Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. o☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. o☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). o☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o☐ Nox ☒

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the average bid and asked price of such common equity at June 30, 2022,2023, the last business day of the registrant’s second fiscal quarter, was approximately $50$13 million. For purposes of this calculation, all directors and executive officers of the registrant and holders of 10% or more of the registrant’s common stock are assumed to be affiliates. This determination of affiliate status is not necessarily conclusive for any other purpose.

As of March 3, 2023,27, 2024, the number of shares outstanding of the registrant’s common stock, $.01 par value, was 514,992,771520,081,365 shares.

DOCUMENTS INCORPORATED BY REFERENCE

Certain information called for in Part III of this Annual Report on Form 10-K is incorporated by reference from the registrant’s definitive proxy statement for the 20232024 annual meeting of shareholders, which will be filed with the Securities and Exchange Commission not later than 120 days after the registrant’s fiscal year ended December 31, 2022.

2023.

Cautionary Note Regarding Forward-Looking Statements

This Annual Report on Form 10-K (the “Annual Report”“Annual Report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, including statements regarding industry prospects and future results of operations or financial position, made in this Annual Report are forward-looking. Words such as: “anticipates,“anticipates,” “believes,“believes,” “should,“should,” “expects,“expects,” “future”“future” and “intends”“intends” and similar expressions identify forward-looking statements. In particular, statements regarding: financial condition, operating results and liquidity, future cash flow from operations, our ability to achieve profitability, the expected growth in business segment revenues, our expansion into new markets, the ability of our products to compete with several larger companies and products, the results of market studies used to support our business model, our anticipated improvement in economic conditions, the expected increased revenue resulting from sales of our U.S. Food and Drug Administration (FDA)-approved sodium iodide drug product, our ability to continue cobalt-60 production, the status of our proposed uranium de-conversion facility, and the sufficiency of our available cash and revenues from operations to meet our operating needs, are forward-looking. Forward-looking statements reflect management’smanagement’s current expectations, plans or projections and are inherently uncertain. Actual results could differ materially from management's expectations, plans or projections. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Annual Report. Certain risks and uncertainties that could cause actual results to differ significantly from management’smanagement’s expectations are described in the section entitled “Risk Factors”“Risk Factors” in this Annual Report. That section, along with other sections of this Annual Report, describes some, but not all, of the factors that could cause actual results to differ significantly from management’smanagement’s expectations. We do not intend to publicly release any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Readers are urged, however, to review the risks and other factors set forth in the other reports that we file from time to time with the Securities and Exchange Commission (the “SEC”“SEC”).

PART I

Item 1.       BUSINESS

General Business and Products Description

International Isotopes Inc. (the “Company”, “we”, “us” and “our”) produces an FDA approved generic sodium iodide I-131 drug product, provides radiochemicals for clinical research and life sciences, manufactures a wide range of nuclear medicine calibration and reference standards, provides radiochemicals for clinical research and life sciences, and produces a variety of cobalt-60 products for medical, research, and industrial applications.

We were formed as a Texas corporation in 1995. Our wholly-owned subsidiaries are International Isotopes Idaho Inc., a Texas corporation; International Isotopes Fluorine Products, Inc., an Idaho corporation; International Isotopes Transportation Services, Inc., an Idaho corporation; RadQual, LLC, a limited liability company (RadQual); and TI Services, LLC, a limited liability company (TI Services). Our core business consists of four reportable segments which include: Theranostics Products (formerly called Radiochemical Products,Products), Cobalt Products, Nuclear Medicine Standards, and Fluorine Products.

During 2022,2023, we focused our efforts on achieving profitability in each of our core business segments and reached several significant goals. During 2022,2023, we:

• Increased company revenues by 16%.
• Reached $11.2 million in total revenues which was the largest single year in company history.
• Increased sales in the Radiochemical segment by 41% primarily through increases in sales of our FDA approved generic sodium iodide I-131 drug product.
• Completed the sale of unused assets for $4.0 million in cash and for a gain of $1.8 million.
• Developed several new products for our Nuclear Medicine products segment and expanded our range of products in this segment into Positron Emission Tomography (PET) imaging standards.
• Expanded sales of our nuclear medicine products through exercising our management opportunity with RadQual, LLC (RadQual). In particular, we increased our international sales by utilizing the marketing and distribution expertise of our wholly owned subsidiary TI Services; and
• Continued to pursue viable opportunities to obtain government or commercial contracts for depleted uranium de-conversion services for our U.S. Nuclear Regulatory Commission (NRC) licensed de-conversion project in Lea County, New Mexico.

there will be a demand for this service to address still growing stockpiles of depleted UF6. When that demand occurs, we believe the groundwork we have completed on the depleted uranium de-conversion and fluorine extraction project should put us in a strong position to take advantage of the NRC license that has already been issued for this facility and should serve to justify the financial investment in this uranium de-conversion project in the future.

Government Regulation

Licensing

We currently operate under two NRC licenses, one for broad scope operations and another for exempt distribution. Our broad scope license covers calibration and reference standard manufacturing and distribution, radioisotope processing and distribution, large scale cobalt processing and recycle operations, radioactive gemstone processing, environmental sample analysis, certain field service activities, and research and development. The exempt distribution license permits the release and distribution of irradiated gemstones to unlicensed entities in the U.S. All of our existing licenses and permits are adequate to allow current business operations. We do not handle “special nuclear materials” (i.e. nuclear fuels and weapons grade uranium, thorium or plutonium); therefore, our facility is not designated as a “nuclear” facility that would require additional licensing.

As a condition of our NRC licenses in Idaho, we are required to provide financial assurance for decommissioning activities. We fulfill this license requirement with a surety bond which names the NRC as beneficiary and is supported by a restricted cash account held in trust by a third party. Similar financial assurances will be required to fund the decommissioning of the proposed de-conversion facility.

In October 2012, we were granted a 40-year construction and operating license by the NRC for our planned depleted uranium de-conversion and fluorine extraction processing facility (the “de-conversion facility”). The de-conversion facility is planned to be located in Lea County, New Mexico. Further engineering work on the proposed de-conversion facility was placed on hold in 2013 until additional contracts for utilization could be obtained. There is no specific timeline required by the NRC for the start of construction on this project. The majority of the pre-construction design, licensing and state permitting has already been completed for the project and a ground water permit from the state of New Mexico remains to be obtained before the plant could begin operation. These licenses for the de-conversion facility are included in the DUF6 Asset Sale as described above.

