ASPI 10-K & 10-Q changes, risk factors and insider trading
ASP Isotopes Inc. · Nasdaq · Miscellaneous Chemical Products · CIK 1921865 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Summary of Risk Factors”
New heading “Risks Related to Our Limited Operating History, Financial Position and Need for Additional Capital”
New heading “Risks Related to the Development and Commercialization of Our Future Isotopes”
New heading “Risks Related to Regulatory Compliance”
New heading “Risks Related to our Operations in South Africa”
New heading “Risks Related to Our Intellectual Property”
New heading “Risks Related to Our Business Operations, Employee Matters and Managing Growth”
New heading “Risks Related to Ownership of Our Common Stock”
New heading “General Risk Factors”
New heading “Risks Related to Quantum Leap Energy’s Business and Industry”
New heading “Risks Related to the Expansion of the Virginia Gas Project”
New heading “Risks Related to Renergen’s Business”
New heading “Risks Related to Renergen’s Indebtedness and Liquidity”
New heading “Our Exploration Rights and Production Right in South Africa could be altered, suspended, or canceled for a variety of reasons, including uncertainties associated with national and local legislation.”
New heading “We are subject to risks associated with litigation and regulatory proceedings, which could have a material adverse effect on our business, operating results and financial condition.”
New heading “Once an amendment to the South African loss carry forward rules comes into operation, it could have an adverse effect on our financial results.”
New heading “Amendments to tax legislation, tax rates or the administration or interpretation thereof may impact our business, results of operations, financial condition and/or prospects.”
New heading “We may be exposed to historical environmental liability risk in respect of Renergen’s closed, closing or sold assets.”
New heading “Risks Related to our Operations in South Africa”
New heading “Our operations in South Africa could be disrupted for a variety of reasons, which could prevent us from completing our development activities.”
New heading “Economic, political or social instability in South Africa may have a material adverse effect on our operations and profits.”
New heading “South African exchange control regulations could materially constrain our financial flexibility.”
New heading “Our business, results of operations, and financial condition may be adversely affected by inflation.”
New heading “HIV/AIDS, tuberculosis and other contagious diseases pose risks to us in terms of lost productivity and increased costs.”
New heading “The costs of healthcare services may increase in the future depending on underlying legislation and the profile of our employees.”
New heading “If we fail to comply with Renergen’s obligations under license or technology agreements with third parties, we may be required to pay damages and could lose license rights that are critical to Renergen’s business.”
New heading “We may not be successful in obtaining, maintaining, enforcing, defending and protecting Renergen’s intellectual property and other proprietary rights, products or processes, including Renergen’s unpatented proprietary knowledge and trade secrets, or in avoiding claims that we infringed, misappropriated or otherwise violated the intellectual property rights of others.”
New heading “The ongoing military conflict between Russia and Ukraine and the USA, Israel and Iran could have a material adverse effect on the global energy industry and our business, financial condition and results of operations.”
New heading “A prolonged government shutdown or lapse in federal appropriations could disrupt our offshore operations and delay required regulatory approvals.”
New heading “Changes in U.S. trade policy and the impact of tariffs may have a negative effect on our business, financial condition and results of operations.”
New heading “Strikes, riots and labor disruptions can damage economic growth and, in turn, negatively impact our business.”
New heading “Unplanned stoppages and unforeseen operational interruptions and operational accidents or injuries could adversely affect our performance.”
New heading “Risks Related to Quantum Leap Energy’s Business and Industry”
New heading “QLE’s future success depends, in part, on target markets that are not yet, and may never be, established. Furthermore, even if QLE’s target markets grow as expected by our management team, our ability to penetrate these markets is uncertain.”
New heading “If QLE is unable to advance its current and future research and development activities, obtain applicable regulatory approval and ultimately commercialize critical isotopes for advanced nuclear fuels, or experience significant delays in doing so, QLE’s business will be materially harmed.”
New heading “If QLE cannot acquire regulatory approvals to leverage its technologies across borders, QLE may need to develop distinctly unique commercial production methods for enriching lithium and uranium for fuel production in each of South Africa, the US and the UK, and QLE’s success in developing and obtaining regulatory approval of QLE’s production method in one jurisdiction does not mean that QLE will be successful in developing and obtaining regulatory approval of a different production method in another jurisdiction.”
New heading “Technological changes could render QLE’s technology uncompetitive or obsolete, which could prevent QLE from achieving market share and sales.”
New heading “QLE is a party to several non-binding memorandums of understanding with third parties that may not result in the parties entering into definitive agreements.”
New heading “Competition from existing or new companies could cause QLE to experience downward pressure on prices, fewer customer orders, reduced margins, the inability to take advantage of new business opportunities, and the loss of market share.”
New heading “QLE may be unable to attract customers as quickly as expected, or at all, and in certain instances expect to be heavily dependent on a limited number of customers to generate a majority of QLE’s revenues.”
New heading “The HALEU supply agreements with TerraPower are terminable, for convenience, at TerraPower’s sole election; accordingly, QLE may never realize any revenue or profit as a result of these agreements.”
New heading “QLE operates in a politically sensitive industry, and the public perception of nuclear energy can affect QLE’s current and future customers, which could adversely impact QLE’s business, financial condition and results of operations.”
New heading “QLE’s future growth depends in large part on the success of QLE’s partner and customer relationships.”
New heading “Risks Related to the Expansion of the Virginia Gas Project”
New heading “As we further expand Renergen’s current operations into Phase 2, we may face additional problems associated with natural gas exploration and development projects.”
New heading “Renergen has several additional supporting authorizations, licenses and permits to obtain before Phase 2 of the Virginia Gas Project is considered fully permitted, which we may not timely obtain or obtain at all.”
New heading “Renergen’s overall cost to complete construction of Phase 2 is an estimate based on assumptions that may be inaccurate and are based on existing economic and operating conditions that may change in the future. If actual costs are materially greater than our estimates, our business, financial condition and results of operations may be negatively impacted.”
New heading “There can be no assurance that we will be able to obtain the necessary financing for Phase 2 in a timely manner and/or on acceptable terms, if at all.”
New heading “Managing a project as substantial in size as Phase 2 of the Virginia Gas Project requires sufficient technical, commercial and project management capacity and there can be no assurance that Renergen’s current management team has sufficient capacity.”
New heading “Even if Phase 2 is completed, the project may not operate as expected or may cost more to operate than expected.”
New heading “The construction and operation of gas gathering pipelines may pose unforeseen difficulties, delays or costs, which could impact Renergen’s profitability and cause a delay in Renergen’s operations.”
New heading “There is no assurance that we will be able to execute future take-or-pay agreements with customers on favorable pricing terms, if at all.”
New heading “As Renergen’s customer contracts expire, we may not be able to replace them with agreements on similar terms, or at all.”
New heading “We cannot assure you that there will be consumer demand for Renergen’s LNG filling stations or that customers will transition to LNG as a liquid fuel.”
New heading “Renergen’s success is partially dependent on the willingness of truckers and other consumers to transition from diesel to LNG, which may not occur in a timely manner, at expected levels or at all.”
New heading “We may experience unforeseen difficulties, delays or costs in implementing Renergen’s business strategy and operational plan.”
New heading “Risks Related to Renergen’s Business”
New heading “Because Renergen holds South Africa’s first and only onshore petroleum Production Right for the extraction and production of natural gas and helium and part of Renergen’s business strategy involves using some of the latest available slant well drilling and completion techniques, Renergen’s drilling results in South Africa may be more uncertain than drilling results in areas that are developed and have established production.”
New heading “Renergen’s identified drilling locations are scheduled out over many years, making them susceptible to uncertainties that could materially alter the occurrence or timing of their drilling. In addition, we may not be able to raise the substantial amount of capital that would be necessary to drill such locations.”
New heading “Renergen’s results of operations and financial condition are dependent upon the economic, environmental, social and political conditions in South Africa.”
New heading “Renergen’s Virginia Gas Plant, located near Virginia in the Free State Province of South Africa, is subject to poor socio-economic conditions, which could hinder Renergen’s progress.”
New heading “We use third-party providers and contractors to conduct Renergen’s operations, and the lack of availability of, or failure to properly perform services by, one or more of these third-party providers or contractors may adversely affect us.”
New heading “All of Renergen’s operations are conducted in one geographic area. Any adverse developments at Renergen’s facility could have a material adverse effect on our business, results of operations and financial condition.”
New heading “Natural gas prices are volatile. A sustained decline in natural gas prices could adversely affect our business, financial condition and results of operations and our ability to meet Renergen’s capital expenditure obligations and financial commitments.”
New heading “The world’s helium supply is located in a few countries, which may cause volatility in helium prices, impact Renergen’s competition and affect our business or results of operations.”
New heading “We face competition based upon the international market price for LNG.”
New heading “Actual and potential supply chain shortages and increases in the prices of production inputs may have a material adverse effect on us as we expand Renergen’s current operations.”
New heading “We depend on third parties to manufacture and to supply key semiconductor components necessary for operations at the Virginia Gas Plant. If these third party suppliers become unwilling or unable to provide an adequate supply of semiconductors, with respect to which there is a global shortage, we may not be able to find alternative sources in a timely manner and our business could be adversely impacted.”
New heading “We may be unable to obtain, maintain or renew permits, leases or licenses necessary for Renergen’s operations, the failure of which could impair our ability to conduct Renergen’s operations and have a material adverse effect on our results of operations.”
New heading “Renergen’s results of operations may be adversely affected by permitting, operating or construction delays and requirements introduced via community, political or regulatory opposition to Renergen’s projects.”
New heading “Poor general economic, business, or political conditions may have a material adverse effect on our results of operations, liquidity, and financial condition.”
New heading “Extreme weather and changing climatic conditions exacerbated by climate change impacts, including prolonged droughts, could lead to delays in Renergen’s projects and adversely affect our operations.”
New heading “Power stoppages, fluctuations, usage constraints and limited access to sufficient water may force us to halt or curtail operations and/or increase costs.”
New heading “Drilling for and producing natural gas and helium are high risk activities with many uncertainties that could adversely affect our financial condition or results of operations.”
New heading “We use information, communication, and technology systems, which record personal information. Failure of these systems, or the failure to protect personal information, could impact our business and operations.”
New heading “Operational risks may adversely impact Renergen’s business or results of operations.”
New heading “The third parties on whom we may rely for gathering and transportation services are subject to complex laws that may adversely impact Renergen’s business or results of operations.”
New heading “Renergen’s insurance coverage may not adequately satisfy all potential claims in the future.”
New heading “If any of Renergen’s operations do not perform in line with Renergen’s expectations, we may be required to write down the carrying value of Renergen’s investment, which could affect Renergen’s profitability and the ability to pay dividends.”
New heading “Possible disputes in relation to access, use and servitude agreements entered into with landowners could result in timing delays.”
New heading “We may not be able to compete with less carbon-intensive sources of energy, such as renewable natural gas and renewable power, given the expected global energy transition to a low carbon economy.”
New heading “Risks Related to Renergen’s Indebtedness and Liquidity”
New heading “The DFC Credit Facility Agreement and IDC Loan Agreement place operating restrictions on Renergen and create default risks.”
New heading “We will continue to have the ability to incur debt and Renergen’s levels of debt may affect Renergen’s operations and our ability to pay the principal of and interest on Renergen’s debt.”
New heading “We may not be able to generate sufficient cash to service all of Renergen’s indebtedness and may be forced to take other actions to satisfy Renergen’s obligations under applicable debt instruments, which may not be successful.”
New heading “Renergen’s outstanding indebtedness under the IDC Loan Agreement bears interest at a variable rate, which makes us more vulnerable to increases in interest rates and could cause Renergen’s interest expense to increase and decrease cash available for operations and other purposes.”
New heading “We may incur losses on interest rate swap and hedging arrangements.”
