ASP Isotopes Inc.: Form 10-Q for the period ended Jun 30, 2025

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. 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,” 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” to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements. Please also see the section entitled “Special Note Regarding Forward-Looking Statements.”

Overview

We are a development stage advanced materials company dedicated to the development of technology and processes that, if successful, will allow for the enrichment of natural isotopes into higher concentration products, which could be used in several industries. Our proprietary technologies, the Aerodynamic Separation Process (“ASP technology”) and Quantum Enrichment technology (“QE technology”), are designed to enable the production of isotopes used in several industries. 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 have completed the commissioning phase and are commencing commercial production at our C-14 and Si-28 enrichment facilities in Pretoria, South Africa. We have also completed the commissioning phase and are commencing production of commercial samples of highly enriched Yb-176 at the Yb-176 enrichment facility in Pretoria, South Africa. Our C-14 and Si-28 enrichment facilities utilize the ASP technology and our Yb-176 enrichment facility utilizes QE technology. We expect our first three enrichment facilities to generate commercial product during 2025. In addition, we have started planning additional isotope enrichment plants both in South Africa and in other jurisdictions, including Iceland and the United States. We believe the C-14 we may produce using the ASP technology could be used in the development of new pharmaceuticals and agrochemicals. We believe the Si-28 we may produce using the ASP technology may be used to create advanced semiconductors and in quantum computing. We believe the Yb-176 we may produce using the QE technology may be used to create radiotherapeutics that treat various forms of oncology.

In addition, 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 Lithium7.

We are 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 we may produce using quantum enrichment technology may 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 October 2024, we 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, we 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. Subject to the receipt of funding and all required permits and licenses to begin enrichment of U-235 in South Africa, it is anticipated that the research, development and ultimate construction of a HALEU production facility will take place at South Africa’s main nuclear research center at Pelindaba in Pretoria. See the section captioned “TerraPower” below for disclosures regarding certain definitive agreements entered into between TerraPower and us and/or our 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.

Our Subsidiaries and Segments

We operate principally through our subsidiaries. ASP Isotopes Guernsey Limited (the holding company for subsidiaries in the Cayman Islands, South Africa, Iceland and the United Kingdom) is focused on the development and commercialization of high-value, low-volume isotopes for highly specialized end markets (such as C-14, Mo-100, and Si-28). ASP Isotopes UK Ltd is the owner of our technology.

QLE. In September 2023, we formed Quantum Leap Energy LLC (“QLE”), which also has subsidiaries in the United Kingdom (Quantum Leap Energy Limited) and South Africa (Quantum Leap Energy (Pty) Limited), to focus on the development and commercialization of advanced nuclear fuels such as HALEU and Lithium-6.

Although no assurance can be given, we plan to spin-out QLE as a separate public company and list the shares of QLE on a U.S. national exchange and distribute a portion of QLE’s common equity to ASPI’s stockholders as of a to-be-determined future record date, in each case subject to obtaining applicable approvals and consents and complying with applicable rules and regulations and public market trading and listing requirements. The regulatory landscape and supply chain for nuclear fuel production differs significantly from that of medical isotopes, hence we and QLE have different business models and we believe that both companies would benefit if QLE is independently managed and financed.

In connection with the anticipated spin-out, we entered into a number of agreements with QLE, including a License Agreement, pursuant to which QLE has licensed from us the rights to technologies and methods used to separate Uranium 235 and Lithium 6 (including but not limited to the quantum enrichment and ASP technologies) in exchange for a perpetual royalty in the amount of 10% of all future QLE revenues, and an EPC Services Framework Agreement, pursuant to which we will provide services for the engineering, procurement and construction of one or more turnkey Uranium-235 and Lithium-6 enrichment facilities in locations to be identified by QLE and owned or leased by QLE, and commissioning, start-up and test services for each such facility, subject to the receipt of all applicable regulatory approvals, permits, licenses, authorizations, registrations, certificates, consents, orders, variances and similar rights. In addition, in February 2024, we assigned to QLE certain existing memoranda of understanding with U.S.-based small modular reactor companies for the use of Quantum Enrichment for the production of HALEU. The MOUs provide for substantial financial support for the development of HALEU production facilities that should be capable of supplying metric ton quantities of HALEU by 2027.

PET Labs. We have a 51% ownership stake in PET Labs Pharmaceuticals Proprietary Limited (“PET Labs”), a South African radiopharmaceutical operations company focused on the production of fluorinated radioisotopes and active pharmaceutical ingredients, through which we entered the downstream medical isotope production and distribution market. Under the terms of the Share Purchase Agreement pursuant to which we acquired the shares in PET Labs, we agreed to pay a total of $2,000,000 for the shares in two installments. The first installment of $500,000 was paid in November 2023. In January 2025 and 2024, we paid $750,000 and $264,750, respectively, towards the balance due. The remaining balance of $485,250 is due upon demand any time after October 31, 2024, and is expected to be paid in 2025.

Beginning in 2024, primarily as a result of the increased business activities of QLE, we have two operating segments: (i) nuclear fuels, and (ii) specialist isotopes and related services.

Financings

In March 2024, our wholly owned subsidiary QLE received gross proceeds of $20,550,000 through the issuance of Convertible Promissory Notes. These convertible notes have a stated interest rate of 6% for the first year and 8% thereafter. The maturity date of these convertible promissory notes is March 7, 2029. These convertible promissory notes automatically convert into common shares upon Quantum Leap Energy’s closing of an IPO or other qualifying public transaction at 80% of the share price taking into consideration a valuation cap.

In June 2024, our wholly owned subsidiary QLE received gross proceeds of $5,386,228 through this issuance of additional Convertible Promissory Notes with a stated interest rate of 6% for the first year and 8% thereafter. One of the notes totaling $108,167 was issued to the placement agent in lieu of cash issuance costs. The maturity date of the Convertible Promissory Notes is March 7, 2029. The Convertible Promissory Notes automatically convert into common shares upon Quantum Leap Energy’s closing of an IPO or other qualifying public transaction at 80% of the share price taking into consideration a valuation cap.

In April 2024, we received approximately $5.5 million from the issuance of 3,164,557 shares of common stock upon the exercise of warrants.

In July 2024, we issued 13,800,000 in a public offering at a public offering price of $2.50 per share resulting in net proceeds of approximately $32.3 million after deducting underwriting discounts, commissions and offering expenses.

In October 2024, a warrant to purchase 151,741 shares of common stock was exercised and the Company received gross proceeds of $299,688.

In November 2024, we issued 2,754,250 shares of common stock at a public offering price of $6.75 per share resulting in net proceeds of approximately $17.1 million after deducting underwriting discounts, commissions and offering expenses.

