A class action lawsuit was filed against ASP Isotopes, Inc. (ASPI) by Levi & Korsinsky on December 4, 2024. The plaintiffs (shareholders) alleged that they bought ASPI stock at artificially inflated prices between October 30, 2024 and November 26, 2024 (Class Period) and are now seeking compensation for their financial losses. Investors who bought ASP Isotopes stock during that period can click here to learn about joining the lawsuit.
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ASP Isotopes is an advanced materials company that focuses on developing technology and processes to produce and enhance isotopes that are used in the medical and semiconductor industries.
The company’s claims about its high-assay low-enriched uranium (HALEU) reactors, construction of a uranium facility, and the supply of HALEU to TerraPower LLC are at the heart of the current complaint.
ASP Isotopes’ Misleading Claims
According to the lawsuit, ASP Isotopes and two of its senior officers (Individual Defendants) repeatedly made false and misleading public statements throughout the Class Period. Particularly, they are accused of omitting truthful information about the potential efficacy of the company’s enrichment technology and the development potential of its HALEU facility from SEC filings and related material.
For instance, in a press release, the company specified its arrangement with TerraPower LLC and also said that it believes its enrichment technologies can be deployed in a new HALEU facility in a much cheaper and more timely manner than building a new facility.
Moreover, in a prospectus supplement filed on November 4, 2024, ASPI stated that the U-235 that it may produce using quantum enrichment technology could be commercialized as a nuclear fuel component to be used in the new generation of HALEU-fueled small modular reactors. These reactors were supposedly under development for commercial and government use.
Finally, in a November 14 press release, ASPI said that it expected the research, development, and construction of a HALEU facility to take place in Pelindaba, South Africa.
However, subsequent events (discussed below) revealed that ASP Isotopes and the defendants wilfully misled investors about the potential efficiency, development, and future prospects of its HALEU facility.
Plaintiffs’ Arguments
The plaintiffs maintain that the Defendants deceived investors by lying and withholding critical information about the company’s business practices and prospects during the Class Period. Importantly, the Defendants are accused of misleading investors about the business and commercial prospects of its HALEU manufacturing facility.
The information became clear on November 26, 2024, when market research firm Fuzzy Panda Research released a report alleging that ASP Isotopes was deceiving investors by using old and obsolete laser enrichment technology instead of new, advanced Uranium enrichment.
Furthermore, the report accused ASP Isotopes of overstating the importance of its agreement with TerraPower. In reality, it was only a non-binding MOU (memorandum of understanding) to pressurize the real suppliers of TerraPower.
To conclude, the defendants allegedly misled investors about the effectiveness and commercial prospects of its HALEU production facility. Owing to these issues, ASPI stock has lost 11.8% in the last three months, causing meaningful damage to shareholder returns.
