ASP Isotopes (ASPI) grows Q1 2026 revenue to $4.2M while funding heavy expansion
ASP Isotopes Inc. (ASPI) reported sharp growth in early-stage revenue but remains deeply loss-making as it scales new businesses. For the quarter ended March 31, 2026, revenue rose to $4.2 million from $1.1 million a year earlier, driven by nuclear medicine doses and initial LNG and helium sales.
The company posted a $26.7 million net loss from continuing operations, widening from $8.5 million, reflecting higher R&D and selling, general and administrative expenses as it builds enrichment and gas projects. After income from discontinued operations, overall net loss was $7.1 million, or $0.06 per share.
ASPI ended the quarter with $207.3 million in cash and cash equivalents and $83.2 million in short‑term investments, and management believes this will fund operations for more than 12 months. The acquisition of Renergen added natural gas properties and created a new helium and LNG segment, while Skyline’s deconsolidation is now reported as discontinued operations.
Positive
- None.
Negative
- None.
Insights
High cash balance supports heavy build‑out despite rising losses.
ASP Isotopes is rapidly shifting from a pure R&D profile toward early commercialization. Revenue expanded to $4.2M, but operating expenses of $26.6M kept the business solidly in the red as it invests in isotope enrichment and gas assets.
Liquidity is a key pillar. Cash and cash equivalents of $207.3M plus short‑term investments of $83.2M led management to state funding should cover more than 12 months of needs. However, convertible notes payable of $199.9M and growing debt introduce future balance sheet considerations.
The acquisition of Renergen created a new helium and LNG segment with natural gas properties of $130.2M, while Skyline’s deconsolidation produced a gain and discontinued operations income. Subsequent filings may clarify how quickly new facilities ramp revenue and whether operating losses narrow across 2026.
Key Figures
Key Terms
HALEU financial
asset retirement obligation financial
variable interest entities financial
fair value option financial
units-of-production method financial
Earnings Snapshot
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from __________________ to __________________
Commission File Number:
(Exact Name of Registrant as Specified in its Charter) |
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
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(Zip Code) |
Registrant’s telephone number, including area code: (
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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The |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of May 20, 2026, the registrant had
Table of Contents
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Page |
PART I. |
FINANCIAL INFORMATION |
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5 |
Item 1. |
Financial Statements (Unaudited) |
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5 |
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Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025 |
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5 |
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Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Month Periods ended March 31, 2026 and 2025 |
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6 |
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Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Month Periods ended March 31, 2026 and 2025 |
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7 |
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Condensed Consolidated Statements of Cash Flows for the Three Month Periods ended March 31, 2026 and 2025 |
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Notes to Unaudited Condensed Consolidated Financial Statements |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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36 |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
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46 |
Item 4. |
Controls and Procedures |
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46 |
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PART II. |
OTHER INFORMATION |
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47 |
Item 1. |
Legal Proceedings |
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47 |
Item 1A. |
Risk Factors |
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47 |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
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47 |
Item 3. |
Defaults Upon Senior Securities |
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47 |
Item 4. |
Mine Safety Disclosures |
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47 |
Item 5. |
Other Information |
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47 |
Item 6. |
Exhibits |
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48 |
Signatures |
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50 |
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2
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations and financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
In some cases, you can identify forward-looking statements by terms such as “may,” “should,” “would,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to a number of risks, uncertainties and assumptions described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Some of the key factors that could cause actual results to differ from our expectations include:
3
These statements relate to future events or to our future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those set forth in Part I, Item 1A - “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 (as amended), and other reports that we filed with the SEC. Any forward-looking statement in this Quarterly Report on Form 10-Q reflects our current view with respect to future events and is subject to these and other risks, uncertainties, and assumptions relating to our operations, results of operations, industry, and future growth. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.
This Quarterly Report on Form 10-Q also contains estimates, projections, and other information concerning our industry, our business, and the potential markets for certain isotopes and for helium and LNG, including data regarding the estimated size of those respective markets, their respective projected growth rates, and, in the case of our isotope enrichment platform, the incidence of certain medical conditions. Information that is based on estimates, forecasts, projections, or similar methodologies is inherently subject to uncertainties, and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained these industry, business, market, and other data from reports, research surveys, studies, and similar data prepared by third parties, industry, medical and general publications, government data, and similar sources. In some cases, we do not expressly refer to the sources from which these data are derived.
Note Regarding Company References
Unless the context otherwise requires, references to the “Company,” “our Company,” “ASPI,” “we,” “us” and “our” refer to ASP Isotopes Inc. and its direct and indirect subsidiaries; references to “ASP Isotopes” refer to ASP Isotopes Inc. and not to any of its subsidiaries; references to “QLE” refer to Quantum Leap Energy, LLC; references to “Renergen” refer to Renergen Limited, a public corporation incorporated in 2014 and existing under the South African Companies Act 71 of 2008, as amended, together with its subsidiaries unless the context dictates otherwise; references to “Tetra4” refer to Tetra4 Proprietary Limited; references to “Skyline” refer to Skyline Builders Group Holding Limited, together with its subsidiaries. The terms “dollar,” “USD” or “$” refer to U.S. dollars, and the terms “R,” “ZAR” or “rand” refer to the South African rand.
Trademarks
All trademarks, service marks, and trade names included in this Quarterly Report on Form 10-Q are the property of their respective owners. Solely for convenience, the trademarks and trade names in this report may be referred to without the ® and ™ symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto.
4
PART I-FINANCIAL INFORMATION
Item 1. Financial Statements.
ASP Isotopes Inc.
Condensed Consolidated Balance Sheets (unaudited)
(in thousands, except share and per share amounts)
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March 31, |
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December 31, |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Short-term investments |
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Restricted cash |
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Accounts receivable |
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Inventories |
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Note receivable |
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Deferred offering costs |
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Prepaid expenses and other current assets |
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Current assets of discontinued operations |
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Total current assets |
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Property and equipment, net |
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Natural gas properties |
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Operating lease right-of-use assets, net |
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Deferred tax assets |
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Intangible assets |
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Goodwill |
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Lease receivable - noncurrent |
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Restricted cash |
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Equity method investments |
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Other investments |
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Other noncurrent assets |
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Noncurrent assets of discontinued operations |
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Total assets |
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$ |
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$ |
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Liabilities and stockholders’ equity |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued expenses |
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Debt - current |
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Finance lease liabilities – current |
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Operating lease liabilities – current |
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Deferred revenue |
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Other current liabilities |
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Current liabilities of discontinued operations |
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Total current liabilities |
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Deferred tax liabilities |
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Convertible notes payable, at fair value |
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Debt - noncurrent |
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Finance lease liabilities – noncurrent |
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Operating lease liabilities – noncurrent |
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Deferred revenue - noncurrent |
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Other noncurrent liabilities |
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Noncurrent liabilities of discontinued operations |
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Total liabilities |
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Commitments and contingencies (Note 11) |
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Stockholders’ equity |
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Preferred stock, $ |
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Common stock, $ |
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Treasury stock at cost |
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Additional paid-in capital |
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Accumulated deficit |
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( |
) |
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( |
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Accumulated other comprehensive (loss) income |
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( |
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Total stockholders’ equity attributed to ASP Isotopes Inc. stockholders |
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Noncontrolling interests in consolidated subsidiaries |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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* Reclassified to reflect discontinued operations presentation.
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
ASP Isotopes Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited)
(in thousands, except share and per share amounts)
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Three Months Ended |
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2026 |
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2025 |
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Revenue |
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Product revenue |
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$ |
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$ |
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Collaboration revenue |
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Total revenue |
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Cost of revenue |
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Gross profit |
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Operating expenses: |
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Research and development |
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Selling, general and administrative |
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Total operating expenses |
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Loss from operations |
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( |
) |
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( |
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Other (expense) income: |
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Foreign exchange transaction loss |
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( |
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( |
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Change in fair value of share liability |
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Change in fair value of convertible notes payable |
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( |
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( |
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Change in fair value of equity investments |
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Interest income |
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Interest expense |
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( |
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( |
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Total other expense |
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( |
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( |
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Loss before income tax benefit |
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( |
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( |
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Income tax benefit |
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Net loss from continuing operations |
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( |
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Income from discontinued operations, net of taxes |
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Net loss |
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( |
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( |
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Less: Net loss attributable to noncontrolling interests |
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( |
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( |
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Net loss attributable to ASP Isotopes Inc. shareholders |
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$ |
( |
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$ |
( |
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Net (loss) income per share, basic and diluted |
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Continuing operations |
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$ |
( |
) |
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$ |
( |
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Discontinued operations |
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$ |
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$ |
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Attributable to ASP Isotopes Inc. shareholders |
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$ |
( |
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$ |
( |
) |
Weighted average shares of common stock outstanding, |
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Comprehensive loss: |
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Net loss before allocation to noncontrolling interests |
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$ |
( |
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$ |
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Foreign currency translation |
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( |
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Less: reclassification to earnings |
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Total comprehensive loss before allocation to noncontrolling interests |
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( |
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Less: Comprehensive loss attributable to noncontrolling interests |
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( |
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( |
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Total comprehensive loss |
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$ |
( |
) |
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$ |
( |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
6
ASP Isotopes Inc.
Condensed Consolidated Statements of Changes in Stockholders’ Equity (unaudited)
(in thousands, except share and per share amounts)
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Common Stock |
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Treasury |
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Additional |
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Accumulated |
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Accumulated |
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Noncontrolling |
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Total Stockholders' |
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Shares |
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Amount |
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Shares |
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Stock |
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Capital |
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(Loss) Income |
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Deficit |
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Interests |
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Equity |
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Balance as of December 31, 2025 |
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$ |
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— |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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Issuance of common stock to acquire Renergen |
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— |
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Forfeiture of restricted common stock |
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( |
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Stock-based compensation expense |
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— |
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— |
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Deconsolidation of subsidiary |
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— |
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— |
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( |
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( |
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( |
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Fair value of noncontrolling interest at acquisition of Numed |
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— |
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— |
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Fair value of noncontrolling interest at acquisition of Renergen |
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— |
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— |
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Distribution to noncontrolling interest of Renergen |
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— |
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— |
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( |
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( |
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Contributions from noncontrolling interest |
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— |
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— |
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Distribution to noncontrolling interest of VIE |
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— |
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— |
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( |
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( |
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Foreign currency translation |
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— |
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— |
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( |
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( |
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Reclassification to earnings |
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— |
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— |
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( |
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Net loss - continuing operations |
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— |
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— |
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( |
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( |
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( |
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Gain on deconsolidation |
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— |
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— |
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Net income - discontinued operations |
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— |
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— |
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Balance as of March 31, 2026 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
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$ |
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Balance as of December 31, 2024 |
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$ |
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— |
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|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
|
|
||||||
Stock-based compensation expense |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Distribution to noncontrolling interest of VIE |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|||||
Foreign currency translation |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
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|
|||||||
Net loss |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
||||
Balance as of March 31, 2025 |
|
|
|
|
$ |
|
|
|
— |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
7
ASP Isotopes Inc.
Condensed Consolidated Statements of Cash Flows (unaudited)
(in thousands)
|
|
Three Months Ended |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Cash flows from Operating activities |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss to cash used in operating activities: |
|
|
|
|
|
|
||
Income from discontinued operations |
|
|
( |
) |
|
|
|
|
Foreign exchange transaction loss from intercompany |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
||
Gain on deconsolidation |
|
|
( |
) |
|
|
|
|
Non cash interest expense on debt |
|
|
|
|
|
|
||
Stock-based compensation |
|
|
|
|
|
|
||
Shares issued for non-cash consultant expense |
|
|
|
|
|
|
||
Change in fair value of share liability |
|
|
|
|
|
( |
) |
|
Change in fair value of convertible notes payable |
|
|
|
|
|
|
||
Change in fair value of equity investments |
|
|
( |
) |
|
|
|
|
Change in right-of-use lease asset |
|
|
|
|
|
|
||
Non-cash lease income |
|
|
( |
) |
|
|
|
|
Change in deferred taxes |
|
|
( |
) |
|
|
( |
) |
Changes in operating assets and liabilities, net of acquisition amounts: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
( |
) |
|
|
|
|
Receivable from noncontrolling interest |
|
|
|
|
|
|
||
Inventories |
|
|
( |
) |
|
|
( |
) |
Prepaid expenses and other current assets |
|
|
( |
) |
|
|
|
|
Other noncurrent assets |
|
|
( |
) |
|
|
|
|
Accounts payable |
|
|
( |
) |
|
|
|
|
Accrued expenses |
|
|
( |
) |
|
|
|
|
Operating lease liabilities |
|
|
( |
) |
|
|
( |
) |
Other current liabilities |
|
|
( |
) |
|
|
( |
) |
Other noncurrent liabilities |
|
|
|
|
|
|
||
Net cash used in operating activities – continuing operations |
|
|
( |
) |
|
|
( |
) |
Cash used for operating activities – discontinued operations |
|
|
( |
) |
|
|
|
|
Net cash used in operating activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from investing activities |
|
|
|
|
|
|
||
Purchases of property and equipment |
|
|
( |
) |
|
|
( |
) |
Purchases of short-term investments |
|
|
( |
) |
|
|
|
|
Principal collections from lease receivable |
|
|
|
|
|
|
||
Cash advance paid for property and equipment |
|
|
|
|
|
( |
) |
|
Purchase of equity investments |
|
|
( |
) |
|
|
|
|
Cash received for acquisition of business, net of cash paid |
|
|
|
|
|
|
||
Cash disposed of upon deconsolidation of subsidiary |
|
|
( |
) |
|
|
|
|
Net cash used in investing activities – continuing operations |
|
|
( |
) |
|
|
( |
) |
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from financing activities |
|
|
|
|
|
|
||
Payment of deferred issuance costs |
|
|
( |
) |
|
|
|
|
Proceeds from collection of receivable from noncontrolling interest in VIE |
|
|
|
|
|
|
||
Distribution to noncontrolling interest in VIE |
|
|
( |
) |
|
|
( |
) |
Distribution to noncontrolling interest of Renergen |
|
|
( |
) |
|
|
|
|
Proceeds from issuance of debt |
|
|
|
|
|
|
||
Payment of principal portion of debt |
|
|
( |
) |
|
|
( |
) |
Payment of principal portion of finance leases |
|
|
( |
) |
|
|
( |
) |
Net cash used in financing activities – continuing operations |
|
|
( |
) |
|
|
( |
) |
Cash provided by financing activities – discontinued operations |
|
|
|
|
|
|
||
Net cash provided by (used in) financing activities |
|
|
|
|
|
( |
) |
|
Net change in cash, cash equivalents and restricted cash |
|
|
( |
) |
|
|
( |
) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
|
( |
) |
|
|
( |
) |
Cash, cash equivalents and restricted cash - beginning of period |
|
|
|
|
|
|
||
Cash, cash equivalents and restricted cash - end of period |
|
$ |
|
|
$ |
|
||
Components of cash, cash equivalents, and restricted cash |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Restricted cash |
|
|
|
|
|
|
||
Total cash, cash equivalents, and restricted cash |
|
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of these condensed consolidated financial statements.
8
ASP Isotopes Inc.
Condensed Consolidated Statements of Cash Flows (unaudited)
(in thousands)
Supplemental disclosures of non-cash investing and financing activities: |
|
|
|
|
|
|
||
Derecognition of asset as a result of sales-type lease |
|
$ |
|
|
$ |
|
||
Unpaid financing fees |
|
$ |
|
|
$ |
|
||
Lease receivable |
|
$ |
|
|
$ |
|
||
Purchase of property and equipment included in accounts payable |
|
$ |
|
|
$ |
|
||
Purchase of property and equipment with bank loans |
|
$ |
|
|
$ |
|
||
Right-of-use asset obtained in exchange for operating lease liability |
|
$ |
|
|
$ |
|
||
Right-of-use asset obtained in exchange for finance lease liability |
|
$ |
|
|
$ |
|
||
Common stock issued in acquisition of Renergen |
|
$ |
|
|
$ |
|
||
Contingent consideration for acquisition of Numed |
|
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of these condensed consolidated financial statements.