Regulation of Radioisotope Production Waste

All our manufacturing processes generate some radioactive waste. We must handle this waste pursuant to the Low-Level Radioactive Waste (LLRW) Policy Act (LLRW Act), which requires the safe disposal of mildly radioactive materials. The estimated costs for storage and disposal of these materials have been included in the manufacturing and sales price of our products. However, actualActual disposal costs are subject to change at the discretion of the disposal site and are ultimately applied at the time of disposal.sites. We have obtained all necessary permits and approvals for the disposal of our waste materials, and we do not anticipate any negative changes in capacity or regulatory conditions that would limit or restrict our waste disposal capabilities.

Nuclear Regulatory Commission Oversight

We operate under two NRC licenses and are subject to NRC oversight and periodic inspections of our operations.

Other Regulations

We are registered as a medical device manufacturer through the FDA for several of our nuclear medicine reference and calibration standards. We are registered with the U.S. Department of Transportation (DOT) for the shipment of radioactive materials. We also have an NRC license for the import and export of radioactive materials. Because of increasing security controls and regulations, it is likely that we may encounter additional regulations affecting transportation, storage, sale, and import/export of radioactive materials.

We are also subject to inspection by the FDA to manufacture our sodium iodide I-131 product in compliance with our ANDA for sodium iodide I-131 and all applicable cGMP requirements for this and other contract manufactured products. We are registered with the FDA as a drug manufacturing facility, and we are subject to periodic and random inspections by the FDA for the continued manufacture of drug products.

We are subject to government regulation and intervention both in the U.S. and in all foreign jurisdictions in which we conduct business. Compliance with applicable laws and regulations results in higher capital expenditures and operating costs and changes to current regulations with which we must comply can necessitate further capital expenditures and increases in operating costs to enable continued compliance.

Environmental Compliance

We are subject to various federal, state, local and foreign government requirements regulating the discharge of materials into the environment or otherwise relating to the protection of the environment. These laws and regulations include, but are not limited to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), the Resource Conservation and Recovery Act (RCRA) and state statutes such as the Idaho Hazardous Waste Management Act, the LLRW Policy Act, NRC regulations concerning various irradiated, radioactive, and depleted uranium materials, and U.S. DOT regulations concerning shipment of radioactive materials. Certain of these laws and regulations can impose substantial fines and criminal sanctions for violations and require installation of costly equipment or operational changes to limit emissions and/or decrease the likelihood of accidental hazardous substance releases. We have incurred, and expect to continue to incur, capital and operating costs to comply with these laws and regulations. In addition, changes in laws, regulations and enforcement of policies, or the imposition of new clean-up requirements or remedial techniques, could require us to incur costs in the future that would have a negative effect on our financial condition or results of operations.

Distribution Methods for Products

We sell our products directly to our customers who, in some cases, are both end users and distributors. We use common commercial carriers for delivery of our products.

Dependence on Customers

Historically, we had been dependent on one customer, RadQual, of which we owned 24.5%, for a significant amount of our gross revenue. In July 2021, we purchased the remaining 75.5% of the ownership interest in RadQual, making it a wholly-owned subsidiary. Our sales to RadQual for 2021 accounted for approximately 28% of our total gross revenue for that year. The change in ownership of RadQual has substantially eliminated any risks associated with having RadQual as a single major customer.

Combined sales, on which we are dependent, to our three largest customers, accounted for 22% of our total gross revenues in 2023 and accounted for 23% of our total gross revenues in 2022 and accounted for 17% of our total gross revenues in 2021.2022.

Patents, Trademarks, Licenses and Royalty Agreements

In 2004, we obtained certain patents related to the FEP. In 2010, we were granted an additional process patent on the FEP process. During 2012, we were granted additional process patents for the FEP process in the United States. These patents are included in the DUF6 Asset Sale as noted above.

In May 2021, we entered into an exclusive licensing agreement with Memorial Sloan-Kettering Cancer Center (MSKCC) for commercial development of a Radioimmuno Assay (RIA) test lit for the detection for SARS COVID-19 virus in the blood. A patent application for this test kit was submitted to the U.S. patent office in March 2021. The useful application and commercial viability of this opportunity will continue to be evaluated,evaluated; however, at the present time we do not plan commercial development of this product but may pursue other related commercial opportunities.

Employees

As of December 31, 2022,2023, we had 3340 total employees, including 3239 full-time employees.

Available Information

Our internet website address is www.intisoid.com.www.intisoid.com. We are subject to the reporting requirements under the Securities Exchange Act of 1934, as amended (the Exchange Act). Consequently, we are required to file reports and information with the SEC, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act. These reports and other information concerning us are available free of charge through (i) our website as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC, and (ii) the SEC’s website at www.sec.gov. Information contained on, or accessible through, our website is not incorporated by reference into this Annual Report or other reports filed with the SEC.

Item 1A.      RISK FACTORS

Readers should carefully consider the following factors that may affect our business, future operating results and financial condition, as well as other information included in this Annual Report. The risks and uncertainties described below are not the only ones the Company faces. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations. If any of the following risks occur, our business, financial condition and operating results could be materially adversely affected.

Risks Related To Our Company

We have incurred, and may continue to incur, losses.We have incurred net losses for most fiscal periods since our inception. From inception through December 31, 2022,2023, we have an accumulated deficit (including preferred stock dividends and returns) in the amount of $126,460,843.$127,329,859. The negative cash flow we have sustained has materially reduced our working capital, which in turn could materially and negatively impact our ability to fund future operations and continue to operate as a going concern. Management has taken and continues to take, actions to improve our financial condition and results of operations. The availability of necessary working capital, however, is subject to many factors beyond our control, including, among other things, our ability to obtain financing on favorable terms, or at all, economic cycles, market acceptance of our products, competitors' responses to our products, the intensity of competition in our markets, and the level of demand for our products.

