

The Company did not recognize any deferred revenue as of December 31, 2022 or January 1, 2022.

The Company has recorded $ 882,000 as deferred revenue on the balance sheet as of December 31, 2024 and 2023.

No amount of deferred revenue was recorded as of January 1, 2023.

Commitments and Contingencies

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As of December 31, 2023, the equipment had not been delivered;

The Company is obligated to purchase this equipment and recorded the other asset and other liability for the full cost of $ 1,653,000 on the consolidated balance sheet as of December 31, 2023.

however, the Company was obligated to purchase this equipment and recorded the full cost of $ 1,653,000 in other noncurrent assets and other noncurrent liabilities on the consolidated balance sheet as of December 31, 2023.

In March 2024, the cyclotron was received by the Company and is recorded as property and equipment.

The financing company has paid the vendor.

During 2024, the Company financed the cost of this equipment and is recorded in notes payable as of December 31, 2024.

ASP Isotopes Inc.

Notes to Consolidated Financial Statements (continued)

Klydon Proprietary Limited

In November 2021, the Company entered into an agreement with Klydon Proprietary Limited (“Klydon”) to design and build a plant to enrich Molybdenum in South Africa.

The initial phase of the project includes the building of a plant that can support the production of at least 5kgs of Mo-100, and is expected to be completed in the second half of 2023.

The contracted cost for this phase is $ 6,800,000 .

The second phase of the project includes the production to be increased to 20kgs of Mo-100 with an additional cost of $ 6,000,000 .

The Company can modify the contract scope and overall costs and the contract can be cancelled by either party.

As of December 31, 2022 and 2021, approximately $ 7,233,000 and $ 1,800,000 , respectively, has been paid under this contract and recorded as construction in progress within property and equipment.

In November 2021, the Company entered into an agreement with Klydon Proprietary Limited (“Klydon”) to design and build a plant to enrich Molybdenum in South Africa (the "Turnkey Contract").

The initial phase of the project included the building of a plant that can support the production of at least 5kgs of Mo-100.

The contracted cost for this phase was $ 6,800,000 .

The second phase of the project included the production to be increased to 20kgs of Mo-100 with an additional cost of $ 6,000,000 .

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.

however, some services were incomplete and many of the services were not completed within the time frame required.

As a result, Klydon and ASP South Africa entered into an Acknowledgement of Debt Agreement dated November 30, 2022, whereby Klydon (i) agreed to pledge its assets (the “Pledged Assets”) to ASP South Africa to secure its performance of the Turnkey Contract by December 31, 2022, and (ii) acknowledged that ASP South Africa would suffer damages in the amount of $ 6,050,000 (“Damage Amount”) should it fail to perform.

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In addition, the Company acquired Klydon's interest in four entities which are inactive and in the process of being dissolved.

The Company has concluded that the Klydon Settlement is accounted for under ASC 805, Business Combinations as an asset acquisition since the assets acquired were concentrated in a single identifiable asset from a related party.

The Company has concluded that the Klydon Settlement is accounted for as an asset acquisition under ASC 805 since the assets acquired were concentrated in a single identifiable asset from a related party.

In conjunction with the Klydon Settlement, the Company recorded an increase to additional paid-in capital for the settlement of all liabilities owed to Klydon at the time of settlement totaling $ 626,223 .

Two individuals who are officers and board members of Klydon, one who is now an officer of ASP Isotopes Inc.

and the other who is now a scientific advisor of ASP Isotopes Inc., received warrants to purchase common stock of the Company and therefore are considered related parties.

Two individuals who were officers and board members of Klydon, one who is now an officer of ASP Isotopes Inc.

and the other who was a scientific advisor of ASP Isotopes Inc., received warrants to purchase common stock of the Company and therefore are considered related parties.

See Notes 10 and 12.

The individual who was a scientific advisor of ASP Isotopes Inc, has resigned from that role, given his age and deteriorating health.

Share Purchase Agreement relating to PET Labs

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

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

Under the Purchase Agreement, the Company has agreed to purchase from the Seller 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 has 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).

The Company agreed to pay to the Seller an aggregate of $ 2,000,000 for the Initial Sale Shares, of which aggregate amount of $ 500,000 was payable 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.

In January 2024, the Company agreed to pay $ 264,750 to the Seller.

The balance due for the Initial Sale Shares as of December 31, 2024 is $ 1,235,250 and is recorded in other current liabilities on the consolidated balance sheet.

If the Company exercises its 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), the Company has agreed to pay $ 2,200,000 for the Option Shares.

PET Labs Global

In August 2024, PET Labs Global entered into a three-year service agreement with Cayman Enterprise City and is licensed to operate from within the Cayman Islands’ Special Economic Zone (“SEZ”).

The service fee includes among other things the right to use certain office space and associated facilities within the SEZ.

The Company has applied the guidance in ASC 842 and determined that this agreement is not a leasing arrangement.

Management has determined that based on the nature of the combined services the expense should be recognized as incurred.

The Company recorded fees under this agreement totaling $ 26,459 for the year ended December 31, 2024.

ASP Isotopes Inc.

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The Company accrues liabilities for such matters when future expenditures are probable and such expenditures can be reasonably estimated.

On October 25, 2022, the Company received a letter from a law firm acting on behalf of Norsk medisinsk syklotronsenter AS (“NMS”), asserting, among other things, that the grant of a license to the ASP technology to the Company by Klydon violates a pre-existing exclusive sub-license to the ASP technology granted to Radfarma.

The asserted claims, arbitration and/or litigation could include claims against the Company, the Company’s licensor (Klydon), or Klydon’s present or former sub-licensors alleging infringement of intellectual property rights with respect to the ASP technology on which our company relies.

The Company recorded legal costs totaling $ 78,304 which was paid to Klydon’s attorneys to settle this claim.

As of December 31, 2023, Radfarma has relinquished all claims and ASP Isotopes owns the rights to the licenses originally held by Klydon and acquired by ASP Isotopes.

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.

The Company accounts for facility leases in accordance with ASC 842 (Note 2).

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Consequently, a ROU lease asset of $ 952,521 with a corresponding lease liability of $ 952,521 based on the present value of the minimum rental payments of such lease was recorded at the inception of the lease.

In the consolidated balance sheet as of December 31, 2023, the Company has a ROU asset balance of $ 626,548 and a current and non-current lease liability of $ 53,504 and $ 637,348 , respectively, relating to this ROU lease asset.

In the consolidated balance sheet as of December 31, 2022, the Company has a ROU asset balance of $ 853,889 and a current and non-current lease liability of $ 45,903 and $ 742,443 , respectively.

A lease for additional production space in Pretoria, South Africa commenced in April 2023 with the initial term expiring in March 2024 and the Company is maintaining the lease under the agreed upon monthly extensions.

The Company has applied the guidance in ASC 842 and has determined that this lease is a short term lease and expenses the monthly payments as incurred.

A lease for additional production space in Pretoria, South Africa commenced in April 2023 with the initial term set to expire in March 2024.