9
ASP Isotopes Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
1. Organization
Description of Business
ASP Isotopes Inc. was incorporated in the state of Delaware on September 13, 2021 and has its headquarters in Dallas, Texas. ASP Isotopes Inc., its subsidiaries and ASP Rentals are collectively referred to as “the Company” throughout these consolidated financial statements.
The Company is an advanced materials company dedicated to the development of a differentiated isotope enrichment platform to strengthen global supply chain access to critical materials used in nuclear medicine, next-generation semiconductors, and nuclear energy. Our proprietary enrichment technologies, the Aerodynamic Separation Process (“ASP technology”) and Quantum Enrichment technology (“QE technology”), are designed to enable the production of isotopes for a range 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”).
The Company commenced commercial production of enriched isotopes at both of its 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 March 31, 2026. The Company's 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, the Company is targeting initial commercial shipments of enriched C-14 in the third quarter of 2026. The Company is targeting initial commercial shipments of enriched Si-28 around mid-year 2026. The Company has also completed the commissioning phase of its third enrichment facility, a QE technology facility, which is the Company's first laser-based enrichment plant. The Company is targeting initial commercial shipments of Yb-176 in the third quarter of 2026.
In addition, the Company has started planning additional isotope enrichment plants both in South Africa and in other jurisdictions, including Iceland and the United States. The Company believes the C-14 it may produce using the ASP technology could be used in the development of new pharmaceuticals and agrochemicals. The Company believes the Si-28 we may produce using the ASP technology may be used to create advanced semiconductors and in quantum computing. The Company believes the Yb-176 it may produce using the QE technology may be used to create radiotherapeutics that treat various forms of oncology. The Company is 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. The Company is also considering the future development of QE technology for the separation of Nickel-64, Gadolinium-160, Ytterbium-171, Lithium-6 and Lithium-7.
Quantum Leap Energy LLC (“QLE”), the Company's subsidiary, is currently pursuing an initiative to apply its enrichment technologies to the enrichment of Uranium-235 (“U-235”) in South Africa. The Company believes that the U-235 QLE may produce has the potential to 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 the Company's uranium enrichment initiative, in October 2024, the Company entered into a term sheet with TerraPower, LLC (“TerraPower”) 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, the Company entered into a memorandum of understanding 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, to collaborate on the research, development and ultimately the commercial production of advanced nuclear fuels. As part of the collaboration contemplated by the MOU with Necsa, QLE’s South African subsidiary has entered into a Pre-Implementation Services Contract Agreement (“Services Contract”) with Necsa, pursuant to which 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 Necsa site in Pelindaba. See the section captioned “TerraPower” below (Note 13) for disclosures regarding certain definitive agreements entered into between TerraPower and us and/or the Company's subsidiaries, 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.
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 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.
QLE entered into the Securities Exchange Agreement (the "Exchange Agreement") with a third party, effective as of March 29, 2026, which resulted in the deconsolidation of Skyline (Note 21). QLE retained approximately
The Company 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 natural gas development project (the “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 natural gas processing plant in the Free State Province of South Africa. The Company is targeting to start the liquefaction of helium process in the second half of 2026. Renergen’s principal asset is its
Liquidity
The Company has incurred net losses and negative cash flows from operating activities since its inception. The Company incurred net losses from continuing operations of $
10
$
There can be no assurance that the Company will achieve or sustain positive cash flows from operations or profitability. The Company anticipates it will need to continue to raise capital through additional equity and/or debt financings and/or collaborative development agreements to fund its operations. However, such funding may not be available on a timely basis on terms acceptable to the Company, or at all. If the Company is unable to raise additional capital when required or on acceptable terms, the Company may be required to scale back or discontinue the advancement of product candidates, reduce headcount, reorganize, merge with another entity, or cease operations.
2. Basis of Presentation and Summary of Significant Accounting Policies
Unaudited Financial Information
The Company’s unaudited condensed consolidated financial statements included herein have been prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"), and pursuant to the rules and regulations of the Securities and Exchange Commission, or SEC. In the Company’s opinion, the information furnished reflects all adjustments, all of which are of a normal and recurring nature, necessary for a fair presentation of the financial position and results of operations for the reported interim periods. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year or any other interim period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and related notes for the year ended December 31, 2025.
Basis of Presentation and Use of Estimates
The Company’s condensed consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of the Company’s condensed consolidated financial statements requires management to make estimates and assumptions that impact the reported amounts of assets, liabilities and expenses and disclosure in the Company’s condensed consolidated financial statements and accompanying notes. The most significant estimates in the Company’s consolidated financial statements relate to stock-based compensation, fair value of convertible notes, equity and other investments, gas reserves, provisions for environmental rehabilitation, loss contingencies and the accounting for acquisitions, including goodwill. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may materially differ from these estimates and assumptions.
The Company has reclassified certain prior-year amounts to conform to the current-year’s presentation. The accounting requirements for reporting the separation of Skyline as a discontinued operation were met when the deconsolidation was completed on March 29, 2026. Accordingly, the historical results of Skyline are presented as discontinued operations and, as such, have been excluded from continuing operations and segment results for all periods presented. Refer to Note 21, “Discontinued Operations,” for additional information.
Principles of consolidation
Currency and currency translation
Concentration of Credit Risk and other Risks
Cash balances are maintained at U.S. financial institutions and may exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance limit of $
The Company's foreign subsidiaries held cash of approximately $
11
The Company is potentially subject to concentrations of credit risk in accounts receivable as the following customer balances exceed 10% of accounts receivable in the consolidated balance sheets as March 31, 2026 and December 31, 2025 (in thousands).
|
|
As of March 31, 2026 |
|
|
As of December 31, 2025 |
|
||||||||||
|
|
Accounts Receivable |
|
|
% of Total Accounts Receivable |
|
|
Accounts Receivable |
|
|
% of Total Accounts Receivable |
|
||||
Customer A |
|
$ |
|
|
|
% |
|
$ |
|
|
|
|
||||
Although the Company is directly affected by the financial condition of its customers, management does not believe significant credit risks existed as of March 31, 2026. Generally, the Company does not require customer to post collateral or other securities to support our associated accounts receivable.
There was
Cash and Cash Equivalents
The Company considers all highly liquid investments with original maturities at the date of purchase of three months or less to be cash equivalents. Cash and cash equivalents are stated at fair value and may include money market funds, U.S. Treasury and U.S. government-sponsored agency securities, corporate debt, commercial paper and certificates of deposit. The Company had cash equivalents totaling $
Short-term Investments
The Company maintains its short-term investments in U.S. treasury and U.S. government-sponsored agency securities and has classified them as held-to-maturity at the time of purchase. Held-to-maturity purchases are those securities in which the Company has the ability and intent to hold until maturity. Held-to-maturity securities are recorded at amortized cost, adjusted for the amortization or accretion of premiums and discounts. Premiums and discounts are amortized or accreted over the life of the related held-to-maturity security using a straight-line method.
Restricted Cash
Restricted cash represents cash balances that are legally or contractually restricted as to withdrawal or use. Restricted cash is classified as current or noncurrent on the condensed consolidated balance sheet based on the nature and expected timing of the underlying restriction. Amounts classified as restricted cash are excluded from cash and cash equivalents and are disclosed separately on the balance sheet. As of March 31, 2026, the Company had current restricted cash of $
Fair Value of Financial Instruments
Accounting guidance defines fair value, establishes a consistent framework for measuring fair value, and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
Level 1: Observable inputs such as quoted prices in active markets;
Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
The Company’s convertible notes payable (Note 9) is measured as a Level 3 fair value on a recurring basis.
Equity Method and Other Investments
The Company accounts for investments in entities over which it has significant influence, but not control, using the equity method of accounting in accordance with ASC Topic 323, Investments - Equity Method and Joint Ventures ("ASC 323"). Significant influence is generally presumed when the Company owns
Under the equity method, the Company has elected to initially record the investment at fair value and subsequently adjusts the carrying amount to reflect its share of the investee’s earnings or losses, which are recognized in the consolidated statements of income. Dividends received from equity method investees reduce the carrying amount of the investment. The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Alternatively, the Company may elect to utilize the fair value option. The Company's equity method investments include the Company's investment in Skyline utilizing the fair value option.
The Company also holds investments in equity securities without readily determinable fair values. These investments are accounted for under the measurement alternative in accordance with ASC Topic 321, Investments - Equity Securities ("ASC 321"), which allows the Company to record the investments at cost, less impairments, plus or minus observable price changes in orderly transactions for the identical or similar investment. The Company's investments recorded at cost include IsoBio, Inc. ("IsoBio") and Opeongo, Inc. ("Opeongo").
If the Company determines that an impairment is other-than-temporary, it recognizes a loss equal to the difference between the
12
investment’s carrying amount and its fair value. Equity method investments and investments at cost are included in “Equity method investments” and "Other investments", respectively, on the consolidated balance sheet.
Accounts Receivable
Accounts receivable are stated at the amount management expects to collect from outstanding balances. An allowance for expected credit losses is estimated for those accounts receivable considered to be uncollectible based upon historical experience and management's evaluation of outstanding accounts receivable. The Company maintains an allowance for expected credit losses for accounts receivable, which is recorded as an offset to accounts receivable, and changes in such are classified as selling, general and administrative expense in the Condensed Consolidated Statements of Operations and Comprehensive Loss. The Company assesses collectability by reviewing accounts receivable on a collective basis where similar characteristics exist and on an individual basis when the Company identifies specific customers with known disputes or collectability issues. In determining the amount of the allowance for expected credit losses, the Company considers historical collectability based on past due status and make judgments about the creditworthiness of customers based on ongoing credit evaluations. The Company also considers customer-specific information and current market conditions. Bad debts are written off against the allowance when identified. As of March 31, 2026 and December 31, 2025 there was
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets primarily consist of amounts paid in advance for goods and services that will be consumed within twelve months. These assets are recorded at historical cost and expensed in the period in which the related benefits are realized. Prepaid expenses and other current assets mainly compromised the prepayment for advertising, insurance, deposits, and advance payments to subcontractors. The Company reviews prepaid expenses and other current assets for impairment or non-recoverability at each reporting date.
Inventories
Inventories are stated at the lower of cost or net realizable value. Cost is determined using the first in, first out inventory method. Inventory cost includes materials, labor, and applicable overhead incurred in bringing the inventories to their present location and condition. Net realizable value represents the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Inventories are primarily located in facilities in South Africa and are not pledged as collateral for any debt arrangements
The components of inventories as of March 31, 2026 and December 31, 2025 were as follows (in thousands):
|
|
March 31, |
|
|
December 31, |
|
||
Raw material |
|
$ |
|
|
$ |
|
||
Work in process |
|
|
|
|
|
|
||
Finished goods |
|
|
|
|
|
|
||
Total inventories |
|
$ |
|
|
$ |
|
||
No significant write-downs to net realizable value or reversals of write-downs occurred in the three months ended March 31, 2026 and 2025.
Property and Equipment
Property and equipment include costs of assets constructed, purchased or leased under a finance lease, related delivery and installation costs and interest incurred on significant capital projects during their construction periods. Expenditures for renewals and betterments also are capitalized, but expenditures for normal repairs and maintenance are expensed as incurred. Costs associated with yearly planned major maintenance are generally deferred and amortized over 12 months or until the same major maintenance activities must be repeated, whichever is shorter. The cost and accumulated depreciation applicable to assets retired or sold are removed from the respective accounts, and gains or losses thereon are included in the statement of operations and comprehensive loss.
The Company assigns the useful lives of its property and equipment based upon its internal engineering estimates, which are reviewed periodically. The estimated useful lives of the Company's property and equipment range from
Construction in progress (Note 6) is carried at cost and consists of specifically identifiable direct and indirect development and construction costs. While under construction, costs of the property are included in construction in progress until the property is placed in service, at which time costs are transferred to the appropriate property and equipment account, including, but not limited to, leasehold improvements or other such accounts.
Business Combination and Asset Acquisitions
The Company evaluates acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen is met, the transaction is accounted for as an asset acquisition. If the screen is not met, further determination is required as to whether or not the Company has acquired inputs and processes that have the ability to create outputs, which would meet the requirements of a business. If determined to be a business combination, the Company accounts for the transaction under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations ("ASC 805"), which requires the acquiring entity in a business combination to recognize the fair value of all assets acquired, liabilities assumed, and any non-controlling interest in the acquiree and establishes the acquisition date as the fair value measurement point. Accordingly, the Company recognizes assets acquired and liabilities assumed in business combinations, including contingent assets and liabilities, and non-controlling interest in the acquiree based on the fair value estimates as of the date of acquisition. In accordance with ASC 805, the Company recognizes and measures goodwill as of the acquisition date, as the excess of the fair value of the consideration paid over the fair value of the identified net assets acquired.
The consideration for the Company’s business acquisitions may include future payments that are contingent upon the occurrence of a particular event or events. The obligations for such contingent consideration payments are recorded at fair value on the acquisition
13
date. The contingent consideration obligations are then evaluated each reporting period. Changes in the fair value of contingent consideration, other than changes due to payments, are recognized as a gain or loss and recorded within change in the fair value of deferred and contingent consideration liabilities in the consolidated statements of comprehensive loss.
If determined to be an asset acquisition, the Company accounts for the transaction under ASC 805-50, which requires the acquiring entity in an asset acquisition to recognize assets acquired and liabilities assumed based on the cost to the acquiring entity on a relative fair value basis, which includes transaction costs in addition to consideration given.
Contingent consideration payments in asset acquisitions are recognized when the contingency is resolved and the consideration is paid or becomes payable (unless the contingent consideration meets the definition of a derivative, in which case the amount becomes part of the basis in the asset acquired). Upon recognition of the contingent consideration payment, the amount is included in the cost of the acquired asset or group of assets.
Goodwill and Identifiable Intangible Assets
Goodwill represents the amount of consideration paid in excess of the fair value of net assets acquired as a result of the Company’s business acquisitions accounted for using the acquisition method of accounting. Identifiable intangible assets recognized in conjunction with acquisitions are recorded at fair value. Significant unobservable inputs are used to determine the fair value of the identifiable intangible assets based on the income approach valuation model, whereby the present worth and anticipated future benefits of the identifiable intangible assets are discounted back to their net present value.
Goodwill and identifiable intangible assets with indefinite lives are not amortized and are subject to impairment testing at a reporting unit level on an annual basis or when a triggering event occurs that may indicate the carrying value of the goodwill or identifiable intangible assets are impaired. An entity is permitted to first assess qualitative factors to determine if a quantitative impairment test is necessary. Further testing is only required if the entity determines, based on the qualitative assessment, that it is more likely than not that the fair value of the reporting unit is less than its carrying amount. The Company performs its annual test for goodwill or identifiable intangible assets as of October 31.
Identifiable intangible assets with definite lives are amortized over their estimated useful lives, ranging from
Natural Gas Producing Activities
Effective January 6, 2026, the Company consolidates Renergen Limited and its subsidiaries, including Tetra4 Proprietary Limited, which holds South Africa’s first onshore petroleum production right. The Company’s natural gas producing activities are located entirely in South Africa (Free State Province). The Company follows the successful efforts method of accounting for its natural gas producing activities. Under this method, property acquisition costs and development costs are capitalized when incurred and depleted on a units-of-production basis over the remaining life of proved reserves and proved developed reserves, respectively. Unproved reserve assets and the related costs are transferred to proved reserve assets when proved reserves are found, or otherwise attributed to, the property.