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 $56.4 million after deducting underwriting discounts, commissions and offering expenses.

TerraPower

On April 4, 2024, we entered into an agreement with TerraPower to develop a conceptual design, refined cost/schedule/financing, risk register, and term sheet for a HALEU facility (the “TerraPower Agreement”). 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 a term sheet with TerraPower (the “TerraPower Term Sheet”) that provides for the execution of two definitive agreements: (1) an agreement pursuant to which TerraPower will provide funding for our construction of a uranium enrichment facility capable of producing HALEU using our proprietary aerodynamic separation process technology to be located in the Republic of South Africa and (2) An agreement pursuant to which we will deliver to TerraPower the full capacity of the enrichment facility.

For the six months ended June 30, 2025, no collaboration revenue has been recognized in the consolidated statements of operations and comprehensive loss.

In May 2025, we entered into a Loan Agreement with TerraPower, which provides conditional commitments from TerraPower to us through one of our wholly-owned U.S.-based subsidiaries (“Borrower”) for a multiple advance term loan totaling $22,000,000 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 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 $20,000,000. The Loan Agreement 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. The Company does not plan to request drawdown on this loan until early 2026 when construction of the uranium enrichment facility is expected to begin.

In addition to a 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.

Renergen Acquisition and Financing

On May 20, 2025, we entered into agreement (the “Firm Intention Agreement”) with Renergen Limited, a public company incorporated under the laws of the Republic of South Africa focused on production of liquefied helium (LHe) and liquefied natural gas (LNG) (“Renergen”), pursuant to which, subject to the terms and conditions thereof, the Company will make an offer to acquire all of the issued ordinary shares of Renergen (“Renergen Ordinary Shares”), in exchange for shares of common stock, par value $0.01 per share, of the Company (the “Company Common Stock”), as described below (the “Offer”). The Company intends to implement the Offer through the implementation of a scheme of arrangement (the “Scheme”) in accordance with Sections 114 and 115 of the South African Companies Act, No. 71 of 2008 (the “Companies Act”). As a result of the implementation of the Scheme, Renergen will become a wholly owned subsidiary of the Company. If the Scheme lapses or fails, solely due to one or more Scheme conditions not being fulfilled or, where applicable, not being waived, the Company, as part of the same Offer, will make an offer to acquire up to 100% of the Renergen Ordinary Shares from Renergen shareholders by way of general standby offer, which will not be subject to any condition as to acceptances (the “Standby Offer”).

The implementation of the Scheme will result in the delisting of the Renergen Ordinary Shares from the Johannesburg Stock Exchange (the “JSE”), the Australian Securities Exchange and A2X. The Company Common Stock will continue to be listed on The Nasdaq Capital Market and will additionally be listed on the JSE by way of a secondary inward listing (the “Company Secondary Listing”).

Offer Consideration. On the implementation date of the Scheme (the “closing date of the acquisition”), the holders of record of Renergen Ordinary Shares, who are registered as such in Renergen’s securities register as of the applicable record date for purposes of the listing requirements of the JSE (the “Scheme Record Date”), will exchange 100% of the issued Renergen Ordinary Shares as of the Scheme Record Date, excluding treasury shares, in exchange for consideration consisting of 0.09196 shares of Company Common Stock for each Renergen Ordinary Share (the “Scheme Consideration” and the shares of Company Common Stock to be issued as the Scheme Consideration or in the Standby Offer, the “Consideration Shares”). Any entitlements to fractions of shares of Company Common Stock that otherwise would be issuable pursuant to the Scheme will be rounded down to the nearest whole number of shares and a cash payment will be made for any fractional shares resulting from such rounding. In no event will the Company issues more than14,270,000 Consideration Shares.

The implementation of the Scheme and the issuance of the Consideration Shares is expected to result in current securityholders of Renergen and current securityholders of the Company owning approximately 16% and 84%, respectively, of the outstanding shares of Company Common Stock immediately following the closing date of the acquisition.

Governance. The Firm Intention Agreement provides that, in the event that either the Scheme or the Stand-by Offer results in the Company acquiring at least 51% of the issued Renergen Ordinary Shares, after such event, Renergen will become an operating subsidiary of the Company and will continue to be led by Stefano Marani, the current Chief Executive Officer of Renergen, who will join the board of directors of the Company and become the Chief Executive Officer of the Electronics and Space Division of ASP Isotopes. Nick Mitchell, the Chief Operating Officer of Renergen, will become Co-Chief Operating Officer of ASP Isotopes.

Conditions to Closing. The Offer (including the Scheme and the Standby Offer) will be subject to the fulfilment or, where permissible, waiver of the following Offer conditions that, by no later than September 30, 2025: (i) the written consent for the transfer of the Renergen Ordinary Shares in terms of the Offer is obtained from the Industrial Development Corporation of South Africa and the United States International Development Finance Corporation (“Renergen Lenders”) in terms of the change of control provisions under their respective loan and/or funding arrangements with Renergen and subsidiaries of Renergen and that the Renergen Lenders agree not to proceed in foreclosing on outstanding debt due by those subsidiaries, as a result of any breach of covenants, event of default or otherwise, prior to July 31, 2027; (ii) the written consent for the transfer of the Renergen Ordinary Shares in terms of the Offer is obtained from The Standard Bank of South Africa (“SBSA”) in terms of the change of control provisions under its respective loan(s) and/or funding arrangement(s) with Renergen and SBSA agrees to extend the repayment date for the loan(s) and/or funding arrangement(s) to at least March 31, 2026; (iii) AIRSOL SRL agrees to extend the maturity date for the convertible debentures that it holds in Renergen, to at least March 31, 2026; (iv) receipt of required regulatory approvals required to implement the Offer are obtained (except for the requirement that Takeover Panel issue a compliance certificate to Renergen in terms of section 121(b) of the Companies Act); (v) receipt of all regulatory approvals required for the Company Secondary Listing; (vi) approval of applicable competition authorities to implement the Offer; (vii) approval by Renergen’s shareholders of the Shareholder Ratification resolution and the Scheme resolution to be descried in the combined circular to be distributed to Renergen’s shareholders (the “Renergen shareholder Approval”); and (viii) absence of a material adverse change with respect to Renergen. The Renergen shareholder Approval was obtained at a general meeting of shareholders of Renergen held on July 10, 2025.