We may need additional financing to continue operations.Because we may continue to experience negative cash flow, we may need to obtain additional financing to continue operations. Management will continue to plan and take actions to improve our financial results which could enhance our ability to obtain financing. However, obtaining additional financing is subject to many factors beyond our control and may not be available to us on acceptable terms or at all. If we are unable to raise additional funds when needed, we could be required to delay development and construction of projects, reduce the scope of, abandon or sell some or all our growth projects or default on our contractual commitments in the future, any of which would have a material adverse effect on our business, financial condition and operating results.

Our operations expose us to the risk of material environmental liabilities.  We are subject to potential material liabilities related to the remediation of environmental hazards and to personal injuries or property damages that may be caused by hazardous substance releases and exposures. The materials used in our operations expose us to risks of environmental contamination that could subject us to liability, including remediation obligations that could be very costly. In addition, the discovery of previously unknown contamination could require us to incur costs in the future that would have a negative effect on our financial condition or results of operations. We have a Surety Bond in place supported by funds in a restricted cash account to provide the financial assurance required by the NRC for our Idaho facility license for decommissioning and a similar mechanism will be required to fund the decommissioning of the proposed new depleted uranium facility. However, if a contamination event occurred within, or outside of, our facility, we may be financially responsible to remediate such contamination and could have to borrow money or fund the remediation liability from our future revenue. We may not be able to borrow the funds, or have available revenue, sufficient to meet this potential liability, which could have a significant negative impact on our financial condition and results of operations.

We are dependent upon key personnel.  Our ongoing operations are currently dependent on Steve T. Laflin,Shahe Bagerdjian, President and Chief Executive Officer. The loss of Mr. LaflinBagerdjian could have a material adverse effect on our business. There is no assurance that we will be able to retain Mr. LaflinBagerdjian or our existing personnel or attract additional qualified employees. The loss of any of our key personnel or an inability to attract additional qualified employees could result in a significant decline in revenue.

General economic conditions in markets in which we do business can impact the demand for our goods and services. Decreased demand for our products and services can have a negative impact on our financial performance and cash flow.  Demand for our products and services, in part, depends on the general economic conditions affecting the countries and industries in which we do business. A downturn in economic conditions in the U.S. or industry that we serve may negatively impact demand for our products and services, in turn negatively impacting our operations and financial results. Further, changes in demand for our products and services can magnify the impact of economic cycles on our businesses.

Volatility in raw material and energy costs, interruption in ordinary sources of supply and an inability to recover unanticipated increases in energy and raw material costs from customers could result in lost sales or significantly increase the cost of doing business.  Market and economic conditions affecting the costs of raw materials, utilities, energy costs, and infrastructure required for the delivery of our goods and services are beyond our control and any disruption or halt in supplies, or rapid escalations in costs could affect our ability to manufacture products or to competitively price our products in the marketplace. For instance, an interruption in the supply of isotopes such as cobalt-57, cobalt-60, or iodine-131 could result in lost sales of nuclear medicine and calibration standards sales, cobalt product sales, and sodium iodide I-131 generic drug product. We also purchase some of our radiochemical productstheranostics Products from overseas suppliers and the price of those products could be adversely affected through changes in currency exchange rates.

We are subject to extensive government regulation in jurisdictions around the globe in which we do business. Regulations address, among other things, environmental compliance, import/export restrictions, healthcare services, taxes and financial reporting, and can significantly increase the cost of doing business, which in turn can negatively impact our operations, financial results and cash flow.  We are subject to government regulation and intervention both in the United States and in all foreign jurisdictions in which we conduct business. Compliance with applicable laws and regulations results in higher capital expenditures and operating costs and changes to current regulations with which we must comply can necessitate further capital expenditures and increases in operating costs to enable continued compliance. Additionally, from time to time, we may be involved in legal or administrative proceedings under certain of these laws and regulations. Significant areas of regulation and intervention include the following:

Radioactive Waste. All our manufacturing processes generate some radioactive waste. For waste that cannot be decayed in storage we must handle this waste pursuant to the LLRW Policy Act, which requires the safe disposal of mildly radioactive materials. The estimated costs for storage and disposal of these materials have been included in the manufacturing and sales price of our products. However, actual disposal costs are subject to change at the discretion of the disposal site and are ultimately applied at the time of disposal.site. An unexpected or material increase in these costs could have a material adverse effect on our financial condition and results of operations.

Health Compliance. Health regulations dictated by the United States Occupational Safety and Health Administration and NRC are extensive in our business. There is no assurance that our activities will comply with all applicable health regulations at times and, as a result, may expose us to liability under applicable health regulations. Costs and expenses resulting from such liability may materially negatively impact our operations and financial condition. Overall, health laws and regulations will continue to affect our business worldwide.

NRC License Enforcement Actions. The NRC may take enforcement action in the event that we are found to be in violation of NRC regulations or in violation of any of our license requirements. Consequences of violations depend upon the severity of the violations as well as the adequacy and timeliness of corrective actions implemented by the licensee to investigate and correct the cause of the violation and to prevent reoccurrence. The NRC has discretionary authority in the action they choose to take against license violations, but these actions can include civil penalties and restrictions upon licensee operations or license suspension. The imposition of any such penalties and/or restrictions upon our operations or suspension of our license could have a material adverse effect on our financial condition and results of operations.

Environmental Regulation. We are subject to various federal, state, local and foreign government requirements regulating the discharge of materials into the environment or otherwise relating to the protection of the environment. These laws and regulations include, but are not limited to CERCLA, the RCRA and state statutes such as the Idaho Hazardous Waste Management Act, the LLRW Policy Act, NRC regulations concerning various irradiated, radioactive, and depleted uranium materials, and U.S. DOT regulations concerning shipment of radioactive materials. Certain of these laws and regulations can impose substantial fines and criminal sanctions for violations and require installation of costly equipment or operational changes to limit emissions and/or decrease the likelihood of accidental hazardous substance releases. We have

incurred, and expect to continue to incur, capital and operating costs to comply with these laws and regulations. In addition, changes in laws, regulations and enforcement of policies, or the imposition of new clean-up requirements or remedial techniques, could require us to incur costs in the future that would have a negative effect on our financial condition or results of operations.

Import/Export Regulation. We are subject to significant regulatory oversight of our import and export operations due to the nature of our product offerings. Penalties for non-compliance can be significant and violations can result in adverse publicity. Because of increasing security controls and regulations, it is likely that we may encounter additional regulations affecting the transportation, storage, sale, and import/export of radioactive materials.