The Company initially capitalizes exploratory well costs pending a determination whether proved reserves have been found. If proved reserves are found, costs remain capitalized; if no proved reserves are found or a well is uneconomic, costs are charged to expense. Other exploration costs, including geological and geophysical costs, are expensed as incurred. Costs to operate and maintain wells and field equipment are expensed as incurred.
Proved reserve assets and proved developed assets are assessed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, in accordance with ASC 360, Property, Plant and Equipment. As of March 31, 2026, no impairment indicators were identified with respect to the Renergen’s proved properties.
The Company performs periodic assessments of unproved properties for impairment and recognizes a loss at the time of impairment. In determining whether an unproved property is impaired, the Company considers numerous factors including, but not limited to, current development and exploration drilling plans, favorable or unfavorable exploration activity on adjacent lands, and in-house geologists’ evaluation of the reservoir. As of March 31, 2026,
Variable Interest Entities
The Company accounts for the investments it makes in certain legal entities in which equity investors do not have (1) sufficient equity at risk for the legal entity to finance its activities without additional subordinated financial support, or (2) as a group, the holders of the equity investment at risk do not have either the power, through voting or similar rights, to direct the activities of the legal entity that most significantly impact the entity’s economic performance, or (3) the obligation to absorb the expected losses of the legal entity or the right to receive expected residual returns of the legal entity. These certain legal entities are referred to as variable interest entities (“VIEs”).
The Company would consolidate the results of any such entity in which it determined that it had a controlling financial interest. The Company would have a “controlling financial interest” in such an entity if the Company had both the power to direct the activities that most significantly affect the VIE’s economic performance and the obligation to absorb the losses of, or right to receive benefits from, the VIE that could be potentially significant to the VIE. On a quarterly basis, the Company will reassess whether it has a controlling financial interest in any investments it has in these certain legal entities.
Leases
Leases are accounted for in accordance with ASC Topic 842, Leases ("ASC 842"). The Company enters into lease arrangements both as lessee and a lessor for office, laboratories and production facilities, vehicles and equipment. At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on specific facts and circumstances, the existence of an identified asset(s), if any, and the Company’s control over the use of the identified asset(s), if applicable.
14
Lessee arrangements
Operating lease liabilities and their corresponding right-of-use ("ROU") assets are recorded based on the present value of future lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company will utilize the incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment, and considering the region in which the ROU asset and liabilities are located.
The Company has elected to combine lease and non-lease components as a single component. Operating leases are recognized on the balance sheet as ROU lease assets, lease liabilities current and lease liabilities non-current. Fixed rents are included in the calculation of the lease balances, while variable costs paid for certain operating and pass-through costs are excluded. Lease expense is recognized over the expected term on a straight-line basis.
Finance leases are recognized on the balance sheet as property and equipment, finance lease liabilities current and finance lease liabilities non-current. Finance lease ROU assets and the related lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The finance lease ROU assets are amortized on a straight-line basis over the lease term with the related interest expense of the lease liability payment recognized over the lease term using the effective interest method.
Lessor arrangements
For leases where the Company retains ownership of the underlying asset, the Company classifies the lease as an operating lease. Lease revenue is recognized on a straight-line basis and the associated asset is depreciated.
When control of the underlying asset is transferred to the lessee, the Company classifies the lease as sales-type lease. The Company derecognizes the asset, recognizes a net investment in the lease, and recognizes selling profit and interest income over the lease term. This classification applies if certain criteria are met, including transfer of ownership, a purchase option, a lease term covering a major part of the asset's life, the present value of payments covering substantially all of the asset's fair value, or the asset being specialized.
Impairment of Long-lived Assets
Long-lived assets consist primarily of property and equipment. The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset is not recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds the fair value of the assets. The Company did
Convertible Notes Payable
Convertible notes payable are accounted for in accordance with ASC Topic 825, Financial Instruments ("ASC 825"). Upon issuance the Company has elected the fair value option to account for the convertible notes payable. Changes in fair value during the reporting period are recognized in other income (expense) in the consolidated statement of operations and comprehensive loss.
Asset Retirement Obligations
The Company accounts for legal obligations associated with the retirement of its natural gas properties in accordance with ASC 410-20, Asset Retirement and Environmental Obligations. An asset retirement obligation ("ARO") is recognized at fair value in the period in which it is incurred and when a reasonable estimate of fair value can be made. Upon initial recognition, the fair value of the ARO is capitalized as part of the carrying amount of the related long-lived asset (the "rehabilitation asset") and included in property and equipment, net, in the condensed consolidated balance sheets.
The ARO is measured at the present value of estimated future cash flows required to satisfy the retirement obligation, discounted at a credit-adjusted risk-free rate that reflects current market assessments of the time value of money and the risks specific to the liability. In subsequent periods, the liability is increased for the passage of time through accretion expense, which is recognized within cost of revenue. Revisions to the timing or amount of estimated future cash flows result in an adjustment to both the carrying amount of the ARO liability and the related rehabilitation asset.
The Company has production and exploration rights on land in South Africa. A rehabilitation obligation of ZAR
The ARO was recognized at fair value on the acquisition date discounted at a pre-tax rate of
Revenue Recognition
The Company recognizes revenue in accordance with Accounting Standard Codification ("ASC") Topic 606, Revenue from Contracts with Customers (“ASC 606”). Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine the appropriate amount of revenue to be recognized for arrangements determined to be within the scope of ASC 606, the Company performs the following five steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to
15
the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect consideration it is entitled to in exchange for the goods or services it transfers to the customer.
The Company evaluates a transaction’s performance obligations to determine if promised goods or services in a contract to transfer a distinct good or service to the customer and are considered distinct when (i) the customer can benefit from the good or service on its own or together with other readily available resources and (ii) the promised good or service is separately identifiable from other promises in the contract. In assessing whether promised goods or services are distinct, the Company considers whether the goods or services are integral or dependent to other goods or services in the contract. The Company determines the transaction price based on the agreed government rates for the promised goods in the contract. The consideration is recognized as revenue when control is transferred for the related goods.
The Company enters into revenue generating transactions with certain customers that include payment for delivery of nuclear medical doses from its radiopharmacies in South Africa and the U.S. for PET and SPECT scanning. Revenue from its radiopharmacies is recognized upon delivery.
In January 2026, the Company acquired Renergen (Note 14). Renergen explores, produces and sells LNG in South Africa. Revenue from the sale of LNG is recognized upon delivery to the specified destination agreed to in the contract.
When consideration is received from a customer prior to transferring goods or services to the customer under the terms of long-term LNG contracts, a token liability is recorded. The Company classifies these token liabilities within “Deferred revenue - noncurrent” on the Company’s condensed consolidated balance sheets since they have no expiration date. Token contract liabilities are recognized as revenue after control of the goods and services is transferred to the customer and all revenue recognition criteria have been met. The token liability was $
Research and Development Costs
Research and development costs consist primarily of fees paid to consultants, license fees and facilities costs. Nonrefundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received rather than when the payment is made. All research and development costs are expensed as incurred.
Acquired in-process research and development
Selling, General and Administrative Costs
Selling, general and administrative expenses consist primarily of salaries and related benefits, including stock-based compensation expense, related to the Company's executive, finance, business development, legal, human resources and support functions. Other general and administrative expenses include professional fees for auditing, tax, consulting and patent-related services, rent and utilities and insurance.
Stock-based Compensation Expense
Stock-based compensation expense represents the cost of the grant date fair value of employee stock awards recognized over the requisite service period of the awards (usually the vesting period) on a straight-line basis. The Company estimates the fair value of each stock-based award on the date of grant using the Black-Scholes option pricing model. The Black-Scholes option pricing model incorporates various assumptions, such as the value of the underlying common stock, the risk-free interest rate, expected volatility, expected dividend yield, and expected life of the options. Forfeitures are recognized as a reduction of stock-based compensation expense as they occur.
The Company also awards restricted stock to employees and directors. Restricted stock is generally subject to forfeiture if employment terminates prior to the completion of the vesting restrictions. The Company expenses the cost of the restricted stock, which is determined to be the fair market value of the shares of common stock underlying the restricted stock at the date of grant, ratably over the period during which the vesting restrictions lapse.
Stock-based compensation expense is classified in the condensed consolidated statements of operations and comprehensive loss in the same manner in which the award recipients’ payroll costs are classified or in which the award recipients’ service payments are classified.
Income Taxes
Deferred income tax assets and liabilities arise from temporary differences associated with differences between the financial statements and tax basis of assets and liabilities, as measured by the enacted tax rates, which are expected to be in effect when these differences reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.
The Company records the provision for income taxes for the activity from PET Labs, ECNP, Numed and Renergen's operations.
The Company follows the provisions of ASC Topic 740-10, Uncertainty in Income Taxes ("ASC 740-10"). The Company has
The Company has identified the United States, South Africa and Guernsey as its major tax jurisdictions. Refer to Note 19 for further details.
Comprehensive Loss
Comprehensive loss is defined as a change in equity during a period from transactions and other events and circumstances from non-owner sources. The Company’s comprehensive loss is comprised of net loss and the effect of currency translation adjustments.
16
Related Parties
Parties, either an entity or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence, such as a family member or relative, shareholder, or a related corporation
Recently Adopted Accounting Pronouncements
In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets ("ASU 2025-05") and is effective for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years. Early adoption is permitted. ASU 2025-05 provides a practical expedient that allows entities to assume that conditions existing at the balance sheet date will remain unchanged over the remaining life of current accounts receivable and contract assets arising from revenue transactions under ASC 606. Additionally, entities other than public business entities that elect the practical expedient may also make an accounting policy election to consider subsequent collection activity occurring after the balance sheet date when estimating expected credit losses. The adoption of this standard did not have a material effect on the consolidated financial results.
Recently Issued Accounting Pronouncements
The Company has reviewed recently issued accounting pronouncements and plans to adopt those that are applicable to it. The Company does not expect the adoption of any recently issued pronouncements to have a material impact on its results of operations or financial position.
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (“ASU 2024-03”) and is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. ASU 2024-03 requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. The Company is still assessing the impact of adopting this standard.
In August 2025, the FASB issued ASU 2025-08, Financial Instruments—Credit Losses (Topic 326): Purchased Loans (“ASU 2024-08”) and is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years with early adoption permitted. ASU 2025-08 clarifies the accounting for purchased loans under the current expected credit loss (CECL) model, including guidance on recognizing and measuring expected credit losses and presentation of related amounts. The Company is still assessing the impact of adopting this standard.
In September 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software ("ASU 2025-06") and is effective January 1, 2028 with early adoption permitted. ASU 2025-06 modernizes the accounting for internal use software costs and requires entities to start capitalizing eligible costs when (1) management has authorized and committed to funding the software project, and (2) it is probable that the project will be completed and the software will be used to perform the function intended. The guidance can be applied on a prospective basis, a modified basis for in-process projects, or a retrospective basis. The Company is still assessing the impact of adopting this standard.
3. Short-term Investments
A summary of the Company’s held-to-maturity investments as of March 31, 2026 and December 31, 2025 consisted of the following (in thousands):
|
|
Three Months Ended March 31, 2026 |
|
|||||||||||||
|
|
Amortized Cost |
|
|
Unrealized Gains |
|
|
Unrealized Losses |
|
|
Fair Value |
|
||||
U.S. Treasury securities - mature April 2026 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
U.S. Treasury securities - mature September 2026 |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Total |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
|
|
Year Ended December 31, 2025 |
|
|||||||||||||
|
|
Amortized Cost |
|
|
Unrealized Gains |
|
|
Unrealized Losses |
|
|
Fair Value |
|
||||
U.S. Treasury securities - mature April 2026 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
There is
4. Fair Value Measurements
The Company classified its U.S. Treasury securities (Note 3) within Level 2 because their fair values are determined using alternative pricing sources or models that utilized market observable inputs. The Company’s convertible notes payable (Note 9) is measured as a Level 3 fair value on a recurring basis and was $
The Company holds an equity investment in IsoBio. The Company previously measured the investment at cost because no observable price changes were identified. In October 2025, IsoBio completed a preferred stock financing with unrelated third‑party investors. The transaction represented an observable price change for an identical or other similar equity security held by the Company. Accordingly, the Company remeasured the investment to fair value and recorded an unrealized gain of $
The Company holds an equity investment in Opeongo. The Company measured the investment at cost and no observable price changes were identified. The carrying value of the Opeongo investment is $
The Company holds an equity investment in Skyline. The Company measured the investment under the equity method and recorded the investment at $
17
amount was adjusted by $
There were
A summary of the assets and liabilities that are measured at fair value as of March 31, 2026 and December 31, 2025 is as follows (in thousands):
|
|
Three Months Ended March 31, 2026 |
|
|||||||||||||
|
|
Carrying Value |
|
|
Quoted Price in Active Markets for Identical Assets (Level 1) |
|
|
Significant Other Observable Inputs (Level 2) |
|
|
Significant Unobservable Inputs (Level 3) |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Treasury securities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Other investments (ASC 321) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Convertible notes payable |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
Year Ended December 31, 2025 |
|
|||||||||||||
|
|
Carrying Value |
|
|
Quoted Price in Active Markets for Identical Assets (Level 1) |
|
|
Significant Other Observable Inputs (Level 2) |
|
|
Significant Unobservable Inputs (Level 3) |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Treasury securities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Other investments (ASC 321) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Convertible notes payable |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The following table provides a reconciliation of the Company’s assets and liabilities measured as a Level 3 at fair value on a recurring basis using significant unobservable inputs (in thousands):
|
|
Convertible |
|
|
Balance as of December 31, 2024 |
|
$ |
|
|
Fair value at issuance |
|
|
|
|
Fair value adjustment |
|
|
|
|
Balance as of December 31, 2025 |
|
|
|
|
Fair value adjustment |
|
|
|
|
Balance as of March 31, 2026 |
|
$ |
|
|
5. Revenue and Segment Information
In connection with the Company's acquisitions of
The following table presents revenue from continuing operations disaggregated by geography based on the Company’s locations (in thousands):
|
|
Revenues |
|
|||||
|
|
Three Months Ended March 31, |
|
|||||
Segment |
|
2026 |
|
|
2025 |
|
||
South Africa |
|
$ |
|
|
$ |
|
||
United States |
|
|
|
|
|
|||
Total Revenue |
|
$ |
|
|
$ |
|
||
The following table presents changes in the Company’s accounts receivable from continuing operations for the three months ended March 31, 2026 (in thousands):
|
|
Balance as of |
|
|
Additions (a) |
|
|
Deductions |
|
|
Balance as of |
|
||||
Accounts receivable |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
18
Segment Information
Beginning in 2024, primarily as a result of increased business activities of its subsidiary, Quantum Leap Energy LLC, the Company had
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, Molybdenum-100 (“Mo-100"), Si-28 and Yb-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 nuclear fuels segment is focused on research and development of technologies and methods used to produce high-assay low-enriched uranium (HALEU) and Lithium-6 for the advanced nuclear fuels target end market, and this segment includes operations of QLE.
The Helium and LNG segment is currently focused on the exploration, production and sale of LNG in South Africa, and this segment includes operations of Renergen.
The Company’s chief operating decision maker (“CODM”) is its chief executive officer.
