ASP Isotopes Inc. 10-K

Item 8. Financial Statements and Supplementary Data ASP Isotopes Inc. Index to Consolidated Financial Statements Report of Independent Registered Public Accounting Firm (PCAOB ID 274 ) 65 Consolidated Balance Sheets as of December 31, 2024 and 2023 66 Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2024 and 2023 67 Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2024 and 2023 68 Consolidated Statements of Cash Flows for the years ended December 31, 2024 and 2023 69 Notes to Consolidated Financial Statements 70 64 Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of ASP Isotopes Inc Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of ASP Isotopes Inc. and Subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity, and cash flows for each of the years then ended, and the related notes (collectively referred to as the “financial statements”). 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. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ EisnerAmper LLP We have served as the Company’s auditor since 2022. EISNERAMPER LLP Iselin, New Jersey March 31, 2025 65 ASP Isotopes Inc. Consolidated Balance Sheets December 31, 2024 2023 Assets Current assets: Cash and cash equivalents $ 61,890,048 $ 7,908,181 Accounts receivable 706,925 216,504 Inventory 65,655 — Receivable from noncontrolling interests 27,556 721,548 Prepaid expenses and other current assets 3,053,478 1,664,023 Total current assets 65,743,662 10,510,256 Property and equipment, net 22,354,377 10,712,839 Operating lease right-of-use assets, net 1,122,134 1,258,701 Deferred tax assets 31,847 — Goodwill 3,168,101 3,267,103 Other noncurrent assets 1,927,867 1,793,014 Total assets $ 94,347,988 $ 27,541,913 Liabilities and stockholders’ equity Current liabilities: Accounts payable $ 1,021,393 $ 1,111,819 Accrued expenses 2,275,681 1,311,245 Notes payable - current 939,110 470,396 Finance lease liabilities – current 125,862 61,941 Operating lease liabilities – current 557,676 336,564 Deferred revenue 882,000 882,000 Other current liabilities 1,256,549 1,500,000 Total current liabilities 7,058,271 5,673,965 Deferred tax liabilities — 110,578 Convertible notes payable, at fair value 33,433,184 — Notes payable - noncurrent 1,441,286 — Finance lease liabilities – noncurrent 560,328 207,092 Operating lease liabilities – noncurrent 688,479 1,066,647 Other noncurrent liabilities — 1,653,000 Total liabilities 43,181,548 8,711,282 Commitments and contingencies (Note 8) Stockholders’ equity Preferred stock, $ 0.01 par value; 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, 72,068,059 and 48,923,276 shares issued and outstanding as of December 31, 2024 and 2023, respectively 720,681 489,233 Additional paid-in capital 105,515,005 40,567,003 Accumulated deficit ( 56,172,881 ) ( 23,839,300 ) Accumulated other comprehensive loss ( 2,164,313 ) ( 920,982 ) Total ASP Isotopes stockholders’ equity 47,898,492 16,295,954 Noncontrolling interests 3,267,948 2,534,677 Total stockholders’ equity 51,166,440 18,830,631 Total liabilities and stockholders’ equity $ 94,347,988 $ 27,541,913 The accompanying notes are an integral part of these consolidated financial statements. 66 ASP Isotopes Inc. Consolidated Statements of Operations and Comprehensive Loss Year Ended December 31, 2024 2023 Revenue Product revenue $ 3,944,226 $ 433,026 Collaboration revenue 200,000 — Total revenue 4,144,226 433,026 Cost of goods sold 2,544,614 294,056 Gross profit 1,599,612 138,970 Operating expenses: Research and development 3,138,978 764,581 Selling, general and administrative 24,814,288 15,416,388 Total operating expenses 27,953,266 16,180,969 Loss from operations ( 26,353,654 ) ( 16,041,999 ) Other income (expense): Foreign exchange transaction gain 69,865 45,753 Change in fair value of share liability ( 132,273 ) ( 194,540 ) Change in fair value of convertible notes payable ( 6,875,041 ) — Interest income 1,238,691 9,074 Interest expense ( 258,867 ) ( 118,547 ) Total other expense ( 5,957,625 ) ( 258,260 ) Loss before income tax expense ( 32,311,279 ) ( 16,300,259 ) Income tax (expense) benefit ( 111,449 ) 6,133 Net loss before allocation to noncontrolling interests ( 32,422,728 ) ( 16,294,126 ) Less: Net loss attributable to noncontrolling interests ( 89,147 ) ( 7,892 ) Net loss attributable to ASP Isotopes Inc. shareholders before deemed dividend on inducement warrant for common stock $ ( 32,333,581 ) $ ( 16,286,234 ) Deemed dividend on inducement warrant for common stock ( 2,779,659 ) — Net loss attributable to ASP Isotopes Inc. shareholders $ ( 35,113,240 ) $ ( 16,286,234 ) Net loss per share attributable to ASP Isotopes Inc. shareholders, basic and diluted $ ( 0.63 ) $ ( 0.49 ) Weighted average shares of common stock outstanding, basic and diluted 55,671,805 33,066,708 Comprehensive income (loss): Net loss before allocation to noncontrolling interests $ ( 32,422,728 ) $ ( 16,294,126 ) Foreign currency translation ( 1,243,331 ) ( 1,176,012 ) Total comprehensive loss before allocation to noncontrolling interests ( 33,666,059 ) ( 17,470,138 ) Less: Comprehensive (loss) income attributable to noncontrolling interests ( 119,417 ) 27,255 Comprehensive loss attributable to ASP Isotopes Inc. $ ( 33,546,642 ) $ ( 17,497,393 ) The accompanying notes are an integral part of these consolidated financial statements. 67 ASP Isotopes Inc. Consolidated Statements of Changes in Stockholders’ Equity Common Stock Additional Paid-in Accumulated Other Comprehensive Accumulated Noncontrolling Total Stockholders’ Shares Amount Capital (Loss) Income Deficit Interests Equity Balance as of December 31, 2022 35,907,127 $ 359,071 $ 16,756,426 $ 255,030 $ ( 7,553,066 ) $ — $ 9,817,461 Issuance of common stock, net of issuance costs of $ 563,473 13,117,067 131,171 13,434,851 — — — 13,566,022 Issuance of common stock for non-cash issuance costs 472,582 4,726 ( 4,726 ) — — — — Issuance of common stock to settle share liability 150,000 1,500 226,500 228,000 Settlement of liability with related parties — — 626,223 — — — 626,223 Settlement of liability with consultants 519,750 5,198 771,497 — — — 776,695 Cancellation of common stock received in exchange for issuance of convertible preferred stock in subsidiary ( 3,000,000 ) ( 30,000 ) 30,000 — — — — Issuance of restricted shares 1,756,750 17,567 ( 17,567 ) — — — — Stock-based compensation — — 8,743,799 — — — 8,743,799 Noncontrolling interest in ASP Rentals — — — — — 721,548 721,548 Acquisition of PET Labs — — — — — 1,821,021 1,821,021 Foreign currency translation — — — ( 1,176,012 ) — — ( 1,176,012 ) Net loss — — — — ( 