Effective February 1, 2024, this lease was amended such that the new term begins on February 1, 2024 and expires in February 2026 .

Prior to the amendment, the Company had applied the guidance in ASC 842 and determined that this lease was a short term lease and expensed the monthly payments as incurred.

The Company has applied the guidance in ASC 842 to the amended lease and has determined that it should be classified as an operating lease.

The Company’s incremental borrowing rate for this lease is 10.6 % based on the lease term of the applicable lease.

A ROU lease asset of $ 364,458 with a corresponding lease liability of $ 364,458 based on the present value of the minimum rental payments of such lease was recorded at the commencement of the amended lease.

A lease for laboratory space in Pretoria, South Africa commenced in November 2023 with the initial term set to expire in October 2026 .

2 unchanged sentences

Consequently, a ROU lease asset of $ 70,607 with a corresponding lease liability of $ 70,607 based on the present value of the minimum rental payments of such lease was recorded at the inception of the lease.

In the consolidated balance sheet as of December 31, 2023, the Company has a ROU asset balance of $ 68,089 and a current and non-current lease liability of $ 19,608 and $ 48,805 , respectively, relating to this ROU lease asset.

A lease for office and production space in Pretoria, South Africa commenced prior to October 31, 2023 with the initial term set to expire in March 2026 .

The Company has applied the guidance in ASC 842 and has determined that it should be classified as an operating lease effective on the date of ASP Isotopes acquisition of 51% of PET Labs Pharmaceuticals.

The Company has applied the guidance in ASC 842 and has determined that it should be classified as an operating lease effective on the date of ASP Isotopes acquisition of 51 % of PET Labs.

The Company’s incremental borrowing rate is approximately 12.875 % based on the expected remaining lease term of the applicable lease.

Consequently, a ROU lease asset of $ 592,304 which reflects an 84,858 unfavorable adjustment based on the fair value of the lease terms and a corresponding lease liability of $ 677,163 based on the present value of the minimum rental payments of such lease was recorded at the date of ASP Isotopes acquisition of 51% of PET Labs Pharmaceuticals.

In the consolidated balance sheet as of December 31, 2023, the Company has a ROU asset balance of $ 564,064 and a current and non-current lease liability of $ 263,452 and $ 380,494 , respectively, relating to this ROU lease asset.

Gerdus Kemp, an officer of PET Labs Pharmaceuticals and an employee of ASP Isotopes UK Ltd is the sole owner of the facility under this lease agreement.

A lease for additional production space in Pretoria, South Africa commenced prior to October 31, 2023 with the initial term expiring in March 2024 and the Company is maintaining the lease under the agreed upon monthly extensions.

The Company has applied the guidance in ASC 842 and has determined that this lease is a short term lease effective on the date of ASP Isotopes acquisition of 51% of PET Labs Pharmaceuticals and expensed the monthly payments for the two months ended December 31, 2023.

Consequently, a ROU lease asset of $ 592,304 which reflects an $ 84,858 unfavorable adjustment based on the fair value of the lease terms and a corresponding lease liability of $ 677,163 based on the present value of the minimum rental payments of such lease was recorded at the date of ASP Isotopes acquisition of 51 % of PET Labs.

Gerdus Kemp, an officer of PET Labs and an employee of ASP UK, is the sole owner of the facility under this lease agreement.

A summary of long-term leases in the consolidated balance sheet as of December 31, 2024 is as follows:

ASP Isotopes Inc.

Notes to Consolidated Financial Statements (continued)

Operating Lease Liability - Current

Operating Lease Liability – Non-Current

Total Operating Lease Liability

Office and laboratory, Pretoria, South Africa

Additional production, Pretoria, South Africa

Laboratory, Pretoria, South Africa

Office and production, Pretoria, South Africa

A summary of long-term leases in the consolidated balance sheet as of December 31, 2023 is as follows:

Operating Lease Liability - Current

Operating Lease Liability – Non-Current

Total Operating Lease Liability

Office and laboratory, Pretoria, South Africa

Laboratory, Pretoria, South Africa

Office and production, Pretoria, South Africa

The Company has applied the guidance in ASC 842 and has determined that this lease is a short term lease effective on the date of ASP Isotopes acquisition of 51 % of PET Labs and expensed the monthly payments for the years ended December 31, 2024 and 2023.

Quantitative information regarding the Company’s operating lease liabilities is as follows:

Year Ended December 31,

Year Ended December 31, 2022

Operating Lease Cost

1 unchanged sentence

Other Information

Operating cash flows paid for amounts included in the measurement of lease liabilities

Operating lease liabilities arising from obtaining right-of-use assets

Operating cash flows paid for amounts included in the

measurement of lease liabilities

Operating lease liabilities arising from obtaining right-of

Weighted average remaining lease term (years)

1 unchanged sentence

Future lease payments under noncancelable operating lease liabilities are as follows as of December 31, 2024:

Operating Leases

Future Lease Payments

1 unchanged sentence

imputed interest

Total lease liabilities

Total operating lease liabilities

Less current portion

Lease liability – noncurrent

Operating lease liability - noncurrent

The Company records the expense from short term leases as incurred.

For the year ending December 31, 2023, the Company recorded $ 121,312 in rent expense from its short term leases in Pretoria, South Africa.

The remaining lease payments due in 2024 are $ 37,263 .

The Company recorded lease expense from its short term leases of $ 31,746 and $ 121,312 for the year ended December 31, 2024 and 2023, respectively.

ASP Isotopes Inc.

Notes to Consolidated Financial Statements (continued)

The Company accounts for finance leases in accordance with ASC 842 (Note 2).

Subsequent to the acquisition of 51% of PET Labs Pharmaceuticals, the Company is party to nine finance leases in South Africa for certain fixed assets.

Subsequent to the acquisition of 51 % of PET Labs on October 31, 2023, the Company is party to several ongoing finance leases in South Africa for certain fixed assets.

In addition, In May and October 2024, the Company entered into new finance leases for additional equipment.

Quantitative information regarding the Company’s finance lease liabilities is as follows:

Year Ended December 31,

Year Ended December 31, 2022

Finance Lease Cost

1 unchanged sentence

Other Information

Operating cash flows paid for amounts included in the measurement of finance lease liabilities

Operating cash flows paid for amounts included in the

measurement of finance lease liabilities

Amortization of right-of-use assets

2 unchanged sentences

Future lease payments under noncancelable finance lease liabilities are as follows as of December 31, 2024:

Finance Leases

Future Lease Payments

3 unchanged sentences

Less current portion

Lease liability – noncurrent

ASP Isotopes Inc.

Notes to Consolidated Financial Statements (continued)

License Agreements

In September 2021, the Company licensed certain intellectual property from Klydon for the development, production distribution, marketing and sale of Mo-100.

The license term is 999 years, unless terminated earlier by either party under certain provisions.

Any development efforts improving the intellectual property performed by either Klydon or the Company will be the property of Klydon.