Exclusivity Agreement and Bridge Loan. On March 31, 2025, the Company and Renergen entered into an exclusivity agreement (as subsequently amended, the “Exclusivity Agreement”), pursuant to which the parties agreed to discuss and negotiate the proposed transaction on an exclusive basis for a limited period ending on May 31, 2025. Renergen received a refundable exclusivity payment of the ZAR equivalent amount of $10 million, which amount has since been converted into and credited as an advance under a $30 million bridge loan agreement, dated May 19, 2025, by and among the Company, ASP Isotopes South Africa Proprietary Limited, as lender, and Renergen, as borrower (the “Bridge Loan Agreement”). Under the Bridge Loan Agreement, the Company agreed to advance two tranches of loan amounts of the ZAR equivalent amount of $10 million, each of which was advanced to Renergen in the second quarter of 2025, such that the total advanced amounts advanced to Renergen as of June 30, 2025 is the ZAR equivalent of $30 million, to enable Renergen to meet key lender payment deadlines and avoid a default by Renergen under its existing loan/funding arrangements.

Other Commercial Agreements

Below is a summary of the key terms of our other commercial agreements.

Lease for Processing Plant. On October 12, 2021, ASP South Africa entered into an agreement of lease with the landlord of the facility located at 33 Eland Street, Koedoespoort Industrial, Pretoria where we operate our multi-isotope processing plant where gaseous compounds will be treated (which process comprises several stages of compression and expansion during which the product is purified). The term of the lease ends on December 31, 2030.

Lease for additional production space. On April 1, 2023, ASP South Africa entered into an agreement of lease with the landlord of facility located in Pretoria where we plan to perform production activities. The initial term of the lease was set to end on March 31, 2024. We entered into a new agreement of lease with the landlord. The terms of the new lease ends on February 28, 2026.

Lease for additional laboratory space. On November 1, 2023, ASP South Africa entered into an agreement of lease with the landlord of the facility located in Pretoria where we perform research and development activities. The term of the lease ends on October 30, 2026.

Lease for additional office space. On June 1, 2025, ASP South Africa entered into an agreement of lease with the landlord of facility located in Pretoria for additional office space. The term of the lease ends on May 31, 2028.

Lease for PET Labs operations. Commencing with our acquisition of PET Labs in October 2023, this facility has an initial term set to expire in March 2026 with automatic monthly extensions thereafter. This space is used for office and production activities.

Lease for additional PET Labs operations. Commencing with our acquisition of PET Labs in October 2023, this facility had an initial term which expired in December 2023 and is currently under automatic monthly extensions. This space is used for production activities.

Components of Results of Operations

Revenue

Effective with the acquisition of 51% of PET Labs, the Company recognizes revenue from the sale of nuclear medical doses for PET scanning.

Cost of Goods Sold

Cost of goods sold associated with the sale of nuclear medical doses for PET scanning consist of labor, 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:

• external research and development expenses; and
• costs related to designing the development processes of isotope production.

Indirect costs include:

• personnel-related costs, which include salaries, payroll taxes, employee benefits, and other employee-related costs, including stock-based compensation expense, for personnel engaged in research and development functions; and
• facilities and other various expenses.

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:

• the scope, rate of progress, expense and results of our development activities;
• the phase of development of our future isotopes;
• the timing, receipt, and terms of any approvals from applicable regulatory authorities including the FDA and foreign regulatory authorities;
• significant and changing government regulation and regulatory guidance;
• the cost and timing of designing the development processes of isotope production;
• the extent to which we establish additional strategic collaborations or other arrangements; and
• the impact of any business interruptions to our operations or to those of the third parties with whom we work.

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 the increased business activities of our subsidiary QLE, we have two operating segments: (i) nuclear fuels, and (ii) specialist isotopes and related services.

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.

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 PET Labs.

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.

We manage assets on a total company basis, not by operating segment, as the assets are shared or commingled. Therefore, the chief operating decision maker does not regularly review any asset information by operating segment and, accordingly, asset information is not reported on a segment basis.

Select information from the consolidated statements of operations and comprehensive loss as of the three months ended June 30, 2025 and 2024 is as follows:

Select information from the consolidated statements of operations and comprehensive loss as of the six months ended June 30, 2025 and 2024 is as follows:

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Results of Operations

Comparison of the Three Months Ended June 30, 2025 and 2024

The following table summarizes our results of operations for the three months ended June 30, 2025 and 2024:

Revenue and Cost of Goods Sold

We have recognized revenue of PET Labs from the sale of nuclear medical doses for PET scanning for the three months ended June 30, 2025 and 2024. In addition, we have recognized the related cost of goods sold, operating expenses and other income and expenses of PET Labs for the same periods.

Research and Development Expenses

The following table summarizes our research and development expenses for the three months ended June 30, 2025 and 2024:

Research and development expenses were $879,925 for the three months ended June 30, 2025, compared to $473,302 for the three months ended June 30, 2024. The overall increase of $406,623 was primarily due to the following:

• an increase in facility and depreciation expenses of $456,069 due to an increase in space dedicated to development, noncapitalized expenses and repairs and maintenance; and
• an increase in other expenses of $67,749 primarily related to other general research and development expenses.

This increase is partially offset by a decrease in consulting and professional fees of $116,528 due to increased outsourced development activity for new specialty isotopes.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $11,660,759 for the three months ended June 30, 2025, compared to $7,405,178 for the three months ended June 30, 2024. The overall increase of $4,255,581 was primarily due to the following:

• an increase in personnel-related costs of $3,131,829 primarily due to the increase in headcount and salaries; and
• an increase in professional fees of $1,306,636 primarily due to corporate development activity and consulting costs related to new general ledger system.

Other (Expense) Income

Other expense for the three months ended June 30, 2025 was $63,093,335, which includes an expense of $63,757,723 due to change in fair value of the convertible notes payable issued in March and June 2024, a change in fair value of share liability of $141,769 related to the share issued to consultants, interest expense of $81,803 and a foreign exchange transaction expense of $37,047, partially offset by interest income of $925,007.

Other expense for the three months ended June 30, 2024 was $1,410,217, which includes a $1,574,816 change in fair value of the convertible notes payable issued in March and June 2024, interest expense of $69,078, partially offset by a $164,000 change in the fair value of the share liability related to the shares issuable to a consultant, foreign exchange transaction gain of $26,147 and interest income of $43,530.

Results of Operations

Comparison of the Six Months Ended June 30, 2025 and 2024

The following table summarizes our results of operations for the six months ended June 30, 2025 and 2024:

Revenue and Cost of Goods Sold

We have recognized revenue of PET Labs from the sale of nuclear medical doses for PET scanning for the six months ended June 30, 2025 and 2024. In addition, we have recognized the related cost of goods sold, operating expenses and other income and expenses of PET Labs for the same periods.

Research and Development Expenses

The following table summarizes our research and development expenses for the six months ended June 30, 2025 and 2024:

Research and development expenses were $2,409,720 for the six months ended June 30, 2025, compared to $688,436 for the six months ended June 30, 2024. The overall increase of $1,721,284 was primarily due to the following:

• an increase in personnel-related costs of $362,234 primarily due to the increase in headcount, salaries and related costs;
• an increase in facility and depreciation expenses of $1,054,921 due to an increase in space dedicated to development, noncapitalized expenses and repairs and maintenance; and
• an increase in other expenses of $420,657 primarily related to other general research and development expenses.