16,286,234 ) ( 7,892 ) ( 16,294,126 ) Balance as of December 31, 2023 48,923,276 489,233 40,567,003 ( 920,982 ) ( 23,839,300 ) 2,534,677 18,830,631 Issuance of common stock, net of issuance costs of $ 3,648,385 16,554,250 165,542 49,277,260 — — — 49,442,802 Issuance of common stock from warrant exercise 3,316,298 33,163 5,804,500 — — — 5,837,663 Issuance of restricted common stock 2,523,554 25,236 ( 25,236 ) — Issuance of common stock to consultants 60,000 600 183,000 — — — 183,600 Issuance of common stock to board members 670,681 6,707 ( 6,707 ) — — — — Retired unvested restricted shares ( 325,000 ) ( 3,250 ) 3,250 — — — — Settlement of liabilities with consultant 345,000 3,450 1,151,400 — — — 1,154,850 Board fee liabilities settled with shares — — 240,000 — — — 240,000 Commission fee liability settled with cash and common stock warrant — — ( 1,006,763 ) — — — ( 1,006,763 ) Settlement of commission fee liability payable in common stock warrant — — 765,894 — — — 765,894 Stock-based compensation expense — — 8,561,404 — — — 8,561,404 Contribution from noncontrolling interest in VIE — — — — — 920,336 920,336 Distribution to noncontrolling interest of VIE — — — — — ( 97,918 ) ( 97,918 ) Foreign currency translation — — — ( 1,243,331 ) — — ( 1,243,331 ) Net loss — — — — ( 32,333,581 ) ( 89,147 ) ( 32,422,728 ) Balance as of December 31, 2024 72,068,059 $ 720,681 $ 105,515,005 $ ( 2,164,313 ) $ ( 56,172,881 ) $ 3,267,948 $ 51,166,440 The accompanying notes are an integral part of these consolidated financial statements. 68 ASP Isotopes Inc. Consolidated Statements of Cash Flows Year Ended December 31, 2024 2023 Cash flows from Operating activities Net loss $ ( 32,422,728 ) $ ( 16,294,126 ) Adjustments to reconcile net loss to cash used in operating activities: Foreign exchange transaction loss(gain) from intercompany 42,407 ( 44,649 ) Depreciation 471,421 37,433 Loss on disposal of property and equipment 1,666 — Stock-based compensation 8,561,404 8,743,799 Convertible note payable for non-cash issuance costs 621,915 — Shares issued for non-cash consultant expense 1,314,200 669,700 Change in fair value of share liability 132,273 194,540 Change in fair value of convertible notes payable 6,875,041 — Change in right-of-use lease assets 473,202 104,528 Change in deferred tax assets, net ( 143,276 ) 16,655 Changes in operating assets and liabilities, net of acquisition amounts: Accounts receivable ( 505,952 ) 237,952 Inventory ( 67,639 ) — Prepaid expenses and other current assets ( 1,356,761 ) ( 546,097 ) Other noncurrent assets ( 9,190 ) ( 59,324 ) Accounts payable ( 877,468 ) ( 224,598 ) Accrued expenses 909,873 873,705 Deferred revenue — 882,000 Operating lease liability ( 427,460 ) ( 85,775 ) Tax liability current — ( 22,787 ) Other current liabilities ( 288,293 ) 104,652 Net cash used in operating activities ( 16,695,365 ) ( 5,412,392 ) Cash flows from investing activities Purchases of property and equipment ( 9,675,127 ) ( 2,331,343 ) Cash advance paid for property and equipment ( 1,697,272 ) — Cash paid for acquisition of business, net of cash acquired — ( 121,848 ) Net cash used in investing activities ( 11,372,399 ) ( 2,453,191 ) Cash flows from financing activities Proceeds from issuance of common stock 53,091,187 14,129,495 Common stock issuance costs ( 3,648,385 ) ( 563,473 ) Proceeds from exercise of warrants 5,837,663 — Proceeds from noncontrolling interest in VIE 920,336 — Proceeds from collection of receivable from noncontrolling interest in VIE 706,774 — Distribution to noncontrolling interest in VIE ( 97,918 ) — Proceeds from issuance of convertible notes payable 25,936,228 — Proceeds from issuance of notes payable 500,923 526,282 Payments of notes payable ( 561,176 ) ( 87,713 ) Payment of bank loan ( 51,381 ) ( 609,499 ) Payment of principal portion of finance leases ( 100,611 ) ( 9,601 ) Net cash provided by financing activities 82,533,640 13,385,491 Net change in cash and cash equivalents 54,465,876 5,519,908 Effect of exchange rate changes on cash and cash equivalents ( 484,009 ) ( 867 ) Cash and cash equivalents– beginning of year 7,908,181 2,389,140 Cash and cash equivalents– end of year $ 61,890,048 $ 7,908,181 Supplemental disclosures of non-cash investing and financing activities: Issuance of common stock in lieu of commissions $ — $ 75,570 Settlement of liabilities with related party $ — $ 626,223 Seller financed portion of investment in PET Labs Pharmaceuticals $ — $ 1,500,000 Purchase of property and equipment included in accounts payable $ 795,264 $ 453,985 Right-of-use assets obtained in exchange for operating lease liability $ 364,458 $ 70,607 Right-of-use assets obtained in exchange for financing lease liability $ 538,768 $ — Deemed dividend on inducement warrant $ 2,779,659 $ — Purchase of property and equipment with bank loans $ 2,020,511 $ — Board fees settled with common stock $ 240,000 $ — Commission fee settled with common stock warrant $ 765,894 $ — The accompanying notes are an integral part of these consolidated financial statements. 69 ASP Isotopes Inc. Notes to Consolidated Financial Statements 1. Orga nization Description of Business ASP Isotopes Inc. 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 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 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’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. Liquidity The Company has experienced net losses and negative cash flows from operating activities since its inception. 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 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 scale back or discontinue the advancement of product candidates, reduce headcount, reorganize, merge with another entity, or cease operations. 70 ASP Isotopes Inc. Notes to Consolidated Financial Statements (continued) 2. Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation and Use of Estimates The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). 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, 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 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. Currency and Currency Translation The consolidated financial statements are presented in U.S. dollars, the Company’s reporting currency. The functional currency of ASP Isotopes Inc. and ASP Guernsey is the U.S. dollar. 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. 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 and comprehensive loss. 