There are no upfront, milestone payments, nor royalties on product sales over the term of the license.

Two individuals who are officers and board members of Klydon received warrants to purchase common stock of the Company.

(See Note 12.)

In January 2022, the Company licensed certain intellectual property from Klydon for the development, production distribution, marketing and sale of uranium isotope U-235 (“U-235”).

The license term is 999 years, unless terminated earlier by either party under certain provisions.

Any development efforts improving the intellectual property performed by either Klydon or the Company will be the property of Klydon.

Finance lease liability - noncurrent

License and Collaboration Agreements

Klydon Proprietary Ltd (“Klydon”)

In September 2021, ASP South Africa licensed certain intellectual property from Klydon for the development, production distribution, marketing and sale of Mo-100.

The license had a term of 999 years, unless terminated earlier by either party under certain provisions.

Two individuals who are officers and board members of Klydon received warrants to purchase common stock of the Company (See Note 12).

Effective July 26, 2022, the parties agreed to terminate the Mo-100 license, which was superseded and replaced by a new license agreement (described below).

In January 2022, ASP South Africa licensed certain intellectual property from Klydon for the development, production distribution, marketing and sale of uranium isotope U-235 (“U-235”).

The license had a term of 999 years, unless terminated earlier by either party under certain provisions.

The Company paid an upfront fee of $ 100,000 , which was expensed to research and development expense.

The Company is required to pay a nominal royalty per Kg of product sold plus 10 % royalties on product net profits over the term of the contract.

The Company was required to pay a nominal royalty per Kg of product sold plus 10 % royalties on product net profits over the term of the contract.

One of the officers, who is also a board member of Klydon, became a board member and consultant of ASP Isotopes Inc.

and an employee of ASP Guernsey in January 2022.

In July 2022, ASP Isotopes UK Ltd (a subsidiary of the Company) entered into a license agreement with Klydon, as licensor, pursuant to which ASP Isotopes UK Ltd acquired from Klydon an exclusive license to use, develop, modify, improve, subcontract and sublicense certain intellectual property rights relating to the ASP technology for the production, distribution, marketing and sale of all isotopes produced using the ASP technology (the “Klydon license agreement”).

Effective July 26, 2022, the parties agreed to terminate the U-235 license, which was superseded and replaced by a new license agreement (described below).

In July 2022, ASP UK entered into a license agreement with Klydon, as licensor, pursuant to which ASP Isotopes UK Ltd acquired from Klydon an exclusive license to use, develop, modify, improve, subcontract and sublicense certain intellectual property rights relating to the ASP technology for the production, distribution, marketing and sale of all isotopes produced using the ASP technology (the “Klydon license agreement”).

The Klydon license agreement superseded and replaced the Mo-100 license and U-235 license described in Note 8 above.

The Klydon license agreement is royalty-free, has a term of 999 years and is worldwide for the development of the ASP technology and the distribution, marketing and sale of isotopes.

Future production of isotopes is limited to member countries of the Nuclear Suppliers Group.

In connection with the Klydon license agreement the Company agreed to make an upfront payment of $ 100,000 (to be included within the payments we make under the Turnkey Contract) and deferred payments of $ 300,000 over 24 months, which was expensed to research and development expense.

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.

The $ 400,000 due to Klydon is in accounts payable as of December 31, 2022.

Future production of

ASP Isotopes Inc.

Notes to Consolidated Financial Statements (continued)

isotopes is limited to member countries of the Nuclear Suppliers Group.

In connection with the Klydon license agreement the Company agreed to make an upfront payment of $ 100,000 (to be included within the payments the Company makes under the Turnkey Contract) and deferred payments of $ 300,000 over 24 months, which was expensed to research and development expense.

In July 2022, ASP South Africa 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 $ 354,000 ), which was recorded to property and equipment, would have been 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.

2 unchanged sentences

TerraPower, LLC

On April 4, 2024, the Company entered into an agreement with TerraPower to develop a conceptual design, refined cost/schedule/financing, risk register, and term sheet for a High Assay Low Enriched Uranium (“HALEU”) facility (the “TerraPower Agreement”).

The TerraPower Agreement may be terminated for (a) breach or default, (b) the Company’s convenience or (c) TerraPower’s convenience.

TerraPower is obligated to make all payments for milestones completed by the Company and these payments are nonrefundable.

On October 18, 2024, the Company and TerraPower signed a term sheet (the “TerraPower Term Sheet”) that provides for the execution of two definitive agreements:

(1) an agreement pursuant to which TerraPower will provide funding for the Company’s construction of a uranium enrichment facility capable of producing HALEU using the Company’s proprietary aerodynamic separation process technology to be located in the Republic of South Africa and (2) An agreement pursuant to which the Company will deliver to TerraPower the full capacity of the enrichment facility.

The Company accounts for the TerraPower Agreement in accordance with ASC 808.

The Company has concluded that other authoritative accounting literature does not apply directly to these payments from TerraPower, either directly or by analogy, including ASC 606 because TerraPower is not a customer.

The Company has concluded that TerraPower is not a customer because TerraPower has not contracted with the Company to obtain goods or services that are an output of the Company’s ordinary activities in exchange for consideration.

The Company also has concluded that there is no other authoritative accounting literature that is appropriate to apply by analogy, and, accordingly, its accounting policy is to evaluate the income statement classification for presentation of amounts associated with each separate activity.

As a result, the Company concludes that all portions of the net receivable from TerraPower are directly related to the conceptual design of the HALEU facility.

Furthermore, the Company and TerraPower will jointly develop criteria for optimization of the HALEU facility’s operations.

TerraPower shares the risks and rewards of designing the HALEU facility since its successful completion will enable TerraPower to purchase output from the HALEU facility in the future.

For the year ended December 31, 2024, $ 200,000 has been recognized as collaboration revenue in the consolidated statements of operations and comprehensive loss.

PET Labs Pharmaceuticals

In October 2023, the Company completed the PET Labs Pharmaceuticals Acquisition, a provider of nuclear medical doses for use in PET scans in South Africa.

The acquisition of PET Labs Pharmaceuticals was intended to accelerate the distribution of the Company’s pipeline.

The acquisition of PET Labs Pharmaceuticals has been accounted for as a business combination in accordance with ASC 805.

Pursuant to the terms of the agreement, the Company acquired 51 % of the common shares issued and outstanding for total purchase consideration of $ 2,000,000 in cash of which $ 500,000 was paid up front and the balance of $ 1,500,000 is expected to be paid in the second half of 2024.

In October 2023, the Company completed the acquisition of PET Labs.

The acquisition is intended to accelerate the distribution of the Company’s pipeline.

The acquisition of PET Labs has been accounted for as a business combination in accordance with ASC 805.

In January 2024, the Company made a partial payment of $ 264,750 and the balance of $ 1,235,250 is expected to be paid in 2025 and is recorded in other current liabilities on the consolidated balance sheet.