This increase is partially offset by a decrease in consulting and professional fees of $116,528 due to decreases in outsourced development activity.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $18,410,140 for the six months ended June 30, 2025, compared to $13,283,724 for the six months ended June 30, 2024. The overall increase of $5,126,416 was primarily due to the following:

• an increase in personnel-related costs of $4,053,766 primarily due to the increase in headcount, salaries and related costs; and
• an increase in professional fees of $1,288,728 primarily due to corporate development activity and consulting costs related to new general ledger system.

Other (Expense) Income

Other expense for the six months ended June 30, 2025 was $63,673,151, which includes an expense of $64,715,131 due to change in fair value of the convertible notes payable issued in March and June 2024, a change in fair value of share liability related to the shares issuable to consultants of $129,269, interest expense of $168,954 and a foreign exchange transaction loss of $98,517, partially offset by interest income of $1,438,720.

Other expense for the six months ended June 30, 2024 was $2,607,870, which includes a $54,000 change in the fair value of the share liability related to the shares issuable to a consultant, a $2,528,526 change in fair value of the convertible notes payable issued in March and June 2024 and interest expense of $82,866, partially offset by interest income of $55,718.

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 June 30, 2025, we had cash and cash equivalents of $67.7 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 scanning in South Africa. Our ability to generate product revenue from the sale of nuclear medical doses for PET scanning sufficient to achieve profitability will depend on the successful expansion of production capabilities and commercialization of the results of that expansion.

Future Funding Requirements

Based on our current operating plan, we estimate that our existing cash and cash equivalents 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. 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:

• the type, number, scope, progress, expansions, results, costs and timing of, our development activities for our future isotopes;
• the outcome, timing and costs of regulatory review of our future isotopes;
• the costs and timing of manufacturing for our future isotopes;
• our efforts to enhance operational systems and hire additional personnel to satisfy our obligations as a public company, including enhanced internal controls over financial reporting;
• the costs associated with hiring additional personnel and consultants as our preclinical and clinical activities increase;
• the costs and timing of establishing or securing sales and marketing and distribution capabilities, whether alone or with third parties, to commercialize future isotopes for which we may obtain regulatory approval, if any;
• our ability to achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payors and adequate market share and revenue for any approved products;
• the terms and timing of establishing and maintaining collaborations, licenses and other similar arrangements;
• the costs of obtaining, expanding, maintaining and enforcing our patent and other intellectual property rights;
• the costs to spinoff QLE and subsequent arrangement for distributing proceeds; and
• costs associated with any products or technologies that we may in-license or acquire.

Developing 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 in substantial quantities until at least 2025. 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.

Until such time as we can generate significant revenue from sales of our future isotopes or nuclear medical doses for PET scanning, 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 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 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 even if we would otherwise prefer to develop and market such isotopes ourselves.

Cash Flows

The following table summarizes our sources and uses of cash for each of the periods presented:

Operating Activities

Net cash used in operating activities was $11,071,311 for the six months ended June 30, 2025 and was primarily due to our net loss of $83.6 million, adjusted for stock-based compensation expense of $6,319,378, amortization of right-of-use asset of $267,952, depreciation expense of $678,959, issuance of common stock to a consultant with a fair value of $673,497, change in fair values for the convertible notes payable of $64,715,131 and a $148,671 change in our operating assets and liabilities.

Net cash used in operating activities was $8,095,256 for the six months ended June 30, 2024, and was primarily due to our net loss of $15.8 million, adjusted for stock-based compensation expense of $4,231,670, non-cash issuance costs for the convertible notes payable of $621,915, amortization of right-of-use asset of $217,997, issuance of common stock to a consultant with a fair value of $619,200, change in fair values for the convertible notes payable of $2,528,526, change in deferred tax liabilities of $39,068, and a $734,590 change in our operating assets and liabilities.

Investing Activities

Net cash used in investing activities was $34,107,564 for the six months ended June 30, 2025 and was comprised of cash paid for a note receivable of $30.0 million and the purchases of machinery and equipment, vehicles and construction in progress of $4,520,048.

Net cash used in investing activities was $3,867,903 for the six months ended June 30, 2024 and was comprised of the purchases of machinery and equipment and additional construction in progress.

Financing Activities

Net cash provided by financing activities was $50,780,627 for the six months ended June 30, 2025 and was comprised primarily of $50,000,000 in gross proceeds from the issuance of common stock and $4,915,312 in proceeds from the exercise of warrants, partially offset by underwriting discounts, commissions and offering expenses from the issuance of common stock of $3,238,630, payments of $409,696 on the note payable related to a financed corporate insurance policy, payment of principal portion of finance leases of $61,831 and distribution to noncontrolling interest in VIE of $79,310.

Net cash provided by financing activities was $32,414,967 for the six months ended June 30, 2024, and was comprised primarily of gross proceeds of $25,936,228 from the issuance of convertible notes payable, proceeds of $5,537,975 million from the issuance of common stock for a warrant exercise, contributions from noncontrolling interest in VIE of $807,975, proceeds from collection of receivable from noncontrolling interest in VIE of $705,403, partially offset by payments of $438,569 on the note payable related to a financed corporate insurance policy, payment of principal portion of finance leases of $61,929 and distribution to noncontrolling interest in VIE of $27,116.

Contractual Obligations and Commitments

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 expiring on February 28, 2026 and the Company is 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 $2,000 with a term expiring on October 30, 2026 and a base monthly rent payment of approximately $3,000 with a term expiring on May 31, 2028.

PET Labs Pharmaceuticals operates in a facility in Pretoria, South Africa is under a lease with a base monthly rent payment of approximately $27,000 with a term expiring on March 30. 2026 with automatic monthly extension afterwards. 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 is currently in automatic monthly extensions.

In November 2024 and 2023, the Company executed a promissory note payable with a finance company to fund its directors and officers’ insurance policy for $500,923 and $526,282, respectively. During 2024, the Company entered into several loans to purchase motor vehicles and certain equipment totaling $2,020,511. For the six months ended June 30, 2025, the Company entered into loans to purchase motor vehicles and certain equipment totaling $47,045. These loans are secured by the underlying assets included in property and equipment. Refer to Note 6 to our condensed consolidated financial statements included in Part I, Item 1, for information regarding interest rates and maturities.