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 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 separately in stockholders’ equity as a component of accumulated other comprehensive (loss) income. Concentration of Credit Risk and other Risks Cash balances are maintained at U.S. financial institutions and may exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance limit of $ 250,000 per depositor, per insured bank for each account ownership category. Although the Company currently believes that the financial institutions with whom it does business, will be able to fulfill their commitments to the Company, there is no assurance that those institutions will be able to continue to do so. The Company has not experienced any credit losses associated with its balances in such accounts for the years ended December 31, 2024 and 2023. 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. If we were to repatriate foreign cash to the U.S., we would be required to accrue and pay U.S. taxes in accordance with applicable U.S. 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 Customer A $ 200,000 28 % $ — — Customer B $ 144,590 20 % $ 32,683 15 % Customer C $ — — $ 27,398 13 % Customer D $ — — $ 21,682 10 % 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. 71 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. Cash and cash equivalents are stated at fair value and may include money market funds, U.S. Treasury and U.S. government-sponsored agency securities, corporate debt, commercial paper and certificates of deposit. The Company had no cash equivalents as of December 31, 2024 and 2023 . Fair Value of Financial Instruments Accounting guidance defines fair value, establishes a consistent framework for measuring fair value, and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1: Observable inputs such as quoted prices in active markets; Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The Company’s share liability (Note 12) is measured 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: Convertible Notes Payable Balance as of December 31, 2023 — Fair value at issuance 26,558,143 Fair value adjustment 6,875,041 Balance as of December 31, 2024 $ 33,433,184 The carrying amounts of accounts payable, accrued expenses and notes payable are considered to be representative of their respective fair values because of the short-term nature of those instruments. Revenue Recognition The Company’s 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. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine the appropriate amount of revenue to be recognized for arrangements determined to be within the scope of ASC 606, the Company performs the following five steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect consideration it is entitled to in exchange for the goods or services it transfers to the customer. 72 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. In assessing whether promised goods or services are distinct, the Company considers whether the goods or services are integral or dependent to other goods or services in the contract. The Company determines the transaction price based on the agreed government rates for the promised goods in the contract. The consideration is recognized as revenue when control is transferred for the related goods. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. The Company receives payments from its customers based on billing schedules established in each contract. Upfront payments and fees are recorded as deferred revenue upon receipt or when due until the Company performs its obligations under these arrangements. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional. 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. 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. Inventory 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 Property and equipment include costs of assets constructed, purchased or leased under a finance lease, related delivery and installation costs and interest incurred on significant capital projects during their construction periods. Expenditures for renewals and betterments also are capitalized, but expenditures for normal repairs and maintenance are expensed as incurred. Costs associated with yearly planned major maintenance are generally deferred and amortized over 12 months or until the same major maintenance activities must be repeated, whichever is shorter. The cost and accumulated depreciation applicable to assets retired or sold are removed from the respective accounts, and gains or losses thereon are included in the statement of operations and comprehensive loss. The Company assigns the useful lives of 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 (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. 73 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. Business Combination and Asset Acquisitions The Company evaluates acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen is met, the transaction is accounted for as an asset acquisition. If the screen is not met, further determination is required as to whether or not the Company has acquired inputs and processes that have the ability to create outputs, which would meet the requirements of a business. If determined to be a business combination, the Company accounts for the transaction under the acquisition method of accounting in accordance with ASC Topic 805 Business Combinations ("ASC 805"), which requires the acquiring entity in a business combination to recognize the fair value of all assets acquired, liabilities assumed, and any non-controlling interest in the acquiree and establishes the acquisition date as the fair value measurement point. Accordingly, the Company recognizes assets acquired and liabilities assumed in business combinations, including contingent assets and liabilities, and non-controlling interest in the acquiree based on the fair value estimates as of the date of acquisition. In accordance with ASC 805, the Company recognizes and measures goodwill as of the acquisition date, as the excess of the fair value of the consideration paid over the fair value of the identified net assets acquired. The consideration for the Company’s business acquisitions may include future payments that are contingent upon the occurrence of a particular event or events. The obligations for such contingent consideration payments are recorded at fair value on the acquisition date. The contingent consideration obligations are then evaluated each reporting period. Changes in the fair value of contingent consideration, other than changes due to payments, are recognized as a gain or loss and recorded within change in the fair value of deferred