In addition to the purchase consideration, the Company has an option to purchase the remaining 49 % of the issued and outstanding shares for an agreed consideration totaling $ 2,200,000 .

2 unchanged sentences

Notes to Consolidated Financial Statements (continued)

The Company incurred approximately $ 4,000 in transaction costs related to the PET Labs Acquisition, which is recorded in general and administrative expenses in Consolidated Statement of Operations and Comprehensive Loss in the year ended December 31, 2023.

Gerdus Kemp is an officer of PET Labs Pharmaceuticals and, effective November 1, 2023, an employee of ASP Isotopes UK Ltd.

The Company incurred approximately $ 4,000 in transaction costs related to the acquisition of PET Labs, which is recorded in general and administrative expenses in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2023.

Gerdus Kemp is an officer of PET Labs and, effective November 1, 2023, an employee of ASP UK.

In addition, Dr.

Kemp controls the remaining 49% ownership of PET Labs Pharmaceuticals.

The following table summarizes the preliminary allocation of the purchase consideration to the fair value of the assets acquired and liabilities assumed:

Kemp controls the remaining 49 % ownership of PET Labs.

The following table summarizes the allocation of the purchase consideration to the fair value of the assets acquired and liabilities assumed:

Consideration

Present value of balance due

Recognized amounts of identifiable assets acquired and liabilities assumed

Recognized amounts of identifiable assets acquired and

liabilities assumed

Cash and cash equivalents

4 unchanged sentences

Financial liabilities

( 1,248,699 )

Right of use liabilities

1 unchanged sentence

Noncontrolling interest

Goodwill arising from the acquisition as of October 31, 2023 of $ 3,205,227 was attributable mainly to certain existing doctor and service center relationships, which are not identifiable as a separate intangible asset, along with buyer specific synergies expected to arise from the acquisition.

The Company expects that no goodwill from this acquisition will be deductible for income tax purposes.

The Company considered the contractual value of accounts receivable to be the same as the fair value and expects the full amount to be collected.

The results of PET Labs Pharmaceuticals have been included in the consolidated financial statements from the date of the acquisition.

Goodwill arising from the acquisition as of October 31, 2023 of $ 3,205,227 was attributable mainly to buyer specific synergies expected to arise from the acquisition.

No goodwill from this acquisition is deductible for income tax purposes.

The Company considered the contractual value of accounts receivable to be the same as the fair value and the full amount was collected.

The results of PET Labs have been included in the consolidated financial statements from the date of the acquisition.

The Company accounts for business combinations in accordance with ASU No.

2015-16, Business Combinations (Topic 805), which requires an acquirer to retrospectively adjust provisional amounts recognized in a business combination during the measurement period (which represents a period not to exceed one year from the date of the acquisition), in the reporting period in which the adjustment is determined, as well as present separately on the face of the income statement or as a disclosure in the notes to the consolidated financial statements, the portion of the amount recorded in current period earnings that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date.

The changes to the carrying value of goodwill is as follows:

2 unchanged sentences

Balance as of December 31, 2023

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information shows the results of the Company’s operations for the years ended December 31, 2023 and 2022 as if the acquisition had occurred on January 1, 2022.

The unaudited pro forma financial information is presented for information purposes only and is not necessarily indicative of the Company’s performance had the acquisition occurred as of that date.

The unaudited pro forma information is also not intended to be a projection of future results due to the integration of the acquired operations of PET Labs Pharmaceuticals.

The unaudited pro forma information reflects the effects of applying the Company’s accounting policies to the combined historical financial information of the Company and PET Labs Pharmaceuticals.

$ ( 15,783,485 )

$ ( 4,291,993 )

Net loss per common share

Translation adjustment

Balance as of December 31, 2024

In December 2023, ASP South Africa entered into a Shareholders Agreement (“ASP Rentals Shareholders Agreement”) with ASP Rentals, a newly formed equipment financing service provider formed for the sole purpose of providing financing to ASP South Africa for its significant asset purchases in South Africa.

In accordance with the terms of the ASP Rentals Shareholders Agreement, ASP Rentals issued 24 % of its capital stock to ASP South Africa for total consideration of ZAR 3,300,829 (which at the exchange rate as of December 31, 2023 was $ 180,387 ) and the remaining 76 % of its capital stock was issued to two third party entities for combined consideration of ZAR 13,203,317 (which at the exchange rate as of December 31, 2023 was $ 721,548 ).

ASP Isotopes Inc.

Notes to Consolidated Financial Statements (continued)

In December 2023, the Company entered into Shareholders Agreement (“ASP Rentals Shareholders Agreement”) with ASP Rentals, an equipment financing service provider in South Africa.

In conjunction with the ASP Rental Shareholders Agreement, the Company entered into an Asset Sale Agreement and an Asset Rental Agreement in order to facilitate the financing of energy equipment recently purchased by ASP South Africa.

ASP Rentals is considered a variable interest entity, and the Company is the primary beneficiary and therefore ASP Rentals has been consolidated in accordance with ASC 810.

Pursuant to the terms of the ASP Rentals Shareholders Agreement, as of December 31, 2023 ASP South Africa is obligated to acquire and ASP Rentals is obligated to issue 24% of the common shares of ASP Rentals to be issued and outstanding for total purchase consideration of ZAR 3,300,829 (which at the exchange rate as of December 31, 2023 was $180,387) .

In June 2024, ASP Rentals issued additional capital stock to support additional financing to ASP South Africa and PET Labs.

Per the terms of the ASP Rentals Shareholder Agreement, ASP Rentals issued 20 % of the new capital to ASP South Africa for total consideration of ZAR 3,671,412 (which at the exchange rate as of June 30, 2024 was $ 201,994 ) and the remaining 80 % of the new capital to one of the two original third party entities for a combined consideration of ZAR 18,357,063 (which at the exchange rate as of June 30, 2024 was $ 1,009,969 ).

In August 2024, ASP Rentals issued additional capital stock to support additional financing to PET Labs.

Per the terms of the ASP Rentals Shareholder Agreement, ASP Rentals issued 20 % of the new capital to ASP South Africa for total consideration of ZAR 369,965 (which at the exchange rate as of August 23, 2024 was $ 21,421 ) and the remaining 80 % of the new capital to one of the two original third party entities for a combined consideration of ZAR 1,849,826 (which at the exchange rate as of August 23, 2024 was $ 104,925 ).

In December 2024, ASP Rentals issued additional capital stock to support additional financing to ASP South Africa.

Per the terms of the ASP Rentals Shareholder Agreement, ASP Rentals issued 20 % of the new capital to ASP South Africa for total consideration of ZAR 130,000 (which at the exchange rate as of December 31, 2024 was $ 6,889 ) and the remaining 80 % of the new capital to one of the two original third party entities for a combined consideration of ZAR 650,000 (which at the exchange rate as of December 31, 2024 was $ 35,746 ).

As a result of the additional financings in 2024, ASP South Africa now controls 42 % of ASP Rentals.

In addition to issuance of these shares, future ASP South Africa and PET Labs equipment purchases may also be financed by ASP Rentals through the issuance of additional shares.

