US-based ASP Isotopes (ASPI) and some of its senior executives are facing a securities class action, led by law firm Hagens Berman, alleging the company deceived investors by making false and misleading statements about its advanced nuclear fuel technologies.
The suit, filed in the US District Court for the Southern District of New York, claims that ASPI misled investors about the viability and potential of its Aerodynamic Separation Process (ASP) which is designed to enrich isotopes, and Quantum Enrichment technology, a laser-based process under development for nuclear fuel applications.
The company’s claims came into question in late November after Fuzzy Panda Research published a report alleging that “ASP Isotopes (ASPI) is using old, disregarded laser enrichment technology to masquerade as a new, cutting-edge uranium enrichment company.” The complaint alleges that ASPI overstated the effectiveness of its enrichment technologies, the development potential of its high assay low-enriched uranium (HALEU) facility, and the performance of its nuclear fuels operating segment.
Following the release of the report, ASPI’s stock price plummeted 23% in a single trading day and Hagens Berman, a global plaintiffs’ rights complex litigation firm, began an investigation. “We are investigating whether ASPI may have misled investors about the true commercial prospects for its ASP and Quantum Enrichment technologies,” said Reed Kathrein, a partner leading the investigation.
According to Fuzzy Panda’s report, “The truth is hiding just below the surface. Unbeknownst to investors, we discovered a crew tied to the most notorious “Microcap Fraudsters” (Honig & Stetson) behind the scenes. Nuclear energy and uranium stocks are hot right now, so naturally Honig’s family and friends are tied to a paid stock promotion in uranium. ASPI is that company.”
The report said: “ASPI’s Headquarters was originally a Virtual Shared Space in Boca Raton and now is in a Co-Working Space in DC. We caught ASPI using Multiple Paid Stock Promoters.”
Fuzzy Panda spoke with former executives from customers and competitors, “and they told us ASPI is using old, mothballed technology that has been shown to be uneconomic”. Former Centrus Executives deemed ASPI’s technology virtually worthless. “One senior executive told us Centrus had looked at acquiring ASPI’s tech in the past and Centrus decided it was not even worth $2 million. They said ASPI was “selling hope” with tech that is “impossible” to scale.”
A TerraPower former executive said its agreement with ASPI was “non-binding” and came at zero cost to TerraPower. In October, US-based TerraPower signed a term sheet (non-binding agreement or letter of intent) with ASP Isotopes for the construction of a uranium enrichment facility in South Africa and a fuel supply agreement for its Natrium reactor. The term sheet aimed to expand global production of HALEU. TerraPower said it planned to invest in the construction of a HALEU enrichment facility in South Africa from which it would purchase fuel for the Natrium reactor and energy storage system being developed at Kemmerer in Wyoming.
Fuzzy Panda noted: “Our Investigators could not find multiple of ASPI’s South African subsidiaries at their registered addresses: we pulled South African corporate records which showed multiple ASPI subsidiaries sharing the same address. When our investigator visited, we found none at that location. Instead, we found a South African crypto fund for retail investors, Jaltech.”
Cameco reportedly looked at ASPI’s tech and passed on investing. Fuzzy Panda said “a former Klydon employee told us that Cameco’s scientists were ‘sceptical of the technology’ and ‘did not think it would work on uranium’”.
ASPI has no patents with its management claiming patents would be bad and that their process is a trade secret, the report said. ASPI was incorporated September 2021 then funded less than 90 days later by a shell company formerly controlled by Barry Honig’s organisation. According to Fuzzy Panda, Honig & Stetson were previously charged by the Securities $ Exchange Commission (SEC) for defrauding retail investors with misleading stock promotions and “pump-and-dump schemes”. Honig & Stetson have “have been tied to more than 40 alleged stock promotions and [are] currently banned from penny stock offerings after the SEC charged them with fraud”. Stetson has a 10-year ban and Honig has a lifetime ban.
Fuzzy Panda said 20 governments spent decades researching ASPI’s AVLIS Technology (laser enrichment of uranium) and they scrapped the programmes as it was proven to be uneconomic. The US Government spent some $2bn and gave the tech away for free. Japan scrapped its laser isotope enrichment programme in 2001.France cancelled its programme in 2003. “Even Iran & Iraq researched the tech and decided it didn’t work”. ASPI’s “propriety” technical process “appear to be the exact same images as ones from more than15-year-old NRC’s studies, the report noted. ASPI does not have a Nuclear Regulatory Commission licence to enrich uranium and industry experts said an NRC licence could take 10-15 years.
Experts told Fuzzy Panda that ASPI did not bid for the US Department of Energy’s HALEU supply contract but claimed that its planned facilities would cost less than $10m. “TerraPower and Centrus Executives said at best it would cost more than $100m and would more likely run into billions.” Experts told Fuzzy Panda that if incoming US President Donald Trump restored trade relations with Russia, “it would destroy hope stories like ASPI”. The report concluded that “ASPI management has issued false promises and promised milestones since the beginning”.
