The apparently joint office of Nano Nuclear and LIS Technologies. Photo by J Capital Research

NNE

Rampant stock promotion and undisclosed related parties

​behind the empty shell that is Nano Nuclear
​

October 3, 2024
J Capital Research ("J Cap")  is a stock-research company. ​J Cap  has analyzed the U.S.-listed company Nano Nuclear Energy Inc. (“NNE”) and is hereby publishing the outcome and the conclusions of our analysis, based on publicly available information. We may benefit from a decline in the price of NNE shares, and, for this reason, there might be a conflict of interest.
  • We believe this back-of-the-napkin nuclear idea is an obvious stock promote. The self-promotional founder, Jay Jiang Yu, and his team of market bro directors have been involved in a half dozen penny stocks that fell between 40-100% post IPO. The founder and nearly all directors lack any experience in the nuclear industry.
  • Jay Yu deploys an army of interns and a plethora of affiliated media companies like Financial Buzz Media Networks and Nuclear Insider to promote NNE, which has been called a “shameless grift.”  We are stunned by the outrageously blatant stock promotion, which had pushed shares up by about 300% as of October 2 with, we believe, zero substance.
  • We conducted onsite checks and learned that NNE shares the same space as an undisclosed related party called LIST. LIST raised almost $12 mln in August  for a suspiciously similar plan to NNE’s.  We suspect LIST may be financially involved with NNE’s “new headquarters” building in Oak Ridge, Tennessee. 
  • NNE CFO Jaisun Garcha is simultaneously CFO of at least five other companies, four of which look like failures while one is undisclosed related party LIST. 
  • NNE just spent $1.7 mln on a “headquarters” in Tennessee even though the $33k/mo lease on its office in New York (for fewer than five staff members we observed during a site visit) does not expire until 2031. The purchased building is in the same office park as LIST—which actually has executives in Tennessee and has earmarked about $1 mln for “refurbishing” an unnamed space in the Heritage Center.
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  • Dilution is coming. After raising $10.4 mln net in May 2024, NNE has offered another roughly $18.6 mln net in shares, and the company says it will need “potentially hundreds of millions of dollars” to develop a product.  Lock-up for large inside owners ends in November. 
  • Service providers are notoriously third-tier. The auditor, WithumSmith+Brown, in February 2024 was fined by the PCAOB for poor audits. The bookrunner, The Benchmark Company, has been sanctioned multiple times by financial authorities.  Investors are organizing a lawsuit against NNE for “laughable” regulatory claims.
  • Management paid itself roughly $1.5 mln in 2023 despite 0 revenues and even though NNE reported no full-time employees.
  • NNE IPO’ed with barely even the concept of a plan. The company went public with zero revenues, zero patents, zero plant and equipment, and zero full-time executives. Since its inception, NNE has spent a grand total of about $4.5 mln on R&D yet has a market capitalization of some $529 mln. 
  • Advisors remind us of Theranos 2.0: they include General Wesley Clark, the former presidential candidate and frontman for Rodman & Renshaw, which stumped for Chinese frauds, and disgraced ex–New York Governor Andrew Cuomo. These men have neither domain expertise nor, at this point, much political clout. 
  • NNE has not even received government funding, unlike many of its peers in the SMR and microreactor space. Industry expertise in the company is sorely lacking, and the “independent directors” have no visible experience with either the nuclear industry or listed companies. 
  • We are enthusiastically in favor of new nuclear technologies, even speculative ones. But our research tells us that NNE is an empty stock promote of the worst type.

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