ASP Isotopes Inc. NASDAQ: ASPI ("ASPI,” or the “Company”), an
advanced materials company dedicated to the development of
technology and processes designed to produce isotopes used in
multiple industries, today released the following letter to
stockholders from its Chairman and CEO, Paul Mann.
Dear Fellow Stockholder,
In light of the considerable progress made since my last
shareholder letter approximately six months ago, and with our
Annual Report on Form 10K for 2023 having just been filed, I wanted
to personally communicate with you today to highlight some of our
recent key milestones and discuss our future goals.
- Annual Report on Form 10-K
was filed with 2023 annual results largely in line with
expectations
- Current balance sheet and
available cash are at their strongest since the inception of the
Company
- The Company’s first
commercial isotopes plant started processing raw materials for the
anticipated production of enriched isotopes around
mid-year
- The Company signed a
purchase agreement for the supply of highly enriched silicon-28,
for use in next-generation semiconductors capable of enabling
quantum computing and artificial intelligence
- The Company signed a
contract with a U.S.-based SMR (Small Modular Reactor) company,
pursuant to which the Company will engage in certain activities
related to preliminary engineering design and planning for an
enrichment facility for the production of nuclear fuels that are
expected to be used in next-generation nuclear
reactors
- Construction underway of
first quantum enrichment facility, focused on producing
Ytterbium-176, an important feedstock used in the production of
Lutetium 177 which is the active component of Novartis’ potential
blockbuster for the treatment of prostate cancer
Pluvicto.
- PET Labs FDG production grew
32% year on year in 2023 over 2022.
Tight control on operating expenses and strengthened
balance sheet on heels of recent capital raises.
During 2023 we had $(4.7) million in operating free cash flow,
slightly lower expense than the $(5) million that we had been
targeting. We will continue to maintain a tight control on all
expenses.
We finished the year with cash on the balance sheet of $7.9
million. In February 2024, our wholly owned subsidiary – Quantum
Leap Energy LLC – raised over $20 million via a convertible note
offering, with Ocean Wall Limited acting as Placement Agent. In
addition, this week we received approximately $5.5 million in gross
proceeds from the exercise of warrants held by an institutional
investor. Thus, our current cash balance is very strong, enabling
focused accelerated development of new technologies.
We have a large backlog of interest from customers for many
different isotopes and we expect to fund future isotope enrichment
facilities using primarily funding provided by those customers
combined with additional debt. With proof of concept for the ASP
process now demonstrated and revenue generation from the sale of
enriched isotopes anticipated this year, we have begun discussions
with multiple potential debt providers.
First isotope enrichment plant in start-up
phase.
In June 2023, the Company entered into a multi-year carbon-14
take-or-pay contract with a minimum revenue commitment of $2.5
million per annum. In late 2023, we and RC-14, our North American
commercial partner, commenced the processing of the feedstock to
produce enriched Carbon-14 at our light isotope enrichment facility
in Pretoria, South Africa. Processing the materials for the first
batch of carbon-14 is expected to take about six months, with the
Company still expecting to receive the first revenues from this
contract around the middle of 2024. Subsequent production runs are
expected to take less than three months, allowing the Company to
make quarterly deliveries of carbon-14 in the future. The contract
required RC14 to provide an irrevocable standby letter of credit in
lieu of a deposit, which was received. However, the company
currently does not expect to draw from it.
We expect to produce highly enriched electronic gases
during 2024, which we expect to enable next generation
semiconductors for quantum computing and artificial intelligence
(AI). Last week we signed a supply agreement with a
leading semiconductor company for the supply of highly enriched
silicon-28 (28Si) for the next-generation of semiconductors, which
are expected to enable technologies such as quantum computing and
artificial intelligence.
Naturally occurring silicon has three isotopes: Si-28, -29 and
-30. The presence of Si-29 isotope has a negative impact for
performance of silicon in semiconductor applications(1). Our
enrichment process allows removal of Si-29, and production of
highly enriched silicon-28, which can conduct heat 150% more
efficiently(2) than natural silicon. This will potentially allow
for semiconductor chips to become smaller, faster, cooler and more
energy efficient.
Our proprietary technology has proven capabilities to enrich a
wide range of isotopes, including light isotopes and lighter
molecules, such as silane (SiH4). We believe this gives us
competitive advantage vs. other commercial methods of silicon
enrichment. Our process should result in a finished product of
higher quality, to be used by our semiconductor customers without
additional chemical steps.