Removed heading “Summary of the Material and Other Risks Associated with Our Business”
Removed heading “The acquisition of a controlling interest in PET Labs Pharmaceuticals may fail to result in anticipated benefits but has involved significant investment of financial and other resources.”
Removed heading “Development activities at our facility in South Africa could be disrupted for a variety of reasons, which could prevent us from completing our development activities.”
Largest changes
“We cannot guarantee that Renergen’s POPIA compliance efforts will be deemed appropriate or sufficient by regulatory authorities or the courts. South African law provides protection to the personal information of both individuals and companies, the latter forming the vast majority of entities with whom we do business. Moreover, we may have difficulty adapting Renergen’s systems and processes to the new legislation. The changes have impacted, and could further adversely impact, Renergen’s business by increasing Renergen’s operational and compliance costs. …”see in full comparison
“The ongoing military conflict between Russia and Ukraine and the USA, Israel and Iran could have a material adverse effect on the global energy industry and our business, financial condition and results of operations.”see in full comparison
“Strikes, riots and labor disruptions can damage economic growth and, in turn, lead to loss of production and/or interruption of our operations. We could suffer supply chain disruptions due to any labor disputes, slowdowns or shutdowns that may occur. For example, during the height of the COVID-19 pandemic due to government enforced lockdowns, Renergen suffered project delays for various components of Renergen’s gas gathering system, balance of plant utilities and LNG and liquid helium processing plant because of supply chain challenges. …”see in full comparison
“In addition, economic and political instability and geopolitical events in regions outside of South Africa, including the Russian invasion of Ukraine, the United States-Israel-Iran war, trade tensions between the U.S. and China and U.S. …”see in full comparison
“The estimated build cost to complete construction of Phase 2, which as of our latest cost estimate is expected to be approximately $1.16 billion (including borrowing costs and general corporate costs during construction), is based on assumptions that may be inaccurate and existing economic and operating conditions that may change in the future, which could materially and adversely affect the cost of construction beyond our estimates. The cost of construction could change for a variety of reasons including, but not limited to, increased labor costs, increased energy costs and cost overruns. …”see in full comparison
“We may be subject to the risk of LNG price competition when we need to replace any existing sale purchase agreement (“SPA”), whether due to natural expiration, default or otherwise, or enter into new LNG SPAs. Factors relating to competition may prevent us from entering into a new or replacement SPA on economically comparable terms as existing SPAs, or at all. Such an event could have a material adverse effect on Renergen’s business, contracts, financial condition, operating results, cash flow, liquidity and prospects. …”see in full comparison
Full comparison: every changed paragraph (378)
Summary of Risk Factors
Summary of the Material and Other Risks Associated with Our Business
Our business is subject to numerous material and other risks and uncertaintiesuncertainties, further described below, that you should be aware of in evaluating our business. These risks include, but are not limited to, the following:
Risks Related to Our Limited Operating History, Financial Position and Need for Additional Capital
We also have a limited operating history, which may make it difficult to evaluate our prospects and likelihood of success.
Our business is dependent on our ability to recognize the anticipated benefits of acquisitions.
Our current business is tied directly to the nuclear medicine and quantum computing industries and depends on our ability to successfully introduce our medical and other specialty isotopes to changing technology and a changing medical practice landscape.
Our business is dependent on our ability to recognize the anticipated benefits of acquisitions, including our acquisition of assets of Molybdos (Pty) Limited in the “business rescue” auction, the assets and intellectual property we acquired from Klydon Proprietary Ltd, and our investment in PET Labs Pharmaceuticals;
We currently have no sales attributable to enriched isotopes, but we expect to be heavily dependent on a few large customers to generate a majority of our revenues from sales of our future isotopes. Our operating results could be adversely affected by a reduction in business with our future significant customers.revenues.
We will require substantial additional capital to finance our operations, which may not be available on acceptable terms, or at all.
Risks Related to the Development and Commercialization of Our Future Isotopes
We are stillcontinuing conductingour research and development efforts for isotopes such as Mo-100, Zinc-68, Xenon-129/136, Germanium-70/72/74 and Chlorine-37 using the ASP technology and the QE technology. IfWe wemay arebe unable to advance our future isotopes in development, obtain applicable regulatory approval and ultimately commercialize our future isotopes, or experience significant delays in doing so, our business will be materially harmed.so.
Our success depends on our future customers’ ability to successfully commercialize products that are produced from our isotopes, as well as our suppliers’ ability to provide us components as and when expected and at expected prices.
Even if the products that we or our customers may produce using the ASP technology receive regulatory approval, it may fail to achieve market acceptance by our target market of customers.
Risks Related to Regulatory Compliance
Our business is and could become subject to a wide variety of extensive and evolving laws and regulations. For example, if technology developed for the enrichment of isotopes can be applied to the creation or development of weapons-grade materials, then it may be considered “dual use” technology and be subject to limitations on public disclosure or export.
Our Exploration Rights and Production Right in South Africa could be altered, suspended, or canceled for a variety of reasons, including uncertainties associated with national and local legislation.
Risks Related to our Operations in South Africa
Our operations in South Africa could be disrupted for a variety of reasons, including economic, political or social instability, which could prevent us from completing our development activities or have a material adverse effect on our operations and profits.
Risks Related to Our Intellectual Property
Our and certain of Renergen’s intellectual property and other proprietary rights, products or processes is not protected through patents or formal copyright registration. As a result, we do not have the full benefit of patent or copyright laws to prevent others from replicating our technologies and we may be unable to adequately protect our intellectual property and proprietary rights and prevent others from making unauthorized use of our products and technology.
Our ASP technology and QE technology may be found to infringe third-party intellectual property rights.
If we fail to comply with Renergen’s obligations under license or technology agreements with third parties, we may be required to pay damages and could lose license rights that are critical to Renergen’s business.
Risks Related to Our Business Operations, Employee Matters and Managing Growth
We will need to expand our organization, and we may experience difficulties in managing this growth.
Our international operations subject us to risks of doing business in foreign countries.
Risks Related to Ownership of Our Common Stock
We are awaiting the approvals necessary to conduct early research and development efforts for isotopes such as Uranium-235 utilizing the Quantum Enrichment technology. The necessary approvals may take a significant amount of time and may never materialize. As a result, we may not be able to enter into the nuclear energy space utilizing our technology.
Obtaining and maintaining our patent protection depends on compliance with various procedures, document submissions, fee payments and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.
Since our listing on the Nasdaq Capital Market in November 2022, there has been only a limited prior public market for our Common Stock,Stock and the stock price of our Common Stockstock may be volatilevolatile. orAdditionally, mayif declinewe regardlessare unable to maintain listing of our operatingsecurities performanceon Nasdaq or any stock exchange, our stock price could be adversely affected and you may not be able to resell your shares quickly or at the market price if trading in sharesliquidity of our common stock isand notour active.ability to obtain financing could be impaired.
We are an emerging growth company and a smaller reporting company, and the reduced reporting requirements applicable to such companies may make our Common Stock less attractive to investors.
General Risk Factors
We will incur significant increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives.
We have identified a material weakness in our internal control over financial reporting. If our remediation of this material weakness is not effective, or if we experience material weaknesses in the future or otherwise fail to implement and maintain an effective system of internal controls in the future, we may not be able to accurately report our financial condition or results of operations which may adversely affect investor confidence in us, and as a result, the value of our Common Stock.
We have been and could be in the future subject to securities class action litigation.
Risks Related to Quantum Leap Energy’s Business and Industry
QLE’s future success depends, in part, on target markets that are not yet, and may never be, established. Furthermore, even if QLE’s target markets grow as expected by our management team, our ability to penetrate these markets is uncertain.
Technological changes could render QLE’s technology uncompetitive or obsolete, which could prevent QLE from achieving market share and sales. Further, QLE may be unable to attract customers as quickly as expected, or at all, and competition from existing or new companies could cause QLE to experience downward pressure on prices, fewer customer orders, reduced margins, the inability to take advantage of new business opportunities, and the loss of market share.
Risks Related to the Expansion of the Virginia Gas Project
As we further expand Renergen’s current operations into Phase 2, we may face additional problems associated with natural gas exploration and development projects, including potential problems securing additional supporting authorizations, licenses and permits, as well as unforeseen difficulties, delays and costs in construction (including potential cost-overruns, if underlying assumptions prove to be inaccurate) and operation of Phase 2.
Managing a project as substantial in size as Phase 2 of the Virginia Gas Project requires sufficient technical, commercial and project management capacity. There can be no assurance that Renergen’s current management team has sufficient capacity, or that the project will operate as expected, incur costs within expected estimates, or that we will be able to obtain the necessary financing for Phase 2 in a timely manner and/or on acceptable terms, if at all.
Risks Related to Renergen’s Business
Renergen’s drilling results in South Africa may be more uncertain than drilling results in areas that are developed and have established production. Additionally, Renergen’s identified drilling locations are scheduled out over many years, making them susceptible to uncertainties that could materially alter the occurrence or timing of their drilling.
Natural gas prices are volatile. A sustained decline in natural gas prices could adversely affect our business, financial condition and results of operations. Further, we may be unable to obtain, maintain or renew permits, leases or licenses necessary for Renergen’s operations, the failure of which could impair our ability to conduct Renergen’s operations.
Risks Related to Renergen’s Indebtedness and Liquidity
The DFC Credit Facility Agreement and IDC Loan Agreement place operating restrictions on Renergen and create default risks. Further, we may not be able to generate sufficient cash to service all of Renergen’s indebtedness and may be forced to take other actions to satisfy Renergen’s obligations under applicable debt instruments, which may not be successful.
Renergen’s outstanding indebtedness under the IDC Loan Agreement bears interest at a variable rate, which makes us more vulnerable to increases in interest rates and could cause Renergen’s interest expense to increase and decrease cash available for operations and other purposes.
If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, stockholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our Common Stock.
We were incorporated in September 2021, and we have a very limited operating history upon which you can evaluate our business and prospects. Our operations to date have been primarily focused on acquiring assets, organizing and staffing our company, research and development activities, business planning, raising capital, and providing general and administrative support for these operations. We have not yet demonstrated the ability to produce commercial quantities of enriched isotopes using the ASP technology or QuantumQE Enrichmenttechnology technology. We have not yet demonstratednor an ability to overcome many of the risks and uncertainties frequently encountered by companies in the medical, technology and energy industries, including an ability to obtain applicable regulatory approvals, manufacture any isotopes at commercial scale, or conduct sales and marketing activities necessary for successful isotope commercialization. In addition, we have not yet sought any regulatory approval that may be necessary for application of isotopes that we may produce for the medical industry or the production of enriched U-235. Furthermore, Renergen’s LNG and helium extraction operations similarly have a limited financial and operating history. Renergen began producing LNG in September 2022 and has produced limited quantities of LNG to date. The selling and distribution of LNG began in November 2022. Helium commissioning and production was achieved in January 2023. Consequently, any predictions about our future performance may not be as accurate as they would be if we had a history of successfully developing and commercializing isotopes.isotopes, and such predictions may differ materially from our actual results of operations and financial performance.
continue to develop Phase 2 of the Virginia Gas Project;
OurCertain of our future prospects are tied directly to the end markets that use our isotopes including the diagnostic medical imaging industry and depend on our ability to successfully introduce our isotopes and adapt to a changing technology and medical practice landscape.