and contingent consideration liabilities in the consolidated statements of comprehensive loss. If determined to be an asset acquisition, the Company accounts for the transaction under ASC 805-50, which requires the acquiring entity in an asset acquisition to recognize assets acquired and liabilities assumed based on the cost to the acquiring entity on a relative fair value basis, which includes transaction costs in addition to consideration given. No gain or loss is recognized as of the date of acquisition unless the fair value of non-cash assets given as consideration differs from the assets’ carrying amounts on the acquiring entity’s books. Consideration transferred that is non-cash will be measured based on either the cost (which shall be measured based on the fair value of the consideration given) or the fair value of the assets acquired and liabilities assumed, whichever is more reliably measurable. Goodwill is not recognized in an asset acquisition and any excess consideration transferred over the fair value of the net assets acquired is allocated to the identifiable assets based on relative fair values. Contingent consideration payments in asset acquisitions are recognized when the contingency is resolved and the consideration is paid or becomes payable (unless the contingent consideration meets the definition of a derivative, in which case the amount becomes part of the basis in the asset acquired). Upon recognition of the contingent consideration payment, the amount is included in the cost of the acquired asset or group of assets. Goodwill Goodwill represents the amount of consideration paid in excess of the fair value of net assets acquired as a result of the Company’s business acquisitions accounted for using the acquisition method of accounting. Goodwill is not amortized and is subject to impairment testing at a reporting unit level on an annual basis or when a triggering event occurs that may indicate the carrying value of the goodwill is impaired. An entity is permitted to first assess qualitative factors to determine if a quantitative impairment test is necessary. Further testing is only required if the entity determines, based on the qualitative assessment, that it is more likely than not that the fair value of the reporting unit is less than its carrying amount. The Company 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. 74 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. Leases 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 ("ROU") assets are recorded based on the present value of future lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company will utilize the incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment, and considering the region in which the ROU asset and liabilities are located. The Company has elected to combine lease and non-lease components as a single component. Operating leases are recognized on the balance sheet as ROU lease assets, lease liabilities current and lease liabilities non-current. Fixed rents are included in the calculation of the lease balances, while variable costs paid for certain operating and pass-through costs are excluded. Lease expense is recognized over the expected term on a straight-line basis. Finance leases are recognized on the balance sheet as property and equipment, finance lease liabilities current and finance lease liabilities non-current. Finance lease ROU assets and the related lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The finance lease ROU assets are amortized on a straight-line basis over the lease term with the related interest expense of the lease liability payment recognized over the lease term using the effective interest method. Impairment of Long-lived Assets Long-lived assets consist primarily of property and equipment. The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset is not recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds the fair value of the assets. Fair value would be assessed using a discounted cash flows or other appropriate measures of fair value. The Company did no t recognize any impairment losses for the years ended December 31, 2024 and 2023 . Research and Development Costs Research and development costs consist primarily of fees paid to consultants, license fees and facilities costs. Nonrefundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received rather than when the payment is made. All research and development costs are expensed as incurred. Selling, General and Administrative Costs Selling, general and administrative expenses consist primarily of salaries and related benefits, including stock-based compensation, related to our executive, finance, business development, legal, human resources and support functions. Other general and administrative expenses include professional fees for auditing, tax, consulting and patent-related services, rent and utilities and insurance. 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. The Company estimates the fair value of each stock-based award on the date of grant using the Black-Scholes option pricing model. The Black-Scholes option pricing model incorporates various assumptions, such as the value of the underlying common stock, the risk-free interest rate, expected volatility, expected dividend yield, and expected life of the options. Forfeitures are recognized as a reduction of stock-based compensation expense as they occur. The Company also awards restricted stock to employees and directors. Restricted stock is generally subject to forfeiture if employment terminates prior to the completion of the vesting restrictions. The Company expenses the cost of the restricted stock, 75 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. The fair value of the shares of common stock underlying the Company’s share-based awards was estimated on each grant date by the Company’s board of directors based on then current facts and circumstances. To determine the fair value of the Company’s common stock underlying option grants, the board of directors considered, among other things, input from management and recent third-party financings consummated by the Company. Income Taxes Deferred income tax assets and liabilities arise from temporary differences associated with differences between the financial statements and tax basis of assets and liabilities, as measured by the enacted tax rates, which are expected to be in effect when these differences reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Prior to the acquisition of 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 