ASP South Africa will only be entitled to dividend distributions upon the two third party entities receiving a designated return on their investment.

In conjunction with the ASP Rental Shareholders Agreement, ASP South Africa and PET Labs have both entered into an Asset Sale Agreement and an Asset Rental Agreement with ASP Rentals in order to facilitate the financing of equipment recently purchased by ASP South Africa and PET Labs.

As a result of the transactions contemplated by these agreements, collectively, ASP Rentals is considered a variable interest entity.

In addition, since the only function of ASP Rentals is to provide financing to ASP South Africa and PET Labs, ASP Isotopes is considered to be the primary beneficiary of ASP Rentals.

Therefore, ASP Rentals has been consolidated in accordance with ASC 810.

Pursuant to the terms of the ASP Rentals Shareholders Agreement, as of December 31, 2023 ASP South Africa was obligated to acquire and ASP Rentals was obligated to issue 24 % of the common shares of ASP Rentals to be issued and outstanding for total purchase consideration of ZAR 3,300,829 (which at the exchange rate as of December 31, 2023 was $ 180,387 ).

As of December 31, 2023 these amounts are eliminated in consolidation.

As of December 31, 2023, ASP Rentals has a receivable and an obligation to issue 76 % of the common shares of ASP Rentals with non-affiliates for an aggregate of ZAR 13,203,317 (which at the exchange rate as of December 31, 2023 was $ 721,548 ).

As of December 31, 2023, the Company has recorded $ 721,548 as a receivable from noncontrolling interest in current assets and a non-controlling interest in equity.

Consideration for all common shares of ASP Rentals was received in January 2024.

In January 2024, a total of ZAR 14,351,431 (which at the exchange rate as of December 31, 2023 was $784,291) was transferred between ASP Rentals and ASP South Africa per the terms of the ASP Sale Agreement and Asset Rental Agreement, excluding VAT .

Therefore, no interest income nor interest expense was recognized for the year ended December 31, 2023.

As of December 31, 2023, ASP Rentals had a receivable and an obligation to issue 76 % of the common shares of ASP Rentals with non-affiliates for an aggregate of ZAR 13,203,317 (which at the exchange rate as of December 31, 2023 was $ 721,548 ).

As of December 31, 2023, the Company had recorded $ 721,548 as a receivable from noncontrolling interest in current assets and a non-controlling interest in equity.

All consideration for these common shares of ASP Rentals was received in January 2024.

Stockholders’ Equity

Preferred stock

The Company has 10,000,000 shares of preferred stock authorized, of which no shares were issued and outstanding as of December 31, 2023 and December 31, 2022.

The Company has 500,000,000 shares of common stock authorized, of which 48,923,276 shares were issued and outstanding as of December 31, 2023.

The Company has 10,000,000 shares of preferred stock authorized, of which no shares were issued and outstanding as of December 31, 2024 and 2023.

The Company has 500,000,000 shares of common stock authorized, of which 72,068,059 and 48,923,276 shares were issued and outstanding as of December 31, 2024 and 2023 , respectively.

Common stockholders are entitled to one vote for each share of outstanding common stock held at all meetings of stockholders and written actions in lieu of meetings.

1 unchanged sentence

No dividends have been declared or paid by the Company through December 31, 2024.

During 2022, prior to the IPO, the Company issued 1,559,780 shares of common stock at $2.00 per share for gross proceeds of $ 3,119,560 .

The Company incurred $ 255,965 in cash issuance costs and is required to issue 120,491 shares of common stock to the placement agent with an initial fair value of $ 240,982 .

In October 2022, the Company amended its agreement with the placement agent for the shares issued from November 2021 through the first nine months of 2022.

The shares of common stock issuable to the placement agent was reduced from 120,491 shares to 57,250 shares.

The fair value of the 57,250 shares issuable to the placement agent as of December 31, 2022 was $ 90,455 .

The fair value of the 57,250 shares issuable to the placement agent just prior to settlement in March 2023 was $ 75,570 , resulting in a change in fair value of share liability of $ 14,885 for the three months ended March 31, 2023.

In March 2023, the Company settled this share liability by issuing 57,250 shares of common stock.

In November 2022, the Company was required to issue shares of common stock with a then fair value totaling $ 50,000 to a consultant.

The fair value of the 12,500 shares issued in August 2023 was $ 18,125 .

The resulting change in fair value income of the share liability was $ 31,875 for the year ended December 31, 2023.

In November 2022, the Company completed its IPO, selling an aggregate of 1,250,000 shares of common stock at a price to the public of $ 4.00 per share, not including 187,500 shares of common stock issuable pursuant to the underwriters’ exercise of their option to purchase additional shares of common stock.

The Company received net proceeds from the IPO, after deducting underwriting discounts and commissions but before deducting offering costs, of approximately $ 3.8 million.

ASP Isotopes Inc.

Notes to Consolidated Financial Statements (continued)

In February 2023, the Company was required to issue an aggregate of 100,000 shares of common stock to two consultants.

The Company determined that the fair value of these two awards was $ 1.55 and $ 1.90 per share, respectively, for a total value of $ 172,500 .

The fair value of these shares issued in August 2023 to the two consultants was $ 145,000 .

The resulting change in fair value income of the share liability was $ 27,500 for the year ended December 31, 2023.

In March 2023, the Company was required to issue an aggregate of 100,000 shares of restricted common stock pursuant to a settlement agreement that vests immediately.

The Company determined that the fair value of this award was $ 0.94 per share for a total value of $ 93,700 .

The fair value of these shares issued in August 2023 was $ 145,000 .

The resulting change in fair value of the share liability expense was $ 51,300 for the year ended December 31, 2023, respectively.

In March 2023, an officer and scientific advisor of the Company exchanged an aggregate of 3,000,000 shares of ASP Isotopes Inc.

common stock for 2,500 shares of Enlighted Isotopes convertible preferred stock.

In conjunction with the exchange, Enlighted Isotopes transferred the common shares of ASP Isotopes Inc.

In conjunction with the exchange, Enlightened Isotopes transferred the common shares of ASP Isotopes Inc.

to ASP Isotopes and then ASP Isotopes immediately cancelled all 3,000,000 shares.

The Company will report the non-controlling interest of future net income or loss on the consolidated balance sheet and statement of operations and comprehensive loss.

As of December 31, 2023, negligible activity has been recorded for Enlighted Isotopes.

In March 2023, the Company’s non-employee board members agreed to receive the 2022 cash director fees totaling $ 45,000 in shares of common stock.

As of December 31, 2023, these shares had yet to be issued.

As of December 31, 2023, negligible activity had been recorded for Enlightened Isotopes.

Activities for Enlightened Isotopes began in 2024.

ASP Isotopes Inc.

Notes to Consolidated Financial Statements (continued)

The Company’s non-employee board members agreed to receive the 2022 and 2023 director fees totaling $ 240,000 in shares of common stock.