Taxes. We structure our operations to be tax efficient and to make use of tax credits and other incentives. Nevertheless, changes in tax laws, actual results of operations, final audit of tax returns by taxing authorities, and the timing and rate at which tax credits can be utilized can change the rate at which we are taxed, thereby affecting our financial results and cash flow.

We may incur material losses and costs as a result of product liability claims that may be brought against us.We face an inherent business risk of exposure to product liability claims in the event that products supplied by us fail to perform as expected or such failures result, or are alleged to result, in bodily injury. Although we have purchased insurance with coverage and in amounts that we believe to be adequate and reasonable in light of our current and planned operations, including our planned uranium de-conversion and fluoride gas production business, if a successful product liability claim were brought against us in excess of our available insurance coverage, it would have a material adverse effect on our business and financial results.

Catastrophic events such as natural disasters, pandemics, war and acts of terrorism could disrupt our business or the business of our suppliers or customers, and any such disruptions could have a negative impact on our operations, financial results and cash flow.  Our operations are at all times subject to the occurrence of catastrophic events outside our control, ranging from severe weather conditions such as hurricanes, floods, earthquakes and storms, to health epidemics and pandemics, to acts of war and terrorism. Any such event could cause a serious business disruption that could affect our ability to produce and distribute our products and possibly expose us to third-party liability claims. Additionally, such events could impact our suppliers, thereby causing energy and raw materials to become unavailable to us, and our customers, who may be unable to purchase or accept our products and services. Any such occurrence could have a negative impact on our operations and financial condition.

In addition, public health epidemics or outbreaks could adversely impact our business. For example, as a result of the COVID-19 pandemic, we experienced a reduction of sales within our nuclear medicine calibration standards segment and radiochemicals segment during 2021. There was no discernable impact from COVID-19 to our cobalt products business segment during the period. The decrease in sales for 2021 for our nuclear medicine calibration standards segment was the result of the temporary closure of many imaging clinics and suspension of elective or non-essential imaging procedures. During 2021 and 2022, we experienced some global shipping disruption that were partially attributable to the COVID-19 pandemic.

To-date we have not furloughed or terminated any employees as a result of the financial impact of COVID-19. We have seen a limited impact in our raw material supply chain related to the COVID-19. However, from the beginning of 2022, we have experienced an increase in costs for many raw materials and production supplies due to recent cost inflation which have led to increases to costs of goods sold and operating expenses. Although, all segments have been impacted from these cost increases, our nuclear medicine calibration standards segment has been impacted the most. We have seen these increased costs stabilize somewhat; and we are working on counteracting these cost increases with an increase to our produce prices. We believe we can increase our sales prices enough to overcome these cost increases while continuing to maintain and grow our sales.

Our future growth is largely dependent upon our ability to develop new products that achieve market acceptance with acceptable margins.  Our businesses operate in global markets that are characterized by rapidly changing technologies and evolving industry standards. Accordingly, our future growth rate depends upon several factors, including, but not limited to, our ability to (i) identify emerging technological trends in our target end-markets, (ii) develop and maintain competitive products, (iii) enhance our products by adding innovative features that differentiate our products from those of our competitors, and (iv) develop, manufacture, and bring products to market quickly and cost-effectively. Our ability to develop new products based on technological innovation or U.S. FDA approval can affect our competitive position and requires the investment of significant resources. These development efforts divert resources from other potential investments in our businesses, and they may not lead to the development of new products on a timely basis or that meet the needs of our customers as fully as competitive offerings. In addition, the markets for our products may not develop or grow as we currently anticipate. The failure of our technologies or products to gain market acceptance due to more attractive offerings by our competitors could significantly reduce our revenues and adversely affect our competitive standing and prospects.

We are dependent on various third parties in connection with our business operations.  The production of high-specific activity cobalt is dependent upon the DOE, and its prime-operating contractor, which controls the Idaho reactor. Current activity at the Idaho ATR may continue to affect the supply of cobalt material needed for the manufacture of cobalt sources. Loss of the ability to use, or cost-effectively use, these irradiation services would significantly impact our cobalt products business segment because there is not currently another reactor available in the U.S. that is capable of providing this type of service for us. Our radiochemical iodine is supplied to us through two supply sources. Unanticipated contract terminations by these suppliers or suppliers the key raw materials of our other products or other third parties would have a material adverse impact on our operations, financial results, and cash flow.

We are dependent on a limited number of customers in connection with some of our current business operations. Combined sales to our three top customers accounted for 23%22% and 17%23% of our total gross revenue during 20222023 and 2021,2022, respectively. Although we are making efforts to reduce our dependency on a small number of customers, the loss of any one of these customers could have a significant impact on our future results of operations and financial condition. Unanticipated contract terminations by any of these current customers could have a material adverse impact on operations, financial results, and cash flow.

We are subject to competition from other companies.  Each of our existing business areas has direct competition from other businesses. High-specific activity cobalt is supplied by other reactor facilities around the world. Nuclear medicine calibration and reference standards are being produced by one other major manufacturer in the U.S. We have one major competitor in the U.S. for our sodium iodide I-131 drug product. Most of our radiochemicals are also manufactured by several other companies in the world. Most of our competitors have significantly greater financial resources that could give them a competitive advantage over us.

Risks Related To Our Common Stock

Trading in our common stock is limited and the price of our common stock may be subject to substantial volatility.  Our common stock is quoted on the OTCQB Marketplace under the U.S. trading symbol “INIS”. The market for our securities is limited, the price of our stock is volatile, and the risk to investors in our common stock is greater than the risk associated with stock trading on other markets. These factors may reduce the potential market for our common stock by reducing the number of potential investors. This may make it more difficult for investors in our common stock to sell shares to third parties or to otherwise dispose of their shares. This could cause our stock price to decline.

We currently do not intend to pay dividends on our common stock.  We do not plan to pay dividends on shares of our common stock in the near future. Consequently, an investor in our common stock can only achieve a return on its investment in us if the market price of our common stock appreciates.