TheOur success of the company will depend in large part on the success of our management in integrating the acquired assets into theour company.operations. In October 2021, our subsidiary in South Africa acquired the assets of Molybdos after participating in and being declared the winner of a competitive auction process under Section 45 of the South Africa Consumer Protection Act, 2008 for ZAR 11,000,000 (which at the then currentthen-current exchange rate was approximately $734,000), plus value added tax (VAT) levied by the government of South Africa at the rate of 15% and auctioneers’ commission at the rate of 10%. In July 2022, we acquired assets comprising a dormant Silicon-28Si-28 aerodynamic separation processing plant from Klydon located in Pretoria, South Africa for ZAR 6,000,000 (which at the then currentthen-current exchange rate was approximately $364,000). In addition, in April 2023, we perfected our interest under the Acknowledgement of Debt Agreement, under which we acquired specific intellectual property from Klydon. To date, we have completed the construction of one isotope enrichment facility, but we have not yet produced any commercial quantities of isotopes and we have not yet demonstrated the ability to produce any isotope in commercial quantities using ASP technology. We will not know whether the assets that we acquired will work according to our expectations until we have produced commercial quantities of isotopes at our enrichment facilities. Our failure to achieve the integration of the acquired assets into the company and to commercialize the assets could result in our failure to realize the anticipated benefits of those acquisitions and could impair our results of operations, profitability and financial results.
The acquisition of a controlling interest in PET Labs Pharmaceuticals may fail to result in anticipated benefits but has involved significant investment of financial and other resources.
In October 2023, we entered into a Share Purchase Agreement with Nucleonics Imaging Proprietary Limited, a company incorporated in South Africa, to purchase 51% of the ordinary shares (the “initial shares”) in Nucleonics’ wholly-owned subsidiary, PET Labs Pharmaceuticals Proprietary Limited,Labs, a company incorporated in South Africa and dedicated to nuclear medicine and the science of radiopharmaceutical production. We agreed to pay a total of $2,000,000$2.0 million for the initial shares in two installments.installments, Thewhich firsthas installment of $500,000 wasbeen paid in Novemberfull 2023. In January 2024, the Company made a partial paymentas of $264,750 and the balance of $1,235,250 is expected to be paid inDecember 2025. In addition, we have an option to purchase the remaining 49% of the ordinary shares (the “option shares”). If we exercise our option to purchase the option shares (which option isshares, exercisable until January 31, 2027, provided that the initial shares have been paid for in full), we have agreed to pay $2,200,000 for the option shares.$2,200,000.
In addition, in August 2025 QLE completed the acquisition of a controlling interest in Skyline and in January 2026, we acquired all of the issued and outstanding ordinary shares of Renergen. To date, we have completed the construction of one isotope enrichment facility, but we have not yet produced any commercial quantities of isotopes and we have not yet demonstrated the ability to produce any isotope in commercial quantities using ASP technology. Acquisitions generally create risks such as (i) the need to integrate and manage the businesses and products acquired with our own business and products; (ii) additional demands on our resources, systems, procedures and controls; (iii) disruption of our ongoing business; (iv) potential unknown or unquantifiable liabilities associated with the target company; and (v) diversion of management’s attention from other business concerns. Moreover,We this acquisition involves substantial investment of funds. This acquisition maywill not know whether the assets that we acquired will work according to our expectations or be successful in generating material revenue, income or other returns, and any resources we committed will not be available to us for other purposes. Our inabilityfailure to takeachieve advantagethe integration of growththe opportunitiesacquired orassets addressinto risksthe associated with this acquisitioncompany and investmentto maycommercialize negativelythe affectassets our operating results. This acquisition may notcould result in itsour anticipated benefits, and we may not be ablefailure to properly integraterealize the business with our future products and operations or successfully combine personnel and cultures. Failure to do so could deprive us of the intendedanticipated benefits of thisthose acquisition.acquisitions and could impair our results of operations, profitability and financial results.
We currently have no sales attributable to enriched isotopes. However, we expect to rely on a limited number of customers to purchase any isotopes that we produce using the ASP technology or quantumQE enrichmenttechnologies under long-term contracts. Our future key customers may stop ordering our isotopes at any time or may become bankrupt or otherwise unable to pay. The loss of any of our future key customers could result in lower revenues than we anticipate and could harm our business, financial condition or results of operations.
We expect our expenses to increase substantially in connection with our ongoing and planned activities, particularly as we continue our research and development activities, seek applicable regulatory approvals for any future isotopes that we may successfully develop, and expand our organization by hiring additional personnel.personnel, continue to integrate acquired assets into our company and continue the development of Phase 2 of the Virginia Gas Project. In addition, we expect to continue incurring significant costs associated with operating as a public company.
As of December 31, 2024,2025, our cash wasand cash equivalents were approximately $61.9$285.6 million and short term investments were approximately $47.7 million. We believe, based on our current operating plan, that our existing cash,cash and cash equivalents, proceeds from short-term investments, cash flow from operations, the IDC Debt Funding (defined below), the SBSA Loan (defined below), the DFC Credit Facility (defined below) and the conditionally approved senior secured debt facilities expected to be funded by the DFC and the Standard Bank of South Africa, will be sufficient to fund our operations for at least the next 12 months from the date the financial statements are issued.issued and beyond.
As we pursue additional research and development activities related to our ASP technology and seek applicable regulatory approval of our any future isotopes, and otherwise to support our continuing operations, including the development of Phase 2 of the Virginia Gas Project, we will require substantial additional capital to support our business operations. As an example, from our latest cost estimate we anticipate we will need to incur at least approximately $1.16 billion in costs (including borrowing costs and general corporate costs during construction) to complete Phase 2 of the Virginia Gas Project. See “—There can be no assurance that we will be able to obtain the necessary financing for Phase 2 in a timely manner and/or on acceptable terms, if at all.” In addition, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution (assuming receipt of applicable regulatory approvals for our future isotopes). Even if we believe we have sufficient capital for our current or future operating plans, we may seek additional capital if market conditions are favorable or if we have specific strategic considerations. Any additional capital raising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our future isotopes (assuming receipt of applicable regulatory approvals). and Phase 2 of the Virginia Gas Project.
Additionally, as a result of severely diminished liquidity and credit availability, increased interest rates, inflationary pressures, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability, the global credit and financial markets have experienced extreme volatility and disruptions, including severely diminished liquidity and credit availability. The financial markets and the global economy may also be adversely affected by the current or anticipated impact of military conflict. If the equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly or more dilutive. If we do not raise additional capital in sufficient amounts, we may be prevented from pursuing development and commercialization efforts, which will harm our business, operating results and prospects.
Management's Discussion & Analysis (MD&A)
New heading “Investments in Early Stage Drug Development Companies”
New heading “Skyline Investments”
New heading “Agreements with TerraPower LLC”
New heading “Cost of Revenue”
New heading “Acquired In-Process Research and Development Expense”
New heading “Acquired In-Process Research and Development”
New heading “Non-GAAP Financial Information”
New heading “Headline Loss per Share”
New heading “Promissory Note and Loans”
New heading “Renergen Acquisition Agreements”
New heading “Renergen Contractual Obligations and Commitments”
New heading “DFC Credit Facility”
New heading “IDC Debt Funding”
New heading “Unsecured Convertible Debentures with AIRSOL”
Removed heading “TerraPower, LLC”
Removed heading “Cost of Goods Sold”
Removed heading “Business Combinations”
Removed heading “Loss Contingencies”
Removed heading “Stock-Based Compensation”
Removed heading “Convertible Notes Payable at Fair Value”
Largest changes
“Pursuant to the DFC Credit Facility Agreement, Tetra4 is required to maintain at all times (a) (i) a ratio of all interest bearing Debt to EBITDA of not more than 3.0 to 1; (ii) a ratio of Current Assets to Current Liabilities of not less than 1 to 1; and (iii) a Reserve Tail Ratio of not less than 25%; …”see in full comparison
“On April 4, 2024, we entered into an agreement with TerraPower LLC ("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 Agreeement”). The TerraPower Agreement may be terminated for (a) breach or default, (b) our convenience or (c) TerraPower’s convenience. TerraPower is obligated to make all payments for milestones completed by us and these payments are nonrefundable.”see in full comparison
“On April 4, 2024, we entered into the TerraPower Agreement with TerraPower to develop a conceptual design, refined cost/schedule/financing, risk register, and term sheet for a HALEU facility. The TerraPower Agreement may be terminated for (a) breach or default, (b) our convenience or (c) TerraPower’s convenience. TerraPower is obligated to make all payments for milestones completed by us and these payments are nonrefundable.”see in full comparison
“On December 20, 2021, Tetra4, as borrower, entered into a loan agreement (the “IDC Loan Agreement”) with the Industrial Development Corporation of South Africa Limited (“IDC”), as lender, for R160.7 million (the “IDC Debt Funding”) for the procurement of the virtual pipeline equipment and dispensing equipment to be constructed on Renergen customers’ premises. …”see in full comparison
“We test goodwill for impairment annually, or more frequently if events or changes in circumstances indicate that the carrying value may not be recoverable. If it is determined that carrying values of goodwill cannot be recovered, the unrecoverable amounts are charged against current earnings. Recoverability is dependent upon assumptions and judgments regarding market conditions, or business strategies. Other assumptions used in the calculation of recoverable amounts are discount rates, future cash flows and profit margins. …”see in full comparison
“On March 31, 2025, we entered into an Exclusivity Agreement with Renergen, an entity in South Africa that was previously listed on the Johannesburg Stock Exchange (“JSE”), the Australian Securities Exchange and the A2X. On May 18, 2025, the Exclusivity Agreement was amended. Per the terms of the amended Exclusivity Agreement, we received the rights to negotiate the terms of the acquisition of Renergen during an exclusive negotiation period that ended on May 31, 2025. In April 2025, we paid an exclusivity fee of $10.0 million to Renergen. …”see in full comparison
Full comparison: every changed paragraph (181)
The following discussion and analysis of financial condition and results of operations is provided to enhance the understanding of, and should be read in conjunction with Part I, Item I,1, “Business” and Item 8, ‘Financial Statements and Supplementary Data.” For information on risks and uncertainties related to our business that may make past performance not indicative of future results or cause actual results to differ materially from any forward-looking statements, see “Special Note Regarding Forward-Looking Statements,” and Part I, Item 1A, ‘Risk Factors.”
We are a development stagean advanced materials company dedicated to the development of technologya anddifferentiated processes that, if successful, will allow for theisotope enrichment ofplatform naturalto isotopesstrengthen intoglobal highersupply concentrationchain products,access whichto couldcritical bematerials used in severalnuclear industries.medicine, next-generation semiconductors, and nuclear energy. Our proprietary enrichment technologies, the Aerodynamic Separation Process (“ASP technology”) and Quantum Enrichment technology (“QE technology”),technology, are designed to enable the production of isotopes usedfor ina severalrange industries.of industrial and advanced technology applications. Our initial focus is on the production and commercialization of enriched Carbon-14 (“C-14”), Silicon-28 (“Si-28”) and Ytterbium-176 (“Yb-176”).
We commenced commercial production of enriched isotopes at both of our ASP enrichment facilities located in Pretoria, South Africa during the first half of 2025. Our first ASP enrichment facility is designed to enrich light isotopes, such as C-14 and C-12. The second ASP enrichment facility, which is substantially larger than the first, should have the potential to enrich kilogram quantities of relatively heavier isotopes, including but not limited to Si-28. We are targeting initial commercial shipments of enriched C-14 in mid-2026. We are targeting initial commercial shipments of enriched Si-28 during the second quarter of 2026. We have also completed the commissioning phase and are producing commercial samples of highly enriched Yb-176 at our third enrichment facility, a QE technology facility, which is our first laser-based enrichment plant. We are targeting initial commercial shipments of Yb-176 in mid-2026 or the third quarter of 2026.