On March 31, 2025, after the annual report on Form 10-K was filed, we entered into an Exclusivity Agreement with Renergen Limited (“Renergen”), an entity in South Africa listed on the Johannesburg Stock Exchange (“JSE”) and the Australian Stock Exchange. On May 18, the Exclusivity Agreement was amended. Per the terms of the amended Exclusivity Agreement, we received the rights to negotiate the terms of the acquisition of Renergen during an exclusive negotiation period that ends on May 31, 2025. In April 2025, we paid an exclusivity fee of $10,000,000 to Renergen. On May 19, 2025 we entered into a Firm Intention Letter with Renergen. The Firm Intention Letter sets the acquisition terms for us to purchase 100% of the outstanding shares of Renergen in exchange for our shares. The acquisition has been approved by Renergen shareholders. The completion of the acquisition is subject to certain regulatory and debtor approvals.

In addition, we entered into a Loan Agreement with Renergen in which a total of $30,000,000 will be provided by us in periodic payments for the purpose of funding Renergen’s operations. In conjunction with the Loan Agreement, the full amount of the previously paid exclusivity fee of $10,000,000 is applied to the loan. The remaining $20,000,000 available under the loan was paid by us to Renergen prior to June 30, 2025.

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.

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.

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 June 30, 2025. 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 June 30, 2025, our Chief Executive Officer and Chief Financial Officer concluded that, as a result of a material weakness identified in 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, 2024, our disclosure controls and procedures were not effective as of June 30, 2025. In order to remediate the material weakness, 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.

Changes in Internal Control

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.

In addition to the other 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 II, Item 1A—Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 31, 2025 and as amended by Forms 10-K/A filed with the SEC on April 30, 2025 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, 2024 (as amended) and those additional risks listed below 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. Except as set forth below, there are no material changes to the Risk Factors described in our Annual Report on Form 10-K for the year ended December 31, 2024 (as amended).

Risks Relating to the Acquisition of Renergen

The number of shares of ASPI common stock that Renergen shareholders will receive in the Offer is based on a fixed Entitlement Ratio. The market value of the ASPI common stock to be issued upon completion of the transaction is unknown, and therefore, Renergen shareholders cannot be certain of the value of the acquisition consideration to be paid in ASPI common stock.

Renergen shareholders will receive a fixed number of ASPI common stock in the transaction rather than a number of shares with a particular fixed market value. The market values of ASPI common stock and Renergen shares have fluctuated since the date of the announcement of the transaction and will continue to fluctuate to the closing date of the acquisition. The market values of ASPI common stock and Renergen shares at the time of the closing of the transactions may vary significantly from their prices on the date of the ASPI Offer Letter, the date of the announcement of the transaction or the closing date of the acquisition. Because the Entitlement Ratio will not be adjusted to reflect any changes in the market prices of ASPI common stock or Renergen shares, the market value of the ASPI common stock issued as the Scheme Consideration Shares and Renergen shares exchanged in the transaction may be higher or lower than the values of such shares on earlier dates. The Scheme Consideration to be received by Renergen shareholders will be solely ASPI common stock, except that any entitlements to fractions of shares of ASPI common stock that otherwise would be issuable pursuant to the Scheme will be rounded down to the nearest whole number of shares and a cash payment will be made for any fractional shares resulting from such rounding. Although the consideration to be received by Renergen shareholders is set, the market value of the Scheme Consideration to be received by Renergen shareholders that is comprised of ASPI common stock will fluctuate. On May 19, 2025, the last trading day prior to the announcement of the transaction, the market value of the Scheme Consideration was approximately $107.3 million based on the closing price of ASPI common stock on May 19, 2025. As of July 31, 2025, the market value of the Scheme Consideration was approximately $129.4 million based on the closing price of ASPI common stock on July 31, 2025.

Changes in the market prices of ASPI common stock and Renergen shares may result from a variety of factors that are beyond the control of ASP Isotopes or Renergen, including changes in their businesses, operations and prospects, regulatory considerations, governmental actions, and legal proceedings and developments.

The parties may not realize the anticipated benefits and cost savings of the transaction.

While ASPI and Renergen will continue to operate independently until the completion of the transaction, the success of the transaction will depend, in part, on ASPI’s and Renergen’s ability to realize the anticipated benefits and cost savings from combining ASPI’s and Renergen’s businesses. The parties’ ability to realize these anticipated benefits and cost savings is subject to certain risks, including, among others:

• the parties’ ability to successfully combine their respective businesses;
• the risk that the combined businesses will not perform as expected;
• the extent to which the parties will be able to realize the expected synergies, which include realizing potential savings from re-assessing priority assets and aligning investments, eliminating duplication and redundancy, adopting an optimized operating model between both companies and leveraging scale, and creating value resulting from the combination of ASPI’s and Renergen’s businesses;
• the possibility that the aggregate consideration being paid for Renergen is greater than the value ASPI will derive from the transaction;
• the possibility that the combined company will not achieve unlevered free cash flow that the parties expect;
• the incurrence of additional indebtedness in connection with the transaction and the resulting limitations placed on the combined company’s operations;
• the assumption of known and unknown liabilities of Renergen, including potential tax and employee-related liabilities; and;
• the possibility of costly litigation challenging the transaction.

If ASPI and Renergen are not able to successfully integrate their businesses within the anticipated time frame, or at all, the anticipated cost savings, synergies operational efficiencies and other benefits of the transaction may not be realized fully or may take longer to realize than expected, and the combined company may not perform as expected.

Integrating ASPI’s and Renergen’s businesses may be more difficult, time-consuming or costly than expected.

ASPI and Renergen have operated and, until completion of the transaction, will continue to operate independently, and there can be no assurances that their businesses can be integrated successfully. It is possible that the integration process could result in the loss of key employees, the disruption of either company’s or both companies’ ongoing businesses or unexpected integration issues, such as higher than expected integration costs and an overall post-completion integration process that takes longer than originally anticipated. Specifically, issues that must be addressed in integrating the operations of ASPI and Renergen in order to realize the anticipated benefits of the transaction so the combined business performs as expected include, among others:

• combining the companies’ separate operational, financial, reporting and corporate functions;
• integrating the companies’ technologies, products and services;
• identifying and eliminating redundant and underperforming operations and assets;
• harmonizing the companies’ operating practices, employee development, compensation and benefit programs, internal controls and other policies, procedures and processes;
• addressing possible differences in corporate cultures and management philosophies;
• maintaining employee morale and retaining key management and other employees;
• attracting and recruiting prospective employees;
• consolidating the companies’ corporate, administrative and information technology infrastructure;
• coordinating sales, distribution and marketing efforts;
• managing the movement of certain businesses and positions to different locations;
• maintaining existing agreements with customers and vendors and avoiding delays in entering into new agreements with prospective customers and vendors;
• coordinating geographically dispersed organizations; and
• effecting potential actions that may be required in connection with obtaining regulatory approvals.