The following table shows total assets by segment and a reconciliation to the condensed consolidated financial statements as of March 31, 2026 and December 31, 2025 (in thousands):
|
|
March 31, |
|
|
December 31, |
|
||
Segment assets: |
|
|
|
|
|
|
||
Specialist isotopes and related services |
|
$ |
|
|
$ |
|
||
Nuclear fuels |
|
|
|
|
|
|
||
Helium and LNG |
|
|
|
|
|
|
||
Discontinued operations |
|
|
|
|
|
|
||
Total assets |
|
$ |
|
|
$ |
|
||
Select information from the consolidated statements of operations and comprehensive loss as of the three months ended March 31, 2026 and 2025 is as follows (in thousands):
|
|
Revenues |
|
|
Net Income (Loss) Before |
|
||||||||||
|
|
Three Months Ended March 31, |
|
|
Three Months Ended March 31, |
|
||||||||||
Segment |
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Specialist isotopes and related services |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
||
Nuclear fuels |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Helium and LNG |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
||
A reconciliation of total segment revenue to total consolidated revenue and of total segment gross profit and segment operating income to total consolidated income before income taxes, for the three months ended March 31, 2026 and 2025, is as follows (in thousands):
|
|
Three Months Ended March 31, 2026 |
|
|||||||||||||
|
|
Specialist isotopes and related services |
|
|
Nuclear fuels |
|
|
Helium and LNG |
|
|
Total |
|
||||
Sales from external customers |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Collaboration revenue |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Less: cost of sales |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Segment gross profit |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Personnel expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Professional fees |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other segment expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Segment operating loss |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Foreign exchange transaction loss |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Change in fair value of investments |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Change in fair value of convertible notes payable |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Interest income (expense), net |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Loss before income tax benefit |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
19
|
|
Three Months Ended March 31, 2025 |
|
|||||||||
|
|
Specialist isotopes and related services |
|
|
Nuclear fuels |
|
|
Total |
|
|||
Sales from external customers |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Less: cost of sales |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Segment gross profit |
|
|
|
|
|
|
|
|
|
|||
Personnel expenses |
|
|
|
|
|
|
|
|
|
|||
Professional fees |
|
|
|
|
|
|
|
|
|
|||
Other segment expenses |
|
|
|
|
|
|
|
|
|
|||
Segment operating loss |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Foreign exchange transaction loss |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Change in fair value of share liability |
|
|
|
|
|
|
|
|
|
|||
Change in fair value of convertible notes payable |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Interest income, net |
|
|
|
|
|
|
|
|
|
|||
Loss before income tax expense |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
6. Property and Equipment
Property and equipment as of March 31, 2026 and December 31, 2025 consisted of the following (in thousands):
|
|
Useful Lives |
|
|
March 31, |
|
|
December 31, |
|
|||
Construction in progress |
|
|
— |
|
|
$ |
|
|
$ |
|
||
Plant and office buildings |
|
|
|
|
|
|
|
|
||||
Land |
|
|
— |
|
|
|
|
|
|
|
||
Tools, machinery and equipment |
|
|
|
|
|
|
|
|
||||
Computer equipment |
|
|
|
|
|
|
|
|
||||
Vehicles |
|
|
|
|
|
|
|
|
||||
Software |
|
|
|
|
|
|
|
|
||||
Office furniture |
|
|
|
|
|
|
|
|
||||
Leasehold improvements |
|
Lesser of estimated useful life or the remaining lease term |
|
|
|
|
|
|
|
|||
Property and equipment, at cost |
|
|
|
|
|
|
|
|
|
|||
Less accumulated depreciation |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Property and equipment, net |
|
|
|
|
$ |
|
|
$ |
|
|||
The Company has three isotope enrichment plants in Pretoria, South Africa: a C-14 plant, a multi-isotope plant and a laser isotope separation plant using QE technology. As of March 31, 2026 and December 31, 2025, costs incurred for the multi-isotope plant and the laser isotope separation plant were considered construction in progress because the work was not complete. In conjunction with the acquisition of Renergen, the Company has a helium and LNG Plant in the Free State, South Africa.
Depreciation expense was $
Natural gas properties at cost as of March 31, 2026 and December 31, 2025 consisted of the following (in thousands):
|
|
March 31, |
|
|
December 31, |
|
||
Proved reserves |
|
$ |
|
|
$ |
|
||
Wells in process |
|
|
|
|
|
|
||
Developed Assets |
|
|
|
|
|
|
||
Rehabilitation Asset |
|
|
|
|
|
|
||
Natural gas properties, at cost |
|
|
|
|
|
|
||
Less accumulated depreciation, depletion and amortization |
|
|
( |
) |
|
|
|
|
Net capitalized costs |
|
$ |
|
|
$ |
|
||
Natural gas properties are depleted using the unit-of-production method. Acquisition costs (proved reserves) are depleted over total proved reserves; development costs (developed assets) are depleted over proved developed reserves. The useful life of the rehabilitation asset is consistent with the units-of-production depletion of the underlying developed assets. Depletion expense attributable to natural gas properties was $51
7. Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets as of March 31, 2026 and December 31, 2025 consisted of the following (in thousands):
|
|
March 31, |
|
|
December 31, |
|
||
Value-added tax refund receivable |
|
$ |
|
|
$ |
|
||
Insurance |
|
|
|
|
|
|
||
Vendor advances and deposits |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total prepaid expenses and other current assets |
|
$ |
|
|
$ |
|
||
20
8. Accrued Expenses
Accrued expenses as of March 31, 2026 and December 31, 2025 consisted of the following (in thousands):
|
|
March 31, |
|
|
December 31, |
|
||
Salaries and other employee costs |
|
$ |
|
|
$ |
|
||
Professional |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total accrued expenses |
|
$ |
|
|
$ |
|
||
9. Debt
Debt consisted of the following as of March 31, 2026 and December 31, 2025 (in thousands):
|
|
March 31, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
Promissory notes |
|
$ |
|
|
$ |
|
||
Motor vehicle and equipment loans |
|
|
|
|
|
|
||
Credit facility |
|
|
|
|
|
|
||
Secured term loans |
|
|
|
|
|
|
||
Unsecured term loans |
|
|
|
|
|
|
||
Total debt |
|
|
|
|
|
|
||
less current portion of debt |
|
|
( |
) |
|
|
( |
) |
Long term portion of debt |
|
$ |
|
|
$ |
|
||
Credit facility and term loans contain a repayment on demand clause. Management believes the carrying values of debt outstanding approximates fair value based on the interest rates and scheduled maturities applicable to the outstanding borrowings.
Promissory Note Payable
In August 2025, the Company executed a promissory note payable with a finance company to fund a general liability insurance policy for $
The Company assumed a promissory note in connection with the acquisition of Renergen in January 2026 to fund a general liability insurance policy for approximately $
Motor Vehicle and Equipment Loans
Periodically, the Company enters into loans to purchase motor vehicles and certain equipment. For the three months ended March 31, 2026, the Company entered into new loans totaling $
Credit Facilities
Renergen's subsidiary Tetra4 entered into a $
Secured Term Loans
Renergen's subsidiary Tetra4 entered into a ZAR
21
engaged with IDC to amend the IDC Loan Agreement to defer the Calculation Date for covenant measurement to October 31, 2026. Although no assurance can be provided, the Company expects to receive a waiver from IDC in connection with the renegotiation of the applicable Calculation Date. The IDC Loan outstanding on March 31, 2026 amounted to ZAR
Pursuant to a Secured Term Loan Facility Agreement, Renergen obtained a ZAR
Unsecured Term Loans
Renergen entered into a $
Renergen's subsidiary Tetra4 entered into a ZAR
As the loan was not repaid on August 31, 2024 it now accrues interest at the prime lending rate plus
In November 2024, Molopo initiated legal proceedings against Tetra4 in the High Court of South Africa, Gauteng Local Division, Johannesburg, by issuing a summons alleging a breach of contract when Renergen sold the
Scheduled maturities of the Company’s debt as of March 31, 2026 are as follows (in thousands):
2026 (9 months) |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
Thereafter |
|
|
|
|
Total notes payable |
|
$ |
|
|
Less debt - current |
|
|
( |
) |
Debt -noncurrent |
|
$ |
|
Convertible Notes Payable
In March 2024, QLE issued convertible notes payable (“March 2024 Convertible Notes”) totaling $
In June 2024, QLE issued additional convertible notes payable (“June 2024 Convertible Notes”) totaling $
22
The 2024 Convertible Notes were recorded on the consolidated balance sheet at their fair values. The fair value of the March 2024 Convertible Notes on the date of issuance was $
In November 2025, QLE issued convertible notes payable (“2025 Convertible Notes”) totaling $
The 2025 Convertible Notes are recorded on the consolidated balance sheet at their fair values. The fair value of the 2025 Convertible Notes as of March 31, 2026 and December 31, 2025 has been determined to be $
The Company announced plans to list QLE as a standalone public company in the second half of 2025. The Company has also announced QLE and certain of its subsidiaries have entered into a loan agreement with TerraPower (the “TerraPower Loan Agreement”), a US nuclear innovation company, for a multiple advance term loan of up to $
American Ventures Advisory Agreement
On October 28, 2025, QLE entered into an Advisory Agreement (“Advisory Agreement”) with American Ventures LLC, a Delaware limited liability company (“American Ventures”). Under the Advisory Agreement, American Ventures will provide various services to the Company related to QLE and its present and future subsidiaries’ business and operations and is considered a related party based on its 2025 Convertible Notes holdings.
In October 2025, pursuant to the Advisory Agreement,
10. Deferred Revenues
In June 2023, the Company entered into a Supply Agreement with a customer for the delivery of Mo-100 and molybdenum-98 beginning in 2024. In conjunction with the Supply Agreement, the Company received $
The Company assumed a token liability in connection with the acquisition of Renergen in January 2026. Tokens with the value of $
11. Commitments and Contingencies
Commitments
Share Purchase Agreement relating to PET Labs
On October 31, 2023, the Company entered into a Share Purchase Agreement with Nucleonics Imaging Proprietary Limited, a company incorporated in the Republic of South Africa (the “Seller”), relating to the purchase and sale of ordinary shares in the issued share capital of PET Labs. PET Labs is a South African radiopharmaceutical operations company, dedicated to nuclear medicine and the science of radiopharmaceutical production.
Under the Purchase Agreement, the Company agreed to purchase from the Seller
23
(which option is exercisable from the agreement date until January 31, 2027, provided that the Initial Sale Shares have been paid for in full), the Company has agreed to pay $
PET Labs Global
In August 2024, PET Labs Global entered into a three-year service agreement with Cayman Enterprise City and is licensed to operate from within the Cayman Islands’ Special Economic Zone (“SEZ”). The service fee includes among other things the right to use certain office space and associated facilities within the SEZ. The Company has applied the guidance in ASC 842 and determined that this agreement is not a leasing arrangement. Management has determined that based on the nature of the combined services the expense should be recognized as incurred.
Renergen Firm Intention Letter and Loan Agreement
On March 31, 2025, the Company entered into an Exclusivity Agreement with Renergen, an entity in South Africa listed on the Johannesburg Stock Exchange (“JSE”), the Australian Stock Exchange and the A2X. On May 18, 2025, the Exclusivity Agreement was amended. Per the terms of the amended Exclusivity Agreement, the Company 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, the Company paid an exclusivity fee of $
As contemplated in the Exclusivity Agreement signed on March 31, 2025 and amended on May 18, 2025, the Company entered into a Firm Intention Letter with Renergen on May 19, 2025. The Firm Intention Letter sets the acquisition terms for the Company to purchase
In addition, the Company entered into a loan agreement with Renergen ("Renergen Loan") in which a total of $
Certain Commitments to the South Africa Competition Commission
In connection with the Company's acquisition of Renergen, the Company made certain commitments to the South Africa Competition Commission designed to address public interest concerns and promote historically disadvantaged persons (“HDP”) and worker ownership. These commitments to the South Africa Competition Commission include: (1) a moratorium on retrenchments of workers at Renergen’s operations for a period of two years from the merger closing date; and (2) a commitment to implement, within 12 months of the merger closing date, a trust for the benefit of qualifying workers employed by Renergen and certain HDP communities and people located within the production rights area of the Virginia Gas Project (the “HDP and Worker Trust”). Upon the effective implementation date of the HDP and Worker Trust, the HDP and Worker Trust is expected to hold an aggregate
Contingencies
From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of its business activities. The Company accrues liabilities for such matters when future expenditures are probable and such expenditures can be reasonably estimated.
On December 4, 2024, a purported stockholder of the Company filed a putative securities class action on behalf of purchasers of the Company’s securities between October 30, 2024 through November 26, 2024 against ASP Isotopes Inc. and certain of its executive officers in the United States District Court for the Southern District of New York (Corredor v. ASP Isotopes Inc., et al., Case No. 1:24-cv-09253 (S.D.N.Y)) (the “Securities Class Action”). The Securities Class Action alleges that the Company, its chief executive officer and chief financial officer (“Defendants”) made materially misleading or false statements or omissions regarding the Company’s business and asserts purported claims under §§ 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and SEC Rule 10b-5 promulgated thereunder. The complaint seeks unspecified compensatory damages, attorney’s fees and costs. On May 2, 2025, the Court appointed Mark Leone (“Leone”) as lead plaintiff and directed the Clerk of court to amend the caption to substitute Leone for Alexander Corredor as plaintiff. On May 2, 2025, the Court also appointed lead counsel and set deadlines for filing an amended consolidated class action complaint and briefing schedules for a motion to dismiss, if any, and class certification. On May 27, 2025, Leone and two additional named plaintiffs (“Plaintiffs”) filed the amended class action complaint (“Amended Complaint”), that asserts the same causes of action and seeks the same relief as the initial complaint and is based upon substantially similar factual allegations as the initial complaint. On June 27, 2025, Defendants filed a motion to dismiss the Amended Complaint. Also on June 27, 2025, Plaintiffs filed a motion for class certification. On December 4, 2025, the Court denied in part Defendants’ motion to dismiss and granted Plaintiffs’ motion for class certification. On April 3, 2026, following a mediation in which the parties reached an agreement-in-principle to resolve all claims in the Securities Class Action, subject to the Court’s approval, the parties filed a Joint Stipulation agreeing to stay the Securities Class Action (the “Stipulation”). The Stipulation requires the parties to file a stipulation of settlement and for the Plaintiffs to file a motion for preliminary approval of the stipulation of settlement within 60 days of the Court’s approval of the Stipulation. On April 6, 2026, the Court approved the Stipulation. The Company cannot be certain of the outcome of the Securities Class Action and, if decided adversely to us, our business and financial condition may be adversely affected.
On January 30, 2026, a purported stockholder of the Company filed a derivative action against certain members of the Company’s board of directors in the United States District Court for the Northern District of Texas asserting claims for, among others, breach of fiduciary duty, violation of § 14(a) of the Exchange Act and a claim for contribution pursuant to § 21D thereof (Jenis v. Mann, et al., Case No. 3:26-cv-251 (N.D. Tex.)) (the “Jenis Action”). The Company is named as a Nominal Defendant. On March 2, 2026, a different purported stockholder of the Company filed a derivative action against certain members of the Company’s board of directors in the United States District Court for the Southern District of New York asserting claims for, among others, breach of fiduciary duty, violations
24
of §§ 14(a) and 20(a) of the Exchange Act, and a claim for contribution pursuant to § 21D thereof (Stewart v. Mann, et al., Case No. 1:26-cv-1712 (S.D.N.Y.)) (the “Stewart Action”) (together with the Jenis Action, the “Derivative Actions”)). The Company is named as a Nominal Defendant. The Derivative Actions arise out of similar allegations as those made in the Securities Class Action. The plaintiffs in the Derivative Actions seek unspecified damages, disgorgement of compensation, corporate governance reforms, fees, interests, and costs. The defendants have not yet responded to the complaints in the Derivative Actions. The Company cannot be certain of the outcome of the Derivative Actions and, if decided adversely to us, our business and financial condition may be adversely affected.
In November 2024, Molopo Energy Limited ("Molopo") initiated legal proceedings against Tetra4 in the High Court of South Africa, Gauteng Local Division, Johannesburg, by issuing a summons alleging breach of a written loan agreement concluded between Molopo, as lender, and Tetra4, as borrower, in April 2014 (the "Molopo Loan Action"). The Molopo Loan Action alleges that Renergen, Tetra4's parent company, breached a condition of the loan agreement when it sold a
In addition to the matters described above, from time to time, the Company may become subject to arbitration, litigation or claims arising in the ordinary course of business. The results of any current or future claims or proceedings cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and litigation costs, diversion of management resources, reputational harm and other factors.
