ASP Isotopes Issues Letter to Stockholders
- ASPI reported its 2023 annual results in line with expectations, with a strong balance sheet and cash position.
- The company's first commercial isotopes plant began processing raw materials for enriched isotopes production.
- ASPI signed agreements for the supply of silicon-28 for quantum computing, and engaged in activities for nuclear fuel production.
- Construction started on a quantum enrichment facility for Ytterbium-176 production, a key component for cancer treatment.
- Operating expenses were tightly controlled, with operating free cash flow slightly lower than targeted.
- The subsidiary raised over $20 million via a convertible note offering, and received additional proceeds from warrant exercises.
- The company plans to fund future enrichment facilities using customer funding and debt, with discussions ongoing with potential debt providers.
- ASPI entered into a carbon-14 contract with a revenue commitment, and commenced processing for enriched Carbon-14 production.
- None.
Insights
The disclosure by ASP Isotopes Inc. regarding its financial status and operational milestones is a significant indicator of its fiscal health and strategic direction. The company's balance sheet strength, underscored by a robust cash position, is a positive signal to investors. This liquidity not only reflects prudent financial management but also provides the necessary capital to pursue aggressive technological development. The mention of a 32% year-on-year growth in FDG production and the efficient management of operating expenses further reinforces the company's operational competency. However, the operating free cash flow being in the negative territory necessitates a close watch on future cash burn rates and the sustainability of its capital structure. The convertible note offering and warrant exercises are indicative of investor confidence and provide a cushion for near-term expenditures.
From a strategic standpoint, the contracts for enriched silicon-28 and the collaboration with a Small Modular Reactor company align with industry trends towards advanced semiconductor technologies and cleaner energy solutions. These agreements not only diversify revenue streams but also position the company at the forefront of high-growth sectors. The backlog of customer interest suggests strong market demand, yet the reliance on customer funding and additional debt for future facilities introduces a layer of financial risk that warrants monitoring. The carbon-14 contract guarantees a revenue stream, yet the company's ability to meet production targets and contractual obligations will be critical in maintaining these revenue assurances.
ASP Isotopes Inc.'s strategic moves in securing contracts for next-generation semiconductor materials and nuclear fuels speak to the evolving demands in the tech and energy sectors. The company's entry into the quantum computing and artificial intelligence space through the supply of highly enriched silicon-28 is particularly noteworthy, as these are rapidly expanding markets with significant growth potential. The production of Lutetium 177, used in a promising cancer treatment, is another example of the company capitalizing on emerging opportunities in the healthcare industry.
The company's expansion into various isotope applications demonstrates a comprehensive understanding of market needs and a proactive approach to capturing market share. However, the success of these endeavors hinges on the company's ability to maintain technological competencies and meet production timelines. The market will closely observe the company's execution of its strategic initiatives, particularly the start-up phase of its first isotope enrichment plant and its impact on revenue generation. The company's positioning in niche markets with high barriers to entry could provide a competitive advantage, but also requires sustained innovation and investment.
The construction of the quantum enrichment facility for producing Ytterbium-176 is a strategic move by ASP Isotopes Inc. that taps into the growing market for radiopharmaceuticals. Lutetium 177, a product derived from Ytterbium-176, is gaining traction in the medical field for its application in targeted cancer therapies, such as Novartis' Pluvicto for prostate cancer treatment. The increasing prevalence of cancer and the shift towards personalized medicine are driving demand for such advanced treatments.
The company's involvement in this space is indicative of its alignment with healthcare trends and its potential to contribute significantly to the field of nuclear medicine. The financial commitment to this facility and the expected revenue from the sale of enriched isotopes could position ASP Isotopes Inc. as a key player in the production of medical isotopes. However, the company must navigate stringent regulatory environments and ensure consistent product quality to capitalize on this opportunity fully. The ability to scale production and meet global demand will be instrumental in establishing a strong foothold in the radiopharmaceutical market.
WASHINGTON, April 11, 2024 (GLOBE NEWSWIRE) -- 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
We finished the year with cash on the balance sheet of
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
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
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
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
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
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
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
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
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. Mann
Chairman 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 relations
Email: Jassad@aspisotopes.com
Telephone: 561-709-3043
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/245bbc5d-b6ba-438a-b270-07fbc092e8fb
FAQ
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