Hello. This is Craig bralford with red chip companies. Thank you for joining today’s event with ASP isotopes, which trades on the NASDAQ under the ticker ASP. I With us today we have Paul Mann, the CEO of ASP isotopes. Paul will briefly introduce the company in just a moment, and then we will jump right to your questions. You can submit a question at any time by email at ASPI, at red chip com. You may also use the Q and A button and type in your question. I will read it aloud, and Paul will answer your Q and A button is at the middle of your zoom window. Before we begin, I’m going to quickly read the safe harbor statement. This call may contain forward looking statements within the meaning of the private securities litigation reform act of 1995 all statements pertaining to future financial and or operating results, along with other statements about the future, expectations, beliefs, goals, plans or prospects expressed by management constitute forward looking statements. Any statements that are not historical fact should also be considered forward looking statements. Of course, forward looking statements involve risks and uncertainties. I now turn this webinar over to Paul. Please go ahead.
Thanks, Craig. Yeah. So the format’s bit different this month or this quarter, people have asked us not to go through the presentation and go to Q and A, kind of go straight to Q and A, which is absolutely fine by me. You see the presentation online, so you can find that whenever you want to. I thought I’d give a couple of highlights of what we achieved this quarter, and then hand straight over to Craig for Q and A. So I think, you know, the main highlights for me this quarter is we’ve put three plants into commercial operation in terms of, you know, starting to enrich commercial product, or starting which product ready for commercial distribution. So the carbon 14 plant started up back in early February. That plant was actually constructed last year. It’s been sitting there idle for nine months, you know, waiting for the feedstock to arrive from Canada. That arrived in late January, and they started to process that feedstock now, which is fantastic. We still require a second batch of feedstock, which I’m told is coming shortly, and that should produce commercial product around the middle of the year, which is great. The team are great. Really happy to be starting to starting to enrich proper carbon 14, the second plant, the silicon 28 plant, started up about two weeks ago or so, maybe three weeks ago, and we finished construction that plant in November. We then spent about three months or so commissioning it. With four months commissioning it, commissioning is always an uncertain process. You never know how long it’s going to take. You generally find all the problems during the commissioning phase. The team did a great job. The side end team did an amazing job. They got through the commissioning phase. Some of the problems they encounter, things like, you know, they they couldn’t get the liquid helium down to a cold enough temperature to work out better insulation. Change the cryogenic pump. Is a problem with the OEM supplied equipment, and then that they kind of got there an impeller on the on the compressors broken. It’s tedious, but we get a new one, mend it, work through it, kind of thing. Our team of engineers are great at working through these problems, and they they solve these problems in real time. Snap plant started commercial production a couple of weeks ago. It’s now reaching silane, which is fantastic. And the final plant, the utopian plant, is our first laser plant, and that started commercial productions about sort of seven or eight days ago, and just producing commercial samples right now, then we’re going to full commercial production, you know, later on, when we’ve got commercial samples out to customers. So I think the team’s done a great job bringing those into commission. Have some great R and D results as well, looking at isotopes such as xenon, Xenon 129 germane things like that as well. And the team are currently working out how to enrich those and nitrogen 15 team are currently working how to enrich those isotopes. We have international customers, more all that stuff. So certainly main, the main highlights of of the year so far, and we look forward to building more plants and producing more isotopes. So So Craig, I guess I’ll stop there, and we can start from the Q and A session, if that’s okay.
Thank you very much, Paul. Yes, there are three ways to reach Paul. You can email us your question at aspi@redship.com, you may also click the Q and A button and type your question into the text box that will appear in those cases, I will read your question aloud, and Paul will answer you. May also use the raise hand button at the bottom of your zoom window, if you would like to speak to Paul Mann, I will unmute your line and you can speak to Paul. We will excuse me. Let. Start with Michael Samuels, you had your hand up, Michael, please go ahead.