12. Leases
Operating leases
The Company is party to several facility leases in South Africa and the U.S. for office, manufacturing and laboratory space. Dr. Gerdus Kemp, an officer of PET Labs and an employee of ASP UK, is the sole owner of a leased office and production facility in Pretoria, South Africa. In 2026, the Company has expanded its facility leases in South Africa. In conjunction with the acquisition of Renergen in January 2026, the Company is recognizing additional operating leases for its office space in South Africa. A lease for production space in Pretoria, South Africa is being accounted for as a short-term lease effective with the acquisition of
Quantitative information regarding the Company’s operating lease liabilities is as follows (in thousands):
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Operating Lease Cost |
|
|
|
|
|
|
||
Operating lease cost |
|
$ |
|
|
$ |
|
||
Other Information |
|
|
|
|
|
|
||
Operating cash flows paid for amounts included in the |
|
$ |
|
|
$ |
|
||
Operating lease liabilities arising from obtaining right-of- |
|
$ |
|
|
$ |
|
||
Weighted average remaining lease term (years) |
|
|
|
|
|
|
||
Weighted average discount rate |
|
|
% |
|
|
% |
||
Future lease payments under noncancelable operating lease liabilities as of March 31, 2026 are as follows (in thousands):
|
|
Operating |
|
|
Future Lease Payments |
|
|
|
|
2026 (remaining nine months) |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
Thereafter |
|
|
|
|
Total lease payments |
|
$ |
|
|
Less: imputed interest |
|
|
( |
) |
Total operating lease liabilities |
|
$ |
|
|
Less current portion |
|
$ |
( |
) |
Operating lease liability - noncurrent |
|
$ |
|
|
The Company records the expense from short-term leases as incurred. Lease expense from short-term leases was $
Financing leases
The Company is party to several ongoing finance leases in South Africa for vehicles and equipment. Some of these finance leases include arrangements with variable interest rates indexed to the prime interest rate in South Africa. There was
25
Quantitative information regarding the Company’s finance lease liabilities is as follows (in thousands):
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Finance Lease Cost |
|
|
|
|
|
|
||
Interest on lease liabilities |
|
$ |
|
|
$ |
|
||
Other Information |
|
|
|
|
|
|
||
Operating cash flows paid for amounts included in the |
|
$ |
|
|
$ |
|
||
Amortization of right-of-use assets |
|
$ |
|
|
$ |
|
||
Weighted average remaining lease term (years) |
|
|
|
|
|
|
||
Weighted average discount rate |
|
|
% |
|
|
% |
||
Future lease payments under noncancelable finance lease liabilities are as follows as of March 31, 2026 (in thousands):
|
|
Finance |
|
|
Future Lease Payments |
|
|
|
|
2026 (remaining nine months) |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
Thereafter |
|
|
|
|
Total lease payments |
|
$ |
|
|
Less: imputed interest |
|
|
( |
) |
Total lease liabilities |
|
$ |
|
|
Less current portion |
|
$ |
( |
) |
Finance lease liability - noncurrent |
|
$ |
|
|
Lease receivable
The Company leases certain equipment to customers under sales-type leases and records the leases within lease receivables on the Company’s condensed consolidated balance sheets and records interest income in the Company’s condensed consolidated statements of operations and comprehensive loss. The Company does not have significant variable lease payments or residual value guarantees associated with these leases. Credit risk is monitored regularly, and no allowance for credit losses was recorded as of the reporting date.
The Company’s net investment in sales-type leases were comprised of the following (in thousands):
|
|
March 31, 2026 |
|
|
Total undiscounted cash flows |
|
$ |
|
|
Present value discount |
|
|
( |
) |
Net investment in sales-type leases |
|
$ |
|
|
Less current portion |
|
$ |
( |
) |
Net investment in sales-type leases - noncurrent |
|
$ |
|
|
Future minimum lease payments to be collected under sales-type leases, excluding lease payments that are not fixed and determinable, as of March 31, 2026 are as follows (in thousands):
|
|
Sales-type |
|
|
Future Lease Payments To Be Collected |
|
|
|
|
2026 (remaining nine months) |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
Thereafter |
|
|
|
|
Total undiscounted cash flows |
|
$ |
|
|
Interest income recognized from sales-type leases during the three months ended March 31, 2026 was $
13. License and Collaboration Agreements
TerraPower, LLC
TerraPower Agreement
On April 4, 2024, the Company entered into an agreement with TerraPower LLC (“TerraPower”) to develop a conceptual design, refined cost/schedule/financing, risk register, and term sheet for a HALEU facility (the “TerraPower R&D Agreement”). The TerraPower R&D Agreement may be terminated for (a) breach or default, (b) the Company’s convenience or (c) TerraPower’s convenience. TerraPower is obligated to make all payments for tasks completed by the Company per the statement of work in the TerraPower R&D Agreement totaling $
On October 18, 2024, the Company and TerraPower signed a term sheet (the “TerraPower Term Sheet”) that provides for the execution of two definitive agreements: (1) an agreement pursuant to which TerraPower will provide funding for the Company’s construction of a uranium enrichment facility capable of producing HALEU using the Company’s proprietary aerodynamic separation process technology to be located in the Republic of South Africa and (2) an agreement pursuant to which the Company will deliver to TerraPower the full capacity of the enrichment facility.
26
The Company accounts for the TerraPower R&D Agreement in accordance with ASC 808. The Company has concluded that other authoritative accounting literature does not apply directly to these payments from TerraPower, either directly or by analogy, including ASC 606 because TerraPower is not a customer. The Company has concluded that TerraPower is not a customer because TerraPower has not contracted with the Company to obtain goods or services that are an output of the Company’s ordinary activities in exchange for consideration. The Company also has concluded that there is no other authoritative accounting literature that is appropriate to apply by analogy, and, accordingly, its accounting policy is to evaluate the income statement classification for presentation of amounts associated with each separate activity. As a result, the Company concludes that all portions of the net receivable from TerraPower are directly related to the conceptual design of the HALEU facility. Furthermore, the Company and TerraPower will jointly develop criteria for optimization of the HALEU facility’s operations. TerraPower shares the risks and rewards of designing the HALEU facility since its successful completion will enable TerraPower to purchase output from the HALEU facility in the future.
For the three months ended March 31, 2026, $
TerraPower Loan Agreement and HALEU Supply Agreements
In May 2025, the Company entered into the TerraPower Loan Agreement, which provides conditional commitments from TerraPower to the Company through one of its wholly-owned U.S.-based subsidiaries (“Borrower”) for a multiple advance term loan totaling $
In addition to the Terra Power Loan Agreement, the Company and TerraPower have entered into two supply agreements for the HALEU expected to be produced at the Company’s 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.
14. Acquisitions
The Company accounts for business combinations in accordance with Business Combinations (Topic 805), which requires an acquirer to retrospectively adjust provisional amounts recognized in a business combination during the measurement period (which represents a period not to exceed one year from the date of the acquisition), in the reporting period in which the adjustment is determined, as well as present separately on the face of the income statement or as a disclosure in the notes to the consolidated financial statements, the portion of the amount recorded in current period earnings that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date.
PET Labs
In October 2023, the Company completed the acquisition of PET Labs. The acquisition is intended to accelerate the distribution of the Company’s pipeline.
Pursuant to the terms of the agreement, the Company acquired
In addition to the purchase consideration, the Company has an option to purchase the remaining
Dr. Gerdus Kemp is an officer of PET Labs and, effective November 1, 2023, an employee of ASP Guernsey. In addition, Dr. Kemp controls the remaining
East Coast Nuclear Pharmacy
In October 2025, the Company completed the acquisition of ECNP. The acquisition is intended to supplement the distribution of the Company’s pipeline. The acquisition of ECNP has been accounted for as a business combination in accordance with ASC 805.
Pursuant to the terms of the agreement, the Company acquired
27
The following table summarizes the allocation of the purchase consideration to the fair value of the assets acquired and liabilities assumed (in thousands):
Fair value of business combination |
|
|
|
|
Cash consideration |
|
$ |
|
|
Notes payable to Sellers |
|
|
|
|
Identifiable assets acquired and liabilities assumed |
|
|
|
|
Cash and cash equivalents |
|
|
|
|
Accounts receivable |
|
|
|
|
Inventory |
|
|
|
|
Prepaid expenses and other current assets |
|
|
|
|
Identifiable intangible assets |
|
|
|
|
Accounts payable |
|
|
( |
) |
Other current liabilities |
|
|
( |
) |
Total identifiable assets acquired and liabilities assumed |
|
|
|
|
Goodwill |
|
|
|
|
Total purchase consideration |
|
$ |
|
|
Goodwill arising from the acquisition as of October 1, 2025 of $
One 30 Seven Inc. ("One 30 Seven") Acquisition
In October 2025, QLE acquired substantially all of the assets, including an international patent application and its related rights, from One 30 Seven, a Canadian company engaged in the business of researching and developing decontamination solutions for nuclear waste, particularly radioactive waste from radioactive materials from nuclear power plants, radiopharmaceuticals, and military sources. QLE made an initial cash payment of $
In connection with the acquisition of assets from One 30 Seven, QLE entered into a consulting agreement with B-Con Engineering Inc., led by inventor Brian Creber, to develop and validate the functional operation of a Creber Mini Unit at an estimated cost of $
The Company determined that the cost to acquire the One 30 Seven assets was $
Numed Diagnostics, LLC
In January 2026, the Company completed the acquisition of Numed Diagnostics, LLC ("Numed"). The acquisition is intended to supplement the distribution of the Company’s pipeline. The acquisition of Numed has been accounted for as a business combination in accordance with ASC 805.
Pursuant to the terms of the agreement, the Company acquired
28
The following table summarizes the preliminary allocation of the purchase consideration to the fair value of the assets acquired and liabilities assumed (in thousands):
Fair value of business combination |
|
|
|
|
Cash consideration |
|
$ |
|
|
Contingent Consideration |
|
|
|
|
Identifiable assets acquired and liabilities assumed |
|
|
|
|
Cash and cash equivalents |
|
|
|
|
Accounts receivable |
|
|
|
|
Inventory |
|
|
|
|
Property and equipment, net |
|
|
|
|
Other noncurrent assets |
|
|
|
|
Identifiable intangible assets |
|
|
|
|
Accounts payable |
|
|
( |
) |
Deferred tax liabilities |
|
|
( |
) |
Other current liabilities |
|
|
( |
) |
Total identifiable assets acquired and liabilities assumed |
|
|
|
|
Goodwill |
|
|
|
|
Noncontrolling interest |
|
|
( |
) |
Total purchase consideration |
|
$ |
|
|
Goodwill arising from the acquisition as of January 22, 2026 of $
Renergen
On
In connection with the transaction, Renergen ordinary shares were delisted from the JSE and the Australian Securities Exchange (the "A2X"). The Company's common stock continues to be listed on The Nasdaq Capital Market and on the JSE.
In addition, the Company expects to appoint Stefano Marani, the Chief Executive Officer of Renergen, as the President, Electronics and Space of the Company, and Nick Mitchell, the Chief Operating Officer of Renergen, as the Co-Chief Operating Officer of the Company once the terms of their employment agreements are finalized.
The following table summarizes the preliminary allocation of the purchase consideration to the fair value of the assets acquired and liabilities assumed (in thousands):
Fair value of business combination |
|
|
|
|
Equity consideration |
|
$ |
|
|
Cash consideration |
|
|
|
|
Note receivable |
|
|
|
|
Identifiable assets acquired and liabilities assumed |
|
|
|
|
Cash and cash equivalents |
|
|
|
|
Restricted cash - short term |
|
|
|
|
Accounts receivable |
|
|
|
|
Lessor Receivable |
|
|
|
|
Restricted cash - long term |
|
|
|
|
Inventory |
|
|
|
|
Property and equipment, net |
|
|
|
|
Natural gas properties |
|
|
|
|
Operating lease right-of-use asset, net |
|
|
|
|
Accounts payable |
|
|
( |
) |
Finance lease liabilities – current |
|
|
( |
) |
Operating lease liabilities – current |
|
|
( |
) |
Borrowings |
|
|
( |
) |
Deferred revenue |
|
|
( |
) |
Finance lease liabilities – noncurrent |
|
|
( |
) |
Operating lease liabilities – noncurrent |
|
|
( |
) |
Other liabilities - long term |
|
|
( |
) |
Deferred tax liabilities |
|
|
( |
) |
Total identifiable assets acquired and liabilities assumed |
|
|
|
|
Noncontrolling interest |
|
|
( |
) |
Total purchase consideration |
|
$ |
|
|
The initial allocation of the purchase price was based upon a preliminary valuation, and accordingly, our estimates and assumptions are subject to change as we obtain additional information during the measurement period.
Goodwill
Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in a business combination. Goodwill is tested for impairment at least annually, or more frequently if events or changes in circumstances indicate that
29
it is more likely than not that the carrying value of a reporting segment exceeds its fair value.
The carrying amount of goodwill by reporting segment as of March 31, 2026 and December 31, 2025 is as follows (in thousands):
|
|
March 31, 2026 |
|
|
December 31, |
|
||
Specialist isotopes and related services |
|
$ |
|
|
$ |
|
||
Total goodwill |
|
$ |
|
|
$ |
|
||
The changes to the carrying value of goodwill, which is included in the isotopes and related services segment, is as follows:
Description |
|
Amount |
|
|
Balance as of December 31, 2025 |
|
$ |
|
|
Acquisition of Numed |
|
|
|
|
Translation adjustment |
|
|
( |
) |
Balance as of March 31, 2026 |
|
$ |
|
|
Intangible Assets
Amortization expense was $
The changes to the carrying value of intangible assets, which is included in the construction services and specialist isotopes and related services segments, is as follows (in thousands):
Description |
|
Amount |
|
|
Balance as of December 31, 2024 |
|
$ |
|
|
Trademarks from ECNP acquisition |
|
|
|
|
Amortization |
|
|
( |
) |
Balance as of December 31, 2025 |
|
$ |
|
|
Trademarks from Numed acquisition |
|
|
|
|
Amortization |
|
|
( |
) |
Balance as of March 31, 2026 |
|
$ |
|
|
The following table outlines the estimated future amortization expense related to intangible assets held as of December 31, 2025 (in thousands):
|
|
Amortization Expense |
|
|
Year Ended December 31, |
|
|
|
|
2026 |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
Thereafter |
|
|
|
|
Total |
|
$ |
|
|
15. Equity Method and Other Investments
Investment in IsoBio, Inc.
On July 28, 2025, the Company purchased
As the owner of the Series Seed-1 Preferred Stock, the Company has the right to designate one board member. An officer and director of the Company was designated to fill that board seat. In addition, another board member of the Company is a board member, executive officer and shareholder of IsoBio.
The investment in IsoBio does not have a readily determinable fair value and is therefore measured at cost, adjusted for observable price changes and impairments, in accordance with ASC 321. As of March 31, 2026 and December 31, 2025, the carrying value of the investment was $
The Company monitors the investment for indicators of impairment and observable price changes on a quarterly basis. If indicators of impairment exist, the Company performs a qualitative assessment to determine whether the investment is impaired and adjusts the carrying value accordingly. Therefore, the Company has included this investment in the fair value hierarchy disclosure (Note 4). During the three months ended March 31, 2026, the Company did
Skyline Investment
In August 2025, QLE completed an acquisition of Skyline. QLE entered into a Stock Purchase Agreement to purchase all
30
purchase price of $
Effective as of March 29, 2026, QLE, entered into the Exchange Agreement with a third party investor in which the parties agreed to exchange
Investment in Opeongo, Inc.
On January 26, 2026, the Company purchased
As the owner of the Series Seed-1 Preferred Stock, the Company has the right to designate one board member. An officer and director of the Company was designated to fill that board seat. In addition, another board member of the Company is a board member and shareholder of Opeongo.