In August 2024, 163,632 shares of common stock were issued and the value of the fees totaling $ 165,000 is recorded as par and additional paid-in capital on the consolidated balance sheet.

In December 2024, 77,626 shares of common stock were issued and the value of the fees totaling $ 75,000 is recorded as additional paid-in capital on the consolidated balance sheet.

The Company's non-employee board members received 429,423 shares of common stock during 2024, of which $ 400,000 and $ 100,000 was recorded as stock compensation expense in 2024 and 2023, respectively.

In March 2023, the Company issued 3,164,557 shares of the Company’s 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 its common stock with an exercise price of $ 1.75 per share for gross proceeds of $ 5,000,000 .

The Company incurred $ 506,390 in cash issuance costs and issued warrants to purchase up to an aggregate of 221,519 shares of common stock with an exercise price of $ 1.975 per share to the placement agent with an initial fair value of $ 179,116 .

In May 2023, the Company was required to issue an aggregate of 100,000 shares of restricted common stock pursuant to a consultant.

The Company determined that the fair value of this award was $ 0.65 per share for a total value of $ 65,100 .

The fair value of these shares issued in November 2023 was $ 152,000 .

The resulting change in fair value of the share liability expense was $ 86,900 for the year ended December 31, 2023.

In May 2023, the Company was required to issue an aggregate of 50,000 shares of restricted common stock pursuant to a consultant.

The Company determined that the fair value of this award was $ 0.62 per share for a total value of $ 30,900 .

The fair value of these shares issued in November 2023 was $ 76,000 .

The resulting change in fair value of the share liability expense was $ 45,100 for the year ended December 31, 2023.

In July 2023, the Company was required to issue an aggregate of 150,000 shares to consultants.

The Company determined that the fair value of these awards was $ 1.21 for a total value of $ 181,500 .

The fair value of these shares issued in August 2023 was $248,000 .

The resulting change in fair value of the share liability expense was $ 66,500 for the year ended December 31, 2023.

In August 2023, the Company was required to issue an aggregate of 100,000 shares of restricted common stock pursuant to consultants.

The Company determined that the fair value of this award was $ 1.26 per share for a total value of $ 126,000 .

The fair value of the shares issued in August was $ 145,000 .

This resulted in a change in fair value expense of the share liability of $ 19,000 for the year ended December 31, 2023.

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 $ 9,129,495 , as follows:

1 unchanged sentence

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 .

Activity of the share liabilities for the year ended December 31, 2023 is as follows:

Share Liability as of December 31, 2022

New Share Liabilities in 2023

Mark to Market Adjustments in 2023

Liabilities Settled in 2023

Share Liabilities as of December 31, 2023

Share liabilities originated in 2022

Share liabilities originated in 2023

( 1,004,695 )

In July 2024, the Company issued 13,800,000 shares of common stock in a public offering at a public offering price of $ 2.50 per share for aggregate gross proceeds totaling $ 34,500,000 .

Issuance costs, including commissions and expenses totaled $ 2,194,041 .

In November 2024, the Company issued an additional 2,754,250 shares of common stock in a public offering at a public offering price of $ 6.75 per share for aggregate gross proceeds totaling $ 18,591,187 .

Issuance costs, including commissions and expenses totaled $ 1,454,344 .

The following shares were issued to consultants and vendors for the year ended December 31, 2024:

Origination Date

Settlement Date

Fair Value at Settlement

Change in Fair Value

Settlement of liability with consultants

September 2024

Settlement of liability with consultants

Issuance of common stock to consultant

Settlement of liability with consultants

September 2024

Issuance of restricted common stock to consultants

September 2024

Settlement of liability with consultants

December 2024

ASP Isotopes Inc.

Notes to Consolidated Financial Statements (continued)

The following shares were issued to consultants and vendors for the year ended December 31, 2023:

Origination Date

Settlement Date

Fair Value at Settlement

Change in Fair Value

Issuance of common stock in lieu of commissions

Settlement of liability with consultants

November 2022

Settlement of liability with consultants

February 2023

Settlement of liability with consultants

Issuance of common stock to settle share liability

November 2023

Issuance of common stock to settle share liability

November 2023

Settlement of liability with consultants

During 2023 and 2024, the Company issued shares of common stock to consultants and vendors to settle share liabilities.

The fair value of these shares is recorded to share liability in the consolidated balance sheet and the change in fair value upon settlement of the share liability is recorded to change in fair value of share liability in the consolidated statements of operations and comprehensive loss.

Activity of the share liabilities for the year ended December 31, 2024 is as follows:

Share Liabilities

Share liabilities

Activity of the share liabilities for the year ended December 31, 2023 is as follows:

Share Liabilities

Share liabilities

Common Stock Warrants

In September 2021, the Company issued warrants to purchase 7,230,822 shares of common stock at an exercise price of $ 0.01 per share for no cash consideration to two parties for their field of knowledge related to the technical operations of the Company.

These warrants were to expire in September 2023 .

The Company determined that the fair value of common stock was $ 0.25 per share.

The fair value of these warrants was initially determined to be $ 1,735,841 and was recorded as general and administrative expense.

In January 2022, these warrants were net share settled into 7,194,847 shares of common stock per the terms of the underlying warrant agreements.

The fair values of the warrants to purchase 3,386,076 shares of common stock issued in the year ended December 31, 2023 were estimated based on the Black-Scholes model, using the following assumptions:

In September 2023, the Company issued warrants to purchase 3,386,076 shares of common stock.

The fair value of these warrants was determined to be $ 2,882,621 and estimated based on the Black-Scholes model, using the following assumptions:

Expected volatility

2 unchanged sentences

Expected dividend yield

In April 2024, a warrant to purchase 3,164,557 shares of common stock was exercised and the Company received gross proceeds of $ 5,537,975 .

As an inducement for the warrant holder to exercise in cash, a warrant to purchase 1,225,000 shares of common stock at an exercise price of $ 3.90 per share was issued to that same warrant holder for no consideration (“Inducement Warrant”).

The Inducement Warrant vests in October 2024 and expires in October 2029 .

The Company evaluated the terms of the

ASP Isotopes Inc.

Notes to Consolidated Financial Statements (continued)

Inducement Warrant and determined that it should be accounted for as an equity-based warrant.

The Company also evaluated the circumstances of the award and determined that the inducement should be treated as a deemed dividend.

The fair value of the Inducement Warrant was determined to be $ 2,779,659 and estimated based on the Black-Scholes model, using the following assumptions:

Expected volatility

Weighted-average risk-free rate

Expected term in years

Expected dividend yield

The fair value of the Inducement Warrant is considered a deemed dividend and the amount is reflected in the calculation of earnings (loss) per share on a basic and diluted basis.

In conjunction with the exercise of the warrant in April 2024, the Company is now obligated to issue to an underwriter, a warrant to purchase 221,519 shares of common stock (“Commission Warrant”) in addition to a cash payment totaling $ 387,658 .