Hey, Paul. Um, thanks for taking the time. Just a couple questions. What? What kind of revenue are you looking at generating this year? Number one. Number two, what about how much cash do you have on hand? And you know, do you have enough to last a year, two years? Because I think the last time I looked at them, 60 million in cash. But I don’t know where that is today. So those,
yeah, so for revenues, we haven’t given guidance for the year. So I can’t, I can’t really tell you what members are getting this year. We’ve told you what contracts we’ve signed and what the, you know, what the commercial value of each plant or commercial contracts are, and hopefully you can put those together to kind of work out what an annualized revenue would be doing on a annualized run rate, once we’re hitting annualized targets and annualized numbers. So
what kind of cash burn? What kind of cash burn Do you think you’ll have this year? So
you know, we spend about 12 to $15 million a year and operating cash burn and so that that basically pays for our our 153 employees. It pays for our buildings, our leases. It pays for our energy costs. It pays for our legal fees, our accountants, our auditors, our list our filing listing fees and NASDAQ fees and all that stuff for the public company costs. So, you know, charge 15 million bucks a year is what we spend to keep the company’s lights on, essentially,
okay? And then I’ll actually, I know this is a short subject with you. Obviously, you had shorters in this stock going crazy. You know, at first they said you didn’t even have plants, and you know you’ve proved that wrong. I mean, I know there’s like, I think at the last report, February, there’s 16 million shares short, and I’m just wondering, what can you do to combat that? Because obviously that’s why you’re stuck sitting in where it is. So I was just wondering, what do you have to say about that, I’m
not sure, as a sore subject. And I spent 10 years as a hedge fund manager locally shorting stocks. And it takes two to make a market, you know, buy and sell inside of every trade. So some people can place their bets as they want to. You know, my job over the next several years is to prove the shores wrong and produce commercial revenues and commercial products and drive the company to where generating significant PL significant profits. So, so, you know, that’s just, that’s just the way the markets are. I think, if you look at most nuclear stocks right now, you know, or close Silex, centrist, you know, the short interest is very high in the whole sector in general, you know. And that’s the nature of, you know, pre revenue, early stage growth companies, and that’s where it goes. And if we, if we’d deliver on our business plan, I think we’ll prove the shorts wrong.
Thank you very much, Mike for that question. Paul, please go give an update on the class action that followed that short report.
Yeah, I’m not sure I’m actually allowed to, and I don’t have an update actually. You know, it’s the lawyers are dealing with that, and, you know, my assumption is it gets thrown out of court, but, I mean, we have to wait and see.
Are you going to delay the spin off plans in this uncertain market environment?
Probably not. No. I mean, you know, you say uncertain market environment, I mean, there’s been some recent volatility, but, I mean, we’ve all grown adults. We’ve been doing this a number of years. We’ve been through these cycles many times before markets will settle down at some point in the in the near future, I suspect, and I think probably the US will be a stronger place as a result of it. So, so, so, yeah, I mean, our plan is to spin off q&a as and when we’re ready, when the market’s ready. And I think I’ve said historically, we two things in place before we can spin off purely. The first is we need a location where we’re going to enrich uranium. We have that now. We’re going to do it at pelinda in South Africa, which is basically a plug and play location to build such a plant. And we need to have line of sight to aspiring cash flow positive. And again, we stocked up the free plants now. And so I think, you know, we’re kind of seeing that. So what do we need to do to spin off Julie me to file some registration statements of the SEC and NASDAQ and that kind of stuff, and then we kind of aid it, and hopefully we’ll do it as soon as possible. I mean, yeah, I can’t prove so much more than that. I don’t know. Sec documents take, and there’s that document has taken out of my control, but the goal is to do it sooner rather than later.
Ian Ian Lee, please go ahead. Ian Lee,
Hi, Paul, thanks for your time. Um, I’m a little confused as to why you don’t give earning guidance. You say it’s very simple. You know, the operating plants, you know the markets. One of the factors for attracting, you know, new investors and institutional investors will be that kind of statement from yourselves, on on revenue guidance or revenue range. It would make quite a big difference. To the profile of a company. I’m just really confused why you don’t do it, if you say it’s so simple,
which I don’t know what month we’ll start selling commercial products in. And so the difference between, say, May, June, July and August makes a huge difference to to our annual numbers. And so it’s difficult for me to predict that right now, the plants are all starting up. They’re starting to enrich and stuff, and it’s great, but exactly when the first deliveries take place, I only have two contracts right now for silicon 28 we’re negotiating three more for silicon. We’re negotiating one for germane as well. And there’s more contracts you may sign. And so you know, why not talk about what we think the annualized run rate would be once all the plants look and running, and once you sign contracts and stuff, and we’ll see where we come out at the
end of the year, make some assumptions and state, then no one’s going to it just gives more granularity, more insight into the company, and goes to sort of debunk some of the myths out there, state assumptions. You know, everyone realizes that, you know, there’s a lot of uncertainty. Things are changing. There’s no reason you know that that’s pretty much a standard with every company, really. So I don’t know. I
don’t know. I mean, small companies when they’re in the early, early on, early stages. You know, it’s generally best to kind of earn a side of caution and kind of see what happens. And, you know, we’re delivered, to see what revenues we deliver as much as possible. And then hopefully next year we’ll have a fantastic year, and we’ll exit this year at a huge run rate, I think, yeah, but really, let’s just see how the year plays out. Maybe we can’t go garden set on the you know.
