ASPI

1. Executive Summary

• ASP Isotopes (ASPI) has transitioned from commissioning to operations with three enrichment facilities now operational and first customer samples of Silicon-28 (Si-28) and Ytterbium-176 (Yb-176) shipped.
• The company strengthened its balance sheet with sequential capital raises in June–July 2025 and completed a secondary JSE listing (Aug 27, 2025); combined institutional + insider ownership reported at 74.3%.
• Strategic optionality increased via: (i) expected Q4’25 spin-out and public listing of Quantum Leap Energy (QLE); (ii) a JV MOU with Fermi America to advance U.S. HALEU capacity in Texas; and (iii) progress toward closing the Renergen acquisition (3Q’25), adding helium and LNG.
• Management reiterates a long-term target of >$300m EBITDA by 2030 for the combined group, with visible 2026–2027 revenue from enriched isotopes and initial contributions from Renergen.

Key Takeaways

• First commercial shipments of Si-28 and Yb-176 executed; 3 operational facilities de-risk near-term revenue.
• Robust funding runway: ~$110m gross raised in Jun–Jul 2025 (plus $18.6m in Nov 2024).
• 2026–2027 pipeline: $50–$70m potential revenues (Si-28/Yb-176) plus Renergen ≥$20m in 2026 and Gd-160 ≥$1m/yr contract from 2026.
• HALEU pathway maturing: TerraPower agreements, Texas JV MOU, and target 2027 first production (permits pending); Li-6 plant targeted for 2026.

2. Financial Performance

Capital Raises & Proceeds

• Jun 2, 2025: Underwritten registered direct offering, 7.52m shares at $6.65, gross ~$50m; use of proceeds includes working capital and a Renergen bridge loan disbursement.
• Jul 23, 2025: Registered direct offering, 7.50m shares at $8.00, gross ~$60m, placed to a single institutional investor; positive pricing momentum vs June round.
• Nov 4, 2024: Public offering, 2.75m shares at $6.75, gross ~$18.6m.
• Aug 27, 2025: Secondary listing on JSE (ticker ISO); primary Nasdaq listing retained; reported 74.3% institutional + insider ownership (supports institutional validation/liquidity).

Investor sentiment: Upsized and sequentially higher-priced raises suggest improving investor confidence following operational milestones and visible order pipeline.

Early Revenue Initiatives

• Silicon-28 (Si-28): Commercial production began late Mar 2025; first samples shipped to a U.S. customer in Aug 2025; plant capacity increased to >80 kg/year (from 50 kg).
• Ytterbium-176 (Yb-176): Commercial production started Apr 2025; intermediate enrichment up to 92.4%; first final-product batches/shipment targeted late Aug 2025, with first customer samples now shipped.
• Carbon-14 (C-14): Commercial production commenced Feb 2025; multi-year take-or-pay with a Canadian customer at ~$2.5m per annum (updated from earlier $2.4m).
• Carbon-12 (C-12): Pivoted due to C-14 feedstock constraints; first commercial supply expected Sep 2025.
• Gadolinium-160 (Gd-160): Four-year supply agreement with Isotopia; ≥$1m per annum beginning 2026, enabling Tb-161 radiotherapeutics.
• PET Labs: Second cyclotron operational; authorized to dispense SPECT isotopes; on track for record 2025 dose volumes (incremental services revenue).

Company estimate: Customer demand representing $50–$70m potential revenues during 2026–2027 from Yb-176 and Si-28 alone; plus Renergen ≥$20m revenue in 2026.

Expense Management & Cash Flow

• Q1’25 revenue $1.10m (vs $0.84m Q1’24); net loss $(8.53)m (vs $(7.01)m); R&D $1.53m as development accelerates.
• FY’24 revenue $4.14m; net loss $(32.42)m reflecting build-out and commissioning.
• Cash runway strengthened by ~$128.6m gross (Jun–Jul 2025) plus $18.6m (Nov 2024). Expect higher near-term opex/capex tied to new plants and permitting; Renergen expected to be cash flow positive in 2026 (post-bridge loan support).