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. The Company has identified the United States, South Africa and Guernsey as its major tax jurisdictions. Refer to Note 15 for further details. Comprehensive Loss Comprehensive loss is defined as a change in equity during a period from transactions and other events and circumstances from non-owner sources. The Company’s comprehensive loss is comprised of net loss and the effect of currency translation adjustments. Recently 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 The Company has reviewed recently issued accounting pronouncements and plans to adopt those that are applicable to it. The Company does not expect the adoption of any recently issued pronouncements to have a material impact on its results of operations or financial position. In 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 76 ASP Isotopes Inc. Notes to Consolidated Financial Statements (continued) 15, 2027. ASU 2024-03 requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. The Company is in the process of evaluating the impact of adopting ASU 2024-03 on the Company's consolidated financial statements. 3. 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 Additions Deductions Balance as of December 31, 2024 Accounts receivable $ 216,504 $ 4,144,226 $ ( 3,653,805 ) $ 706,925 Balance as of October 31, 2023 Additions Deductions Balance as of December 31, 2023 Accounts receivable $ 460,165 $ 433,026 $ ( 676,687 ) $ 216,504 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: Revenues Net Loss Before Allocation to Noncontrolling Interest Year Ended December 31, Year Ended December 31, Segment 2024 2023 2024 2023 Specialist isotopes and related services $ 3,944,226 $ 433,026 $ ( 21,367,787 ) $ ( 16,145,339 ) Nuclear fuels 200,000 — ( 10,881,084 ) — Corporate — — ( 173,857 ) ( 148,787 ) $ 4,144,226 $ 433,026 $ ( 32,422,728 ) $ ( 16,294,126 ) 77 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 Corporate Total Sales from external customers $ 3,944,226 $ — $ — $ 3,944,226 Collaboration revenue — 200,000 — 200,000 Less: cost of sales ( 2,544,614 ) — — ( 2,544,614 ) Segment gross profit 1,399,612 200,000 — 1,599,612 Personnel expenses 12,392,833 1,197,515 — 13,590,348 Professional fees 6,108,271 1,631,772 — 7,740,043 Other segment expenses 4,794,818 1,828,057 — 6,622,875 Segment operating loss ( 21,896,310 ) ( 4,457,344 ) — ( 26,353,654 ) Foreign exchange transaction gain — — 69,865 69,865 Change in fair value of share liability — — ( 132,273 ) ( 132,273 ) Change in fair value of convertible notes payable — ( 6,875,041 ) — ( 6,875,041 ) Interest income (expense), net 528,523 451,301 — 979,824 Loss before income tax expense $ ( 21,367,787 ) $ ( 10,881,084 ) $ ( 62,408 ) $ ( 32,311,279 ) Year Ended December 31, 2023 Specialist isotopes and related services Nuclear fuels Corporate Total Sales from external customers $ 433,026 $ — $ — $ 433,026 Less: cost of sales ( 294,056 ) — — ( 294,056 ) Segment gross profit 138,970 — — 138,970 Personnel expenses 11,134,296 — — 11,134,296 Professional fees 2,994,611 — — 2,994,611 Other segment expenses 2,052,062 — — 2,052,062 Segment operating loss ( 16,041,999 ) — — ( 16,041,999 ) Foreign exchange transaction gain — — 45,753 45,753 Change in fair value of share liability — — ( 194,540 ) ( 194,540 ) Interest income (expense), net ( 109,473 ) — — ( 109,473 ) Loss before income tax expense $ ( 16,151,472 ) $ — $ ( 148,787 ) $ ( 16,300,259 ) 78 ASP Isotopes Inc. Notes to Consolidated Financial Statements (continued) 4. Property and Equipment Property and equipment as of December 31, 2024 and 2023 consisted of the following: Useful Lives (Years) December 31, 2024 2023 Construction in progress — $ 13,969,784 $ 9,108,923 Tools, machinery and equipment 3 - 10 5,898,618 1,458,654 Plant 10 2,269,204 — Computer equipment 3 - 4 145,225 60,447 Vehicles 5 292,498 39,849 Software 5 1,590 1,639 Office furniture 7 - 10 147,079 59,588 Leasehold improvements 5 115,890 21,446 Property and equipment, at cost 22,839,888 10,750,546 Less accumulated depreciation ( 485,511 ) ( 37,707 ) Property and equipment, net $ 22,354,377 $ 10,712,839 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. 5. Accrued Expenses Accrued expenses as of December 31, 2024 and 2023 consisted of the following: December 31, 2024 2023 Accrued professional $ 671,314 $ 447,295 Accrued salaries and other employee costs 1,584,273 845,344 Accrued other 20,094 18,606 Total accrued expenses $ 2,275,681 $ 1,311,245 6. Notes Payable Debt consisted of the following as of December 31, 2024 and 2023: December 31, 2024 2023 Promissory note $ 409,696 $ 470,396 Motor vehicle and equipment loans 1,970,700 — Total notes payable 2,380,396 470,396 less current portion of notes payable ( 939,110 ) ( 470,396 ) Long term portion of notes payable $ 1,441,286 $ — 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. 79 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. 7. Deferred Revenues In June 2023, the Company entered into a Supply Agreement with a customer for the delivery of molybdenum-100 and molybdenum-98 beginning in 2024. In conjunction with the Supply Agreement, the Company received $ 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, 2024 and 2023. No amount of deferred revenue was recorded as of January 1, 2023. 8. Commitments and Contingencies Purchase of Cyclotron In November 2023, the cyclotron that the Company ordered was shipped. As of December 31, 2023, the equipment had not been delivered; however, the Company was obligated to purchase this equipment and recorded the full cost of $ 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. 80 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 "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, 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. Under the Acknowledgement of Debt Agreement, the Pledged Assets would serve as collateral for Klydon’s obligation to pay the Damage Amount should Klydon fail to perform. In connection therewith, also on November 30, 2022, ASP South Africa and Klydon entered into a Deed of Security Agreement whereby, if Klydon failed to complete its obligations under the Turnkey Contract by December 31, 2022, all of Klydon’s rights of any nature to and interests of any nature in the Pledged Assets would be transferred to ASP South Africa. Klydon failed to complete its obligations under the Turnkey Contract by December 31, 2022, however, the Company did not perfect its interests in the assets until April 4, 2023. The Company did not believe that the amounts owed by Klydon were realizable, nor did the Company know the timing of any recovery payments. Therefore, a loss recovery receivable was not recorded at any time prior to April 4, 2023. On April 4, 2023, the Company perfected its interest under the Acknowledgement of Debt Agreement, pursuant to which the Company acquired certain intellectual property from Klydon (“Klydon Settlement”). In addition, the Company acquired Klydon's interest in four entities which are inactive and in the process of being dissolved. The Company has concluded that the Klydon Settlement is accounted for as an asset acquisition under ASC 805 since the assets acquired were concentrated in a single identifiable asset from a related party. In conjunction with the Klydon Settlement, the Company recorded an increase to additional paid-in capital for the settlement of all liabilities owed to Klydon at the time of settlement totaling $ 626,223 . 