Thanks a lot, Ian for that question. Paul, why does Iceland keep getting delayed? It seems you are almost four to five months behind schedule.
Yeah. So, you know, our first part in Iceland was going to be zinc 68 and, you know, that was when we were assuming quantum enrichment plant would be built in 2025 mid 2025 but actually our first QE plant arrived 12 months early in the summer of 2024 and the results looked so good the QE process, we kind of felt actually QE is a better way of doing zinc than ASP in Iceland. So the kind of rethinking which first plant is going to go into Iceland? And it’s probably not going to be zinc, 68 No, that’ll probably get down South Africa by quantum enrichment, because it’s just better economics and less capital, higher return on capital, better IRR on the plant. So it’s probably going to be Xenon 129 or germanium or or silicon 28 so we’re kind of working through that at the moment. I think we’re pretty much there with the licensing process in South Africa. So in Iceland, the Icelandic government, so African government, have been speaking about transfer technology. I think both sides are pretty happy with how it should work out. We’ve signed our lease for building. We’ve signed the energy energy supply agreement, so we’re pretty much ready to go. We just need to work out which, which I which side is gonna be the first one to go there, and I think we’ll decide that in the next few months or so. And I’d also add that our team have been really busy completing the construction and commissioning the first three plants in South Africa. And they probably haven’t really had the bandwidth to start the construction of an Icelandic plant. We’ve been already procuring and constructing and fabricating some of the components for it. But you know, terms of the actual putting together the plant, you know they’re they’ve been very busy these last few months.
Jacob row, please go ahead.
Hey, Paul. So one of my questions is, so you set plan on you haven’t actually enriched 99.75% for the last call, and you’re you said the stages are pretty much identical. I think that’s what striatum explained. So how many grams when this first batch finishes, all the way through and you get through the second stage, up to 99.75% I don’t know. You don’t know when that occurs. But how many grams of ytterbium are you expecting to come out of that first batch?
Yeah, we haven’t given that granular, that level of granular detail. You know? What I would say is that in any enrichment process, the first the first batch takes the longest, the second batch, the short circuit shows and the final batch is very short. So for example, in carbon 14, to go from point 5% to 2% takes about 60 days, and then to go from 2% to sort of 5% takes, call it 1520, days. And then from 5% to 30, 40% takes five days. Then to go from 30% to 85% takes takes a couple of hours. So it’s a very non linear. Process in terms of enrichment, you know, and the kilogram swoos in the early part of the process is huge, versus the kilogram smooth towards the end of the process. So we haven’t given that level of detail, Jacob, and we probably won’t. It’s quite information, just how we process it and what we do, you know. Um,
but do you have, I guess, a finalized when you guys send out samples, are you guys going to kind of be like, front running those samples a little bit as in terms of production, as in, you guys will have inventory of fully 99.75% production. You send out a little bit of that via samples, and then you expect, like, to immediately be able to send out commercial quantities after they test it. Yeah, so
we’ll, we’ll, we’ll build up a significant amount of inventory of intermediate, rich products. And you know, the first, first few grams of 99.75 we will send out as as commercial samples. And then we’ll start producing more inventory of intermediate products and more more finished products.
Okay, that makes sense. Okay, all right, that that clarifies it a lot. Thank you. Um, and then I guess my understanding is silicon is a little bit quicker. It’s a lot less swoop. So we should definitely see that before uterb. Um, do you have an idea of when we will see those be sent out? I mean, obviously you’re not giving guidance, so I’m not expecting super details. But are we expecting it this like month, next month, and well before the end of the quarter?
Yeah, I know exactly when sent out, but we haven’t given guidance or advise the student. I can’t say that’s general public information, but, but yeah, we have a good idea when it’s going out. The customer needs it urgently. So,
Jacob, thanks a lot. Jordan heimowitz, you can speak now, please, Jordan.
Can you unmute? Jordan,
sorry. First of all, I’d like to give a ginormous shout out to Jacob, who just asked the question, who wrote an absolutely outstanding report that’s on his website that everybody should read. It’s It’s phenomenal, and he deserves a lot of credit. So my first question is, do you want to hire Jacob to be your IR person?