The investment in Opeongo does
The Company monitors the investment for indicators of impairment and observable price changes on a quarterly basis. If indicators of impairment exist, the Company performs a qualitative assessment to determine whether the investment is impaired and adjusts the carrying value accordingly. During the three months ended March 31, 2026, the Company did
16. Stockholders’ Equity
Preferred stock
The Company has
Common stock
The Company has
In June 2025, the Company issued
In July 2025, the Company issued
In October 2025, the Company issued
Treasury shares are recorded at cost and include forfeited shares from the Company's stock compensation plans. There were
Common Stock Warrants
In May 2025, a warrant to purchase
17. Stock Compensation Plan
Equity Incentive Plans
In October 2021, the Company adopted the 2021 Stock Incentive Plan (“2021 Plan”) that provided for the issuance of common stock to employees, nonemployee directors, and consultants. Recipients of incentive stock options are eligible to purchase shares of common stock at an exercise price equal to no less than the estimated fair market value of such stock on the date of grant. The 2021 Plan provided for the grant of incentive stock options, non-statutory stock options, restricted stock, restricted stock units, stock awards and stock appreciation rights. The maximum contractual term of options granted under the 2021 Plan is
In November 2022, the Company adopted the 2022 Equity Incentive Plan (“2022 Plan”) that provides for the issuance of common stock to employees, nonemployee directors, and consultants. Recipients of incentive stock options are eligible to purchase shares of common stock at an exercise price equal to no less than the estimated fair market value of such stock on the date of grant. The 2022 Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock, restricted stock units, stock awards and stock appreciation rights. The maximum contractual term of options granted under the 2022 Plan is
31
In June 2024, the Company adopted the 2024 Inducement Equity Incentive Plan (“2024 Plan”). The 2024 Plan will be used exclusively for the grant of equity awards to individuals who were not previously employees or directors of the Company, or following a bona fide period of non-employment, as an inducement material to such individuals entering into employment with the Company, pursuant to Nasdaq Listing Rule 5635(c)(4). Recipients of stock options are eligible to purchase shares of common stock at an exercise price equal to no less than the estimated fair market value of such stock on the date of grant. The 2024 Plan provides for the grant of non-statutory stock options, restricted stock, restricted stock units, stock awards and stock appreciation rights. The maximum contractual term of options granted under the 2024 Plan is
2025 Inducement Equity Incentive Plan
On July 16, 2025, upon recommendation of the Compensation Committee of the Company’s Board, the Board approved and adopted the Company’s 2025 Inducement Equity Incentive Plan (the “Inducement Equity Plan”), and subject to the adjustment provisions of the Inducement Equity Plan, reserved
The Inducement Equity Plan was approved and adopted without stockholder approval pursuant to Nasdaq Listing Rule 5635(c)(4). The Inducement Equity Plan provides for grants of stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards (consisting of performance shares or performance units) and other cash-based or stock-based awards (each, an “Inducement Award”). In addition, the Board also approved and adopted forms of Notice of Grant of Restricted Stock and Restricted Stock Agreement, and Notice of Grant of Stock Option and Stock Option Agreement for use with the Inducement Equity Plan. The terms and conditions of the Inducement Equity Plan are intended to comply with the Nasdaq inducement award rules.
In accordance with Nasdaq Listing Rule 5635(c)(4), the only persons eligible to receive grants of Inducement Awards are individuals who were not previously employees or directors of the Company (or following a bona fide period of non-employment), as an inducement material to the individuals’ entry into employment with the Company. As of March 31, 2026,
QLE 2024 Equity Incentive Plan
In March 2024, the Company adopted the QLE 2024 Equity Incentive Plan (“QLE 2024 Plan”). The QLE 2024 Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock, restricted stock units, stock awards, performance awards and stock appreciation rights to employees, nonemployee directors, and consultants. The maximum contractual term of options granted under the QLE 2024 Plan is
In September 2025, QLE granted restricted stock units (“RSUs”) totaling
Since the vesting of the RSUs is based on a liquidity event,
Stock Options
The following table sets forth the activity for the Company’s stock options during the periods presented:
|
|
Number of |
|
|
Weighted- |
|
|
Weighted |
|
|
Aggregate |
|
||||
Outstanding as of December 31, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Forfeited |
|
|
( |
) |
|
$ |
|
|
|
|
|
|
|
|||
Outstanding as of March 31, 2026 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Exercisable as of March 31, 2026 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Vested or expected to vest as of March 31, 2026 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
The Company recorded stock-based compensation expense from options of $
Stock Awards
The Company recorded stock-based compensation expense from stock awards totaling $
32
The following table summarizes vesting of restricted common stock:
|
|
Number of |
|
|
Weighted |
|
||
Unvested as of December 31, 2025 |
|
|
|
|
$ |
|
||
Vested |
|
|
( |
) |
|
$ |
|
|
Forfeited |
|
|
( |
) |
|
$ |
|
|
Unvested as of March 31, 2026 |
|
|
|
|
$ |
|
||
Stock-based Compensation Expense
Stock-based compensation expense for all stock awards recognized in the accompanying consolidated statements of operations and comprehensive loss is as follows:
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Selling, general and administrative |
|
$ |
|
|
$ |
|
||
Research and development |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
18. Net Loss Per Share
The Company has reported losses since inception and has computed basic net loss per share attributable to common stockholders by dividing net loss attributable to common stockholders by the weighted-average number of shares of Common Stock outstanding for the period, without consideration for potentially dilutive securities. The Company computes diluted net loss per share of Common Stock after giving consideration to all potentially dilutive shares of common stock, including options to purchase common stock and warrants to purchase common stock, outstanding during the period determined using the treasury-stock and if-converted methods, except where the effect of including such securities would be antidilutive. Because the Company has reported net losses since inception, these potential shares of Common Stock have been anti-dilutive and basic and diluted loss per share were the same for all periods presented.
The following table sets forth the computation of basic and diluted net loss per share for the three months ended March 31, 2026 and 2025:
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Numerator: |
|
|
|
|
|
|
||
Loss from continuing operations |
|
$ |
( |
) |
|
$ |
( |
) |
Income from discontinued operations |
|
|
|
|
|
— |
|
|
Less: Net (loss) income attributable to noncontrolling interests |
|
|
( |
) |
|
|
( |
) |
Net loss attributable to ASP Isotopes Inc. shareholders |
|
|
( |
) |
|
|
( |
) |
Denominator: |
|
|
|
|
|
|
||
Weighted average common stock outstanding, basic and diluted |
|
|
|
|
|
|
||
Net (loss) income per share, basic and diluted: |
|
|
|
|
|
|
||
Continuing operations |
|
|
( |
) |
|
|
( |
) |
Discontinued operations |
|
|
|
|
|
- |
|
|
Attributable to ASP Isotopes Inc. shareholders |
|
|
( |
) |
|
|
( |
) |
The following table sets forth the potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because to include them would be anti-dilutive:
|
|
As of March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Options to purchase common stock |
|
|
|
|
|
|
||
Restricted stock |
|
|
|
|
|
|
||
Warrants to purchase common stock |
|
|
|
|
|
|
||
Total shares of common stock equivalents |
|
|
|
|
|
|
||
19. Income Taxes
The Company’s effective tax rate for the three months ended March 31, 2026 and 2025 was -
The Company recognizes a tax benefit from an uncertain tax position when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more likely than not recognition threshold to be recognized. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual for interest and penalties on the Company’s balance sheets and has not recognized interest and/or penalties in the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2026. Uncertain tax positions are evaluated based upon the facts and circumstances that exist at each reporting period. Subsequent changes in judgment based upon new information may lead to changes in recognition, derecognition, and measurement. Adjustments may result, for example, upon resolution of an issue with the taxing authorities or expiration of a statute of limitations barring an assessment for an issue. As of March 31, 2026 and December 31, 2025, there were no uncertain tax positions.
33
As of March 31, 2026, the Company did not recognize any interest and penalties associated with unrecognized tax benefits. Due to net operating losses incurred, tax years from inception remain open to examination by the Federal and State taxing jurisdictions to which the Company is subject. The Company is not currently under Internal Revenue Services (IRS), state or local tax examination.
Ownership changes, as defined in the Internal Revenue Code (“IRC”), may limit the amount of net operating loss carryforwards that can be utilized annually to offset future taxable income pursuant to IRC Section 382 or similar provisions. Subsequent ownership changes could further affect the limitation in future years. The Company has not completed a study to assess whether a change of control has occurred or whether there have been multiple changes of control since the Company’s formation due to the significant complexity and cost associated with such study and because there could be additional changes in control in the future. As a result, the Company is not able to estimate the effect of the change in control, if any, on the Company’s ability to utilize net operating loss and research and development credit carryforwards in the future.
20. Related Party Transactions
PET Labs has an operating lease for office and production space in Pretoria, South Africa with monthly payment of about $
21. Discontinued Operations
Effective as of March 29, 2026, the Company entered into the Exchange Agreement and completed the deconsolidation of Skyline. The Company retained approximately
The following table presents the major categories of income from discontinued operations for the three months ended March 31, 2026 (in thousands):
|
|
Three Months Ended |
|
|
|
|
March 31, 2026 |
|
|
Gross profit |
|
$ |
|
|
Selling, general and administrative expenses |
|
|
( |
) |
Change in fair value of investments |
|
|
|
|
Other expenses, net |
|
|
( |
) |
Income from discontinued operations before income taxes |
|
|
|
|
Income tax expense |
|
|
( |
) |
Net loss before allocation to noncontrolling interests |
|
|
|
|
Less: Net income attributable to noncontrolling interests |
|
|
|
|
Income from discontinued operations |
|
$ |
|
|
As the controlling interest of Skyline was not acquired until August 2025,
The following table presents the major classes of assets and liabilities of discontinued operations as of December 31, 2025 (in thousands):
|
|
December 31, |
|
|
Cash and cash equivalents |
|
$ |
|
|
Accounts receivable |
|
|
|
|
Prepaid and other current assets |
|
|
|
|
Total current assets of discontinued operations |
|
$ |
|
|
Property, plant and equipment, net |
|
|
|
|
Operating lease right-of-use lease assets |
|
|
|
|
Intangibles |
|
|
|
|
Goodwill |
|
|
|
|
Equity investments |
|
|
|
|
Other investments |
|
|
|
|
Other noncurrent assets |
|
|
|
|
Total non-current assets of discontinued operations |
|
|
|
|
Total assets of discontinued operations |
|
$ |
|
|
Accounts payable |
|
|
|
|
Accrued expenses |
|
|
|
|
Notes payable -current |
|
|
|
|
Operating lease liabilities - current |
|
|
|
|
Due to related parties |
|
|
|
|
Other current liabilities |
|
|
|
|
Total current liabilities of discontinued operations |
|
|
|
|
Deferred Tax Liabilities |
|
|
|
|
Total non-current liabilities of discontinued operations |
|
|
|
|
Total liabilities of discontinued operations |
|
$ |
|
|
34
|
|
Three Months Ended |
|
|
|
|
March 31, 2026 |
|
|
Net cash used in operating activities |
|
$ |
( |
) |
Net cash provided by financing activities |
|
$ |
|
|
The total net impact to stockholders' equity as a result of the separation was a reduction of $
22. Subsequent Events
The Company has evaluated subsequent events through May 20, 2026, the date on which the accompanying condensed consolidated financial statements were issued and concluded that no subsequent events have occurred that require disclosure except as described below.
35
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
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 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 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.
Overview
We are an advanced materials company dedicated to the development of a differentiated isotope enrichment platform to strengthen global supply chain access to critical materials used in nuclear medicine, next-generation semiconductors, and nuclear energy. Our proprietary enrichment technologies, the Aerodynamic Separation Process (“ASP technology”) and QE technology, are designed to enable the production of isotopes for a range 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 its 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 March 31, 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 third quarter of 2026. We are targeting initial commercial shipments of enriched Si-28 around mid-year 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 third quarter of 2026.
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-6 and Lithium-7.
QLE, our 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 QLE may produce has the potential to 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 in South 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 Pre-Implementation Services Contract Agreement (“Services Contract”) 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 which 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 Necsa site in Pelindaba. In the period since our inception to date, we have not applied our enrichment technologies to the enrichment of U-235, nor received permission or regulatory approval to conduct 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 could be successful is based upon research conducted by certain of our scientists prior to joining the company, as well as the demonstrated effectiveness of QE technology on Yb-176.
We acquired Renergen in January 2026 and issued 14,270,000 Consideration Shares in connection with this acquisition. 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.
QLE entered into the Securities Exchange Agreement with a third party, effective as of March 29, 2026, which resulted in the deconsolidation of Skyline (Note 21). QLE retained approximately 8.6% percent of the outstanding Class A common and preferred shares of Skyline immediately following deconsolidation.
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.
36
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"). 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.
Numed Diagnostics, LLC ("Numed"). In January 2026, the Company acquired 60% of the issued and outstanding membership interests of Numed for $0.8 million. Numed is an independent radiopharmacy dedicated to nuclear medicine and the science of radiopharmaceutical production. In addition to the purchase consideration, the Company has an option to purchase the remaining 40% of the issued and outstanding membership interests within two years following the closing for an agreed consideration totaling $0.5 million.
Renergen Acquisition. On January 6, 2026, ASP Isotopes acquired all of the issued and outstanding Renergen ordinary shares from Renergen shareholders in exchange for shares of our common stock 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 shares of our common stock. 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 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
37
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 $10.0 million. 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.
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.
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.
Financings
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.
On November 19, 2025, QLE received gross proceeds of $72.2 million through the issuance of convertible promissory notes with a stated interest rate of 8% (the “2025 Notes”). The maturity date of the 2025 Notes is November 19, 2030. The 2025 Notes automatically
38
convert into common shares upon QLE’s closing of an IPO or other qualifying public transaction at 80% of the share price taking into consideration a valuation cap. In connection with the issuance of the 2025 Notes, QLE’s outstanding convertible promissory notes originally issued in March 2024 and June 2024 automatically converted into 2025 Notes with a value of $147.7 million. QLE received $10.0 million in gross proceeds from American Ventures LLC, Series IX Quantum Leap and $30.0 million in gross proceeds from ASP Isotopes, its parent.
On January 6, 2026, the Company issued 14,270,000 Consideration Shares in connection with the acquisition of Renergen.
On March 29, 2026, QLE, entered into an Exchange Agreement with a third party investor in which the parties agreed to exchange 1,995,000 Class B common shares owned by QLE for 1,995,000 Class A shares owned by the third party investor, on a one-for-one basis. This resulted in QLE's ownership in Skyline decreasing to under 10%.
Other Contractual Obligations
We enter into contracts in the normal course of business for testing, manufacturing and other services and products for operating purposes. These contracts do not contain any minimum purchase commitments and are cancelable by us upon prior notice. For additional details regarding our contractual obligations, see Note 11 "Commitments and Contingencies" and Note 12 “Leases” to our condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q.
Components of Results of Operations
Revenue
Effective with the acquisition of 51% of PET Labs in the fourth quarter of 2023, we started recognizing 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.
Cost of Revenue
Cost of revenue associated with the sale of nuclear medical doses for PET scanning and the sale of LNG consist of labor, processing costs, delivery and materials.
Operating Expenses
Our operating expenses consist of (i) research and development expenses and (ii) selling, general and administrative expenses.
Research and Development
Our research and development expenses consist primarily of direct and indirect costs incurred in connection with the development activities for our future isotopes.
Direct costs include:
Indirect costs include:
Research and development expenses are recognized as incurred and payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods or services are received.
We expect that our research and development expenses will increase substantially for the foreseeable future as we continue the development of our future isotopes. We cannot determine with certainty the timing of initiation, the duration or the completion costs of development activities. Actual development timelines, the probability of success and development costs can differ materially from expectations.
We will need to raise substantial additional capital in the future. In addition, we cannot forecast which future isotopes may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.