We are contractually obligated to issue shares in the future, which will dilute your interest in us. As of December 31, 2022,2023, there were approximately 16,716,00019,372,500 shares of common stock issuable upon the exercise of vested stock options, at a weighted-average exercise price of $.06$.05 per share. An additional 31,942,54434,932,090 shares were reserved for issuance under our equity plans as of December 31, 2022.2023. Our outstanding preferred stock and certain of our outstanding debt is also convertible into shares of our common stock at the holders’ option. In addition, we expect to issue additional options to purchase shares of our common stock to compensate employees, consultants and directors, and we may issue additional shares to raise capital to expand our manufacturing capability, develop additional products, or fund our planned uranium de-conversion plant. Any such issuance will have the effect of further diluting the interest of the holders of our securities.

Item 1B.      UNRESOLVED STAFF COMMENTS

We are a smaller reporting company, and therefore, are not required to provide the information required by this item.

• Developed several new products for our Nuclear Medicine products segment and expanded these products into Positron Emission Tomography (PET) imaging standards.
• Expanded sales of our nuclear medicine products through exercising our management opportunity with RadQual, LLC (RadQual). In particular, we increased our international sales by utilizing the marketing and distribution expertise of our wholly owned subsidiary TI Services; and
• Continued to pursue viable opportunities to obtain government or commercial contracts for depleted uranium de-conversion services for our U.S. Nuclear Regulatory Commission (NRC) licensed de-conversion project in Lea County, New Mexico.

As a result of the COVID-19 pandemic, we experienced a reduction of sales within our nuclear medicine calibration standards segment and radiochemicals segment during 2020 and 2021.  There was no discernable impact from COVID-19 to our cobalt products business segment during the same period.  The decrease in sales for 2020 and 2021 for our nuclear medicine calibration standards segment was the result of the temporary closure of many imaging clinics and suspension of elective or non-essential imaging procedures. In 2022, our sales in most segments recovered and we saw very limited continued negative impact related to COVID-19. The sale of radiochemical products increased during the year 2022; however, we believe the increases in revenue for 2022 for nuclear medicine could have been greater in 2022 were it not for the lingering negative impact of COVID-19 in the first quarter of 2022.

To-date we have not furloughed or terminated any employees as a result of the financial impact of COVID-19. The Company has only seen a limited impact in our raw material supply chain related to the COVID-19, primarily some plastics which have been in strong demand for certain types of PPE. Alternative sources of raw materials have been obtained without any interruption to production.  With the heightened concern about corporate liquidity during the COVID-19 pandemic, the Company believes that it has adequate cash to support continuing operations.

Business Strategy and Core Philosophies

Broadly defined, our business strategy is to continue to build our reputation as a leader in theradioisotope applications, such as theranostics, radiopharmaceutical, radiochemical, medical device, cobalt, and nuclear medicine product industries, and to maximizingmaximize the revenue potential ofacross our generic sodium iodine I-131 product and nuclear medicine standards products.segments. We also intend to continually seek ways to improve our customer service and expand our market share, with the ultimate goal of providing greater return to our shareholders. Specifically, we are continuously working with our customers to improve and develop new products to better serve the needs of the end user which, ultimately, we believe will boost product sales. A key part of our short-term and long-term business strategy is to develop, and marketenter into additional generic drug products, similar tomarkets for our sodium iodide I-131Theranostics, Nuclear Medicine, and Medical Device product and develop additional nuclear medicine standards products that will offer customers high quality, reliable, and affordable products as well as increase our revenues.segments. In addition, we will manage costs and cash reserves and pursue additional financial support that will be structuredflow in such a way to support further expansion of our products and services to exploit additional market opportunities.

Our core philosophy is to strive to provide high quality products and services as a profitable and environmentally conscious business, while offering excellent customer service and providing a safe and productive working environment for our employees. We operate in accordance with an ISO Quality Management System and in accordance with all current Good Manufacturing Practices under which we seek to maintain the highest level of quality and continuously improve our product manufacturing processes.

Results of Operations

Following is a summary of results of operations for 2022:2023:

Year Ended December 31, 20222023 Compared to Year Ended December 31, 20212022

The following table presents comparative revenues for the years ended December 31, 20222023 and 2021:2022:

Revenues

Total revenues in 20222023 were $11,181,988,$12,267,385, compared to $9,661,942$11,181,988 in 2021,2022, which represents an increase of $1,520,046,$1,085,397, or approximately 16%10%. The performance of each segment is discussed in the following paragraphs.

RadiochemicalTheranostics Products

Sales of radiochemical productstheranostics Products accounted for approximately 54%56% of our sales revenue in 20222023 as compared to 44%54% of our total sales revenue in 2021.2022. Sales in this segment increased by $1,770,723,$797,131, or approximately 41%13% to $6,842,898 in 2023 as compared to $6,045,767 in 2022 as compared to $4,275,044 in 2021.2022. The increase is primarily the result of increased sales of our new generic sodium iodide I-131 drug product which was launched in March 2020. We expect salesproduct.

Sales of our new product to continue to trend upward.

In February 2020, we received approval of an ANDA to the FDA for aFDA-approved generic sodium iodide radiopharmaceuticaldrug product for usemake up the bulk of sales in treatment of hyperthyroidism and carcinoma of the thyroid. We began sales of this product in March 2020, and these sales have had a significant positive impact on our revenues for 2021 and 2022.segment. We expect continued growth in sales for this product in 20222024 and beyond. This is the first of several potential generic drug products we plan to submit to the FDA in the coming years. Within this segment, we also currently distribute sodium iodide (I-131) as a radiochemical product. The radiochemical product is being used for a variety of applications including industrial use and use in investigational and clinical trials. We believe that the product enhancements we have made,market growth, new customers, and entry into new territories, in addition to the generic drug productstheranostics API we plan to submit to the FDA, should increase future sales in this business segment.

In 2019, we entered into a manufacturing and supply agreement with a company and completed an expansion

Cobalt Products

Cobalt products sales accounted for approximately 10%8% of our total sales revenue in 20222023 and approximately 14%10% in 2021.2022. Sales in this segment decreased by $196,981,$120,463, or approximately 15%10%, in 20222023 to $1,157,536,$1,037,073, as compared to $1,354,517$1,157,536 in 2021.2022. The decrease in revenue within this segment was the result of decreased Cobalt Sealed Source Manufacturing due to timing of receipt of additional cobalt material from the ATR in 2022,2023, delays in customer contracts for Cobalt Sealed Source Manufacturing, and delays due to maintenance and repairs to our manufacturing equipment. Our sealed source manufacturing generates the majority of our revenue within this segment and sealed source sales depend on our ability to produce or procure cobalt material.