Contract with U.S. based Small Modular Reactor Company
executed and considerable progress being made by Quantum Leap
Energy
This week we entered into a contract with a U.S. based SMR
(Small Modular Reactor) company pursuant to which we will engage in
certain activities related to preliminary engineering design and
planning for an enrichment facility for the production of nuclear
fuels that are expected to be used in next generation nuclear
reactors. Under the contract, we received an upfront payment and we
are eligible to receive additional payments based on the
achievement of certain regulatory and key deliverable milestones up
to an aggregate of $2.0 million. We believe that this
collaboration between a U.S. enrichment company and a U.S. nuclear
reactor company for the development of enrichment technology and
processes for nuclear fuel is the first of a kind.
The Company has recently entered into two MOUs (Memorandum of
Understanding) with two U.S.-based SMR companies for the production
of HALEU (High Assay Low Enriched Uranium), a critical fuel for
next-generation nuclear reactors. ASP Isotopes Inc. and its
subsidiary, Quantum Leap Energy LLC (QLE), are in active
discussions with various regulatory bodies and governments to
determine the location for their first HALEU production facility.
We set an ambitious goal to supply commercial quantities of HALEU
for SMRs by 2027.
SMRs are widely regarded as the future of nuclear power,
offering numerous significant advantages over the previously built
nuclear power stations. SMRs will be smaller reactors, allowing for
greater flexibility in deployment. They will be designed for
production-line manufacturing requiring limited on-site
preparation, resulting in significantly shorter construction times
and substantially lower construction costs. The simplicity of the
SMR design, combined with enhanced safety features, should mean
that the world can have continuous access to environmentally
friendly, zero-carbon energy at a cost comparable or potentially
lower than that provided by heavily polluting continuous energy
sources such as coal and oil.
Most of the new SMRs require a new type of enriched uranium
fueled, called HALEU (High Assay Low Enriched Uranium) containing
up to 19.75% U-235 isotope. Historically, nuclear reactors used LEU
(Low Enriched Uranium), which is typically enriched up to 5% U-235.
Currently there is no Western producer of HALEU and the US NEI
(Nuclear Energy Institute) predicts a global shortage of 3,000
metric tons by 2035(3). We are currently in discussions with
several SMR companies requiring HALEU and we already have indicated
demand of approximately $30 billion, at current fuel prices(4). We
believe that the two year old NEI estimate, significantly
underestimates the actual market demand.
We expect to enrich uranium and lithium using our Quantum
Enrichment Process, a proprietary technique under development by
our scientists to enrich isotopes using lasers. We believe it is
likely to be the most cost-effective method of enriching heavy
isotopes, particularly those that can’t be readily converted into
stable gases. We believe that over time, we can produce HALEU with
a cost of production substantially below other competitors. This is
important as historically “Green Energy” has traded at a
substantial premium to hydrocarbons-based energy. The only way to
accelerate the adoption of clean nuclear power is to ensure that
nuclear power is offered at a “green discount”, rather than a
“green premium”. We believe that with our planned production of
lower-cost HALEU this “green energy” acceleration will be
possible.
In February 2024, we raised $20.5 million for Quantum Leap
Energy LLC through an oversubscribed convertible note offering.
ASPI intends to list QLE on a national exchange and distribute a
portion of QLE’s common equity to ASPI’s stockholders as of a
future record date. The transaction is anticipated to be completed
by year-end, in each case subject to obtaining applicable approvals
and consents and complying with applicable rules and regulations
and public market trading and listing requirements.
Construction underway of first quantum enrichment
facility, focused on producing Ytterbium-176, an important
feedstock used in the production of Lutetium 177 which is the
active component of Novartis’ potential blockbuster for the
treatment of prostate cancer Pluvicto.
In January 2024, the Company began construction of its third
isotope enrichment facility in Pretoria, South Africa. This third
enrichment facility is expected to produce kilograms of highly
enriched Ytterbium-176 (176Yb), a key stable isotope used in the
production of Lutetium-177 (177Lu). Lutetium-177 is an emerging
beta emitting radiopharmaceutical used in oncology drugs such as
Novartis’ Pluvicto. There are currently two FDA approved drugs and
more than 66 ongoing clinical trials for drugs that require
Lutetium-177.