Our research and development expenses may vary significantly based on a variety of factors, such as:
39
A change in the outcome of any of these variables with respect to the development of any of our future isotopes could significantly change the costs and timing associated with the development of that future isotope.
Selling, General and Administrative
Selling, general and administrative expenses consist primarily of personnel-related costs, which include salaries, payroll taxes, employee benefits, and other employee-related costs, including stock-based compensation expense, for personnel in executive, sales, finance and other administrative functions. Other significant costs include legal fees relating to corporate matters, professional fees for accounting and consulting services and facility-related costs.
We expect that our ongoing selling, general and administrative expenses will increase substantially for the foreseeable future to support our increased research and development activities and increased costs of operating as a public company and in building our internal resources. These increased costs will include increased expenses related to audit, legal, regulatory and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance premiums and investor and public relations costs associated with operating as a public company.
Segment Information
Beginning in 2024, primarily as a result of increased business activities of our subsidiary, QLE, we had 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, the Company had three operating segments: (i) nuclear fuels, (ii) specialist isotopes and related services, and (iii) construction services. Beginning in the first quarter of 2026, primarily as a result of the acquisition of Renergen and the deconsolidation of Skyline, we have three operating segments: (i) nuclear fuels, (ii) specialist isotopes and related services, and (iii) Helium and LNG. Our prior “construction services” segment is shown below as “discontinued operations” due to the deconsolidation of Skyline.
The specialist isotopes and related services segment is focused on research and development of technologies and methods used to separate high-value, low-volume isotopes (such as C-14, Mo-100 and Si-28) for highly specialized target end markets other than advanced nuclear fuels, including pharmaceuticals and agrochemicals, nuclear medical imaging and semiconductors, as well as services related to these isotopes, and this segment includes operations of PET Labs, Numed, and ECNP.
The nuclear fuels segment is focused on research and development of technologies and methods used to produce HALEU and Lithium-6 for the advanced nuclear fuels target end market, and this segment includes operations of QLE.
The Helium and LNG segment is focused on the exploration, production and sale of LNG in South Africa, and this segment includes operations of Renergen.
The financial information is regularly reviewed by the chief operating decision maker (“CODM”) in deciding how to allocate resources. Our CODM is our chief executive officer. The CODM regularly reviews any asset information by operating segment and, accordingly, asset information is reported on a segment basis.
The following table shows total assets by segment and a reconciliation to the consolidated financial statements as of March 31, 2026 and December 31, 2025 (in thousands):
|
|
March 31, |
|
|
December 31, |
|
||
Segment assets: |
|
|
|
|
|
|
||
Specialist isotopes and related services |
|
$ |
431,494 |
|
|
$ |
321,190 |
|
Nuclear fuels |
|
|
90,676 |
|
|
|
94,252 |
|
Helium and LNG |
|
|
65,499 |
|
|
|
— |
|
Discontinued operations |
|
|
— |
|
|
|
82,578 |
|
Total assets |
|
$ |
587,669 |
|
|
$ |
498,020 |
|
Select information from the consolidated statements of operations and comprehensive loss as of the three months ended March 31, 2026 and 2025 is as follows:
|
|
Revenues |
|
|
Net Loss Before Allocation to Noncontrolling Interest |
|
||||||||||
|
|
Three Months Ended March 31, |
|
|
Three Months Ended March 31, |
|
||||||||||
Segment |
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Specialist isotopes and related services |
|
$ |
3,386 |
|
|
$ |
1,102 |
|
|
$ |
(10,590 |
) |
|
$ |
(6,367 |
) |
Nuclear fuels |
|
|
200 |
|
|
|
— |
|
|
|
(6,113 |
) |
|
|
(2,094 |
) |
Helium and LNG |
|
|
594 |
|
|
|
— |
|
|
|
(10,003 |
) |
|
|
— |
|
|
|
$ |
4,180 |
|
|
$ |
1,102 |
|
|
$ |
(26,706 |
) |
|
$ |
(8,461 |
) |
40
Results of Operations
Comparison of the Three Months Ended March 31, 2026 and 2025
The following table summarizes our results of operations for the three months ended March 31, 2026 and 2025:
|
|
Three Months Ended March 31, |
|
|
|
|
||||||
|
|
2026 |
|
|
2025 |
|
|
Change |
|
|||
Revenue |
|
$ |
4,180 |
|
|
$ |
1,102 |
|
|
$ |
3,078 |
|
Cost of revenue |
|
|
2,514 |
|
|
|
775 |
|
|
|
1,739 |
|
Gross profit |
|
|
1,666 |
|
|
|
327 |
|
|
|
1,339 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|||
Research and development |
|
|
5,263 |
|
|
|
1,530 |
|
|
|
3,733 |
|
Selling, general and administrative |
|
|
21,291 |
|
|
|
6,749 |
|
|
|
14,542 |
|
Total operating expenses |
|
|
26,554 |
|
|
|
8,279 |
|
|
|
18,275 |
|
Other (expense) income: |
|
|
|
|
|
|
|
|
|
|||
Foreign exchange transaction loss |
|
|
(3,725 |
) |
|
|
(61 |
) |
|
|
(3,664 |
) |
Change in fair value of share liability |
|
|
— |
|
|
|
12 |
|
|
|
(12 |
) |
Change in fair value of convertible notes payable |
|
|
(568 |
) |
|
|
(957 |
) |
|
|
389 |
|
Change in fair value of investments |
|
|
1,126 |
|
|
|
— |
|
|
|
1,126 |
|
Interest income |
|
|
3,047 |
|
|
|
513 |
|
|
|
2,534 |
|
Interest expense |
|
|
(1,729 |
) |
|
|
(87 |
) |
|
|
(1,642 |
) |
Other income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total other (expense) income |
|
|
(1,849 |
) |
|
|
(580 |
) |
|
|
(1,269 |
) |
Loss before income tax expense |
|
$ |
(26,737 |
) |
|
$ |
(8,532 |
) |
|
$ |
(18,205 |
) |
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 $3.4 million and $1.1 million for the three months ended March 31, 2026 and 2025, respectively. With the acquisition of Renergen in January 2026, we recognized revenue from the sale of LNG of $0.6 million for the three months ended March 31, 2026. We also recognized $0.2 million in collaboration revenue from TerraPower for the three months ended March 31, 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 million and $0.8 million for the three months ended March 31, 2026 and 2025, respectively. The increase in cost of revenue of $1.7 million was primarily due to the acquisitions of ECNP and Numed of $0.8 million and the acquisition of Renergen of $0.8 million.
Research and Development Expenses
The following table summarizes our research and development expenses for the three months ended March 31, 2026 and 2025:
|
|
Three Months Ended March 31, |
|
|
|
|
||||||
|
|
2026 |
|
|
2025 |
|
|
Change |
|
|||
Personnel-related costs |
|
$ |
2,576 |
|
|
$ |
519 |
|
|
$ |
2,057 |
|
Manufacturing engineering |
|
|
91 |
|
|
|
190 |
|
|
|
(99 |
) |
Consulting and professional |
|
|
1,136 |
|
|
|
— |
|
|
|
1,136 |
|
Facility and depreciation expenses |
|
|
1,351 |
|
|
|
670 |
|
|
|
681 |
|
Other expenses |
|
|
109 |
|
|
|
151 |
|
|
|
(42 |
) |
Total research and development expenses |
|
$ |
5,263 |
|
|
$ |
1,530 |
|
|
$ |
3,733 |
|
Research and development expenses were $5.3 million for the three months ended March 31, 2026, compared to $1.5 million for the three months ended March 31, 2025. The overall increase of $3.7 million was primarily due to the following:
Selling, General and Administrative Expenses
Selling, general and administrative expenses were $21.3 million for the three months ended March 31, 2026, compared to $6.7 million for the three months ended March 31, 2025. The overall increase of $14.5 million was primarily due to the following:
41
Other (Expense) Income
Other expense for the three months ended March 31, 2026 was $1.8 million, which includes interest income of $3.0 million and income from a change in the fair value of our investments of $1.1 million, partially offset by an expense of $0.6 million due to change in fair value of the convertible notes payable, interest expense of $1.7 million and a foreign exchange transaction loss of $3.7 million.
Other expense for the three months ended March 31, 2025 was $0.6 million, which includes a $1.0 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 $0.5 million.
Non-GAAP Financial Information
We use certain measures to assess the financial performance of our business, as well as to comply with the reporting requirements of the JSE. Certain of these measures are termed “non-GAAP measures” because they exclude amounts that are included in, or include amounts that are excluded from, the most directly comparable measure calculated and presented in accordance with GAAP, or are calculated using financial measures that are not calculated in accordance with GAAP. These non-GAAP measures include headline loss, and headline loss per common share.
An explanation of the relevance of the non-GAAP measure, a reconciliation of the non-GAAP measure to the most directly comparable measure calculated and presented in accordance with GAAP and a discussion of its limitations are set out below. We do not regard these non-GAAP measures as a substitute for, or superior to, the equivalent measure calculated and presented in accordance with GAAP or that calculated using financial measures that are calculated in accordance with GAAP and such measures may not be comparable to similarly titled measures used by other companies.
Headline Loss per Share
In connection with our secondary listing on the JSE, we are required to calculate and publicly disclose headline loss per share and diluted headline loss per share. Headline loss per share is calculated using net loss which has been determined in accordance with GAAP. Headline loss for the period represents the loss for the period attributable to our common stockholders adjusted for the remeasurements that are more closely aligned to the operating or trading results as set forth below, and headline loss per share represents headline loss divided by the weighted average number of shares of common stock outstanding.
The table below presents a reconciliation between net loss attributable to common stockholders to headline loss.
|
|
Three Months Ended |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Net loss attributable to ASP Isotopes Inc. shareholders |
|
$ |
(6,878 |
) |
|
$ |
(8,446 |
) |
Adjusted for: |
|
|
|
|
|
|
||
Deemed dividend on inducement warrant for common stock |
|
|
— |
|
|
|
— |
|
Change in fair value of share liability |
|
|
— |
|
|
|
(12 |
) |
Change in fair value of convertible notes payable |
|
|
568 |
|
|
|
957 |
|
Headline loss |
|
$ |
(6,310 |
) |
|
$ |
(7,501 |
) |
Weighted average common shares outstanding on which the net loss attributable to ASP Isotopes Inc. shareholders per share and headline loss per share has been calculated - basic and diluted |
|
|
121,000,699 |
|
|
|
69,484,200 |
|
Net loss per share, attributable to ASP Isotopes Inc. shareholders, basic and diluted |
|
$ |
(0.06 |
) |
|
$ |
(0.12 |
) |
Headline loss per share, attributable to ASP Isotopes Inc. shareholders, basic and diluted |
|
$ |
(0.05 |
) |
|
$ |
(0.11 |
) |
The above disclosure was prepared for the purpose of complying with the reporting requirements of the JSE and includes certain non-GAAP measures, such as headline loss and headline loss per common share, and related reconciliations.
Liquidity and Capital Resources
Sources of Liquidity
We have incurred net losses and negative cash flows from operations since our inception, and we expect to continue to incur significant and increasing net losses for the foreseeable future. We have principally financed our operations to date through the issuance of our common stock, including our IPO, and the issuance of convertible notes payable.
As of March 31, 2026, we had cash and cash equivalents of $207.3 million and short-term investments of $83.2 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.
We recognize revenue from the sale of nuclear medical doses for PET and SPECT scanning in South Africa and the U.S. Our ability to generate product revenue from the sale of nuclear medical doses for PET and SPECT scanning sufficient to achieve profitability will depend on the successful expansion of production capabilities and commercialization of the results of that expansion. Effective with the acquisition of Renergen in January 2026, we also recognize revenue from the sale of helium and LNG. Our ability to generate revenue from the sale of helium and LNG sufficient to achieve profitability will depend on the successful expansion of production capabilities and commercialization of the results of that expansion. Renergen’s outstanding debt funding may also materially affect our liquidity.
42
Future Funding Requirements
Based on our current operating plan, we estimate that our existing cash and cash equivalents, proceeds from short-term investments, 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.
Our future capital requirements will depend on many factors, including:
Developing and commercializing isotopes is a time-consuming, expensive and uncertain process that takes years to complete, and we may never achieve the necessary results required or obtain applicable regulatory approval for any isotopes or generate revenue from the sale of any future isotopes (assuming applicable regulatory approval is received). In addition, our future isotopes (assuming applicable regulatory approval is received) may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of isotopes that we do not expect to be commercially available until at least the middle of 2026. If we receive permits and licenses to enrich U-235 (which in itself is highly uncertain), we do not expect U-235 to be commercially available for at least several years, if ever. As a result, we may need substantial additional financing to support our continuing operations and further the development of and commercialization of our future isotopes.
Expansion of the production and distribution of nuclear medical doses for PET scanning is a time-consuming, expensive and uncertain process that may take years to complete. As a result, we may need substantial additional financing to support our continuing operations and further the development of and commercialization of future nuclear medical doses for PET scanning.
Large amounts of capital are required to support the growth in our business and operations in South Africa, including to maintain and progress toward full commercial operation of Phase 1 of the Virginia Gas Project, and for the construction and development of Phase 2 of our Virginia Gas Project, and long-term production and processing requires both significant capital expenditure and ongoing maintenance expenditure. Our revenues related to the sale of helium and LNG may vary significantly from period to period as a result of changes in volumes of production sold and commodity prices. Natural gas prices have historically been volatile. Lower commodity prices may not only decrease our revenues, but also potentially the amount of natural gas that we can produce economically. We plan to add reserves through drilling. Our ability to add reserves through drilling projects is dependent on many factors, including our ability to borrow or raise capital and procure materials, services and personnel. Phase 2 of the Virginia Gas Project requires a significant amount of capital and is currently estimated to cost approximately $1.16 billion (including borrowing costs and general corporate costs during construction) based on our latest cost estimate, which could change based on inaccurate assumptions and changing economic and operating conditions. We anticipate funding this amount through debt, such as the up to $500 million of senior secured debt provided by the DFC, which has been conditionally approved, pursuant to the delineated application review process of the DFC. Additionally, the Standard Bank of South Africa has conditionally approved an additional $250 million of senior secured debt funding for Phase 2, which is anticipated to be funded substantially concurrently with the aforementioned DFC funding. As a result, we may need substantial additional financing to support our continuing operations, ramp up production of Phase 1, and further the development of Phase 2 and commercialization of the Virginia Gas Project.
Until such time as we can generate significant revenue from sales of our future isotopes, nuclear medical doses for PET and SPECT scanning and sales of helium and LNG, if ever, we expect to finance our cash needs through public or private equity or debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and the recent disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting severely diminished liquidity and credit
43
availability, increased interest rates, inflationary pressures, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. The financial markets and the global economy may also be adversely affected by the current or anticipated impact of military conflict. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise funds through collaborations, or other similar arrangements with third parties, we may have to relinquish valuable rights to our future isotopes, future helium and LNG production and sales, future revenue streams or research programs or may have to grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market our future isotopes and helium and LNG production even if we would otherwise prefer to develop and market such isotopes, helium and LNG ourselves.
Cash Flows
The following table summarizes our sources and uses of cash for each of the periods presented:
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Net cash provided by (used in): |
|
|
|
|
|
|
||
Operating activities(1) |
|
$ |
(17,760 |
) |
|
$ |
(3,170 |
) |
Investing activities |
|
|
(97,183 |
) |
|
|
(2,359 |
) |
Financing activities(2) |
|
|
43,168 |
|
|
|
(225 |
) |
Change in cash and cash equivalents |
|
$ |
(71,775 |
) |
|
$ |
(5,754 |
) |
(1) includes cash flows of discontinued operations of $1.1 million for the three months ended March 31, 2026.
(2) includes cash flows provided by discontinued operations of $45.9 million and cash flows used in continuing operations of $2.7 million for the three months ended March 31, 2026.