In October 2014, we entered into a ten-year agreement with the DOE for the irradiation of cobalt targets. It takes many years to irradiate these cobalt targets to the desired level of activity and we anticipated having high specific activity cobalt available for our customers in 2020. However, the material had lower than expected activity and receipt of material was delayed until about June 2021. At that point the material still had lower than expected activity, and we reached an agreement with the DOE to purchase the lower activity material at a discounted rate. Periodically we have been able to acquire recycled material that can be used to manufacture sealed sources for customers, and in some instances, our customers have supplied their own cobalt material for source fabrication. We will continue to have access to additional low specific activity material produced by the DOE and expect to obtain, process, and sell additional cobalt products as a result during 2023.2024.

We have entered into cobalt supply agreements with several customers. The terms of these cobalt contracts require some advance progress payments from each customer. The funding received under these contracts has been recorded as unearned revenue under short- and long-term liabilities in our consolidated financial statements. We recognized some of this revenue in prior years including in 20222023 and 20212022 when we fulfilled contract performance objectives by supplying sealed sources manufactured with cobalt from the ATR or alternate suppliers.

Nuclear Medicine Standards

Due to decreased activity in the Radiological Services segment, starting January 1, 2022, this segment was reorganized into our Nuclear Medicine Standards segment. Additionally, we reclassified our reporting for 2021 to include all activities for the Radiological Services business segment under the Nuclear Medicine Standards segment.

Sales in the nuclear medicine standards segment accounted for approximately 36% and 40%, of our total sales revenue in 2022both 2023 and 2021, respectively.2022. Sales in this segment decreasedincreased by $23,921,$408,729, or approximately 1%10%, to $4,387,414 in 2023, as compared to $3,978,685 in 2022, as compared to $4,002,606 in 2021.2022. This small decreaseincrease in sales in 20222023 is due to a $93,547 decrease inincreased sales related to the discontinued Radiological Services segment partially offset by an increase of $69,626 in sales related toour RadQual nuclear medicine standards products.

In 2017, affiliates of the Company purchased 75.5% of the member units of RadQualstandard products both domestically and at that time, we were named as one of the managing members of RadQual. Because of this change in member ownership and management, we have consolidated RadQual’s operations within the nuclear medicine segment for financial reporting since that time. For purposes of consolidation, all significant intercompany activity has been eliminated in the reporting process. In July 2021, we acquired the remaining 75.5% of the member units of RadQual. As a result of the acquisition, RadQual and TI Services are now our wholly-owned subsidiaries and are fully consolidated.internationally.

We anticipate that our sales of RadQual products will remain strong and that our ownership of RadQual will create significantby creating future opportunities through new product development and expanding markets. Additionally, we will continue to work closely with TI Services using their expertise in marketing and distribution strategies to strengthen nuclear medicine product sales.

Radiological Services

Starting in 2022, due to drastically decreased activity in the segment, all remaining activities in our Radiological Services is reported in our Nuclear Medicine Standards segment.

In January 2020, we notified our gemstone processing customer that the service contract with them was being terminated because the volume of gemstones sent for processing did not meet contract minimums. The termination activities and wrap up of this service substantially occurred in 2021 and the Company saw a steady decline in revenue from this service as production was wrapped up. In the first half of 2022, we converted the spaces in the facility that were previously used to perform this contract work into expanded Nuclear Medicine new product manufacturing. The loss in revenue expected from termination of the gemstone processing agreement is expected to be more than compensated for by the expansion of new nuclear medicine source products.

Revenue from field service work for the DOE had accounted for the majority of revenue in this segment. However, Radiological Field Services work was terminated in 2020 and we did not generate any Radiological Field Services revenue in 2021 or 2022. We have removed this type of activity from our NRC license and do not expect to perform this in future years.

We continue to engage in source disposal activities and have begun reporting these activities under the Nuclear Medicine Standards segment starting January 1, 2022. Additionally, we reclassified our reporting for 2021 to include all activities for the Radiological Services business segment under the Nuclear Medicine Standards segment.

Fluorine Products

In 2023 and 2022, we had no revenues related to Fluorine Products as compared to $29,775 in 2021. These revenues were related to an agreement to provide engineering and technical assistance services related toProducts. Work on our fluorine products’ intellectual property. We did not have any revenue from this agreement in 2022. In October 2022, we entered into an option agreement with a Company to sellde-conversion facility project that is the NRC license and other assets related toentirety of this business area. The agreement gives the buyer up to 18 months to purchase these assets. Work on this project hadsegment has been on hold since 2013 because of a slowdown in the nuclear industry that specifically impacted fuel cycle facilities. Until suchSince that time, that we execute the asset sales agreement we will limithave limited our expenditures to essential items such as maintenance of the NRC license, land use agreements, communication with our prospective FEP product customers, and interface with the State of New Mexico and Lea County officials. In February 2024, we entered into an Asset Purchase Agreement with a Company to sell the NRC license and other assets related to this business area ("DUF6 Asset Sale"). We expect to close the DUF6 Asset Sale in approximately 12 to 24 months, subject to satisfaction of certain closing conditions.

During 2021,2023, we incurred $144,860$113,019 of planning and other expenses related to the de-conversion project, as compared to $150,196$144,860 in 2021.2022. This is a decrease of $5,336,$31,841, or approximately 4%22%, and is the result of decreased professional services allocated to this project in 2022.2023. The largest expense in this business segment is $104,379, approximately 72%92% of the total expenses for 2022,2023, for the amortization of our NRC license for this project. We expect that our costs in the future will be limited to essential items such as continued interactions with our customers, the state of New Mexico, and Lea County, New Mexico. If we are able to close the DUF6 Asset Sale as expected, we anticipate dissolving our Flourine Products segment. 