We have completed the commissioning phase and are commencing commercial production at our C-14and Si-28 enrichment facilities in Pretoria, South Africa. We are in the process of commissioning and commencing commercial production at our Yb-176 enrichment facility in Pretoria, South Africa. Our C-14 and Si-28 enrichment facilities utilize the ASP technology and our Yb-176 enrichment facility utilizes QE technology. We expect our first three enrichment facilities to generate commercial product during 2025. In addition, we have started planning additional isotope enrichment plants both in South Africa and in other jurisdictions, including Iceland and the United States. We believe the C-14 we may produce using the ASP technology could be used in the development of new pharmaceuticals and agrochemicals. We believe the Si-28 we may produce using the ASP technology may be used to create advanced semiconductors and in quantum computing. We believe the Yb-176 we may produce using the QE technology may be used to create radiotherapeutics that treat various forms of oncology. We anticipate shipping the first commercial batches of enriched Carbon-14 in mid-2025 and enriched Silicon-28 during the second quarter of 2025. We expect to commence commercial production of Ytterbium-176 during the second quarter of 2025.
In addition, we have started planning additional isotope enrichment plants both in South Africa and in other jurisdictions, including Iceland and the United States. We believe the C-14 we may produce using the ASP technology could be used in the development of new pharmaceuticals and agrochemicals. We believe the Si-28 we may produce using the ASP technology may be used to create advanced semiconductors and in quantum computing. We believe the Yb-176 we may produce using the QE technology may be used to create radiotherapeutics that treat various forms of oncology. We are considering the future development of the ASP technology for the separation of Zinc-68 and Xenon-129/136 for potential use in the healthcare end market, Germanium 70/72/74 for potential use in the semiconductor end market, and Chlorine -37 for potential use in the nuclear energy end market. We are also considering the future development of QE technology for the separation of Nickel-64, Gadolinium-160, Ytterbium-171, Lithium 6Lithium-6 and Lithium7.Lithium-7.
WeQLE, areour subsidiary, is currently pursuing an initiative to apply our enrichment technologies to the enrichment of Uranium-235 (“U-235”) in South Africa. We believe that the U-235 weQLE may produce usinghas quantumthe enrichmentpotential technology mayto 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. In furtherance of our uranium enrichment initiative,initiative in OctoberSouth 2024,Africa, we have entered into certain definitive agreements with TerraPower, LLC (“TerraPower”), including a term loan subject to conditions to support construction of a new uranium enrichment facility at Pelindaba, South Africa and supply agreements for the future supply of HALEU to TerraPower, as a customer. In addition, QLE’s South African subsidiary has entered into a termPre-Implementation sheetServices withContract TerraPower,Agreement LLC(“Services which contemplates the parties entering into definitive agreements pursuant to which TerraPower would provide funding for the construction of a HALEU production facility and agree to purchase all HALEU produced at the facility over a 10-year period after the planned completion of the facility in 2027. In addition, in November 2024, we entered into a memorandum of understandingContract”) with The South African Nuclear Energy Corporation (“Necsa”), a South African state-owned company responsible for undertaking and promoting research and development in the field of nuclear energy and radiation sciences, pursuant to collaboratewhich Necsa has agreed to provide to QLE’s South African subsidiary certain facilities, infrastructure, utilities and services related to the siting, design, construction, commission and operation of an enrichment facility on the research,Necsa developmentsite andin ultimatelyPelindaba. In the commercialperiod productionsince ofour advancedinception nuclearto fuels.date, Subjectwe have not applied our enrichment technologies to the receiptenrichment of fundingU-235, andnor allreceived requiredpermission permitsor andregulatory licensesapproval to beginconduct testing of our enrichment technologies on U-235, except for the activities contemplated by the Services Contract with Necsa. Our expectation that QLE’s initiative to apply our enrichment technologies to the enrichment of U-235 incould Southbe Africa, itsuccessful is anticipatedbased thatupon research conducted by certain of our scientists prior to joining the research,company, developmentas andwell ultimateas constructionthe demonstrated effectiveness of aQE HALEUtechnology productionon facility will take place at South Africa’s main nuclear research center at Pelindaba in Pretoria.Yb-176.
QLE acquired a controlling interest in Skyline in August 2025. Skyline is a holding company, and its operations are conducted through its wholly owned operating subsidiary, Kin Chiu Engineering Limited. Operations primarily consist of construction activities which include public civil engineering works, such as road and drainage works, in Hong Kong. Skyline mostly undertakes civil engineering works in the role as a subcontractor but is fully qualified to undertake such works in the capacity of a main contractor. QLE intends to pursue opportunities to acquire assets in the critical materials supply chain.
We acquired Renergen in January 2026. Renergen is South Africa’s leading onshore natural gas explorer and the first integrated producer of both liquid helium and LNG, both of which are produced from the natural gas reserve base that underpins Renergen’s Virginia Gas Project. The Virginia Gas Project includes (i) the liquefaction of natural gas into LNG, (ii) the separation of helium from natural gas, and (iii) the further liquefaction of helium into 99.999% pure liquid helium. This liquefaction and separation takes place at Renergen’s Virginia Gas Plant. Renergen’s principal asset is its 94.5% equity ownership in Tetra4, which holds an onshore petroleum production right and is the entity developing the Virginia Gas Project.
Our Subsidiaries and Segments
We operate principally through our subsidiaries. ASP Isotopes Guernsey Limited (the holding company for our subsidiaries in the Cayman Islands, South Africa, Iceland and the United Kingdom) is focused on the development and commercialization of high-value, low-volume isotopes for highly specialized end markets (such as C-14, Mo-100, and Si-28). ASP Isotopes UK Ltd is the owner of our technology.
QLE. In September 2023, we formed Quantum Leap Energy LLC, or “QLE,” which also has subsidiaries in the United Kingdom (Quantum Leap Energy Limited) and South Africa (Quantum Leap Energy (Pty) Limited), to focus on the development and commercialization of advanced nuclear fuels such as HALEU and Lithium-6.
Although no assurance can be given, we plan to spin-out QLE as a separate public company and list the shares of QLE on a U.S. national exchange and distribute a portion of QLE’s common equity to ASPI’s stockholders as of a to-be-determined future record date, in each case subject to obtaining applicable approvals and consents and complying with applicable rules and regulations and public market trading and listing requirements. The regulatory landscape and supply chain for nuclear fuel production differs significantly from that of medical isotopes, hence we and QLE have different business models and we believe that both companies would benefit if QLE is independently managed and financed.
In connection with the anticipated spin-out, in February 2024, we entered into a number of agreements with QLE, including a License Agreement, pursuant to which QLE has licensed from us the rights to technologies and methods used to separate Uranium 235 and Lithium 6 (including but not limited to the quantum enrichment and ASP technologies) in exchange for a perpetual royalty in the amount of 10% of all future QLE revenues, and an EPC Services Framework Agreement, pursuant to which we will provide services for the engineering, procurement and construction of one or more turnkey Uranium-235 and Lithium-6 enrichment facilities in locations to be identified by QLE and owned or leased by QLE, and commissioning, start-up and test services for each such facility, subject to the receipt of all applicable regulatory approvals, permits, licenses, authorizations, registrations, certificates, consents, orders, variances and similar rights. In addition, in February 2024, we assigned to QLE certain existing memoranda of understanding with U.S.-based small modular reactor companies for the use of Quantum Enrichment for the production of High-Assay Low Enriched Uranium (HALEU). The MOUs provide for substantial financial support for the development of HALEU production facilities that should be capable of supplying metric ton quantities of HALEU by 2027.
PET Labs. We have a 51% ownership stake in PET Labs Pharmaceuticals Proprietary Limited (PET Labs), a South African radiopharmaceutical operations company focused on the production of fluorinated radioisotopes and active pharmaceutical ingredients, through which we entered the downstream medical isotope production and distribution market. Under the terms of the Share Purchase Agreement pursuant to which we acquired the shares in PET Labs, we agreed to pay a total of $2,000,000 for the shares in two installments. The first installment of $500,000 was paid in November 2023. In January 2024, we paid $264,750 towards the balance due. The remaining balance of $1,235,250 is due upon demand any time after October 31, 2024, and is expected to be paid in 2025.
Beginning in 2024, primarily as a result of the increased business activities of our subsidiary, QLE, we havehad two operating segments: (i) nuclear fuels, and (ii) specialist isotopes and related services. Beginning in August 2025, primarily as a result of the acquisition of Skyline, we have three operating segments: (i) nuclear fuels, (ii) specialist isotopes and related services, and (iii) construction services.
QLE. In September 2023, we formed QLE, which also has subsidiaries in the United Kingdom (Quantum Leap Energy Limited) and South Africa (Quantum Leap Energy (Pty) Limited), to focus on the development and commercialization of advanced nuclear fuels, such as HALEU and Lithium-6. QLE’s direct wholly owned subsidiary QLE UK, has its operations in the United Kingdom. QLE UK’s direct wholly owned subsidiary, QLE South Africa, has its operations in South Africa. QLE also formed QLE SPE Borrower, as a wholly owned subsidiary to act as a special purpose borrower for a loan transaction with TerraPower, a US nuclear innovation company. The QLE SPE Borrower has formed a subsidiary in South Africa to act as the project company for a proposed new uranium enrichment facility at Pelindaba, South Africa.
QLE’s mission is to address perceived gaps in the nuclear fuel cycle, promote safe nuclear power, and enhance the sustainability of the nuclear fuel cycle for advanced nuclear reactors and fusion systems, as well as the existing nuclear fleet. We believe that many advanced nuclear reactors, including SMRs, will rely on fuels with higher uranium enrichment levels, specifically HALEU, which we intend to produce. QLE also intends to produce high-isotopic purity fuel feedstock, such as Lithium-6, for fusion reactors, and by extension, Lithium-7 for Light Water Reactor control. These fuels may enable greater efficiency, compact reactor footprints, and lengthened operational cycles between refueling. Given the flexible nature of our enrichment technology and integrated value chain approach, QLE also intends to make available LEU+ to the existing fleet of nuclear reactors currently running on LEU, thus enabling existing reactors to lengthen the time between refueling, cut costs and boost power output.
As previously announced, our board of directors intends to pursue the separation of our Nuclear Fuels business and Specialist Isotopes and Related Services business in two independent companies. The regulatory landscape and supply chain for nuclear fuel production differs significantly from that of medical isotopes, hence we and QLE have different business models and we believe that both companies would benefit if QLE is independently managed and financed. We plan to effect the separation through a listing of QLE in a transaction that results in QLE existing as a separate public company with shares listed on a U.S. national securities exchange and a portion of QLE’s common equity being distributed to our stockholders as of a to-be-determined future record date. Although no assurance can be given, our goal is to list QLE on such exchange, subject to market conditions, obtaining applicable approvals and consents, and complying with applicable rules and regulations and public market trading and listing requirements. In November 2025, we announced that QLE had confidentially submitted a draft registration statement on Form S-1 to the SEC relating to the proposed initial public offering of QLE’s Class A common stock. While we currently expect that a listing of QLE as a separate public company is the most likely separation transaction, our board of directors remains committed to maximizing shareholder value creation, and will continue to evaluate other options for separation to maximize shareholder value.
We entered into a number of agreements with QLE, including a License Agreement, pursuant to which QLE has licensed from us the rights to technologies and methods used to separate U-235 and Lithium-6 (including but not limited to the QE and ASP technologies) in exchange for a perpetual royalty in the amount of 10% of all future QLE revenues, and an EPC Services Framework Agreement, pursuant to which we will provide services for the engineering, procurement and construction of one or more turnkey U-235 and Lithium-6 enrichment facilities in locations to be identified by QLE and owned or leased by QLE, and commissioning, start-up and test services for each such facility, subject to the receipt of all applicable regulatory approvals, permits, licenses, authorizations, registrations, certificates, consents, orders, variances and similar rights.
PET Labs. We have a 51% ownership stake in PET Labs, a South African radiopharmaceutical operations company focused on the production of fluorinated radioisotopes and active pharmaceutical ingredients, through which we entered the downstream medical isotope production and distribution market. Under the terms of the Share Purchase Agreement pursuant to which we acquired the shares in PET Labs, we agreed to pay a total of $2.0 million for the shares in two installments, which has been paid in full as of December 2025. In addition, we have an option to purchase the remaining 49% of the outstanding equity in PET Labs, exercisable until January 31, 2027, for $2.2 million.