In addition, at times, the attention of certain members of each company’s management and each company’s resources may be focused on completion of the transaction and the integration of the businesses of the two companies and diverted from day-to-day business operations, which may disrupt each company’s ongoing business and, consequently, the business of the combined company.

Failure to complete the transaction could negatively impact the price of ASPI common stock, Renergen shares and the future business and financial results of ASPI and Renergen.

The parties’ respective obligations to complete the transaction are subject to the satisfaction or waiver of a number of conditions set forth in the Circular. There can be no assurance that the conditions to completion of the transaction will be satisfied or waived or that the transaction will be completed. If the transaction is not completed for any reason, the ongoing businesses of ASPI and Renergen may be materially and adversely affected and, without realizing any of the benefits of having completed the transaction, ASPI and Renergen would be subject to a number of risks, including the following:

• ASPI and Renergen may experience negative reactions from the financial markets, including negative impacts on trading prices of ASPI common stock and Renergen shares and from their respective customers, vendors, regulators and employees;
• ASPI may not be able to recover amounts advanced to Renergen under the Loan Agreement ($30 million);
• ASPI and Renergen will be required to pay certain expenses incurred in connection with the transactions, whether or not the transactions are completed;
• the ASPI Offer Letter places certain restrictions on the operation of each of ASPI’s and Renergen’s respective businesses prior to the closing of the transaction, and such restrictions may prevent ASPI or Renergen, as applicable, from making certain acquisitions, taking certain other specified actions or otherwise pursuing business opportunities during the pendency of the transaction that ASPI or Renergen would have made, taken or pursued if these restrictions were not in place; and
• matters relating to the transaction (including integration planning) will require substantial commitments of time and resources of ASPI and Renergen management and the expenditure of significant funds in the form of fees and expenses, which would otherwise have been devoted to day-to-day operations and other opportunities that may have been beneficial to either ASPI or Renergen as an independent company.

In addition, each of ASPI and Renergen could be subject to litigation related to any failure to complete the transaction or related to any proceeding to specifically enforce ASPI’s or Renergen’s obligations under the ASPI Offer Letter.

If any of these risks materialize, they may materially and adversely affect ASPI’s or Renergen’s business, financial condition, financial results and the price of ASPI common stock, Renergen shares.

ASPI and Renergen will be subject to business uncertainties and contractual restrictions while the transaction is pending.

Uncertainty about the effect of the transaction on employees, vendors and customers may have an adverse effect on ASPI or Renergen and, consequently, on the combined company after the closing of the transaction. These uncertainties may impair ASPI’s or Renergen’s ability to retain and motivate key personnel and could cause customers and others that deal with ASPI or Renergen, as applicable, to defer or decline entering into contracts, or making other decisions concerning ASPI or Renergen, as applicable, or seek to change existing business relationships with ASPI or Renergen, as applicable. In addition, if key employees depart because of uncertainty about their future roles and the potential complexities of the transaction, ASPI’s and Renergen’s businesses could be harmed. Furthermore, the ASPI Offer Letter places certain restrictions on the operation of ASPI’s and Renergen’s businesses prior to the closing of the transaction, which may delay or prevent ASPI and Renergen from undertaking certain actions or business opportunities that may arise prior to the consummation of the transaction.

Third parties may terminate or alter existing contracts or relationships with ASPI or Renergen.

Each of ASPI and Renergen has contracts with customers, vendors and other business partners which may require ASPI or Renergen, as applicable, to obtain consents from these other parties in connection with the transaction. If these consents cannot be obtained, the counterparties to these contracts and other third parties with which ASPI and/or Renergen currently have relationships may have the ability to terminate, reduce the scope of or otherwise materially adversely alter their relationships with either party in anticipation of the transaction, or with ASPI following the transaction. The pursuit of such rights may result in ASPI or Renergen suffering a loss of potential future revenue, incurring liabilities in connection with a breach of such agreements or losing rights that are material to its business. Any such disruptions could limit ASPI’s ability to achieve the anticipated benefits of the transaction. The adverse effect of such disruptions could also be exacerbated by a delay in the completion of the transaction or the termination of the transaction.

In order to complete the transaction, the parties must obtain certain governmental approvals, and if such approvals are not granted or are granted with conditions that become applicable to the parties, completion of the transaction may be jeopardized or prevented or the anticipated benefits of the transaction could be reduced.

Consummation of the transaction is conditioned upon, among other things, the receipt of certain governmental approvals, including approvals required under South African law. Although the parties have agreed in the ASPI Offer Letter to use their reasonable best efforts to make certain governmental filings and obtain the required governmental approvals, there can be no assurance that the required approvals will be obtained and no assurance that the transaction will be completed.

In addition, the governmental authorities from which these approvals are required have broad discretion in administering the governing laws and regulations, and may take into account various facts and circumstances in their consideration of the transaction. These governmental authorities may initiate proceedings seeking to prevent, or otherwise seek to prevent, the transaction. As a condition to the approval of the transaction, these governmental authorities also may impose requirements, limitations or costs, require divestitures or place restrictions on the conduct of the combined company’s business after completion of the transaction. Conditions imposed by certain governmental authorities may be appealable; however, there can be no assurance that an appeal will be successful. Additionally, there is no certainty as to what conditions such governmental authorities may impose, the extent of such conditions or the impact of such conditions on the completion of the transaction.

The transaction is subject to a number of closing conditions and, if these conditions are not satisfied, the ASPI Offer Letter may be terminated in accordance with its terms and the transaction may not be completed.

The transaction is subject to a number of closing conditions and, if these conditions are not satisfied or waived (to the extent permitted by law), the transaction will not be completed. These conditions include, among others: (i) the written consent for the transfer of the Renergen shares in terms of the Offer is obtained from the Industrial Development Corporation of South Africa and the United States International Development Finance Corporation (“Renergen Lenders”) in terms of the change of control provisions under their respective loan and/or funding arrangements with Renergen and subsidiaries of Renergen and that the Renergen Lenders agree not to proceed in foreclosing on outstanding debt due by those subsidiaries, as a result of any breach of covenants, event of default or otherwise, prior to July 31, 2027; (ii) the written consent for the transfer of the Renergen shares in terms of the Offer is obtained from The Standard Bank of South Africa (“SBSA”) in terms of the change of control provisions under its respective loan(s) and/or funding arrangement(s) with Renergen and SBSA agrees to extend the repayment date for the loan(s) and/or funding arrangement(s) to at least March 31, 2026; (iii) AIRSOL SRL agrees to extend the maturity date for the convertible debentures that it holds in Renergen, to at least March 31, 2026; (iv) receipt of required regulatory approvals required to implement the Offer are obtained (except for the requirement that Takeover Panel issue a compliance certificate to Renergen in terms of section 121(b) of the Companies Act); (v) receipt of all regulatory approvals required for the Company Secondary Listing; (vi) approval of applicable competition authorities to implement the Offer (which has been obtained); (vii) approval by Renergen’s shareholders of the Shareholder Ratification resolution and the Scheme resolution to be descried in the combined circular to be distributed to Renergen’s shareholders (the “Renergen shareholder Approval”); and (viii) absence of a material adverse change with respect to Renergen. The Renergen shareholder Approval was obtained on July 20, 2025.