Cost of Revenues and Gross Profit

Cost of revenues for 20222023 was $4,891,927$4,888,409 as compared to $3,924,142$4,891,927 in 2021, an increase2022, a decrease of $967,785,$3,518, or 25%less than 1%. Gross profit percentage decreasedincreased to 60% for 2023, from 56% for 2022, from 59% in 2021.2022. The following table presents revenues and cost of revenues information:

During 2022,2023, we continued to monitor and control direct costs. Raw materials used in our radiochemical productstheranostics Products and nuclear medicine standards represented the bulk of direct costs for 2022.2023. In each of these business segments, we have purchase agreements in place with suppliers to obtain optimum pricing. Periodically, the cost increasescan increase for these raw materials or we may also use alternate supply sources for our material which might not carry pricing as favorable as our contracted suppliers.

The decreaseincrease in gross profit percentage in 20222023 is a result of increased overall sales activity, increased sales prices, and better cost in raw materialcontrols. Additionally, we have worked to find more effective cost controls and supplies in our Nuclear Medicine Standards segment driven by recent cost inflation. We have seen these increased costs stabilize somewhat; and we are working on further offsetting these cost increases with increases to our product prices. We believe we can increase our sales prices enough to overcome these cost increases while continuing to be competitive and maintain sales growth.overall utilization of our raw materials.

Operating Costs and Expenses

Total operating costs and expenses for 20222023 were $7,492,958,$8,155,275, as compared to $6,418,592$7,492,958 in 2021.2022. This is an increase of $1,074,366,$662,317, or approximately 17%9%.

The following table presents operating costs and expenses for 20222023 as compared to 2021:2022:

Salaries and contract labor expense increased by $702,917,$641,503, or approximately 26%19%, which was the result of an increased number of employees, and increases to labor rates.rates, and temporary increase in executive salaries during our CEO transition period. In addition, non-cash equity compensation expense recorded for the year ended December 31, 2022,2023, was $352,458$464,041 as compared to $84,564$352,458 for the same period in 2021.2022. This expense is an increase of $267,894, or approximately 317%, and is the result offor equity compensation recorded for outstanding stock options and restricted stock units granted to directors, officers, and employees.

General administrative and consulting expenses increaseddecreased less than 1% to $3,545,766 in 2023, as compared to $3,568,590 in 2022, as compared to $3,459,143 in 2021, an increase of $109,447, or approximately 3%. This increase is due to periodic waste disposal costs of $329,237 in 2022 with no such cost in 2021.2022. Research and development expense was $577,354 for 2023, compared to $533,716 for 2022, compared to $271,714 for 2021.2022. This is an increase of $262,002,$43,638, or approximately 96%8%. This increase in research and development expense was the result of increased costs associated with product development in our RadiochemicalTheranostics and Nuclear Medicine Standards business segments.

During both 2022 and 2021, we limited further investment in the planned de-conversion facility and limited further spending on the project only for expenses necessary to maintain licensing, continue interactions with Lea County, New Mexico, and supporting a due diligence review of the project by a company interested in purchasing these project assets. We will continue to delay further engineering work on the de-conversion project until we are able to secure additional contracts for de-conversion services.

Other Income (Expense)

The following table presents other income (expense) for 20222023 as compared to 2021:2022:

Other income was $2,110,576$160,173 for 20222023 as compared to other income of $683,253$2,110,576 for 2021. This is an increase in other income of $1,427,323.2022. The increaselarge decrease is primarily due to a $1,797,978 gain on the sale of assets to Pharmalogic Idaho, LLC.LLC in 2022. In February 2022, we entered into an Asset Purchase Agreement with Pharmalogic Idaho, LLC, pursuant to which we sold certain assets for $4,000,000 in cash. The assets consisted primarily of manufacturing equipment and a sublease acquired by the Company in connection with the previously announced termination of the manufacturing and supply agreement with another company.In 2021, we recognized “other income” for an anticipated tax refund of approximately $440,000 for the Employer Retention Credit.

In September 2022, we experienced a fraudulent transactions incident. The fraudulent charges totaled approximately $85,000. These charges were recorded as “other expense”. Investigations by our bank and by law enforcement are ongoing. There have been no indications of any involvement within our Company. As we expected to recoup all fraudulent charges from our bank, we recognized "other income" to offset the fraudulent charges recorded under “other expense”. In October and November 2022, we recovered all the fraudulent charges from our bank.

Interest income in 20222023 was $9,502$78,890 as compared to $111$9,502 in 2021.2022. This increase of $9,391$69,388 was due to increased interest rates earned forand increased cash balances held at banks and other institutions in interest-bearing accounts.

Interest expense decreased during 2022,2023, to $331,780, from $613,943 from $791,532 in 2021.2022. This decrease of $177,589,$282,163, or approximately 22%46%, was due to a decrease in non-cash interest expense and the payoff of some notes payable.expense. In 2022, non-cash interest expense was $274,443 as compared to $401,077with no comparable expense in 2021. This is a decrease of $126,634.2023. Interest expense includes dividends accrued on our Series C Preferred Stock (as defined below) issued in 2017. In 2022,2023, we recorded interest expense of $243,780 for dividends payable on our Series C Preferred Stock.

In connection with the 2013 Promissory Note (as defined below), we recorded $30,000

21

---

Table of interest expense for each of 2022 and 2021, and approximately $3,000 and $13,000 of non-cash interest expense related to a debt discount feature on the 2013 Promissory Note for 2022 and 2021 respectively.

20 

Contents

 

In connection with the 2019 Promissory Note (as defined below), we recorded $40,000 of interest expense for 2022 and 2021, and approximately $256,000 of non-cash interest expense related to a debt discount feature and issuance of warrants related to the 2019 Promissory Note for 2022 and 2021. We will have $0 in non-cash interest expense in connection with the 2019 Promissory Note in 2023 and future years.

In connection with our 2017 issuance of Series C Preferred Stock, we issued Class M Warrants and Class N Warrants. All these warrants expired in 2021. We recorded approximately $0 and $131,000 of non-cash interest expense for 2022 and 2021 respectively in relation to these warrants.

Net Income or Loss

 

Our net incomeloss was $303,238$869,016 in 2022,2023, compared to a net loss was $902,347income of $303,238 in 2021.2022. This is an increasea decrease in net income of $1,205,578.$1,172,254. This increasedecrease is largely the result of the approximate $1.8 million gain on sale of assets. Additionally, the increase in income is the result of the increase in revenue in our Radiochemical Products segment offset by the increase in operating expense from salaries and contract labor and expenses from research and developmentassets in 2022 as compared to the same periodwith no such gain in 2021.2023. 