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. 81 ASP Isotopes Inc. Notes to Consolidated Financial Statements (continued) Contingencies From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of its business activities. The Company accrues liabilities for such matters when future expenditures are probable and such expenditures can be reasonably estimated. On 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. , Case No. 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. 9. Leases The Company accounts for facility leases in accordance with ASC 842 (Note 2). The Company is party to five facility leases in South Africa for office, manufacturing and laboratory space. A lease for office and laboratory space in Pretoria, South Africa commenced in October 2021 with the initial term set to expire in December 2030 . The Company has applied the guidance in ASC 842 and has determined that it should be classified as an operating lease. The Company’s incremental borrowing rate for this lease is 7.5 % based on the remaining lease term of the applicable lease. 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. 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 . The Company has applied the guidance in ASC 842 and has determined that it should be classified as an operating lease. The Company’s incremental borrowing rate for this lease is 13.16 % based on the remaining lease term of the applicable lease. 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. 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. 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. Dr. 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: 82 ASP Isotopes Inc. Notes to Consolidated Financial Statements (continued) ROU Asset Operating Lease Liability - Current Operating Lease Liability – Non-Current Total Operating Lease Liability Lease: Office and laboratory, Pretoria, South Africa $ 538,942 $ 63,703 $ 554,332 $ 618,035 Additional production, Pretoria, South Africa 211,829 179,948 31,881 211,829 Laboratory, Pretoria, South Africa 45,433 23,653 23,674 47,327 Office and production, Pretoria, South Africa 325,930 290,372 78,592 368,964 Total $ 1,122,134 $ 557,676 $ 688,479 $ 1,246,155 A summary of long-term leases in the consolidated balance sheet as of December 31, 2023 is as follows: ROU Asset Operating Lease Liability - Current Operating Lease Liability – Non-Current Total Operating Lease Liability Lease: Office and laboratory, Pretoria, South Africa $ 626,548 $ 53,504 $ 637,348 $ 690,852 Laboratory, Pretoria, South Africa 68,089 19,608 48,805 68,413 Office and production, Pretoria, South Africa 564,064 263,452 380,494 643,946 Total $ 1,258,701 $ 336,564 $ 1,066,647 $ 1,403,211 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 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, 2024 2023 Operating Lease Cost Operating lease cost $ 663,662 $ 178,610 Other Information Operating cash flows paid for amounts included in the measurement of lease liabilities $ 644,793 $ 153,988 Operating lease liabilities arising from obtaining right-of -use assets $ 364,458 $ 70,607 Weighted average remaining lease term (years) 3.61 4.62 Weighted average discount rate 9.83 % 10.24 % Future lease payments under noncancelable operating lease liabilities are as follows as of December 31, 2024: Operating Leases Future Lease Payments 2025 $ 651,437 2026 253,779 2027 124,770 2028 134,128 2029 144,188 Thereafter 155,002 Total lease payments $ 1,463,304 Less: imputed interest ( 217,149 ) Total operating lease liabilities $ 1,246,155 Less current portion ( 557,676 ) Operating lease liability - noncurrent $ 688,479 The Company records the expense from short term leases as incurred. 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. 83 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 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, 2024 2023 Finance Lease Cost Interest on lease liabilities $ 68,609 $ 5,059 Other Information Operating cash flows paid for amounts included in the measurement of finance lease liabilities $ 100,611 $ 9,601 Amortization of right-of-use assets $ 43,039 $ 6,445 Weighted average remaining lease term (years) 4.4 3.9 Weighted average discount rate 13.1 % 11.3 % Future lease payments under noncancelable finance lease liabilities are as follows as of December 31, 2024: Finance Leases Future Lease Payments 2025 $ 208,222 2026 211,913 2027 207,117 2028 170,443 2029 66,218 Thereafter 64,914 Total lease payments $ 928,827 Less: imputed interest ( 242,637 ) Total lease liabilities $ 686,190 Less current portion ( 125,862 ) Finance lease liability - noncurrent $ 560,328 10. 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 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. 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 84 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. On April 4, 2023, the Company perfected its interest under the Acknowledgement of Debt Agreement (see Note 8), pursuant to which the Company acquired certain intellectual property from Klydon (“Klydon Settlement”). The Company concluded that the Klydon Acquisition is accounted for under ASC 805, Business Combinations as an asset acquisition since the assets acquired were concentrated in a single identifiable asset from a related party. In conjunction with the Klydon Settlement, the Company recorded an increase to additional paid-in capital for the settlement of all liabilities owed to Klydon at the time of settlement totaling $ 626,223 . 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. 