The conditions to the closing may not be fulfilled and, accordingly, the transaction may not be completed.

Both ASPI Shareholders and Renergen shareholders will have a reduced ownership and voting interest after the transaction and will exercise less influence over management.

After the completion of the transaction, ASPI’s Shareholders and Renergen’s Shareholders will own a smaller percentage of ASPI than they currently own of ASPI and Renergen, respectively. Based on the number of shares of ASPI common stock and Renergen shares outstanding and the Entitlement Ratio, it is expected that Renergen securityholders will own approximately 14%, and ASPI securityholders will own approximately 86%, of the combined company immediately after consummation of the transaction on a fully diluted basis. Consequently, ASPI stockholders, as a group, and Renergen shareholders, as a group, will each have reduced ownership and voting power in the combined company compared to their current ownership and voting power in ASPI and Renergen, respectively. In particular, Renergen stockholders, as a group, will have less than a majority of the ownership and voting power of ASPI and, therefore, will be able to exercise less collective influence over the management and policies of ASPI than they currently exercise over Renergen’s management and policies. While ASPI shareholders will own a majority of ASPI common stock immediately after consummation of the transaction, their collective ownership percentage will likewise be reduced compared to their current level, as will be their ability to influence management and policies.

There can be no assurance that ASPI will be able to secure the financing necessary to fund Renergen to enable Renergen to meet key lender payment deadlines and avoid a default by Renergen under its existing loan/funding arrangements.

ASPI may need to obtain debt and/or equity financing in an amount sufficient to fund Renergen to enable Renergen to meet key lender payment deadlines and avoid a default by Renergen under its existing loan/funding arrangements; however, there is no assurance that it will secure the financing necessary to do so. ASPI cannot assure stockholders that it will be able to obtain financing in connection with the contemplated funding of Renergen. In the event that ASPI is unable to secure financing on acceptable terms, the funding of Renergen may be delayed or not be completed, and Renergen may not be able to avoid a default under its existing loan/funding arrangements and the consummation of the transaction may be delayed or may not occur.

The financial analyses and forecasts considered by ASPI and Renergen and their respective financial advisor or independent expert, as applicable, may not be realized, which may adversely affect the market price of ASPI common stock following the completion of the transaction.

In performing their financial analyses and rendering their opinions related to the transaction, ASPI’s financial advisor and Renergen’s independent expert relied on, among other things, certain information, including financial forecasts and projections of ASPI and Renergen provided by ASPI and Renergen. These projections and forecasts were prepared by, or at the direction of, the management of ASPI or the management of Renergen, as applicable. None of these projections or forecasts were prepared with a view towards public disclosure or compliance with the published guidelines of the SEC, GAAP or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of financial forecasts. These projections and forecasts are inherently based on various estimates and assumptions that are subject to the judgment of those preparing them. These projections and forecasts are also subject to change, including due to significant economic, competitive, industry and other uncertainties and contingencies, all of which are difficult or impossible to predict and many of which are beyond the control of ASPI and Renergen. There can be no assurance that ASPI’s or Renergen’s financial condition or results of operations will be consistent with those set forth in such projections and forecasts, which could have an adverse impact on the market price of ASPI common stock or the financial position of ASPI following the transaction.

The financial forecasts used by the parties are based on various assumptions that may not be realized.

The unaudited prospective financial information used in the forecasts were prepared solely for internal use and are subjective in many respects. ASPI’s and Renergen’s prospective financial information were based solely upon assumptions of, and information available to, ASPI’s management and Renergen’s management, as applicable, when prepared, and these estimates and assumptions are subject to uncertainties, many of which are beyond ASPI’s and Renergen’s control and may not be realized. Many factors, including the risks outlined in this “Risk Factors” disclosure, will be important in determining the combined company’s future results. As a result of these contingencies, actual future results may vary materially from ASPI’s and Renergen’s estimates.

Executive officers and directors of ASPI and Renergen may have interests in the transaction that are different from, or in addition to, the rights of their respective stockholders.

Executive officers of ASPI and Renergen negotiated the terms of the ASPI Offer Letter and the ASPI board and the Renergen independent board each approved the ASPI Offer Letter and the transaction. These executive officers and directors may have interests in the transaction that are different from, or in addition to, yours. These interests include the continued employment of certain executive officers of ASPI and Renergen, the continued service of certain directors of ASPI and Renergen

ASPI, Renergen and, subsequently, the combined company may have difficulty attracting, motivating and retaining executives and other key employees in light of the transaction.

The combined company’s success after the transaction will depend in part on each of ASPI’s and Renergen’s ability to retain key executives and other employees. Uncertainty about the effect of the transaction on ASPI’s and Renergen’s employees may have an adverse effect on each company separately and, consequently, the combined business. This uncertainty may impair ASPI’s and/or Renergen’s ability to attract, retain and motivate key personnel. Employee retention may be particularly challenging during the pendency of the transaction, as ASPI’s and Renergen’s employees may experience uncertainty about their future roles in the combined business.

Additionally, Renergen’s officers and employees hold Renergen shares, and, if the transaction are completed, these officers and employees will be entitled to the Scheme Consideration in respect of such shares.

Furthermore, if any of ASPI’s or Renergen’s key employees depart or are at risk of departing, including because of issues relating to the uncertainty and difficulty of integration, financial security or a desire not to become employees of the combined business, ASPI or Renergen, as applicable, may have to incur significant costs in retaining such individuals or in identifying, hiring and retaining replacements for departing employees and may lose significant expertise and talent, and the combined company’s ability to realize the anticipated benefits of the transaction may be materially and adversely affected. No assurance can be given that the combined company will be able to attract or retain key employees to the same extent that ASPI or Renergen has been able to attract or retain employees in the past.

ASPI and Renergen will incur significant transaction and Scheme related transition costs in connection with the transaction.