East Coast Nuclear Pharmacy. In October 2025, we completed the acquisition of East Coast Nuclear Pharmacy ("ECNP"). The acquisition is intended to supplement the distribution of our pipeline. Pursuant to the terms of the agreement, we acquired 100% of the issued and outstanding membership interests for total purchase consideration of $2.5 million of which $2.0 million was paid up front in cash and the remaining $0.5 million was deferred through the issuance of notes payable that are to be repaid by June 30, 2026.
Skyline Builders Group Holding Ltd. In August 2025, QLE completed the acquisition of a controlling interest in Skyline. QLE entered into a Stock Purchase Agreement to purchase all 1,995,000 of Skyline's Class B Ordinary Shares for the aggregate purchase price of $1,000,000. Additionally, QLE entered into a Securities Purchase Agreement to purchase (i) 454,794 Class A Ordinary Shares, (ii) a Prefunded Warrant to purchase 1,600,000 Class A Ordinary Shares at an exercise price of $0.0001 per share ("Prefunded Warrants"), (iii) a Class A Ordinary Share Purchase Warrant A to purchase up to 2,054,794 Class A Ordinary Shares at an exercise price of $0.60 per share ("A Warrant"), and (iv) a Class A Ordinary Share Purchase Warrant B to purchase 2,054,794 Class A Ordinary Shares at an exercise price of $0.65 per share ("B Warrant" and together with Prefunded Warrant and A Warrant, "Warrants"), for the aggregate purchase price of $1,500,000 ("Skyline Purchase Agreement").
Each Class A Ordinary Share shall entitle the holder thereof to one (1) vote on all matters subject to vote at general meetings of Skyline, and each Class B Ordinary Share shall entitle the holder thereof to twenty (20) votes on all matters subject to vote at general meetings of Skyline. Currently there is no mechanism in which Class A Ordinary Shares are convertible into Class B Ordinary Shares. Currently there is no mechanism in which Class B Ordinary Shares are convertible into Class A Ordinary Shares. On the acquisition date, QLE became the holder of 79.14% of the aggregate voting power represented by all of Skyline's outstanding Class A ordinary shares and Class B ordinary shares, and thereby gaining control over Skyline.
Skyline is a holding company, and its operations are conducted through its wholly owned operating subsidiaries, Kin Chiu Engineering Limited and Kin Chiu Development Company Limited. Operations primarily consist of construction activities which include public civil engineering works, such as road and drainage works, in Hong Kong. Skyline mostly undertakes civil engineering works in the role as a subcontractor but is fully qualified to undertake such works in the capacity of a main contractor. QLE intends to pursue opportunities to acquire assets in the critical materials supply chain.
Effective September 18, 2025, Dr. Ryno Pretorius, Chief Executive Officer of QLE, was appointed as an independent director of Skyline. In addition, an employee of ASP Isotopes was appointed as an independent director of Skyline. Effective January 1, 2026, the Skyline board of directors appointed Paul Mann as Executive Chairman of Skyline. Effective March 30, 2026, the employee of ASP Isotopes that held one of the director positions at Skyline resigned and was replaced by a new independent director.
On January 23, 2026, Skyline entered into a warrant exchange agreement (the “Skyline Exchange Agreement”) with the holders of Skyline Class A Ordinary Share Purchase Warrant A’s and Skyline Class A Ordinary Share Purchase Warrant B’s (collectively, the “Skyline Holder Warrants”), to purchase an aggregate of 48,698,628 Skyline Class A Ordinary Shares, that were purchased in the Skyline Series A Private Placement, to exchange the Skyline Holder Warrants issued on August 29, 2025, for an aggregate of 47,326,025 newly issued Series A preferred shares of Skyline (“Skyline Series A Preferred Shares”) and allotted among the holders in accordance with the Skyline Exchange Agreement. Each Skyline Series A Preferred Share is convertible, at the option of a holder thereof, into Skyline Class A Ordinary Shares.
On February 11, 2026, Skyline entered into (i) a securities purchase agreement (the “Reg D Purchase Agreement”) for an offering of Skyline’s Series B Convertible Preferred Shares (the “Skyline Series B Preferred Shares”) in a private placement (the “Reg D Private Placement”) pursuant to Regulation D under the Securities Act of 1933, as amended and (ii) a securities purchase agreement (the “Reg S Purchase Agreement”) for an offering of the Skyline Series B Preferred Shares in a private placement pursuant to Regulation S under the Securities Act (the “Reg S Private Placement” and together with the Reg D Private Placement, the “February 2026 Skyline Series B Private Placements”), in each case, for the purchase and sale of the Skyline Series B Preferred Shares.
The February 2026 Skyline Series B Private Placements closed on February 13, 2026 at which Skyline issued 6,322 of the Skyline Series B Preferred Shares. The purchase price for each Skyline Series B Preferred Share was $5,000. Each Skyline Series B Preferred Share is convertible into Skyline Class A ordinary shares with a conversion price of $2.40 per share, subject to certain anti-dilution adjustments that are subject to a floor of $1.50 per share and other customary adjustments for share splits, recapitalizations, reorganizations and similar transactions. The gross proceeds of the Skyline Series B Private Placement were approximately $31.6 million, before deducting placement agent fees and other offering expenses payable by Skyline.
In connection with the February 2026 Skyline Series B Private Placements, Skyline also entered into placement agency agreements dated February 10, 2026 that included the payment of a cash fee equal to 8.0% of the aggregate gross proceeds of the February 2026 Skyline Series B Private Placements and the issuance of non-callable warrants exercisable for a number of Skyline's Class A Ordinary Shares equal to 6% of the Class A Ordinary Shares underlying the Skyline Series B Preferred Shares. The warrants have an exercise price of $2.40 per share.
On March 20, 2026, Skyline entered into (i) a senior unsecured convertible note purchase agreement for an offering of approximately $16.6 million of Skyline's senior unsecured convertible notes (the “2026 Skyline Notes”) in a private placement and (ii) a securities purchase agreement dated March 20, 2026 for an offering of $0.6 million of Skyline’s Series B Preferred Shares (the “March 2026 Skyline Preferred Shares”) in a private placement (the "March 2026 Skyline Private Placement").
The March 2026 Skyline Private Placement closed on March 25, 2026. The 2026 Skyline Notes are convertible into Skyline's class A ordinary shares, par value $0.00001 per share at a conversion price of $2.40 per share, subject to certain anti-dilution adjustments, that are subject to a floor of $1.50 per share. The conversion price of the 2026 Skyline Notes is also subject to other customary adjustments for share splits, recapitalizations, reorganizations and similar transactions The purchase price for each March 2026 Skyline Preferred Share was $5,000. Each March 2026 Skyline Preferred Share is convertible into Class A ordinary shares at a conversion price of $2.40 per share, subject to certain anti-dilution adjustments that are subject to a floor of $1.50 per share. The gross proceeds of the March 2026 Skyline Private Placement was approximately $17.2 million, before deducting placement agent fees and other offering expenses that were paid by Skyline.
In connection with the March 2026 Skyline Private Placement, Skyline also entered into placement agency agreements dated March 20, 2026 that included the payment of a cash fee equal to 8.0% of the aggregate gross proceeds of the March 2026 Skyline Private Placement and the issuance of non-callable warrants exercisable for a number of Skyline's Class A Ordinary Shares equal to 8% and 6% of the Class A Ordinary Shares underlying the 2026 Skyline Notes and March 2026 Skyline Preferred Shares, respectively. The warrants have an exercise price of $2.40 per share.
On March 29, 2026, QLE entered into a securities exchange agreement with an investor (the "QLE Exchange Agreement"). Per the QLE Exchange Agreement, the investor assigned and transferred 1,995,000 Class A Ordinary Shares held by the investor to QLE in exchange for an equal number of Class B Ordinary Shares held by QLE.
On March 31, 2026, Skyline issued an additional $3.0 million of 2026 Skyline Notes in a private placement.
Renergen Acquisition. On January 6, 2026, ASP Isotopes acquired all of the issued and outstanding Renergen Ordinary Shares from Renergen shareholders in exchange for the Consideration Shares through the implementation of the Scheme in accordance with Sections 114 and 115 of the South African Companies Act, No. 71 of 2008, resulting in the issuance of an aggregate of 14,270,000 Consideration Shares. As a result of the transactions contemplated by the Scheme, the Renergen Ordinary Shares, which were publicly traded on the Johannesburg Stock Exchange (JSE: REN) and the Australian Securities Exchange (ASX:RLT), were delisted and Renergen became a wholly owned subsidiary of ASP Isotopes.
Renergen is South Africa’s leading onshore natural gas explorer and the first integrated producer of both liquid helium and LNG, both of which are produced from the large natural gas reserve base that underpins Renergen’s Virginia Gas Project. The Virginia Gas Project includes (i) the liquefaction of natural gas into LNG, (ii) the separation of helium from natural gas, and (iii) the further liquefaction of helium into 99.999% pure liquid helium. This liquefaction and separation takes place at Renergen’s Virginia Gas Plant in the Free State Province of South Africa. Based on the drilled and flow-tested wells, Renergen’s average helium concentration exceeds 3.0%, which is well above typical conventional natural gas reservoirs containing helium in small concentrations (less than 0.5%).
Renergen’s principal asset is its 94.5% equity ownership in Tetra4, which holds South Africa’s first and only onshore petroleum Production Right and is the entity developing the Virginia Gas Project. Phase 1 of the Virginia Gas Project has commenced commercial LNG and liquid helium operations. The Virginia Gas Project benefits from favorable supply and demand trends in both the LNG and liquid helium sectors. The LNG is and will continue to be sold domestically in South Africa into a market suffering energy and natural gas shortages, and we plan to sell helium directly to global customers at a time when the world is suffering helium supply shortages, which have been further exacerbated by the ongoing United States-Israel-Iran war. We believe that it was for these two reasons that the Virginia Gas Project was conditionally approved to be funded by the U.S. International Development Finance Corporation (“DFC”) as part of the U.S.’s initiative to ensure new helium supply comes online as aerospace and the semiconductor industry increase helium requirements in the face of diminished supply, while increasing South Africa’s domestic energy supply.
Helium is a vital and irreplaceable element in many modern industries because it is both chemically and electrically inert and, when in liquid form, is the coldest substance known to man at 3 degrees Kelvin (minus 454.3 degrees Fahrenheit). For these reasons, it can be used in the manufacture of semiconductors, to purge laboratory or manufacturing environments, act as a fuel propellant for other cryogenic fuels, and/or provide deep cryogenic cooling. It is commonly used in space exploration and rocketry, high-level physics experiments (e.g., particle accelerators, quantum mechanics), medical science within MRI devices, fiber optic cable production, commercial diving gas, specialized welding, coolant for nuclear power stations and lifting balloons.
We believe that Renergen’s LNG supply can play an important role in reducing South Africa's relatively high carbon emissions by being the first, and currently the only, LNG supplier in the country. According to Energy Institute (2024), coal has a 69% share of national primary energy consumption, with gas only around 3.5%. As such, according to the World Bank, South Africa ranks as the fifth-worst carbon emissions country per kilogram per purchasing power parity of gross domestic product (“GDP”). This ranking is largely due to South Africa’s high reliance on low-grade coal to provide electricity, supplemented by Sasol’s use of coal to liquids technology. Sasol Limited is one of the country’s largest energy suppliers and operator of the natural gas pipeline supplying gas from Mozambique into Johannesburg. LNG is a significantly lower carbon-emitting fuel than either of coal (by 50%) and diesel (25%), upon combustion. Therefore, the introduction of Renergen’s LNG into South Africa’s energy supply mix, including the possible direct substitution of Renergen’s LNG for first diesel, and then potentially coal, may help reduce South Africa’s overall carbon emissions intensity as the country moves towards its net zero carbon emissions targets by 2050.