The Company evaluated the terms of the Commission Warrant and determined that it should be accounted for as an equity-based warrant.

The fair value of the Commission Warrant was determined to be $ 657,871 and estimated based on the Black-Scholes model, using the following assumptions:

Expected volatility

Weighted-average risk-free rate

Expected term in years

Expected dividend yield

The cash payment and the issuance of the Commission Warrant was settled in December 2024.

The fair value of the Commission Warrant upon issuance was $ 765,894 .

The resulting change in fair value of share liability was a loss of $ 108,023 for the year ended December 31, 2024 and is included in change in fair value of share liability in the statement of operations and comprehensive loss.

In October 2024, a warrant to purchase 151,741 shares of common stock was exercised and the Company received gross proceeds of $ 299,688 .

Stock Compensation Plan

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The maximum contractual term of options granted under the 2022 Plan is ten years .

The number of shares of the Company’s common stock reserved for issuance under the 2022 Plan is equal to 5,000,000 , subject to an annual increase, to be added on the first day of each fiscal year, beginning with the fiscal year ending December 31, 2023 and continuing until, and including, the fiscal year ending December 31, 2033, equal to the lesser of 5% of the number of shares of the Company’s common stock outstanding on such date or an amount determined by the Company’s board of directors.

The number of shares of the Company’s common stock initially reserved for issuance under the 2022 Plan is equal to 5,000,000 , subject to an annual increase, to be added on the first day of each fiscal year, beginning with the fiscal year ending December 31, 2023 and continuing until, and including, the fiscal year ending December 31, 2033, equal to the lesser of 5 % of the number of shares of the Company’s common stock outstanding on such date or an amount determined by the Company’s board of directors.

On January 1, 2024, the Company added 2,446,164 shares to the 2022 Plan.

As of December 31, 2024, 395,535 shares remain available for future grant under the Plan.

In June 2024, the Company adopted the 2024 Inducement Equity Incentive Plan (“2024 Plan”).

The 2024 Plan will be used exclusively for the grant of equity awards to individuals who were not previously employees or directors of the Company, or following a bona fide period of non-employment, as an inducement material to such individuals entering into employment with the Company, pursuant to Nasdaq Listing Rule 5635(c)(4).

Recipients of stock options are eligible to purchase shares of common stock at an exercise price equal to no less than the estimated fair market value of such stock on the date of grant.

The 2024 Plan provides

ASP Isotopes Inc.

Notes to Consolidated Financial Statements (continued)

for the grant of non-statutory stock options, restricted stock, restricted stock units, stock awards and stock appreciation rights.

The maximum contractual term of options granted under the 2024 Plan is ten years.

The number of shares of the Company’s common stock initially reserved for issuance under the 2024 plan is equal to 2,500,000 .

As of December 31, 2024, 1,825,000 shares remain available for future grant under the 2024 Plan.

Stock Options

The following table sets forth the activity for the Company’s stock options during the periods presented:

Number of Options

Weighted- Average

Exercise Price

Weighted Average

Term (in Years)

Aggregate Intrinsic

Outstanding as of December 31, 2022

3 unchanged sentences

Vested or expected to vest as of December 31, 2024

ASP Isotopes Inc.

Notes to Consolidated Financial Statements (continued)

The fair values of the options granted were estimated based on the Black-Scholes model, using the following assumptions:

Year Ended December 31, 2022

Expected volatility

62.6 % – 69.5 %

Risk-free interest rate

1.68 % – 3.25 %

Expected term in years

Expected dividend yield

For the year ended December 31, 2022, the Company granted 2,751,000 options with an exercise price of $ 2.00 per share, of which 288,000 options were issued to nonemployee directors that vest in April 2023 and the remaining options generally vest monthly over three years.

The weighted average grant date fair value of options granted during 2022 was $ 1.18 .

No options were granted in the year ended December 31, 2023.

No options were granted in the years ended December 31, 2024 and 2023.

The Company recorded stock compensation from options of $ 783,145 and $ 973,844 for the year ended December 31, 2024 and 2023, respectively.

3 unchanged sentences

The Company determined that the fair value of this award was $ 0.25 per share for a total value of $ 375,000 .

Upon the performance condition being considered probable, which has not been met as of December 31, 2023, the Company will recognize stock compensation expense over the remaining measurement period.

In October 2021, the Company issued 600,000 shares of restricted common stock to a consultant who is also a member the board of directors, that vest annually over three years.

The Company determined that the fair value of this award was $ 0.25 per share for a total value of $ 150,000 .

The consulting agreement also included future awards of common stock for continued service, however in March 2023, the consulting agreement was amended and these future awards were cancelled.

In July 2022, the Company issued 600,000 shares of restricted common stock to a consultant who is also a member the board of directors, that vest quarterly over one year.

The Company determined that the fair value of this award was $ 2.00 per share for a total value of $ 1,200,000 .

In July 2022, the Company issued 100,000 shares of restricted common stock to a consultant, that vests on the one-year anniversary of the grant.

The Company determined that the fair value of this award was $ 2.00 per share for a total value of $ 200,000 .

In November 2022, the Company issued 3,000,000 shares of restricted common stock to certain employees and directors, that vest two to four years from the date of the grant.

The Company determined that the fair value of these awards was $ 2.63 per share for a total value of $ 7,890,000 .

In December 2022, the Company issued an aggregate of 1,550,000 shares of restricted common stock to its Chief Executive Officer and Chairman, Interim Chief Financial Officer and a director that vest quarterly over one year from the date of the grant.

The Company determined that the fair value of these awards was $ 1.58 per share for a total value of $ 2,449,000 .

In March 2023, the Company issued an aggregate of 1,256,750 shares of restricted common stock to its Chief Executive Officer and Chairman and a director that vests quarterly over one year from the date of the grant.

The Company determined that the fair value of these awards was $ 1.80 per share for a total value of $ 2,262,150 .

In August 2023, the Company issued 300,000 and 200,000 shares of restricted common stock pursuant to one employee and one director for employment services, respectively.

The Company determined that the fair value of these awards was $ 0.55 per share and $ 1.22 per share, respectively for a total combined value of $ 409,000 .

In October 2023, the Company was obligated to issue $ 100,000 to a board member for his services.

These shares were not awarded as of December 31, 2023, however, stock based compensation was recorded totaling $ 100,000 .

ASP Isotopes Inc.

Notes to Consolidated Financial Statements (continued)

The Company recorded stock compensation from stock awards totaling $ 7,669,955 and $ 1,075,732 for the years ended December 31, 2023 and 2022, respectively.

As of December 31, 2023, there is $ 5,806,129 of unrecognized compensation cost related to the non-vested portion of stock awards that is expected to be recognized over the next 1.5 years.

The Company determined the performance condition probable and recognized stock-based compensation expense of $ 375,000 for the year ended December 31, 2024.

The Company recorded stock-based compensation expense from stock awards totaling $ 7,778,259 and $ 7,669,955 for the years ended December 31, 2024 and 2023, respectively.

