| Basis of Presentation and Summary of Significant Accounting Policies | 2. Basis of Presentation and Summary of Significant Accounting Policies Unaudited Financial Information The Company’s unaudited condensed consolidated financial statements
included herein have been prepared in conformity with accounting principles generally accepted in the United States of America, or
GAAP, and pursuant to the rules and regulations of the Securities and Exchange Commission, or SEC. In the Company’s opinion,
the information furnished reflects all adjustments, all of which are of a normal and recurring nature, necessary for a fair presentation
of the financial position and results of operations for the reported interim periods. The Company considers events or transactions that
occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates
or to identify matters that require additional disclosure. The results of operations for interim periods are not necessarily indicative
of results to be expected for the full year or any other interim period. These unaudited condensed consolidated financial statements should
be read in conjunction with the audited financial statements and related notes for the year ended December 31, 2021 included in the Company’s
a registration statement on Form S-1 (File No. 333-267392), which was filed with the SEC on September 12, 2022. Basis of Presentation and Use of Estimates The Company’s condensed consolidated financial statements are
prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The preparation of
the Company’s condensed consolidated financial statements requires management to make estimates and assumptions that impact the
reported amounts of assets, liabilities and expenses and disclosure in the Company’s condensed consolidated financial statements
and accompanying notes. The most significant estimates in the Company’s consolidated financial statements relate to the valuation
of equity instruments and estimating our accrued research and development expenses. Although these estimates are based on the Company’s
knowledge of current events and actions it may undertake in the future, actual results may materially differ from these estimates and
assumptions. Principles of consolidation The Company’s condensed consolidated financial statements include
the accounts of ASP Isotopes Inc. and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Currency and currency translation The condensed consolidated financial statements are presented in U.S. dollars,
the Company’s reporting currency. The functional currency of ASP Isotopes Inc. and ASP Guernsey is the U.S. dollar. The functional
currency of the Company’s subsidiary ASP South Africa is the South African Rand. Adjustments that arise from exchange rate changes
on transactions of each group entity denominated in a currency other than the functional currency are included in other income and expense
in the consolidated statements of operations. Assets and liabilities of ASP South Africa are recorded in their South African Rand functional
currency and translated into the U.S. dollar reporting currency of the Company at the exchange rate on the balance sheet date. Revenue,
when recorded, and expenses of ASP South Africa are recorded in their South African Rand functional currency and translated into the U.S. dollar
reporting currency of the Company at the average exchange rate prevailing during the reporting period. Resulting translation adjustments
are recorded to other comprehensive income (loss). Concentration of Credit Risk and other Risks The Company maintains its cash in bank deposit and
checking accounts that at times exceed insured limits. The Company has not experienced any losses in such accounts and believes it is
not exposed to any significant credit risk. Cash The Company considers all highly liquid investments
with original maturities at the date of purchase of three months or less to be cash equivalents. Cash and cash equivalents are stated
at fair value and may include money market funds, U.S. Treasury and U.S. government-sponsored agency securities, corporate debt,
commercial paper and certificates of deposit. The Company had no cash equivalents as of September 30, 2022 and December 31,
2021. Deferred offering costs The Company capitalizes deferred IPO costs, which
primarily consist of direct, incremental legal, professional, accounting and other third-party fees relating to the Company’s initial
public offering (“IPO”). The deferred IPO costs will be offset against IPO proceeds upon the consummation of the offering. Segment Information The Company manages its operations as a single segment
for the purposes of assessing performance and making operating decisions. The financial information is regularly reviewed by the chief
operating decision maker (“CODM”) in deciding how to allocate resources. The Company’s CODM is its chief executive officer. Fair Value of Financial Instruments Accounting guidance defines fair value, establishes
a consistent framework for measuring fair value, and expands disclosure for each major asset and liability category measured at fair value
on either a recurring or nonrecurring basis. Fair value is defined as an exit price, representing the amount that would be received to
sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based
measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis
for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs
used in measuring fair value as follows:
Level 1: Observable inputs such as quoted prices in active markets;
Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The Company's share liability (Note 9) measured at Level 3 fair
value on a recurring basis was $243,885 as of September 30, 2022. There were no transfers among Level 1, Level 2 or Level 3 categories
in the nine months ended September 30, 2022. The following table provides a reconciliation of the Company’s liabilities
measured at fair value on a recurring basis using significant unobservable inputs (Level 3):
Share
Balance, September 13, 2021 $ —
Addition on issuance of common stock 116,200
Balance, December 31, 2021 116,200
Addition on issuance of common stock 124,782
Fair value adjustment 2,903
Balance, September 30, 2022 $ 243,885 The carrying amounts of accounts payable, accrued
expenses and notes payable are considered to be representative of their respective fair values because of the short-term nature of those
instruments. Property and Equipment Property and equipment include costs of assets constructed,
purchased or leased under a finance lease, related delivery and installation costs and interest incurred on significant capital projects
during their construction periods. Expenditures for renewals and betterments also are capitalized, but expenditures for normal repairs
and maintenance are expensed as incurred. Costs associated with yearly planned major maintenance are generally deferred and amortized
over 12 months or until the same major maintenance activities must be repeated, whichever is shorter. The cost and accumulated depreciation
applicable to assets retired or sold are removed from the respective accounts, and gains or losses thereon are included in the statement
of operations. We assign the useful lives of our property and equipment
based upon our internal engineering estimates, which are reviewed periodically. The estimated useful lives of our property and equipment
range from 3 to 5 years, or the shorter of the useful life or remaining life of the lease for leasehold improvements. Depreciation
is recorded using the straight-line method. Construction in progress (Note 3) is carried
at cost and consists of specifically identifiable direct and indirect development and construction costs. While under construction, costs
of the property are included in construction in progress until the property is placed in service, at which time costs are transferred
to the appropriate property and equipment account, including, but not limited to, leasehold improvements or other such accounts. Leases In February 2016, the Financial Accounting
Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016 02, “Leases” (“ASC 842”),
which establishes a right-of-use model (“ROU”) that requires a lessee to recognize an ROU asset and corresponding lease liability
on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification
affecting the pattern and classification of expense recognition in the income statement as well as the reduction of the right-of-use asset.