Investments in Early Stage Drug Development Companies
IsoBio. On July 28, 2025, we purchased 2,000,000 shares of IsoBio Series Seed-1 Preferred Stock at $2.50 per share for a total aggregate purchase price of $5.0 million. IsoBio is a U.S.-based radiotherapeutic development company focused on developing a broad pipeline of mAb-based radioisotope therapeutics targeting both derisked and novel tumor antigens for patients in need of new cancer therapies. As the owner of the Series Seed-1 Preferred Stock, we have the right to designate one board member. An officer and director of ours was designated to fill that board seat. In addition, another board member of ours is a board member and executive officer of IsoBio.
Opeongo. On January 26, 2026, we purchased 4,356,918 shares of Opeongo Series Seed-1 Preferred Stock at $2.2952 per share for a total aggregate purchase price of $10,000,000. Opeongo is a biotechnology company developing novel therapeutics using extracellular matrix modulation to target fibrosis, inflammation, and cancer. Opeongo was co-founded by David Baram, Ph.D. who serves as Opeongo’s Chief Executive Officer and director. As the owner of the Series Seed-1 Preferred Stock, we have the right to designate one board member. An officer and director of ours was designated to fill that board seat. In addition, another board member of ours is a board member and executive officer of Opeongo.
Skyline Investments
Skyline Reemag Investment. In November 2025, Skyline acquired a 13.09% ownership of Reemag LLC ("Reemag") for a cash purchase price of $3.0 million. Skyline will subscribe for additional membership interests of Reemag in tranches, resulting in ownership percentages of 13.09%, 20.06%, 33.42% and 50.10% at the initial, second, third and fourth closing respectively for an aggregate purchase price of $20.0 million. The second, third and fourth closings were scheduled on or before January 31, 2026, March 31, 2026 and by the earlier of a $200.0 million capital raise or July 31, 2026, respectively. However, in March 2026, Skyline entered into the first amendment to the subscription agreement with Reemag that amended the dates of the second, third and fourth closings to May 31, 2026, July 31, 2026 and September 30, 2026, respectively.
Skyline Critical Minerals Space Investment. On October 31, 2025, Skyline entered into a subscription and unit purchase agreement with a limited liability company engaged in the critical minerals space, pursuant to which Skyline subscribed for an approximate 20% membership interest in such company for a subscription price of $20.0 million.
Agreements with TerraPower LLC
On April 4, 2024, we entered into the TerraPower Agreement with TerraPower to develop a conceptual design, refined cost/schedule/financing, risk register, and term sheet for a HALEU facility. The TerraPower Agreement may be terminated for (a) breach or default, (b) our convenience or (c) TerraPower’s convenience. TerraPower is obligated to make all payments for milestones completed by us and these payments are nonrefundable.
On October 18, 2024, we signed the TerraPower Term Sheet that provides for the execution of two definitive agreements: (1) an agreement pursuant to which TerraPower will provide funding for our construction of a uranium enrichment facility capable of producing HALEU using our proprietary aerodynamic separation process technology to be located in the Republic of South Africa and (2) An agreement pursuant to which we will deliver to TerraPower the full capacity of the enrichment facility.
For the year ended December 31, 2024, $0.2 million has been recognized as collaboration revenue in the consolidated statements of operations and comprehensive loss. No collaboration revenue was recognized for the year ended December 31, 2025.
In May 2025, we entered into the TerraPower Loan Agreement, which provides conditional commitments from TerraPower to us through one of our wholly-owned U.S.-based subsidiaries for a multiple advance term loan totaling $22.0 million for the purpose of partially funding the construction of a proposed new uranium enrichment facility in South Africa. The total loan amount is inclusive of a 10% original issue discount on each disbursement and carries a fixed interest rate of 10% per annum. Per the terms of the TerraPower Loan Agreement and subject to the satisfaction of various conditions precedent to disbursements (including receiving all required licenses and permits to perform uranium enrichment in South Africa), we will receive aggregate loan disbursements of $20.0 million. Such loan matures on May 16, 2032. Interest will begin accruing upon each milestone disbursement we receive and will be added to the principal balance until November 2027. Principal and interest payments will be made in 60 equal installments beginning in November 2027. We plan to request drawdowns on this loan beginning in the third quarter of 2026.
In addition to the TerraPower Loan Agreement, in May 2025, we and TerraPower have entered into two supply agreements for the HALEU expected to be produced at our uranium enrichment facility. The initial core supply agreement is intended to support the supply of the required first fuel cores for the initial loading of TerraPower’s Natrium project in Wyoming. The long-term supply agreement is a 10-year supply agreement of up to a total of 150 metric tons of HALEU, commencing in 2028 through end of 2037.
On November 15, 2022, we completed an IPO of our common stock and issued and sold 1,250,000 shares of common stock at a public offering price of $4.00 per share, resulting in net proceeds of $3.8 million after deducting underwriting discounts and commissions and offering expenses.
In March 2023, we issued 3,164,557 shares of our common stock at a purchase price of $1.58 per share and warrants to purchase up to an aggregate of 3,164,557 shares of our common stock with an exercise price of $1.75 per share for gross proceeds of $5.0 million. We incurred $506,390 in cash issuance costs and issued warrants to purchase up to an aggregate of 221,519 shares of common stock with an exercise price of $1.975 per share to the placement agent with an initial fair value of $179,116.
In October 2023, we entered into Securities Purchase Agreements with certain institutional and other accredited investors and certain directors of ours to issue and sell an aggregate of 9,952,510 shares of our common stock, for aggregate cash consideration of $9,129,495, as follows: (i) 8,459,093 shares to investors at a purchase price per share of $0.9105, (ii) 1,190,239 shares to investors at a purchase price per share of $0.9548, and (iii) 303,178 shares to directors at a purchase price per share of $0.96. We incurred issuance costs equivalent to 5% of the gross proceeds from new investors which was settled in stock through the issuance of 472,582 shares to the placement agent and additional cash issuance costs totaling $57,083.
In March 2024, our wholly owned subsidiary Quantum Leap EnergyQLE received gross proceeds of $20,550,000$20.6 million through the issuance of Convertible Promissory Notes. These convertible notes havehad a stated interest rate of 6% for the first year and 8% thereafter. The maturity date of these convertible promissory notes iswas March 7, 2029. These convertible promissory notes would have automatically convertconverted into common shares upon Quantum Leap Energy’s closing of an IPO or other qualifying public transaction at 80% of the share price taking into consideration a valuation cap.
In June 2024, our wholly owned subsidiary Quantum Leap EnergyQLE received gross proceeds of $5,386,228$5.4 million through this issuance of additional Convertible Promissory Notes with a stated interest rate of 6% for the first year and 8% thereafter. One of the notes totaling $108,167$0.1 million was issued to the placement agent in lieu of cash issuance costs. The maturity date of the Convertible Promissory Notes iswas March 7, 2029. The Convertible Promissory Notes would have automatically convertconverted into common shares upon Quantum Leap Energy’s closing of an IPO or other qualifying public transaction at 80% of the share price taking into consideration a valuation cap.
In October 2024, a warrant to purchase 151,741 shares of common stock was exercised and the Companywe received gross proceeds of $299,688.$0.3 million.
In June 2025, we issued 7,518,797 shares of common stock at $6.65 per share in a registered direct offering resulting in net proceeds of approximately $46.8 million after deducting underwriting discounts, commissions and offering expenses.
In July 2025, we issued 7,500,000 shares of common stock at $8.00 per share in a registered direct offering resulting in net proceeds of approximately $56.3 million after deducting underwriting discounts, commissions and offering expenses.
In October 2025, we issued 17,167,380 shares of common stock in a registered offering at the offering price of $12.25 per share, for net proceeds of approximately $199.3 million, after deducting underwriting discounts and commissions and estimated offering expenses.
What changed in the latest 10-Q
Risk Factors
New heading “Risks Related to the ENDRA Merger”
New heading “The Merger is subject to conditions, including approval by ENDRA’s stockholders, that are outside the parties’ control, and the Merger may not be completed.”
New heading “The anticipated benefits of the Merger may not be realized, or may take longer to realize than expected.”
Largest changes
“The Merger is subject to conditions, including approval by ENDRA’s stockholders, that are outside the parties’ control, and the Merger may not be completed.”see in full comparison
“The anticipated benefits of the Merger may not be realized, or may take longer to realize than expected.”see in full comparison
“The Company, Noble and ENDRA entered into the Merger Agreement with the expectation that the Merger will result in Noble Africa Inc., including Renergen’s operations (the “Combined Company”), having access to the U.S. public capital markets. However, even if the Merger is completed, there can be no assurance that the anticipated benefits of the Merger will be realized fully, or at all, or that they will be realized within the expected time frame. …”see in full comparison
“The completion of the Merger is subject to the satisfaction or waiver of a number of conditions, many of which are outside the control of the parties. …”see in full comparison
“If the Merger is not completed, the Company’s and Renergen’s respective businesses may be adversely affected, and each will be subject to a number of risks, including that the parties will have incurred significant costs that must be paid regardless of whether the Merger is completed and that management’s attention will have been diverted from ongoing business operations. In addition, the announcement and pendency of the Merger, whether or not it is completed, may have an adverse effect on business relationships, operating results and businesses generally. …”see in full comparison
Full comparison: every changed paragraph (7)
In addition to the information set forth in this Quarterly Report on Form 10-Q, including under the heading “Special Note Regarding Forward-Looking Statements,” the risks and uncertainties which could adversely affect our business, financial condition, results of operations and future growth prospects that we believe are most important for you to consider are discussed in “Part I, Item 1A—Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on April 10, 2026 and as amended by Amendment No. 1 on Form 10-K/A filed with the SEC on April 30, 2026 and other reports that we filedfile with the SEC.SEC, including this Quarterly Report on Form 10-Q. The risks described in our Annual Report on Form 10-K for the year ended December 31, 2025 (as amended) and such other reports that we filedfile with the SEC are not the only risks we face. Additional risks and uncertainties not presently known to us or that we presently deem less significant may also impair our business operations. ThereExcept as set forth below, there have been no material changes to our risk factors as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025 (as amended).
Risks Related to the ENDRA Merger
The Merger is subject to conditions, including approval by ENDRA’s stockholders, that are outside the parties’ control, and the Merger may not be completed.
The completion of the Merger is subject to the satisfaction or waiver of a number of conditions, many of which are outside the control of the parties. These conditions include, among others, the approval of the ENDRA stockholder matters by ENDRA’s stockholders, the effectiveness of the registration statement on Form S-4, the approval for listing of the Class A Common Stock on Nasdaq, ENDRA having an amount of cash equal to or greater than $3.8 million, the receipt by Noble of the proceeds of the approximately $50 million Noble Investment, the Company having contributed its equity interests in Renergen to Noble, and Noble’s receipt of a written consent of the U.S. International Development Finance Corporation as required under the finance agreement with Tetra4. There can be no assurance that these conditions will be satisfied or waived on a timely basis, if at all, or that the Merger will be completed on the terms contemplated by the Merger Agreement or at all. Either ENDRA or Noble may terminate the Merger Agreement if the Merger has not been completed by December 24, 2026, or upon the occurrence of certain other events, including the failure of ENDRA’s stockholders to approve the ENDRA stockholder matters.
If the Merger is not completed, the Company’s and Renergen’s respective businesses may be adversely affected, and each will be subject to a number of risks, including that the parties will have incurred significant costs that must be paid regardless of whether the Merger is completed and that management’s attention will have been diverted from ongoing business operations. In addition, the announcement and pendency of the Merger, whether or not it is completed, may have an adverse effect on business relationships, operating results and businesses generally. Uncertainty about the effect of the Merger on employees, customers, offtakers, suppliers, lenders and other third parties may impair the parties’ ability to attract, retain and motivate key personnel, to maintain relationships with customers and financing sources, and to pursue their respective business strategies.