3. Guidance and Future Outlook

Production Ramp–Up

• Three enrichment facilities now operational; first Si-28 and Yb-176 customer shipments executed.
• Si-28: >80 kg/year capacity; ongoing customer qualifications and new discussions for additional kg-scale orders.
• Yb-176: Transitioning from batch to semi-continuous; initial run-rate target ~1 kg/year; key feed for Lu-177 market.
• Li-6: First plant targeted to be operational in 2026 (permits/licenses pending).
• HALEU: First facility targeted 2027 start (permits/licenses pending).

Expansion Plans

• Procurement initiated for four new laser production plants (Gd-160, Zn-68, Ni-64, Li-6/7), with construction to start Q1 2026.
• JV MOU with Fermi America for HALEU and critical materials at the HyperGrid Campus (Amarillo, TX); ASPI to separately lease for stable isotope production at the site.
• QLE spin-out targeted Q4 2025 public listing; leadership expanded (Dr. Ryno Pretorius as CEO). Engagements with UK/US authorities continue for nuclear fuel facilities.

Operational Targets

• Use “blueprint” from initial plants to compress timelines and CAPEX for next builds.
• Efficiency focus: shift Yb-176 toward semi-continuous operations; expand Si-28 throughput; add stable isotope SKUs to improve asset utilization.
• Maintain regulatory/safeguards posture (IAEA-compliant operations, import permits secured for controlled laser equipment).

4. Strategic Positioning and Initiatives

Cost Management

• Leverage repeatable plant designs to reduce CAPEX and commissioning time.
• Combined entity (post-Renergen) expected to reduce enrichment costs materially (management cites up to ~96% vs current cash costs in synergy scenarios) and diversify input energy sources.

Product Development

• Portfolio expansion from initial C-14, Si-28, Yb-176 to Ni-64, Zn-68, Gd-160, Li-6/7.
• Gd-160 supply to accelerate Tb-161 therapeutics; ongoing C-12 offering to meet high demand; PET Labs advancing diagnostics and formulation capabilities to support radiopharma value chain.

Market Expansion

• Dual listings (Nasdaq + JSE) broaden investor base and visibility, notably in South Africa where core assets/staff operate.
• Texas JV MOU anchors U.S. footprint; dialogues with UK/US for HALEU facilities widen geographic exposure.
• QLE public listing to align capital pools and regulatory pathways for nuclear fuels.

5. Competitive Positioning and Market Trends

Market Positioning

• One of the few Western suppliers shipping Yb-176 and Si-28 at commercial scale; first-mover status in high-purity Si-28 (direct silane enrichment) for next-gen semiconductors/quantum.
• Integrated path from stable isotopes to advanced nuclear fuels (HALEU, Li-6); helium/LNG via Renergen enhances critical materials platform.

Competitive Strengths

• Proprietary Quantum Enrichment (laser-based) with high enrichment factor (demonstrated up to 678x), rapid build cycles, and lower capital intensity.
• Strategic contracts and partnerships: TerraPower loan and dual HALEU supply agreements (initial core ~2027/28; long-term up to 150 MT 2028–2037).
• Regulatory credibility (IAEA safeguards; import permits) and diversified production base.

Emerging Industry Trends

• Re-shoring and Western security of supply for nuclear fuels and medical isotopes; U.S. policy support for HALEU and SMR deployment.
• AI/quantum cycles driving demand for isotopically pure Si-28; radiopharma growth in Lu-177 and Tb-161 targeting.
• Tight global helium supply favors integrated critical materials producers with upstream access (Renergen).

6. Technology and Innovation Strategy

Technological Advancements

• Laser-based Quantum Enrichment commissioning complete in South Africa; first laser system operational producing Yb-176 commercial samples.
• Direct enrichment of silane for Si-28 targets superior purity for semiconductor-grade feedstock.

New Product Developments

• Construction procurement for Gd-160, Zn-68, Ni-64, Li-6/7 plants (builds begin Q1’26).
• Li-6 plant targeted 2026; HALEU facility targeted 2027 subject to permitting; PET Labs expanding into SPECT dispensary.

Alignment with Market Needs

• Products mapped to high-growth end-markets: Si-28 (semiconductors, quantum), Yb-176/Lu-177 and Gd-160/Tb-161 (oncology), Li-6 (nuclear/fusion), HALEU (SMRs/advanced reactors).
• Customer-led roadmap with multi-year agreements (C-14; TerraPower HALEU; Isotopia Gd-160).