Thank you for the advice. You know, we are actually looking to we’re looking to add a couple of full time employees to ASPI over the next six, nine months or so, one of which will be a full time professional investor relations person. We’re also looking to hire a somebody in charge of commercial for electronic isotopes, and also commercial for healthcare isotopes, one in the United States and more invested worlds. We’re looking to hire for full time employees in the United States, one of which is IR, but today will be we’ll see. But thank you, Jordan for that. You
need an office for that, though, which someone will have to visit. My serious question that is on his website. He’s got a phenomenal chart with and I don’t want you to ask to comment on the numbers, but each plan comes online and dollar amounts forgetting the timing of it. But does the ARR look reasonable for each of the upcoming three or four products like you’ve already commented? Uterb could be 20 million in ARR, and carbon 14 could be two and a half to five, and silicon could be 20 to 25 but could nickel be 50 million and Xenon be 40 million? Of those reasonable numbers sometime in the future, not this year, because the plants don’t even open. Yeah. I mean, um,
it’s not I have a crystal ball. So I don’t know how big the Xenon market is going to be. Xenon 129, only got approved a couple of years ago the United States. It’s currently fairly small. The customer of ours sells us, they may well need 50,000 liters in three or four years time. That’s a large number. So, you know, that’s, that’s their view on how big their mark could be. I don’t, I don’t know, I don’t know how like that is, but that’s their opinion nickel, you know, could be, could be very significant. You know,
we have customers wanting,
you know, seven, eight digit numbers worth of nickel every year. So it could be quite, could be quite significant. And so, yeah, I mean, it’s number. I’d say most of the medical isotopes are probably in the 10s of millions of dollars. Opportunity. I think your turban could be larger than, obviously, silicon could be a lot larger than that over time. You know. I mean, if we can, if silicon 28 has proven to make faster semiconductors that are smaller, more heat efficient, you know, that could be a very large market opportunity in 510, years time, absolutely.
Jordan, thank you very much for your question, Paul, how do the recently imposed tariffs impact your business outlook and potentially supply agreements that are under negotiation,
you know. So there’s two types of problem in the world. There’s my problem and there’s someone else’s problem, and that’s someone else’s problem. So we sell all of our isotopes ex factory gates. They’re responsible for shipping it to a final destination. So if there’s any tariffs charged on our products, the customer is going to eat those tariffs. I’m guessing, therefore, the end consumer will eat those tariffs. You know, there are some exclusions from the tariffs. Some of those are kind of critical materials. I haven’t checked in a lot of detail, but I would guess most of our products fall under that category, and therefore would be excluded from the tariffs. But I haven’t checked, and it’s our customer’s job to check that.
Calvin, hoary, you are next, Calvin,
Calvin, you’re on mute. Yeah. Unmute your line, please. Calvin, can you hear me, I can Yes, yeah, yeah. Thanks for
Paul for utilizing this format. It’s much more efficient than the previous ones. Um, anyway, just one quick question on, where do you stand on signing the definitive agreement with Tara Powell, but
we haven’t given any guidance on that. And you know, we there’s a period of exclusivity which gives both parties time to negotiate the defensive agreements. You know, defensive supply agreements quite a complex agreement to enter into. You agree on the price and volume in the first half hour, hour or so, then the next six months or longer is taken to determine many other parameters, such as, who’s going to test the product, who’s going to ship the product, what form is it being shipped in? What are the chemical specifications? Who’s going to test those chemical specifications? What tests are going to get used to test those chemical spec, chemical specifications, and who’s going to monitor and zero those machines that test those machines that test those chemical formulations. Who’s going to test the isotomic enrichment? What methods can be used for that? You know, where’s it going to get stored? How’s it going to get shipped? Who’s shipping them, what container, what ports are going from, where it’s going to, timings, that kind of stuff, you know. So there’s a lots of stuff that goes into a supply agreement that has to be worked out by both parties, you know, and that takes time. So, you know, when we signed the the term sheet with ter power in in November last year, it envisaged a period of time where we could work all that information out and what’s needed. So, you know, we’ll, we’ll, I think we’ll sign the people quite quickly. Look at we’re probably running well ahead of schedule, well ahead as well ahead of schedule, actually several months ahead of schedule. So maybe that happens quite soon. See.
Okay, thank you.
Paul, will Q, L, E, Quantum Leap energy be an IPO or a direct listing, as you have made reference to both types of transaction in the past. Yeah,
I wouldn’t want to commit to either right now.
My personal preference is for direct listing. But you know, we’re in the first of hiring bankers to help us with this process and their advisors and guide us accordingly. But it feels to me like a direct listing is most straightforward. They’re doing it. But listen, let’s see how market conditions are and how things look at the time. You know,
how will the plants be operated? Are you selling them? How would staff be trained to operate them?