The anticipated benefits of the Merger may not be realized, or may take longer to realize than expected.
The Company, Noble and ENDRA entered into the Merger Agreement with the expectation that the Merger will result in Noble Africa Inc., including Renergen’s operations (the “Combined Company”), having access to the U.S. public capital markets. However, even if the Merger is completed, there can be no assurance that the anticipated benefits of the Merger will be realized fully, or at all, or that they will be realized within the expected time frame. The Combined Company may fail to realize the anticipated benefits of the Merger for a variety of reasons, including, among others, difficulties with the timely and cost-effective integration of operations, failure to retain key employees, inability to maintain relationships with customers and other business partners, the incurrence of unanticipated costs or liabilities, and the effects of competitive and general economic factors. In addition, the Combined Company will be subject to the risks and uncertainties associated with Renergen’s business, including the risks related to the successful development of Phase 2 of the Virginia Gas Project, the ability to obtain required financing, the ability to obtain or maintain regulatory approvals and permits, exposure to commodity price fluctuations, and the economic, political and regulatory conditions in South Africa. Upon the closing of the Merger, we expect to own approximately 89% of the Combined Company, after giving effect to the private placement financing that is expected to close immediately prior to completion of the Merger, and if the anticipated benefits of the Merger are not realized, or are delayed, the business, financial condition and results of operations of our company could be adversely affected.
Management's Discussion & Analysis (MD&A)
New heading “Financings and Other Transactions”
New heading “ENDRA Merger Agreement and Noble Investment”
New heading “Recent Developments”
New heading “Comparison of the Six Months Ended June 30, 2026 and 2025”
New heading “Revenue and Cost of Revenue”
New heading “Research and Development Expenses”
New heading “Selling, General and Administrative Expenses”
New heading “Other Income (Expense)”
New heading “QLE Convertible Notes”
Largest changes
Renergen’s principal asset is its 94.5% equity ownership in Tetra4, which holds South Africa’s first and only onshore petroleum Production Right and is the entity developing the Virginia Gas Project. Phase 1 of the Virginia Gas Project has commenced commercial LNG operations. The Virginia Gas Project benefits from favorable supply and demand trends in both the LNG and liquid helium sectors. The LNG is and will continue to be sold domestically in South Africa into a market suffering energy and natural gas shortages, and we plan to sell helium directly to global customers at a time when the world is suffering helium supply shortages, which have been further exacerbated by the ongoing United States-Israel-Iransee in full comparisonwar.conflict and associated disruptions to shipping through the Strait of Hormuz. Subsequent to June 30, 2026, the global helium supply chain has been materially disrupted by these geopolitical developments, with repairs to affected production infrastructure expected to take years rather than months. In addition, in April 2026, Russia introduced export controls on helium to maintain domestic supply, further constraining global availability. We believe thatit was for these two reasons that the Virginia Gas Project was conditionally approved to be funded bythe U.S. International Development Finance Corporation (“DFC”) previously indicated its willingness to consider supporting the funding of Phase 2 of the Virginia Gas Project for up to $500 million as part of the U.S.’s initiative to ensure new helium supply comes online as aerospace and the semiconductor industry increase helium requirements in the face of diminished supply, while increasing South Africa’s domestic energy supply.
Full comparison: every changed paragraph (78)
You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q and the consolidated financial statements and related notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission (the “SEC”) on April 10, 2026 and Amendment No. 1 to our Annual Report on Form 10-K/A filed with the SEC on April 30, 2026 (as amended, the “Annual Report”), along with Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in the Annual Report. The Annual Report is accessible on the SEC’s website at www.sec.gov and on our website at www.aspisotopes.com. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the section entitled “Risk Factors” in the Annual Report and this Quarterly Report on Form 10-Q, and the section entitled “Special Note Regarding Forward-Looking Statements” above, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. You should carefully read the section entitled “Risk Factors” in the Annual Report and this Quarterly Report on Form 10-Q, and the section entitled “Special Note Regarding Forward-Looking Statements” above to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements.
We commenced commercial production of enriched isotopes at both of itsour ASP enrichment facilities located in Pretoria, South Africa during the first half of 2025. However, we have not generated any revenue from the sale of our enriched isotopes as of MarchJune 31,30, 2026. Our first ASP enrichment facility is designed to enrich light isotopes, such as C-14 and C-12. The second ASP enrichment facility, which is substantially larger than the first, should have the potential to enrich kilogram quantities of relatively heavier isotopes, including but not limited to Si-28. Depending on the timing and the quality of the feedstock received from our customer, we are targeting initial commercial shipments of enriched C-14 in the thirdsecond quarterhalf of 2026. We are targeting initial commercial shipments of enriched Si-28 aroundin mid-yearthe second half of 2026. We have also completed the commissioning phase of our third enrichment facility, a QE technology facility, which is our first laser-based enrichment plant. We are targeting initial commercial shipments of Yb-176 in the thirdsecond quarterhalf of 2026.
We operate principally through our subsidiaries. ASP Isotopes Guernsey Limited (the holding company for our subsidiaries in the Cayman Islands, South Africa, Iceland and the United Kingdom) is focused on the development and commercialization of high-value, low-volume isotopes for highly specialized end markets (such as C-14, Mo-100,Si-28, and Si-28Yb-176). ASP Isotopes UK Ltd is the owner of our technology.
As previously announced, our board of directors intends to pursue the separation of our Nuclear Fuels business and Specialist Isotopes and Related Services business in two independent companies. The regulatory landscape and supply chain for nuclear fuel production differs significantly from that of medical isotopes, hence we and QLE have different business models and we believe that both companies would benefit if QLE is independently managed and financed. We plan to effect the separation through a listing of QLE in a transaction that results in QLE existing as a separate public company with shares listed on a U.S. national securities exchange and a portion of QLE’s common equity being distributed to our stockholders as of a to-be-determined future record date. Although no assurance can be given, our goal is to list QLE on such exchange, subject to market conditions, obtaining applicable approvals and consents, and complying with applicable rules and regulations and public market trading and listing requirements. In November 2025, we announced that QLE had confidentially submitted a draft registration statement on Form S-1 to the SEC relating to the proposed initial public offering of QLE’s Class A common stock. While we currently expectbelieve that a listing of QLE as a separate public company is the most likely separation transaction, our board of directors remains committed to maximizing shareholder value creation, and will continue to evaluate other options for separation to maximize shareholder value.
Renergen’s principal asset is its 94.5% equity ownership in Tetra4, which holds South Africa’s first and only onshore petroleum Production Right and is the entity developing the Virginia Gas Project. Phase 1 of the Virginia Gas Project has commenced commercial LNG operations. The Virginia Gas Project benefits from favorable supply and demand trends in both the LNG and liquid helium sectors. The LNG is and will continue to be sold domestically in South Africa into a market suffering energy and natural gas shortages, and we plan to sell helium directly to global customers at a time when the world is suffering helium supply shortages, which have been further exacerbated by the ongoing United States-Israel-Iran war.conflict and associated disruptions to shipping through the Strait of Hormuz. Subsequent to June 30, 2026, the global helium supply chain has been materially disrupted by these geopolitical developments, with repairs to affected production infrastructure expected to take years rather than months. In addition, in April 2026, Russia introduced export controls on helium to maintain domestic supply, further constraining global availability. We believe that it was for these two reasons that the Virginia Gas Project was conditionally approved to be funded by the U.S. International Development Finance Corporation (“DFC”) previously indicated its willingness to consider supporting the funding of Phase 2 of the Virginia Gas Project for up to $500 million as part of the U.S.’s initiative to ensure new helium supply comes online as aerospace and the semiconductor industry increase helium requirements in the face of diminished supply, while increasing South Africa’s domestic energy supply.
ENDRA. On May 27, 2026, we purchased 66,846 shares of ENDRA common stock, 511,541 prefunded warrants to purchase shares of common stock and 1,156,774 common warrants to purchase shares of common stock for a total aggregate purchase price of $3.8 million. ENDRA is the pioneer of Thermo Acoustic Enhanced UltraSound (TAEUS ® ), a technology being developed to assess tissue fat content and monitor tissue ablation during minimally invasive procedures, at the point of patient care.
In May 2025, we entered into the TerraPower Loan Agreement, which provides conditional commitments from TerraPower to us through one of our wholly-owned U.S.-based subsidiaries for a multiple advance term loan totaling $22.0 million for the purpose of partially funding the construction of a proposed new uranium enrichment facility in South Africa. The total loan amount is inclusive of a 10% original issue discount on each disbursement and carries a fixed interest rate of 10% per annum. Per the terms of the TerraPower Loan Agreement and subject to the satisfaction of various conditions precedent to disbursements (including receiving all required licenses and permits to perform uranium enrichment in South Africa), we will receive aggregate loan disbursements of $20.0 million. Such loan matures on May 16, 2032. Interest will begin accruing upon each milestone disbursement we receive and will be added to the principal balance until November 2027. Principal and interest payments will be made in 60 equal installments beginning in November 2027. We plan to request drawdowns on this loan beginning in the third quarter of 2026.
Financings and Other Transactions
Financings
On January 6, 2026, the Companywe issued 14,270,000 Consideration Shares in connection with the acquisition of Renergen.
ENDRA Merger Agreement and Noble Investment
On June 25, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among ENDRA, Noble Africa LLC, a Delaware limited liability company and a direct, wholly-owned subsidiary of the Company (“Noble”), Renergen, the Company, and Kruger Merger Sub LLC, a Delaware limited liability company and a direct, wholly-owned subsidiary of ENDRA (“Merger Sub”), pursuant to which Merger Sub will merge with and into Noble (the “Merger”), with Noble surviving the Merger as a direct wholly-owned subsidiary of ENDRA. Prior to the effective time of the Merger, the Company will contribute all of its equity interest in Renergen to Noble in exchange for 55,500,000 of Noble’s Class B Units. Following the Merger, ENDRA will be renamed “Noble Africa Inc.” and its common stock is expected to be listed on Nasdaq.
Concurrently with the entry into the Merger Agreement, Noble entered into subscription agreements with the Company and certain investors pursuant to which Noble agreed to sell approximately (i) 4,594,218 Class A Units of Noble and/or pre-funded warrants to purchase Class A Units of Noble to certain institutional investors and other persons and (ii) 3,054,185 Class B Units of Noble to the Company, at a price per unit of $6.57, for aggregate gross proceeds to Noble of approximately $50 million (the “Noble Investment”). The Noble Investment is expected to close immediately prior to the Merger.
Consummation of the Merger is subject to certain closing conditions, including the approval by ENDRA’s stockholders, the effectiveness of the registration statement on Form S-4, the approval for listing of the Class A Common Stock on Nasdaq, ENDRA having an amount of cash equal to or greater than $3.8 million, the receipt by Noble of the proceeds of the Noble Investment, the Company having contributed its equity interests in Renergen to Noble, and Noble’s receipt of a written consent of the U.S. International Development Finance Corporation as required under the finance agreement with Tetra4. The Merger Agreement may be terminated by either party if the Merger has not been completed by December 24, 2026. The Merger is anticipated to close in the fourth quarter of 2026.
Recent Developments
On July 15, 2026, we and QLE entered into separate, individually negotiated private securities exchange agreements with certain holders of the 2025 Convertible Notes, pursuant to which such noteholders exchanged approximately $109.2 million in aggregate principal amount of the outstanding 2025 Convertible Notes (or approximately 50% of the aggregate principal amount of the outstanding 2025 Convertible Notes), plus accrued and unpaid interest thereon, for an aggregate of approximately 23.2 million shares of our common stock (the “Exchange Transactions”). The Exchange Transactions closed on July 16, 2026. Upon the closing of the Exchange Transactions, the outstanding principal amount of 2025 Convertible Notes held by third party investors was reduced to approximately $80.6 million, and we hold approximately $139.2 million aggregate principal amount of 2025 Convertible Notes.