ASPI and Renergen expect that they will incur significant, non-recurring costs in connection with consummating the transaction and integrating the operations of the two companies post-closing. ASPI and/or Renergen may incur additional costs to retain key employees. ASPI and/or Renergen will also incur significant fees and expenses relating to financing arrangements and legal services (including any costs that would be incurred in defending against any potential class action lawsuits and derivative lawsuits in connection with the transaction if any such proceedings are brought), accounting and other fees and costs associated with consummating the transaction. Some of these costs are payable regardless of whether the transaction is completed. Though ASPI and Renergen continue to assess the magnitude of these costs, additional unanticipated costs may be incurred in the transaction and the integration of the businesses of ASPI and Renergen.

ASPI and Renergen may be the target of securities class action and derivative lawsuits which could result in substantial costs and may delay or prevent the transaction from being completed.

Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into business combination agreements. Even if the lawsuits are without merit, defending against these claims can result in substantial costs and divert management time and resources. An adverse judgment could result in monetary damages, which could have a negative impact on ASPI’s or Renergen’s liquidity and financial condition. Additionally, if a plaintiff is successful in obtaining an injunction prohibiting completion of the transaction, then that injunction may delay or prevent the transaction from being completed, which may adversely affect ASPI’s or Renergen’s or, if the transaction are completed but delayed, the combined company’s business, financial position and results of operations. As of the date hereof, no such lawsuits have been filed in connection with the transaction and we cannot predict whether any will be filed.

Risks Relating to the Combined Company after Completion of the Transaction

In connection with the transaction, the combined company may incur significant indebtedness to fund Renergen.

ASPI may need to obtain debt and/or equity financing in an amount sufficient to fund Renergen to enable Renergen to meet key lender payment deadlines and avoid a default by Renergen under its existing loan/funding arrangements. If such financing involves debt, such indebtedness will have the effect, among other things, of reducing the combined company’s flexibility to respond to changing business and economic conditions, will increase the combined company’s borrowing costs and, to the extent that such indebtedness is subject to floating interest rates, may increase the combined company’s vulnerability to fluctuations in market interest rates. The increased levels of indebtedness could also reduce funds available to fund efforts to combine ASPI’s and Renergen’s businesses and realize expected benefits of the transaction and/or engage in investments in product development, capital expenditures and other activities and may create competitive disadvantages for the combined company relative to other companies with lower debt levels. The combined company may be required to raise additional financing for working capital, capital expenditures, acquisitions or other general corporate purposes. The combined company’s ability to arrange additional financing will depend on, among other factors, its financial position and performance, as well as prevailing market conditions and other factors beyond its control. ASPI and Renergen cannot assure you that they will be able to obtain additional financing on terms acceptable to them or at all.

The combined company will be subject to the risks that each of ASPI and Renergen faces.

Following completion of the transaction, the combined company will be subject to numerous risks and uncertainties, including the risks faced by each of ASPI and Renergen. The risks faced by ASPI are described herein and in the other documents that ASPI has filed with the SEC.

Renergen faces numerous financial, operational and other risks, including risks related to Renergen’s debt, funding challenges, liquidity concerns, losses, project execution risk, ability to produce Grade-A quality helium, the accuracy of reserve estimates, cost overruns and delays, commodity price volatility, market competition, regulatory and environmental risks, and existing and potential litigation. Renergen’s risks also include: unplanned stoppages and unforeseen operational interruptions that can impact production; ineffective or failed internal processes, people, systems, or external events that could lead to injury or harm; increasing pressure and attention from shareholders, activists and NGOs; strikes, riots and labor disruptions that can damage economic growth and, in turn, negatively impact Renergen’s business; escalating global socioeconomic pressures and inflationary impacts on the back of global geopolitical tensions; South Africa's exports to the U.S. may face higher tariffs, leading to reduced competitiveness and export volumes; economic contraction; delays in achieving expansion plans within the specified time due to funding constraints; delays in achieving Phase 1 nameplate capacity within the specified time and budget; Eskom’s inability to prevent load shedding and further risk of blackouts; Eskom remains constrained in meeting the country’s electricity demand; generative artificial intelligence (GenAI) has increased the risk of cyber-attacks by making information for simulation attacks more accessible; a malicious or accidental cyber-attack from outside Renergen, insider threats or supplier breaches that could result in operational interruptions or the infringement of data; information and cyber security threats, including business operations outages; climate change and prolonged droughts that could have an impact on water resources; unseasonal weather exacerbated by climate change impacts that could lead to delays in the project (construction phase).

If any such risks actually occur, the business, financial condition, results of operations or cash flows of the combined company could be materially adversely affected.

The market price for shares of ASPI common stock may decline as a result of the transaction, including as a result of some ASPI stockholders adjusting their portfolios.

The market value of ASPI common stock at the time of consummation of the transaction may vary significantly from the prices of the ASPI common stock and Renergen shares on the date the of the ASPI Offer Letter, the date of the announcement of the transaction and the closing date of the acquisition. Following consummation of the transaction, the market price of ASPI common stock may decline if, among other things, the operational cost savings estimates in connection with the integration of ASPI’s and Renergen’s businesses are not realized, or if the costs related to the transaction are greater than expected, or if the financing related to the transaction is on unfavorable terms. The market price also may decline if ASPI does not achieve the perceived benefits of the transaction as rapidly or to the extent anticipated by financial or industry analysts or if the effect of the transaction on ASPI’s financial position, results of operations or cash flows is not consistent with the expectations of financial or industry analysts.

In addition, sales of ASPI common stock by ASPI’s stockholders after the completion of the transaction may cause the market price of ASPI common stock to decrease. Approximately 105,683,109 shares of ASPI common stock are expected to be issued and outstanding immediately after the closing of the transaction. Many Renergen shareholders may decide not to hold the shares of ASPI common stock that they receive in the transaction. Other ASPI stockholders following consummation of the transaction, such as funds with limitations on their permitted holdings of stock in individual issuers, may be required to sell the shares of ASPI common stock that they receive in the transaction. Such sales of ASPI common stock could have the effect of depressing the market price for ASPI common stock and may take place promptly following the transaction.

Any of these events may make it more difficult for ASPI to sell equity or equity-related securities, dilute your ownership interest in ASPI and have an adverse impact on the price of ASPI common stock.

The transaction may not be accretive, and may be dilutive, to the combined company’s earnings per share, which may negatively affect the market price of shares of ASPI common stock.

ASPI and Renergen currently believe the transaction will result in a number of benefits, including cost savings, operating efficiencies, and stronger demand for their respective products and services, and that the transaction will be accretive to ASPI’s earnings. This belief is based, in part, on preliminary current estimates that may materially change. In addition, future events and conditions, including adverse changes in market conditions, additional transaction and integration-related costs and other factors such as the failure to realize some or all of the anticipated benefits of the transaction, could decrease or delay the accretion that is currently anticipated or could result in dilution. Any dilution of, or decrease in or delay of any accretion to, the combined company’s earnings per share could cause the price of shares of ASPI common stock to decline or grow at a reduced rate.