Consensus forecasts for Novartis’ Pluvicto exceed $4 billion and
the beta emitting radiopharmaceutical market is expected to exceed
$15 billion per annum in the next decade. The supply chain for this
radioisotope has been particularly challenged with recent industry
reports highlighting over two months treatment delay due to lack of
drug availability(5). The Company is in discussions with multiple
potential customers and aims to start commercial production of
Ytterbium-176 during 2025 but is working to accelerate this
timeline.
PET Labs demonstrates solid YoY growth. Poised for
continued growth.
During the second half of 2023 we entered into a strategic
relationship with PET Labs for the production and distribution of
medical isotopes. In October 2023 we acquired 51% of PET Labs. PET
Labs demonstrated 32% YoY growth in FDG production during 2023 and
we expect strong growth again during 2024. The technical
advancements of PET imaging in various diagnostics applications and
the rising demand for the production of new PET
radiopharmaceuticals are expected to drive continued market growth.
The increasing shift towards image-guided medical care is further
propelling the growth of the PET scanning market globally.
To promote future growth in radiopharmaceuticals in South Africa
and neighboring countries, we plan to add two new cyclotrons in
Pretoria and Cape Town. The two cyclotrons (to be supplied by GE
Healthcare) are expected to fulfill the needs in the growing
medical radioisotope needs in South Africa and a few neighboring
countries. The cyclotrons are expected to be financed by
third-party debt financing arrangements. The first cyclotron
arrived in January 2024 and is currently being installed and
commissioned. We anticipate first production of radioisotopes from
the new cyclotron during 2H 2024.
ASP Isotopes and PET Labs share a symbiotic relationship. Pet
Labs will use a cyclotron, linear accelerator or nuclear reactor to
convert stable isotopes into radioisotopes and deliver them to
medical practitioners. ASP Isotopes’ goal is to become the lowest
cost and most reliable supplier of stable isotopes globally. If we
achieve this goal, this will provide PET Labs with a significant
competitive advantage over others and will provide superior service
to its medical customers.
The global isotopes market is at an inflection point,
both in terms of demand and a supply. We intend to position ASPI
and QLE as trusted suppliers of both existing and future isotope
products.
Isotopes have one of the most severely compromised supply chains
of any material in the world. Currently, supply is almost entirely
controlled by Rosatom State Nuclear Energy Corporation, the Russian
state-owned entity and a few state-owned or controlled
enrichers(6). The US Department of Energy (DOE) and every other
major government in the Western World considers isotopes to be
critical materials. Isotopes enable everyday activities such as
nuclear imaging, they are essential in the production of advanced
electronics and semiconductors. Importantly, they serve as fuels
and coolants in nuclear power stations which provide approximately
13% of the US electricity(7). Global industrial production,
electricity generation and Western defense capabilities remain
vulnerable to supply chain disruption by geopolitically hostile
counterparties. This explains active interest from so many
companies and governments regarding our longer-term supply
capabilities, and we hope to sign additional supply agreements for
essential isotopes in the coming months.
If you would like to learn more about our Company, please visit
our corporate website and make sure to follow us on our social
media channels.
Thank you for your interest and continued support.
With best wishes,
Paul E. MannChairman and Chief Executive
Officer
(1) |
Isotopically Enriched Layers for Quantum Computers Formed by 28Si
Implantation and Layer Exchange, Schneider, E and England, J; ACS
Appl. Mater. Interfaces 2023, 15, 17, 21609–21617 |
(2) |
Penghong Ci, Muhua Sun, Meenakshi
Upadhyaya, Houfu Song, Lei Jin, Bo Sun, Matthew R. Jones, Joel W.
Ager, Zlatan Aksamija, and Junqiao Wu Phys. Rev. Lett. 128, 085901
– Published 23 February 2022 |
(3) |
Korsnick, M. (2021, December 20).
Updated Need for High-Assay Low Enriched Uranium. Nuclear Energy
Institute |
(4) |
https://www.uxc.com/p/tools/FuelCalculator.aspx2021 |
(5) |
Ravi et al, Clinical
Implementation of 177Lu-PSMA-617 in the United States: Lessons
Learned and Ongoing Challenges; J Nuc Med March 2023, 64 (3)
349-350 |
(6) |
RFERL “Russia’s Stranglehold on
the World’s Nuclear Power cycle,”
https://www.rferl.org/a/russia-nuclear-power-industry |
(7) |
https://www.eia.gov/energyexplained/nuclear/us-nuclear-industry.php |
|
|
About ASP Isotopes Inc.