Operating Activities
Net cash used in operating activities was $17.8 million for the three months ended March 31, 2026, including $1.1 million from discontinued operations, for the three months ended March 31, 2026 and was primarily due to our net loss from continuing operations of $26.7 million, adjusted for a gain on deconsolidation of $19.3 million, a change in right-of-use assets primarily from the acquisition of Renergen in January 2026, stock-based compensation expense of $4.4 million, amortization of right-of-use asset of $3.3 million, depreciation and amortization expense of $3.1 million, change in fair values of investments of $1.1 million, change in fair values for the convertible notes payable of $0.6 million, noncash interest on the note receivable of $2.5 million and a $6.1 million change in our operating assets and liabilities.
Net cash used in operating activities was $3.2 million for the three months ended March 31, 2025, and was primarily due to our net loss of $8.5 million, adjusted for stock-based compensation expense of $1.9 million, amortization of right-of-use asset of $0.1 million, depreciation expense of $0.1 million, issuance of common stock to a consultant with a fair value of $0.2 million, change in fair values for the convertible notes payable of $1.0 million and a $2.0 million change in our operating assets and liabilities.
Investing Activities
Net cash used in investing activities was $97.2 million for the three months ended March 31, 2026 and was comprised of purchase of short-term investments of $35.4 million, purchase of Opeongo investment of $10.0 million, cash disposed of upon deconsolidation of Skyline of $50.7 million and the purchases of machinery and equipment, vehicles and construction in progress of $6.1 million, partially offset by cash provided by acquisitions of $4.9 million.
Net cash used in investing activities was $2.4 million for the three months ended March 31, 2025 and was comprised of the purchases of machinery and equipment, vehicles and construction in progress.
Financing Activities
Net cash provided by financing activities was $43.2 million for the three months ended March 31, 2026, including $45.9 million from discontinued operations, and was comprised primarily of $0.1 million in proceeds from the issuance of notes payable, partially offset by principal payments on debt, finance leases and bank loans of $1.8 million and distribution to noncontrolling interest in VIE of $0.3 million.
Net cash used in financing activities was $0.2 million for the three months ended March 31, 2025, and was comprised primarily of principal payments on debt, finance leases and bank loans of $0.3 million on the note payable related to a financed corporate insurance policy.
Contractual Obligations and Commitments
Leases
We lease our main facility in Pretoria, South Africa under a lease with a base monthly rent payment of approximately $9,000 with a term expiring on December 31, 2030. We also lease additional space on a short term basis in Pretoria, South Africa under a lease with a base monthly rent payment of approximately $18,000 with a term that expired on February 28, 2026, and we are continuing to occupy that space under the monthly extensions. We also lease additional space in Pretoria, South Africa under leases with a base monthly rent payment of approximately (i) $2,000 with a term expiring on October 30, 2026 and (ii) $3,000 with a term expiring on May 31, 2028.
Renergen enters into lease agreements as a lessor whereby customers lease equipment and infrastructure required for the
delivery, storage, utilization and conversion of LNG to natural gas. Renergen operates in a facility in Sandton, South Africa under a lease with a base monthly rent payment of approximately $21,000 with a term that expires on May 31, 2029.
44
PET Labs Pharmaceuticals operates in a facility in Pretoria, South Africa under a lease with a base monthly rent payment of approximately $27,000 with a term expiring on January 31, 2056. PET Labs Pharmaceuticals also rents space at a local hospital in Pretoria, South Africa for which there was a lease with a base monthly rent payment of approximately $5,000 which expired on December 31, 2023 and operates based on monthly extensions.
Promissory Note and Loans
In August 2025, the Company executed a promissory note payable with a finance company to fund a general liability insurance policy for $0.2 million. The Company assumed a promissory note in connection with the acquisition of Renergen in January 2026 to fund a general liability insurance policy for approximately $1.1 million. Periodically, the Company enters into loans to purchase motor vehicles and certain equipment. For the three months ended March 31, 2026, the Company entered into new loans totaling $0.1 million. These loans are secured by the underlying assets included in property and equipment. Refer to Note 9 ("Debt") to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q for information regarding interest rates and maturities, as well as information regarding Renergen's debt obligations and QLE’s convertible notes.
Renergen Contractual Obligations and Commitments
As previously discussed, we acquired Renergen (and its indirect 94.5% equity ownership in Tetra4) in January 2026, which entities are subject to certain contractual obligations and commitments discussed further below. See Note 9 "Debt" for additional information.
Certain Commitments to the South Africa Competition Commission
In connection with our acquisition of Renergen, we made certain commitments to the South Africa Competition Commission designed to address public interest concerns and promote historically disadvantaged persons (“HDP”) and worker ownership. These commitments to the South Africa Competition Commission include: (1) a moratorium on retrenchments of workers at Renergen’s operations for a period of two years from the merger closing date; and (2) a commitment to implement, within 12 months of the merger closing date, a trust for the benefit of qualifying workers employed by Renergen and certain HDP communities and people located within the production rights area of the Virginia Gas Project (the “HDP and Worker Trust”). Upon the effective implementation date of the HDP and Worker Trust, the HDP and Worker Trust is expected to hold an aggregate 5% of the issued shares in Tetra4 and Renergen is expected to hold 89.5% of the issued shares in Tetra4, subject to change in accordance with any capital raising activities of the Company, Renergen and/or Tetra4 following the merger closing date. In conjunction with the establishment of the HDP and Workers Trust, Tetra4 will issue an offsetting vendor financed loan to the HDP and Worker Trust. The HDP and Worker Trust will continue for the duration of the Production Right held by Tetra4, which will expire during 2042, unless extended.
Normal Course Operating Agreements
In addition, we entered into contracts in the normal course of business with vendors for services and products for operating purposes. These contracts do not contain any minimum purchase commitments and generally provide for termination after a notice period and, therefore, are not considered long-term contractual obligations. Payments due upon cancellation consist only of payments for services provided and expenses incurred up to the date of cancellation.
Off-balance Sheet Arrangements
We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.
Critical Accounting Policies and Significant Judgments and Estimates
See Note 2 to our condensed consolidated financial statements which discusses new accounting pronouncements.
45
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are a smaller reporting company as defined by Item 10 of Regulation S-K and are not required to provide the information otherwise required under this item.
Item 4. Controls and Procedures.
Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2026. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, mean controls and other procedures of a company that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company on the reports that it files or submits under the Exchange Act is accumulated and communicated to management, including our principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure.
Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgement in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of March 31, 2026, our Chief Executive Officer and Chief Financial Officer concluded that, as a result of material weaknesses identified in connection with our evaluation of our internal control over financial reporting, as previously disclosed in our Annual Report on Form 10-K (as amended) for the year ended December 31, 2025, our disclosure controls and procedures were not effective as of March 31, 2026.
Management’s Plan for Remediation of the Material Weakness
As previously described in Part II, Item 9A of our Annual Report, we began implementing a remediation plan to address the material weaknesses mentioned in such Annual Report. In order to remediate the material weaknesses, we expect to enhance our formal documentation over internal control procedures and management controls infrastructure to allow for more consistent execution of control procedures and hire additional accounting, and finance and information technology resources or consultants with public company experience. The material weaknesses will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.
Although we intend to complete the remediation process as promptly as possible, we cannot at this time estimate how long it will take to remediate the material weaknesses described in the Annual Report. We may discover additional material weaknesses that require additional time and resources to remediate, and we may decide to take additional measures to address the material weaknesses or modify the remediation steps described above.
Changes in Internal Control
Except for the activities taken related to the remediation of the material weaknesses described in the Annual Report, there has been no change in our internal control over financial reporting as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act during our most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
46
PART II-OTHER INFORMATION
Item 1. Legal Proceedings.
Except as described in Note 11 ("Commitments and Contingencies") to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q, we are not currently party to, and our property is not currently the subject of, any material pending legal matters or claims.
In addition, from time to time, we may become subject to arbitration, litigation or claims arising in the ordinary course of business. The results of any current or future claims or proceedings cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and litigation costs, diversion of management resources, reputational harm and other factors.
Item 1A. Risk Factors.
In addition to the information set forth in this 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 filed with the SEC. 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 filed 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. 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).
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
None.
Item 5. Other Information.
Rule 10b5-1 Trading Plans
During the three months ended March 31, 2026,
47
Item 6. Exhibits.
Exhibit Number |
|
Description |
3.1 |
|
Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.3 to the Form S-1/A filed on November 9, 2022 (File No. 333-267392)). |
3.2 |
|
Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Annual Report on Form 10-K for the year ended December 31, 2023, filed on April 10, 2024). |
10.1* |
|
First Addendum to the Term Loan Facility Agreement, between ASP Isotopes Inc., Renergen Limited and ASP Isotopes South Africa Proprietary Limited, dated January 15, 2026. |
10.2* |
|
Second Addendum to the Term Loan Facility Agreement, between ASP Isotopes Inc., Renergen Limited and ASP Isotopes South Africa Proprietary Limited, dated February 26, 2026. |
10.3* |
|
Third Addendum to the Term Loan Facility Agreement, between ASP Isotopes Inc., Renergen Limited and ASP Isotopes South Africa Proprietary Limited, dated April 16, 2026. |
10.4 |
|
Loan Agreement, between Industrial Development Corporation of South Africa Limited and Tetra4 Proprietary Limited, dated December 20, 2021 (incorporated by reference to Exhibit 10.40 to the Annual Report on Form 10-K for the year ended December 31, 2025, filed on April 10, 2026). |
10.5 |
|
Amendment, dated October 10, 2023, to Loan Agreement between Industrial Development Corporation of South Africa Limited and Tetra4 Proprietary Limited (incorporated by reference to Exhibit 10.41 to the Annual Report on Form 10-K for the year ended December 31, 2025, filed on April 10, 2026). |
10.6 |
|
Amendment, dated September 1, 2025, to Loan Agreement between Industrial Development Corporation of South Africa Limited Tetra4 Proprietary Limited (incorporated by reference to Exhibit 10.42 to the Annual Report on Form 10-K for the year ended December 31, 2025, filed on April 10, 2026). |
10.7 |
|
Finance Agreement, between U.S. International Development Finance Corporation, as successor in interest to Overseas Private Investment Corporation, and Tetra4 Proprietary Limited, dated August 20, 2019 (incorporated by reference to Exhibit 10.43 to the Annual Report on Form 10-K for the year ended December 31, 2025, filed on April 10, 2026). |
10.8 |
|
Amendment No. 1 to Finance Agreement, between United States International Development Finance Corporation and Tetra 4 Proprietary Limited, dated March 30, 2020 (incorporated by reference to Exhibit 10.44 to the Annual Report on Form 10-K for the year ended December 31, 2025, filed on April 10, 2026). |
10.9 |
|
Amendment No. 2 to Finance Agreement, between United States International Development Finance Corporation and Tetra4 Proprietary Limited, dated April 28, 2020 (incorporated by reference to Exhibit 10.45 to the Annual Report on Form 10-K for the year ended December 31, 2025, filed on April 10, 2026). |
10.10 |
|
Amendment No. 3 to the Finance Agreement, between United States International Development Finance Corporation and Tetra4 Proprietary Limited, dated February 27, 2021 (incorporated by reference to Exhibit 10.46 to the Annual Report on Form 10-K for the year ended December 31, 2025, filed on April 10, 2026). |
10.11 |
|
Amendment No. 4 to Finance Agreement, between United States International Development Finance Corporation and Tetra4 Proprietary Limited, dated August 24, 2021 (incorporated by reference to Exhibit 10.47 to the Annual Report on Form 10-K for the year ended December 31, 2025, filed on April 10, 2026). |
10.12 |
|
Amendment No. 5 to Finance Agreement, between United States International Development Finance Corporation and Tetra4 Proprietary Limited, dated December 16, 2021 (incorporated by reference to Exhibit 10.48 to the Annual Report on Form 10-K for the year ended December 31, 2025, filed on April 10, 2026). |
10.13*# |
|
Consent and Waiver, dated January 12, 2024, in connection with the Finance Agreement between U.S. International Development Finance Corporation and Tetra4 Proprietary Limited. |
10.14*# |
|
Consent and Waiver, dated March 12, 2024, in connection with the Finance Agreement between U.S. International Development Finance Corporation and Tetra4 Proprietary Limited. |
10.15*# |
|
Consent and Waiver, dated August 30, 2024, in connection with the Finance Agreement between U.S. International Development Finance Corporation and Tetra4 Proprietary Limited. |
10.16*# |
|
Consent and Waiver, dated December 9, 2024, in connection with the Finance Agreement between U.S. International Development Finance Corporation and Tetra4 in Proprietary Limited. |
10.17*# |
|
Waiver, dated April 9, 2025, in connection with the Finance Agreement between U.S. International Development Finance Corporation and Tetra4 Proprietary Limited. |
10.18*# |
|
Consent and Waiver, dated November 25, 2025, in connection with the Finance Agreement between U.S. International Development Finance Corporation and Tetra4 Proprietary Limited. |
10.19 |
|
Amended and Restated Secured Term Loan Facility Agreement between Renergen Limited and the Standard Bank of South Africa Limited, dated December 12, 2025 (incorporated by reference to Exhibit 10.49 to the Annual Report on Form 10-K for the year ended December 31, 2025, filed on April 10, 2026). |
10.20* |
|
Production Right granted by the Republic of South Africa to Molopo South Africa Exploration and Production Proprietary Limited on September 20, 2012. |
10.21* |
|
Amendment/Variation of a Production Right granted by the Republic of South Africa to Tetra4 Proprietary Limited on September 17, 2021. |
10.22* |
|
Amendment/Variation of a Production Right granted by the Republic of South Africa to Tetra4 Proprietary Limited on March 15, 2024. |
10.23* |
|
Exploration Right granted by the Republic of South Africa to Highland Exploration and Production Proprietary Limited on May 8, 2007. |
10.24* |
|
Exploration Right granted by the Republic of South Africa to Highland Exploration and Production Proprietary Limited on May 26, 2009. |
10.25*# |
|
Liquified Natural Gas Supply Agreement between Tetra4 Proprietary Limited and Consol Glass Proprietary Limited, effective as of June 24, 2022. |
10.26* |
|
Series Seed-1 Preferred Stock Purchase Agreement, between ASP Isotopes Inc. and Opeongo, Inc., dated January 26, 2026. |
10.27* |
|
Investors’ Rights Agreement, by and among Opeongo, Inc., ASP Isotopes Inc., and the Key Holders named therein, dated January 26, 2026. |
10.28* |
|
Right of First Refusal and Co-Sale Agreement, by and among Opeongo, Inc., ASP Isotopes Inc.,and the Key Holders named therein, dated January 26, 2026. |
10.29* |
|
Voting Agreement, by and among Opeongo, Inc., ASP Isotopes Inc., and the Key Holders named therein, dated January 26, 2026. |
31.1* |
|
Certification of Principal Executive Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended. |
48
31.2* |
|
Certification of Principal Financial Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended. |
32.1** |
|
Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS |
|
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. |
101.SCH |
|
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents |
104 |
|
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Exhibits filed herewith.
** Exhibits furnished herewith.
+ Management contract or compensatory plan or arrangement.
# Information in this exhibit has been omitted pursuant to Item 601 of Regulation S-K.
Certain instruments defining rights of holders of long-term debt of the company are omitted pursuant to Item 601(b)(4)(iii) of Regulation S-K. Upon request, the company agrees to furnish to the SEC copies of such instruments.
49
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
ASP Isotopes Inc. |
|
|
|
|
|
|
Date: May 20, 2026 |
By: |
/s/ Paul E. Mann |
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Paul E. Mann |
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Chief Executive Officer, Executive Chairman and Director |
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(Principal Executive Officer) |
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Date: May 20, 2026 |
By: |
/s/ Heather Kiessling |
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Heather Kiessling |
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Chief Financial Officer |
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(Principal Financial and Accounting Officer) |
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