7. Risk and Reward Analysis

Growth Catalysts

• Scaling shipments of Si-28 and Yb-176; onboarding additional isotope SKUs in 2026.
• Closing and integrating Renergen (helium/LNG) with expected positive cash contribution in 2026.
• QLE spin-out and HALEU permitting wins; execution of TerraPower supply schedules.
• U.S. footprint via Texas JV MOU; potential UK facility approvals for nuclear fuels.

Downside Risks

• Permitting/licensing for HALEU/Li-6; geopolitical/export-control considerations.
• Execution risk transitioning from pilot/batch to scaled, semi-continuous operations.
• Feedstock availability (as seen with C-14), customer qualification timelines, and supply chain lead times for specialized laser equipment.
• Capital intensity for new plants; commodity and pricing risks in helium/LNG markets.
• Integration risk with Renergen and separation risk for QLE.

Valuation Metrics

• Near-term (2026) revenue visibility:
• Management-identified demand: $50–$70m (Si-28 + Yb-176).
• Renergen ≥$20m (2026).
• C-14 ~$2.5m/yr contracted; Gd-160 ≥$1m/yr starting 2026.
• Illustrative 2026 revenue range (ex-HALEU, ex-unknown C-12 volumes): ~$73–$93m.
• Early-stage specialty materials EBITDA margin assumption: 15–25% yields ~$11–$23m 2026 EBITDA (execution-dependent).
• Applying specialty materials EV/EBITDA multiples 12–18x implies indicative EV range ~$130–$410m on 2026 base (ex-HALEU option value).
• Long-term target: >$300m EBITDA by 2030 (company). Applying 8–12x suggests potential EV $2.4–$3.6bn; discounting 5 years at 20–25% gives a present EV range roughly $0.8–$1.5bn for the aspirational case (high execution and permitting certainty required).
• Note: P/E not meaningful pre-profit. Investors should translate EV to equity value using current net cash and shares outstanding; HALEU adds material real-option value not fully captured in the 2026 base.

8. Investment Thesis

Investment Rationale

• Scarcity value in Western supply of critical isotopes (Si-28, Yb-176) with commercial shipments initiated; diversified pipeline of medical/industrial isotopes and nuclear fuels.
• Strengthened balance sheet and institutional support; clear catalysts (QLE spin-out, HALEU permits, Renergen close, new plant builds).
• Structural tailwinds across AI/quantum semiconductors, radiopharma, and the nuclear renaissance.

Price Target Justification

• Base case: Value on 2026 isotopes + Renergen contribution at $130–$410m EV (12–18x on $11–$23m EBITDA).
• Bull case (includes progression toward 2030 plan and partial HALEU discounting): ~$0.8–$1.5bn EV present value.
• Upside drivers to revise higher: accelerated customer ramps, earlier HALEU licensing/start, stronger helium/LNG pricing, and additional long-term isotope contracts.

Influencing Market Dynamics

• U.S./EU policy priorities for domestic HALEU and critical materials; Russia supply displacement; semiconductor onshoring; rapid growth in Lu-177/Tb-161 therapies; helium supply tightness.

9. Macroeconomic and Industry Trends

Regulatory Changes

• Momentum for HALEU supply in the U.S./UK; ASPI secured import permits for controlled laser equipment; operations under IAEA safeguards. JV MOU at pre-qualified nuclear site (near Pantex, TX).
• JSE listing enhances local capital access in South Africa where most assets and employees are based.

Supply Chain Dynamics

• Early procurement of long lead-time equipment for four new plants mitigates supply bottlenecks.
• C-14 feedstock issues addressed via C-12 pivot; Renergen adds upstream resilience (helium/LNG).
• TerraPower financing support de-risks initial HALEU facility capex.

Technology Adoption Trends

• AI/quantum computing elevates demand for isotopically pure Si-28.
• Oncology shifts to targeted radionuclide therapies (Lu-177, Tb-161) increase demand for Yb-176 and Gd-160.
• SMRs/advanced reactors drive HALEU and Li-6 demand; decarbonization imperatives sustain nuclear adoption.