ASP is an advanced materials company dedicated to developing
technology and processes to produce isotopes in multiple
industries. The Company employs proprietary technology, the
Aerodynamic Separation Process (“ASP technology”), for the
production, distribution, marketing, and sale of all isotopes. The
Company’s initial focus is on producing and commercializing highly
enriched isotopes for the healthcare and technology industries.
With time, it also plans to enrich isotopes for the green energy
sector. The Company has two isotope enrichment facilities in
Pretoria, South Africa. The first is a facility dedicated to the
enrichment of isotopes of elements with a low atomic mass (light
isotopes) and will initially produce Carbon-14. The ASP plans to
use the second, larger facility for the production of multiple
different isotopes.
There is a growing demand for isotopes such as Silicon-28, which
will enable quantum computing, and Molybdenum-100, Molybdenum-98,
Zinc-68, Ytterbium-176, and Nickel-64 for new, emerging healthcare
applications, as well as Chlorine-37, Lithium-6, and Uranium-235
for green energy applications. The ASP Technology (Aerodynamic
Separation Process) is ideal for enriching low and heavy atomic
mass molecules. For more information, please
visit www.aspisotopes.com.
Forward-Looking Statements
This press release contains “forward-looking statements” within
the meaning of the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995. Forward-looking
statements are neither historical facts nor assurances of future
performance. Instead, they are based only on our current beliefs,
expectations and assumptions regarding the future of our business,
future plans and strategies, projections, anticipated events and
trends, the economy and other future conditions. Forward-looking
statements can be identified by words such as “believes,” “plans,”
“anticipates,” “expects,” “estimates,” “projects,” “will,” “may,”
“might” and words of a similar nature. Examples of forward-looking
statements include, among others but are not limited to, statements
we make regarding expected operating results, such as future
revenues and prospects from the potential commercialization of
isotopes, future performance under contracts, and our strategies
for product development, engaging with potential customers, market
position, and financial results. Because forward-looking statements
relate to the future, they are subject to inherent uncertainties,
risks and changes in circumstances that are difficult to predict,
many of which are outside our control. Our actual results,
financial condition and events may differ materially from those
indicated in the forward-looking statements based upon a number of
factors. Forward-looking statements are not a guarantee of future
performance or developments. You are strongly cautioned that
reliance on any forward-looking statements involves known and
unknown risks and uncertainties. Therefore, you should not rely on
any of these forward-looking statements. There are many important
factors that could cause our actual results and financial condition
to differ materially from those indicated in the forward-looking
statements, including: our reliance on the efforts of third
parties; our ability to complete the proposed the construction and
commissioning of our enrichment plant(s) or to commercialize
isotopes using the ASP technology or the Quantum Enrichment
Process; our ability to obtain regulatory approvals for the
production and distribution of isotopes; the financial terms of any
current and future commercial arrangements; our ability to complete
certain transactions and realize anticipated benefits from
acquisitions; contracts, dependence on our Intellectual Property
(IP) rights, certain IP rights of third parties; and the
competitive nature of our industry. Any forward-looking statement
made by us in this press release is based only on information
currently available to us and speaks only as of the date on which
it is made. We undertake no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future developments or otherwise. This press release includes
market and industry data and forecasts that we obtained from
internal research, publicly available information and industry
publications and surveys. Industry publications and surveys
generally state that the information contained therein has been
obtained from sources believed to be reliable. Unless otherwise
noted, statements as to our potential market position relative to
other companies are approximated and based on third-party data and
internal analysis and estimates as of the date of this press
release. We have not independently verified this information, and
it could prove inaccurate. Industry and market data could be wrong
because of the method by which sources obtained their data and
because information cannot always be verified with certainty due to
the limits on the availability and reliability of raw data, the
voluntary nature of the data-gathering process and other
limitations and uncertainties. In addition, we do not know all of
the assumptions regarding general economic conditions or growth
that were used in preparing the information and forecasts from
sources cited herein. No information in this press release should
be interpreted as an indication of future success, revenues,
results of operation, or stock price. All forward-looking
statements herein are qualified by reference to the cautionary
statements set forth herein and should not be relied upon.
Contacts
Jason Assad– Investor
relationsEmail: Jassad@aspisotopes.comTelephone:
561-709-3043
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/245bbc5d-b6ba-438a-b270-07fbc092e8fb
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