11. Acquisitions PET Labs Pharmaceuticals In October 2023, the Company completed the acquisition of PET Labs. The acquisition is intended to accelerate the distribution of the Company’s pipeline. The acquisition of PET Labs has been accounted for as a business combination in accordance with ASC 805. Pursuant to the terms of the agreement, the Company acquired 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. 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 . No consideration or value relating to this option was recognized as it was not considered probable at the time of acquisition and as of December 31, 2024. 85 ASP Isotopes Inc. Notes to Consolidated Financial Statements (continued) 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. Dr. Gerdus Kemp is an officer of PET Labs and, effective November 1, 2023, an employee of ASP UK. In addition, Dr. Kemp controls the remaining 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 Cash $ 500,000 Present value of balance due 1,395,348 $ 1,895,348 Recognized amounts of identifiable assets acquired and liabilities assumed Cash and cash equivalents $ 378,152 Accounts receivable 460,165 Other current assets 184,457 Property and equipment 821,926 Right of use assets 592,304 Financial liabilities ( 1,248,699 ) Right of use liabilities ( 677,163 ) Total identifiable net assets 511,142 Noncontrolling interest ( 1,821,021 ) Goodwill 3,205,227 $ 1,895,348 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: Balance as of October 31, 2023 (acquisition date) $ 3,205,227 Translation adjustment 61,876 Balance as of December 31, 2023 $ 3,267,103 Translation adjustment ( 99,002 ) Balance as of December 31, 2024 $ 3,168,101 ASP Rentals In December 2023, ASP South Africa entered into a Shareholders Agreement (“ASP Rentals Shareholders Agreement”) with ASP Rentals, a newly formed equipment financing service provider formed for the sole purpose of providing financing to ASP South Africa for its significant asset purchases in South Africa. In accordance with the terms of the ASP Rentals Shareholders Agreement, 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 ). 86 ASP Isotopes Inc. Notes to Consolidated Financial Statements (continued) 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 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. 12. 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, 2024 and 2023. Common stock 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. Common stockholders are entitled to receive dividends for each share of outstanding common stock, if and when declared by the Board. No dividends have been declared or paid by the Company through December 31, 2024. 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, 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 had been recorded for Enlightened Isotopes. Activities for Enlightened Isotopes began in 2024. 87 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 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: (i) 8,459,093 shares to investors at a purchase price per share of $ 0.9105 , (ii) 1,190,239 shares to investors at a purchase price per share of $ 0.9548 , and (iii) 303,178 shares to directors at a purchase price per share of $ 0.96 . 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 . 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: Description Origination Date Shares Fair Value Settlement Date Fair Value at Settlement Change in Fair Value Settlement of liability with consultants January 2024 100,000 $ 195,000 September 2024 $ 219,500 $ ( 24,500 ) Settlement of liability with consultants April 2024 60,000 240,600 June 2024 183,600 $ 57,000 Issuance of common stock to consultant June 2024 60,000 183,600 June 2024 183,600 $ — Settlement of liability with consultants July 2024 50,000 164,000 September 2024 109,750 $ 54,250 Issuance of restricted common stock to consultants September 2024 150,000 — September 2024 — $ — Settlement of liability with consultants December 2024 135,000 531,000 December 2024 642,000 $ ( 111,000 ) 555,000 $ 1,314,200 $ 1,338,450 $ ( 24,250 ) 88 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: Description Origination Date Shares Fair Value Settlement Date Fair Value at Settlement Change in Fair Value Issuance of common stock in lieu of commissions October 2022 57,250 $ 90,455 March 2023 $ 75,570 $ 14,885 Settlement of liability with consultants November 2022 12,500 50,000 August 2023 18,125 $ 31,875 Settlement of liability with consultants February 2023 100,000 172,500 August 2023 145,000 $ 27,500 Settlement of liability with consultants March 2023 100,000 93,700 August 2023 145,000 $ ( 51,300 ) Issuance of common stock to settle share liability May 2023 100,000 65,100 November 2023 152,000 $ ( 86,900 ) Issuance of common stock to settle share liability May 2023 50,000 30,900 November 2023 76,000 $ ( 45,100 ) Settlement of liability with consultants July 2023 150,000 181,500 August 2023 248,000 $ ( 66,500 ) Settlement of liability with consultants August 2023 100,000 126,000 August 2023 145,000 $ ( 19,000 ) 669,750 $ 810,155 $ 1,004,695 $ ( 194,540 ) 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 as of December 31, 2023 New Share Liabilities in 2024 Mark to Market Adjustments in 2024 Liabilities Settled in 2024 Share Liabilities as of December 31, 2024 Share liabilities $ — $ 1,130,600 $ 24,250 $ ( 1,154,850 ) $ — Activity of the share liabilities for the year ended December 31, 2023 is as follows: Share Liabilities 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 $ 140,455 $ 669,700 $ 194,540 $ ( 1,004,695 ) $ — Common Stock Warrants 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 60.3 % Weighted-average risk-free rate 3.44 % Expected term in years 5.5 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 89 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 73.5 % Weighted-average risk-free rate 4.37 % Expected term in years 5.5 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 73.5 % Weighted-average risk-free rate 4.60 % Expected term in years 5.5 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 . 