So we have about 153 employees in our company now, of which, 20% have got PhDs, about half have got advanced degrees, and the other half have got very good, strong high school education. We’ve trained the staff. We trained all the staff we need to operate the free plants. We have an operations team for each plant, a plant manager for each plant, Mia, who runs the carbon 14 plant, she’s actually a student of ex Andres, who’s our head of R and D at a university for undergraduate degree of her, and you have a similar person that I set up in 28 plant. And actually Hendrick runs the uturbian plant right now that we have a plant manager, manages schedules and that kind of stuff, the team of a very well trained they understand what they’re doing in the carbon 14 plant. They’ve been trained by by Nexa, actually, in terms of radiation controls and radiation safety and that kind of stuff. So, you know, these are fairly skilled workers who understand how to control these plants and how to operate them. Yeah. And they’re doing a great job.
If you were running at what you consider to be full capacity, then what would the approximate annual production be?
So you can set a question again and which point you referring to.
The writer didn’t specify. Here’s what he wrote. He wrote, if you were writing, yeah, if you were running at what you consider to be full capacity, then what would approximately be the annual production, yeah. So
let’s go for each plant individually. So for so your turbine, 176 our current expectation is that that plant could do about a kilogram a year. We’re still not searching yet. We haven’t really run the plant for very long, so we’re finding that out at the moment, but that’s our current expectation. You know, we have about two kilos of demand, and so, you know, we’re trying to expand that plant as quick as we can and find ways to produce more for silicon 28 what we said is that, is that we that plant could do over 50 kilos a year. When we started building and designing that plant, we afforded 10 kilos a year, and we took the took the liberty to expand that plant while we’re building it. We recognized 10 kilos wouldn’t be sufficient for the marketplace and then for carbon 14, you know, we’ve said that plant could do about ten million of product A year running at full capacity, and we have a two and a half kilos of take or pay demand from that plant. And perhaps we do, we do more from spot sales to the same customer
ASP isotopes is currently valued at over $300 million while trailing 12 month revenue is approximately 4.1 million, which implies a price to sales multiple north of 60 times, and EV slash EV over revenue of over 70 times. These are valuation levels rarely seen outside of high growth tech or biotech in early stages. Can you walk us through what specific milestones or contracts over the next six to 12 months you believe will justify this premium, and how you plan to scale revenue to support it?
Yeah, so, I mean, I’d say the whole of the nuclear space is trading in a hell of a multiple right now. If you look at, you know, up close, centrist Silex, you know, valuations are way north of where we are. The whole sector is pretty pre juiced up right now. So what are we going to do to justify our valuations? So first of all, the revenue looking at is backwards looking. It’s 2024 we’ve just started up three plants where the revenues aren’t included in that 4.1 million. So that will be that will accrue to this year’s revenue number, which should be substantially larger than 4.1 million. And then we’re going to build additional plants this year which will further grow revenue in 2026 and 2027 you know where we hope to sign a we expect to sign a contract with TerraPower to supply them with haleu, I say, which may beam in the near future. And actually we have two MOUs with two customers who collected you require $37 billion of Haley between now and 2020, 37 so I think if we sign those contracts and we start delivering, we start delivering revenues from these free plants, you’ll see that that price to revenue and EV to revenue number ratio dropped dramatically as over the next couple of years.
Lots of questions about silicon. I’m going to try to bring them together here, Paul, when should we expect samples to be sent out for silicon? When do we expect to see new contracts announced for silicon? And somebody asked, Are you expecting definitive supply contracts being signed for silicon? 28 this quarter?
So let’s ask the first question. First samples. We won’t be sending out samples of silicon 28 they’re commercial contracts or nothing. So at least large customers, we may send out some samples to universities and that kind of stuff. But, but, yeah, the main big semi graphic companies, they’re going straight to commercial, commercial sales right now. So that’s answers the question on when we’re sending out samples, we’re not sending out samples, it’s just commercial contracts. Instead of signing more commercial contracts, I’d expect to sign some more in the second quarter. It takes two to sign a contract, and we’ve got talking to a number of different parties, but you know, we’re talking to enough parties where I would expect to sign at least one or two contracts more for silicon, 28 and completed to germanium, 73 so germane, 1772 and then definitive supply agreements as a challenging one to want to to answer. You know, we may do we’ve been asked to do one. Um. It. You know, we’ll have to wait and see if that’s something we want to do or not. You know, the defensive supply agreement, the customer who wants from comes from other terms and conditions may not want to, may not want to deal with. So maybe stick with shorter term supply. We’ll have to wait and see, to wait and see