As of December 31, 2024, there is $ 7,982,308 of unrecognized stock-based compensation expense related to the non-vested portion of restricted stock awards that is expected to be recognized over the next 2.2 years.

The following table summarizes awards and vesting of restricted common stock:

Number of Shares

Weighted Average Grant Date

Average Grant

Unvested as of December 31, 2022

Unvested as of December 31 2023

( 4,267,564 )

Forfeited and retired

Unvested as of December 31 2024

ASP Isotopes Inc.

Notes to Consolidated Financial Statements (continued)

Of the 2,523,554 shares of restricted common stock granted in 2024, 150,000 shares were issued to consultants and 170,088 shares were issued to the Company's non-employee board members.

Stock-based Compensation Expense

1 unchanged sentence

Year Ended December 31,

Selling, general and administrative

6 unchanged sentences

Year Ended December 31,

Net loss attributable to ASP Isotopes shareholders

$ ( 16,286,234 )

$ ( 4,945,139 )

Weighted average common stock outstanding, basic and diluted

Net loss attributable to ASP Isotopes

Weighted average common stock outstanding,

basic and diluted

Net loss per share, basic and diluted

ASP Isotopes Inc.

Notes to Consolidated Financial Statements (continued)

The following table sets forth the potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because to include them would be anti-dilutive:

Year Ended December 31,

Options to purchase common stock

4 unchanged sentences

Year Ended December 31,

$ ( 12,892,377 )

$ ( 3,205,342 )

( 3,407,882 )

( 1,739,797 )

Total net loss before taxes

$ ( 16,300,259 )

$ ( 4,945,139 )

The effective tax rate of the Company’s provision for income taxes differs from the federal statutory rate for the year ended December 31, 2023 and 2022 as follows:

Year Ended December 31,

ASP Isotopes Inc.

Notes to Consolidated Financial Statements (continued)

Income tax (benefit) expense for the years ended December 31, 2024 and 2023 is comprised of the following:

Total Current

Total Deferred

Total income tax expense (benefit)

The effective tax rate of the Company’s provision for income taxes differs from the federal statutory rate for the years ended December 31, 2024 and 2023 as follows:

Year Ended December 31,

Tax computed at federal statutory rate

Earnings in jurisdictions taxed at rates different from the statutory U.S.

Earnings in jurisdictions taxed at rates different

from the statutory U.S.

federal tax rate

Return to provision

Change in fair value of convertible notes

Non-deductible stock compensation expense

17 unchanged sentences

valuation allowance

( 2,159,799 )

Net deferred taxes (liabilities) assets

$ ( 110,578 )

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and deferred tax liabilities for the expected future tax consequences of events that have been included in the financial statements.

Under this method, the Company determines deferred tax assets and deferred tax liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse.

The effect of a change in tax rates on deferred tax assets and deferred tax liabilities is recognized in income in the period that includes the enactment date.

ASP Isotopes Inc.

Notes to Consolidated Financial Statements (continued)

The Company recorded income tax income totaling $ 6,133 from the activities of PET Labs Pharmaceuticals for the two months ended December 31, 2023.

The Company has no income tax expense due to operating losses incurred for the year ended December 31, 2022.

The valuation allowance increased by $ 1,182,177 and $ 926,104 in 2023 and 2022, respectively, due to the increase in the net deferred tax assets by the same amount;

primarily due to net operating loss carryforwards.

As of December 31, 2023, the Company has federal, state and South Africa NOLs available of $ 5,993,571 , $ 332,933 and $ 2,271,489 , respectively, to offset future taxable income, if any, for federal and state income tax purposes.

The state NOLs are carried forward indefinitely until used and never expire.

Under the Tax Act, federal NOLs utilized are limited to 80% of taxable income in any year where taxable income is determined without regard to the NOL deduction itself.

The Tax Act generally eliminates the ability to carry back any net operating loss to prior taxable years, while allowing unused net operating losses to be carried forward indefinitely.

The Company recognizes a tax benefit from an uncertain tax position when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits.

Income tax positions must meet a more likely than not recognition threshold to be recognized.

The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense.

The Company had no accrual for interest and penalties on the Company’s balance sheets and has not recognized interest and/or penalties in the statements of operations and comprehensive loss for the years ended December 31, 2023 and 2022.

Uncertain tax positions are evaluated based upon the facts and circumstances that exist at each reporting period.

Subsequent changes in judgment based upon new information may lead to changes in recognition, derecognition, and measurement.

Adjustments may result, for example, upon resolution of an issue with the taxing authorities or expiration of a statute of limitations barring an assessment for an issue.

As of December 31, 2023 and December 31, 2022, there were no uncertain tax positions.

Ownership changes, as defined in the IRC, may limit the amount of net operating loss carryforwards that can be utilized annually to offset future taxable income pursuant to IRC Section 382 or similar provisions.

Subsequent ownership changes could further affect the limitation in future years.

The Company has not completed a study to assess whether a change of control has occurred or whether there have been multiple changes of control since the Company’s formation due to the significant complexity and cost associated with such study and because there could be additional changes in control in the future.

As a result, the Company is not able to estimate the effect of the change in control, if any, on the Company’s ability to utilize net operating loss and research and development credit carryforwards in the future.

The Company recognize deferred tax assets to the extent that the Company believes that these assets are more likely than not to be realized.

In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, carryback potential if permitted under the tax law, and results of recent operations.

If the Company determines that it would not be able to realize its deferred tax assets in the future in excess of the net recorded amount, the Company would make an adjustment to the deferred tax assets through recognizing a valuation allowance, which would increase the provision for income taxes.

The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

We recognize interest and penalties related to UTBs on the income tax expense line in the accompanying consolidated statement of operations.

Accrued interest and penalties are included on the related tax liability line in the consolidated balance sheet.

Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing DTAs.

On the basis of this evaluation, as of December 31, 2024, a full valuation allowance has been recorded against the federal, state, and South Africa deferred tax assets, excluding PET Labs and ASP Rentals which have no valuation allowance recorded.

The amount of the DTA considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses becomes present and less weight is given to subjective evidence such as our projections for growth.

We are subject to taxation in the United States and various states and foreign jurisdictions.

The statute of limitations remains open for all periods of taxable loss until the losses have been utilized.

Subsequent Events

On March 7, 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 .

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.

On April 9, 2024, the Company received approximately $ 5,500,000 from the issuance of 3,164,557 shares of common stock upon the exercise of a warrant held by an institutional investor.

In conjunction with the exercise of the warrants, the same investor received a new warrant to purchase 1,225,000 shares of common stock at $ 3.90 per share.

This new warrant becomes exercisable 6 months after issuance and expires on the fifth anniversary of the initial exercise date .

Effective on January 1, 2025, the Company added 3,603,403 shares to the 2022 Equity Incentive Plan.

The Company has evaluated subsequent events through March 31, 2025, the date on which the accompanying financial statements were issued, and no other events were noted.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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 8. Financial Statements and Supplementary Data