13. Stock Compensation Plan Equity Incentive Plan In October 2021, the Company adopted the 2021 Stock Incentive Plan (“2021 Plan”) that provided for the issuance of common stock to employees, nonemployee directors, and consultants. Recipients of incentive stock options are eligible to purchase shares of common stock at an exercise price equal to no less than the estimated fair market value of such stock on the date of grant. The 2021 Plan provided for the grant of incentive stock options, non-statutory stock options, restricted stock, restricted stock units, stock awards and stock appreciation rights. The maximum contractual term of options granted under the 2021 Plan is ten years . The maximum number of shares initially available for issuance under the 2021 Plan was 6,000,000 . No further options were available to be issued under the 2021 Plan. In November 2022, the Company adopted the 2022 Equity Incentive Plan (“2022 Plan”) that provides for the issuance of common stock to employees, nonemployee directors, and consultants. Recipients of incentive stock options are eligible to purchase shares of common stock at an exercise price equal to no less than the estimated fair market value of such stock on the date of grant. The 2022 Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock, restricted stock units, stock awards and stock appreciation rights. The maximum contractual term of options granted under the 2022 Plan is ten years . 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 90 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 per Share Weighted Average Remaining Contractual Term (in Years) Aggregate Intrinsic Value Outstanding as of December 31, 2022 2,901,000 $ 1.91 9.4 $ 199,500 Granted — $ — Forfeited ( 135,000 ) $ 2.00 Outstanding as of December 31, 2023 2,766,000 $ 1.91 8.4 $ 231,000 Granted — $ — Forfeited ( 35,000 ) $ 2.00 Outstanding as of December 31, 2024 2,731,000 $ 1.90 7.4 $ 7,171,930 Exercisable as of December 31, 2024 2,339,807 $ 1.89 7.4 $ 6,182,213 Vested or expected to vest as of December 31, 2024 2,731,000 $ 1.90 7.4 $ 7,171,930 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. As of December 31, 2024, there was $ 466,234 of unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plan, which is expected to be recognized over a weighted average period of approximately 0.5 years. Stock Awards In October 2021, the Company issued 1,500,000 shares of restricted common stock to its Chief Executive Officer. The number of shares that vest is dependent on achieving certain performance conditions and dependent market conditions upon the third anniversary from the date of grant. The Company determined that the fair value of this award was $ 0.25 per share for a total value of $ 375,000 . 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 Fair Value Per Share Unvested as of December 31, 2022 7,000,000 $ 1.75 Granted 1,756,750 $ 1.52 Vested ( 4,267,564 ) $ 1.84 Unvested as of December 31 2023 4,489,186 $ 1.42 Granted 2,523,554 $ 3.79 Vested ( 3,873,037 ) $ 1.76 Forfeited and retired ( 325,000 ) $ 1.19 Unvested as of December 31 2024 2,814,703 $ 3.24 91 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 Stock-based compensation expense for all stock awards recognized in the accompanying consolidated statements of operations is as follows: Year Ended December 31, 2024 2023 Selling, general and administrative $ 8,231,386 $ 8,378,875 Research and development 330,018 364,924 Total $ 8,561,404 $ 8,743,799 14. Net Loss Per Share The Company has reported losses since inception and has computed basic net loss per share attributable to common stockholders by dividing net loss attributable to common stockholders by the weighted-average number of shares of Common Stock outstanding for the period, without consideration for potentially dilutive securities. The Company computes diluted net loss per share of Common Stock after giving consideration to all potentially dilutive shares of common stock, including options to purchase common stock and warrants to purchase common stock, outstanding during the period determined using the treasury-stock and if-converted methods, except where the effect of including such securities would be antidilutive. Because the Company has reported net losses since inception, these potential shares of Common Stock have been anti-dilutive and basic and diluted loss per share were the same for all periods presented. The following table sets forth the computation of basic and diluted net loss per share: Year Ended December 31, 2024 2023 Numerator: Net loss attributable to ASP Isotopes shareholders $ ( 35,113,240 ) $ ( 16,286,234 ) Denominator: Weighted average common stock outstanding, basic and diluted 55,671,805 33,066,708 Net loss per share, basic and diluted $ ( 0.63 ) $ ( 0.49 ) 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, 2024 2023 Options to purchase common stock 2,731,000 2,766,000 Restricted stock 2,814,703 4,489,186 Warrants to purchase common stock 1,516,297 3,386,076 Total shares of common stock equivalents 7,062,000 10,641,262 15. Income Taxes The components of net loss before taxes are as follows: Year Ended December 31, 2024 2023 Domestic $ ( 24,777,514 ) $ ( 12,892,377 ) Foreign ( 7,533,765 ) ( 3,407,882 ) Total net loss before taxes $ ( 32,311,279 ) $ ( 16,300,259 ) 92 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: December 31, 2024 2023 Current: U.S. Federal $ 60,253 $ — State 1,484 — Foreign 193,045 — Total Current 254,782 — Deferred: Foreign ( 143,333 ) ( 6,133 ) Total Deferred ( 143,333 ) ( 6,133 ) Total income tax expense (benefit) $ 111,449 $ ( 6,133 ) 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, 2024 2023 Tax computed at federal statutory rate 21.00 % 21.00 % Earnings in jurisdictions taxed at rates different from the statutory U.S. federal tax rate 1.78 % ( 0.58 )% Return to provision ( 3.88 )% — Change in fair value of convertible notes ( 4.47 )% — Non-deductible stock compensation expense ( 5.58 )% ( 11.19 )% Permanent differences ( 0.09 )% 0.24 % Other — ( 2.44 )% Valuation allowance ( 9.10 )% ( 7.00 )% Income tax expense ( 0.34 )% 0.03 % Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and (b) operating losses and tax credit carryforwards. Significant components of deferred tax assets (liabilities) are as follows: December 31, 2024 2023 Deferred tax assets: Net operating loss carryforwards $ 5,261,986 $ 2,321,339 Capitalized R&D costs 33,758 31,622 Share-based compensation — 3,644 Accruals and reserves 142,146 12,647 Right-of-use lease liability 336,287 276,134 Total deferred tax assets 5,774,177 2,645,386 Deferred tax liabilities: Property and equipment, net ( 315,806 ) ( 256,315 ) Right-of-use lease asset ( 325,246 ) ( 339,850 ) Total deferred tax liabilities ( 641,052 ) ( 596,165 ) Total net deferred tax assets 5,133,125 2,049,221 Less: valuation allowance ( 5,101,278 ) ( 2,159,799 ) Net deferred taxes (liabilities) assets $ 31,847 $ ( 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. 93 ASP Isotopes Inc. Notes to Consolidated Financial Statements (continued) 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. 16. Subsequent Events 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. 94 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.