The new standard provides a number of optional practical expedients in transition. The Company has elected to apply (i) the practical
expedient, which allows us to not separate lease and non-lease components, for new leases and (ii) the short-term lease exemption
for all leases with an original term of less than 12 months, for purposes of applying the recognition and measurements requirements
in the new standard. At the inception of an arrangement, the Company
determines whether the arrangement is or contains a lease based on specific facts and circumstances, the existence of an identified asset(s),
if any, and the Company’s control over the use of the identified asset(s), if applicable. Operating lease liabilities and their
corresponding right-of-use assets are recorded based on the present value of future lease payments over the expected lease term. The interest
rate implicit in lease contracts is typically not readily determinable. As such, the Company will utilize the incremental borrowing rate,
which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar
economic environment. The Company has elected to combine lease and non-lease
components as a single component. Operating leases are recognized on the balance sheet as ROU lease assets, lease liabilities current
and lease liabilities non-current. Fixed rents are included in the calculation of the lease balances, while variable costs paid for certain
operating and pass-through costs are excluded. Lease expense is recognized over the expected term on a straight-line basis. Impairment of Long-lived Assets Long-lived assets consist primarily of property
and equipment. The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate the carrying
amount of an asset is not recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount
of an asset to the future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired,
the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds the fair value of the assets.
Fair value would be assessed using a discounted cash flows or other appropriate measures of fair value. The Company did not recognize
any impairment losses for the three or nine months ended September 30, 2022. Research and Development Costs Research and development costs consist primarily
of fees paid to consultants and facilities costs. Nonrefundable advance payments for goods and services that will be used in future research
and development activities are expensed when the activity has been performed or when the goods have been received rather than when the
payment is made. All research and development costs are expensed as incurred. General and Administrative Costs General and administrative expenses consist primarily
of salaries and related benefits, including stock-based compensation, related to our executive, finance, business development, legal,
human resources and support functions. Other general and administrative expenses include professional fees for auditing, tax, consulting
and patent-related services, rent and utilities and insurance. Stock-based Compensation Stock-based compensation expense represents the cost of the grant date
fair value of employee stock awards recognized over the requisite service period of the awards (usually the vesting period) on a straight-line
basis. Prior to the Company’s IPO, there was no active market for its common stock, therefore the Company estimated the fair value
of common stock on the date of grant based on then current facts and circumstances. The Company estimates the fair value of each stock-based
award on the date of grant using the Black-Scholes option pricing model. The Black-Scholes option pricing model incorporates various assumptions,
such as the value of the underlying common stock, the risk-free interest rate, expected volatility, expected dividend yield, and expected
life of the options. Forfeitures are recognized as a reduction of stock-based compensation expense as they occur. The Company also awards restricted stock to employees
and directors. Restricted stock is generally subject to forfeiture if employment terminates prior to the completion of the vesting restrictions.
The Company expenses the cost of the restricted stock, which is determined to be the fair market value of the shares of common stock underlying
the restricted stock at the date of grant, ratably over the period during which the vesting restrictions lapse. Equity-based compensation expense is classified
in the statement of operations in the same manner in which the award recipients’ payroll costs are classified or in which the award
recipients’ service payments are classified. Historically, there has been no public market of
the Company’s common stock. The fair value of the shares of common stock underlying the Company’s share-based awards was estimated
on each grant date by the Company’s board of directors. To determine the fair value of the Company’s common stock underlying
option grants, the board of directors considered, among other things, input from management and recent third-party financings consummated
by the Company. In connection with the preparation of the financial statements for the three and nine months ended September 30,
2022 and the period from September 13, 2021 (inception) through September 30, 2021, the Company performed a retrospective review
of the fair value of its common stock related to the current events available. Income Taxes Deferred income tax assets and liabilities arise
from temporary differences associated with differences between the financial statements and tax basis of assets and liabilities, as measured
by the enacted tax rates, which are expected to be in effect when these differences reverse. Valuation allowances are established when
necessary to reduce deferred tax assets to the amount expected to be realized. The Company has generated net losses since inception
and accordingly has not recorded a provision for income taxes. The Company follows the provisions of ASC 740-10, Uncertainty
in Income Taxes, The Company has identified the United States,
Florida, South Africa and Guernsey as its major tax jurisdictions. Refer to Note 12 for further details. Comprehensive Loss Comprehensive loss is defined as a change in equity
during a period from transactions and other events and circumstances from non-owner sources. The Company’s comprehensive loss is
comprised of net loss and the effect of currency translation adjustments. Recently Issued Accounting Pronouncements The Company has reviewed recently issued accounting
pronouncements and plans to adopt those that are applicable to it. The Company does not expect the adoption of any recently issued pronouncements
to have a material impact on its results of operations or financial position. |