Revenue
EffectiveWe with the acquisition of 51% of PET Labs in the fourth quarter of 2023, we started recognizingrecognize revenue from the sale of nuclear medical doses for PET scanning. Beginning in the fourth quarter of 2025, we started recognizing revenue from the sale of nuclear medical doses for SPECT scanning. Effective with the acquisition of 100% of Renergen in the first quarter of 2026, we started recognizing revenue from the sale of LNG.
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-100Si-28 and Si-28Yb-176) 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 operations of PET Labs, Numed, and ECNP.
The following table shows total assets by segment and a reconciliation to the condensed consolidated financial statements as of MarchJune 31,30, 2026 and December 31, 2025 (in thousands):
Select information from the condensed consolidated statements of operations and comprehensive loss as of the three months ended MarchJune 31,30, 2026 and 2025 is as follows:
Select information from the condensed consolidated statements of operations and comprehensive loss as of the six months ended June 30, 2026 and 2025 is as follows:
Comparison of the Three Months Ended MarchJune 31,30, 2026 and 2025
The following table summarizes our results of operations for the three months ended MarchJune 31,30, 2026 and 2025:
We have recognized revenue of our radiopharmacies from the sale of nuclear medical doses for PET and SPECT scanning of $3.4$3.9 million and $1.1$1.2 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. With the acquisition of Renergen in January 2026, we recognized revenue from the sale of LNG of $0.6$0.7 million for the three months ended MarchJune 31,30, 2026. We also recognized $0.2$0.6 million in collaboration revenue from TerraPower for the three months ended MarchJune 31,30, 2026.
In addition, we have recognized the related cost of revenue of our radiopharmacies and Renergen for the same periods. The cost of revenue was $2.5$3.6 million and $0.8$0.6 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. The increase in cost of revenue of $1.7$3.0 million was primarily due to the acquisitions of ECNP and Numed of $0.8$1.1 million and the acquisition of Renergen of $0.8$1.2 million.
The following table summarizes our research and development expenses for the three months ended MarchJune 31,30, 2026 and 2025:
Research and development expenses were $5.3$6.8 million for the three months ended MarchJune 31,30, 2026, compared to $1.5$0.9 million for the three months ended MarchJune 31,30, 2025. The overall increase of $3.7$5.9 million was primarily due to the following:
an increase in manufacturing engineering expenses of $0.6 million due to pre-commercial operations;
an increase in facility and depreciation expenses of $0.7$0.9 million due to an increase in space dedicated to development, noncapitalized expenses and repairs and maintenance; and an increase in contract services and consulting expenses of $1.1 million in order to optimize commercial production.
an increase in exploratory costs at Renergen of $0.9 million; and an increase in contract services and consulting expenses of $1.4 million in order to optimize commercial production.
Selling, general and administrative expenses were $21.3$28.9 million for the three months ended MarchJune 31,30, 2026, compared to $6.7$11.7 million for the three months ended MarchJune 31,30, 2025. The overall increase of $14.5$17.2 million was primarily due to the following:
an increase in employee travel and related expenses of $0.3$0.6 million; and an increase in other general and administrative office expenses of $2.6$1.2 million, which includes expense from the acquisition of Renergen in January 2026 and ECNP in October 2025.
Other Income (Expense) Income
Other expenseincome for the three months ended MarchJune 31,30, 2026 was $1.8$0.1 million, which includes interest income of $3.0$2.7 million and income from a changeforeign inexchange thetransaction fair valuegain of our investments of $1.1$2.6 million, partially offset by an expense of $0.6$3.5 million due to change in fair value of the convertible notes payable,payable and interest expense of $1.7 million and a foreign exchange transaction loss of $3.7$1.8 million.
Other expense for the three months ended MarchJune 31,30, 2025 was $0.6$63.1 million, which includes a $1.0$63.8 million change in fair value of the convertible notes payable issued in March and June 2024 and a foreign exchange transaction loss of $0.1 million,2024, partially offset by interest income of $0.5$0.9 million.
Comparison of the Six Months Ended June 30, 2026 and 2025
The following table summarizes our results of operations for the six months ended June 30, 2026 and 2025:
Revenue and Cost of Revenue
We have recognized revenue of our radiopharmacies from the sale of nuclear medical doses for PET and SPECT scanning of $7.3 million and $2.3 million for the six months ended June 30, 2026 and 2025, respectively. With the acquisition of Renergen in January 2026, we recognized revenue from the sale of LNG of $1.2 million for the six months ended June 30, 2026. We also recognized $0.8 million in collaboration revenue from TerraPower for the six months ended June 30, 2026.
In addition, we have recognized the related cost of revenue of our radiopharmacies and Renergen for the same periods. The cost of revenue was $6.2 million and $1.4 million for the six months ended June 30, 2026 and 2025, respectively. The increase in cost of revenue of $4.8 million was primarily due to the acquisitions of ECNP and Numed of $2.0 million and the acquisition of Renergen of $2.0 million.
Research and Development Expenses
The following table summarizes our research and development expenses for the six months ended June 30, 2026 and 2025:
Research and development expenses were $12.1 million for the six months ended June 30, 2026, compared to $2.4 million for the six months ended June 30, 2025. The overall increase of $9.7 million was primarily due to the following:
an increase in personnel-related costs of $4.3 million due to an increase in headcount and salaries;
an increase in manufacturing engineering expenses of $0.6 million due to pre-commercial operations;
an increase in facility and depreciation expenses of $1.6 million due to an increase in space dedicated to development, noncapitalized expenses and repairs and maintenance;
an increase in exploratory costs at Renergen of $0.9 million; and an increase in contract services and consulting expenses of $2.5 million in order to optimize commercial production.
Selling, General and Administrative Expenses
Selling, general and administrative expenses were $50.1 million for the six months ended June 30, 2026, compared to $18.4 million for the six months ended June 30, 2025. The overall increase of $31.7 million was primarily due to the following:
an increase in personnel-related costs of $11.6 million primarily due to an increase in headcount and salaries and the acquisition of Renergen in January 2026 and ECNP in October 2025;
an increase in professional fees of $9.5 million primarily due to corporate development activity and the acquisition of Renergen in January 2026 and ECNP in October 2025;
an increase in facility and depreciation expenses of $4.9 million due to an increase in space dedicated to development, noncapitalized expenses and repairs and maintenance and the acquisition of Renergen in January 2026;
an increase in employee travel and related expenses of $1.1 million; and an increase in other general and administrative expenses of $3.4 million, which includes expense from the acquisition of Renergen in January 2026 and ECNP in October 2025.
Other Income (Expense)
Other expense for the six months ended June 30, 2026 was $1.7 million, which includes an expense of $4.0 million due to change in fair value of the convertible notes payable, interest expense of $3.5 million and a foreign exchange transaction loss of $1.1 million, partially offset by interest income of $5.8 million and income from a change in the fair value of our investments of $1.1 million.
Other expense for the six months ended June 30, 2025 was $63.7 million, which includes a $64.7 million change in fair value of the convertible notes payable issued in March and June 2024 and a foreign exchange transaction loss of $0.1 million, partially offset by interest income of $1.4 million.
As of MarchJune 31,30, 2026, we had cash and cash equivalents of $207.3$219.6 million and short-term investments of $83.2$35.3 million. We have not generated any revenue from the sale of our enriched isotopes, and our ability to generate product revenue from the sale of enriched isotopes sufficient to achieve profitability will depend on the successful development and eventual commercialization of one or more of our current or future enriched isotopes.
Based on our current operating plan, we estimate that our existing cash and cash equivalents, proceeds from short-term investments, as well as cash flow from operations, the IDC Loan, the SBSA Loan, the DFC Credit Facility and the conditionally approved senior secured debt facilities expected to be funded by the DFC and the Standard Bank of South Africa (as described below), will be sufficient to fund our operating expenses and capital expenditure requirements through at least the next 12 months from the date the financial statements are issued and beyond. However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect. Additionally, the process of developing isotopes is costly, and the timing of progress and expenses in these development activities is uncertain.
the costs to list QLE as a separate public company and costs associated with the ENDRA Merger; and costs associated with any products or technologies that we may in-license or acquire.
ASPI insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 2 Form 4 filings (1 insider, 2 trade dates, 23,000 shares, about $61.8K) and open-market sales in 14 filings (7 insiders, 14 trade dates, 903,494 shares, about $5.3M; 10 of these filings say the sales were made under a Rule 10b5-1 trading plan). Net open-market shares: -880,494 (purchases minus sales); net value about -$5.2M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-30-05:00 | Ryan Robert John Andrew |
Open-market purchase | 15,000 | $2.68 | $40.2K |
| 2026-09-28 | Ryan Robert John Andrew |
Open-market purchase | 8,000 | $2.70 | $21.6K |
| 2026-09-08 | Ainscow Robert |
Open-market sale |
8,438 | $4.29 | $36.2K |
| 2026-09-04 | Mann Paul Elliot |
Open-market sale |
83,759 | $4.10 | $343.4K |
| 2026-09-03 | Mann Paul Elliot |
Open-market sale |
83,758 | $3.92 | $328.3K |
| 2026-09-02 | Ainscow Donald George |
Open-market sale | 23,678 | $3.89 | $92.1K |
| 2026-09-02 | Ainscow Robert |
Open-market sale |
25,000 | $3.91 | $97.8K |
| 2026-09-02 | Mann Paul Elliot |
Open-market sale |
83,758 | $3.91 | $327.5K |
| 2026-07-01 | Kiessling Heather |
Open-market sale |
23,124 | $6.28 | $145.2K |
| 2026-06-30 | Ainscow Donald George |
Open-market sale | 100,000 | $6.14 | $614.0K |
| 2026-06-30 | Wider Todd |
Open-market sale | 50,000 | $6.12 | $306.0K |
| 2026-06-30 | Gorley Michael |
Open-market sale | 30,000 | $6.27 | $188.1K |
| 2026-06-29 | Wider Todd |
Open-market sale | 50,000 | $6.25 | $312.5K |
| 2026-06-08 | Ainscow Robert |
Open-market sale |
8,438 | $7.00 | $59.1K |
| 2026-06-03 | Mann Paul Elliot |
Open-market sale |
83,759 | $7.76 | $650.0K |
| 2026-06-02 | Mann Paul Elliot |
Open-market sale |
83,758 | $8.29 | $694.4K |
| 2026-06-01 | Mann Paul Elliot |
Open-market sale |
83,758 | $7.88 | $660.0K |
| 2026-05-28 | Mann Paul Elliot |
Grant/award |
2,233,555 | — | — |
| 2026-05-28 | Ainscow Robert |
Grant/award | 800,000 | — | — |
| 2026-05-28 | Ainscow Donald George |
Grant/award | 400,000 | — | — |
| 2026-05-28 | Kiessling Heather |
Grant/award | 840,000 | — | — |
| 2026-04-16 | Ainscow Robert |
Open-market sale |
22,500 | $5.21 | $117.2K |
| 2026-04-16 | Moore Duncan |
Open-market sale |
11,642 | $5.21 | $60.7K |
| 2026-04-15 | Kiessling Heather |
Open-market sale |
23,124 | $5.48 | $126.7K |
| 2026-03-06 | Ainscow Robert |
Open-market sale |
25,000 | $4.51 | $112.8K |
| 2025-12-18 | Moore Duncan |
Grant/award |
36,548 | — | — |
| 2025-11-12 | Moore Duncan |
Grant/award |
25,469 | — | — |
Well-known investors holding ASPI (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 357,591 | $2.2M | 0.0% | Reduced 53% |
| Polen Capital Management | 2026-06-30 | 149,559 | $930.3K | 0.01% | Added 22% |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 120,159 | $747.4K | 0.0% | New position |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 13,588 | $84.5K | 0.0% | Reduced 43% |