 

Liquidity and Capital Resources

 

On December 31, 2022,2023, we had cash and cash equivalents of $2,375,817$2,688,141 compared to $474,851$2,375,817 at December 31, 2021.2022. Net cash provided by operating activities was $582,589 in 2023, compared to net cash used in operating activities wasof $1,497,719 in 2022, compared to net cash used by operating activities of $161,914 in 2021.2022. This represents an increase in cash used inprovided by operating activities of approximately $1,335,805.$2,080,308. This increase is due to a largeimproved operational performance, decreases in accounts receivable, decreases in Prepaids and current assets, and an increase in accounts receivable due to the increased sales activity in 2022 as compared to 2021payable and decreased net income from operating activitiesaccrued liabilities in the year over year comparison.

 

Accounts receivable at December 31, 20222023 were $1,596,886$1,469,298 as compared to $853,675$1,596,886 at December 31, 2021.2022. Our allowance for bad debt at December 31, 2022 was $0 as compared to $18,9102023 and at December 31, 2021.2022 was $0.

 

Inventories at December 31, 20222023 were $744,793$927,111 as compared to $924,775$744,793 at December 31, 2021. A large portion2022. Part of this increase is due to acquisition of inventory as part of our inventory consistspurchase of Cobalt target inventory. For 2022, our target inventory accounted for approximately 25% of our work in process inventory. For 2021, our target inventory accounted for approximately 48% of our work in process inventory.business assets from AMICI, Inc.

 

Included in our work in process inventory are in-process and completed nuclear medicine products, irradiated cobalt, and nuclear medicine-related materials and products.

 

We recognized a net profitloss of $303,238,$869,016, for the year ended December 31, 2022,2023, and have an accumulated deficit of $126,460,843$127,329,859 since inception. To date, our operations and plant and equipment expenditures have been funded principally from proceeds from public and private sales of debt and equity as well as through asset sales.

 

Net cash used in investing activities was $149,058 for 2023 and net cash provided inby investing activities was $3,879,986 for 20222022. During 2023, we used $149,058 to purchase equipment, and net cash used in investing activities was $205,474 for 2021. During 2022, we used $120,014 to purchase equipment and we used $205,474 to purchase equipment in 2021.2022. We had proceeds from sale of equipment of $4,000,000 in 2022, and we had no proceeds from sale of equipment in 2021.2023.

 

Financing activities usedprovided cash of $472,004$80,504 for the year ended December 31, 2022.2023. We entered into a note payable agreement for $452,100 to finance the purchase of assets. We received proceeds from the sale of common stock in the amount of $8,398 and made principal payment on loans in the amount of $83,389 in 2023. For the year ended December 31, 2022, financing activities used cash of $472,004. We received proceeds from the sale of common stock in the amount of $76,571 and made principal payment on loans in the amount of $540,032 in 2022. For the year ended December 31, 2021, financing activities used cash of $78,699. We received proceeds from the sale of common stock in the amount of $18,890 and issued debt for proceeds of $351,255. In addition, we made principal payment on loans in the amount of $437,627 in 2021.

 

In February 2017, we entered into subscription agreements with certain investors, including two of our directors, for the sale of (i) an aggregate of 3,433 shares of Series C Preferred Stock, and (ii) Class M warrants to purchase an aggregate of 17,165,000 shares of our common stock (Class M Warrants), for gross proceeds of $3,433,000. The Series C Preferred Stock accrues dividends at a rate of 6% per annum, payable annually on February 17^th of each year, commencing on February 17, 2018. Shares of Series C Preferred Stock are convertible at the option of the holder at any time into shares of our common stock at an initial conversion price equal to $0.10 per share, subject to adjustment. At any time after February 17, 2019, if the volume-weighted average closing price of our common stock over a period of 90 consecutive trading days is greater than $0.25 per share, we may redeem all or any portion of the outstanding Series C Preferred Stock at the original purchase price per

21 

share plus any accrued and unpaid dividends, payable in shares of common stock. All outstanding shares of Series C Preferred Stock must be redeemed by us on February 17, 2022 at the original purchase price per share, payable in cash or shares of common stock, at the option of the holder. In February 2022, based on approval of majority of the Preferred C Holders, we extended the redemption date of the Series C Preferred Stock to February 17, 2023. In December 2022, based on approval of majority of the Preferred C Holders, we extended the redemption date of the Series C Preferred Stock to February 17, 2025. Holders of Series C Preferred Stock do not have any voting rights, except as required by law and in connection with certain events as set forth in the Statement of Designation of the Series C Preferred Stock. The Class M Warrants were exercisable at an exercise price of $0.12 per share, subject to adjustment as set forth in the warrant, and expired in February 2022. In February 2022, 515,000 Class M Warrants were exercised at a price of $0.12. The Company received $61,800 for the exercise.

 

In March 2017, we amended our 8% unsecured debentures issued that were scheduled to mature in July 2017 (the Notes) and gave the noteholders certain additional rights (the Amendment). Pursuant to the Amendment, the Notes were modified to provide each holder the right, at the holder’s option and exercisable prior to May 12, 2017, to convert all or any portion of the principal amount of the Notes, plus accrued but unpaid interest, into shares of our Series C Preferred Stock at a conversion price of $1,000 per share. Holders that elected to convert their Notes into Series C Preferred Stock received a warrant to purchase up to 3,750 shares of our common stock for each share of Series C Preferred Stock received upon conversion of the Notes, with each warrant having a five-year term, a cashless exercise feature, and an exercise price of $0.10 per share of common stock. As a result of this modification, an aggregate of $780,000 of the Notes was converted to 780 shares of Series C Preferred Stock and 2,925,000 Class N Warrants. The Class N Warrants (as defined below). Residual interest was also paidwere exercisable at an exercise price of $0.12 per share, subject to Note holders who converted of $1,515. The Notes maturedadjustment as set forth in July 2017the warrant, and were repaidexpired in full.February 2022.

 

As discussed above, in May 2017, we issued 780

22

---

Table of Contents

In total, 4,213 shares of Series C Preferred Stock and Class N warrants to purchase an aggregatewere issued for gross proceeds of 2,925,000 shares of our common stock (Class N Warrants) upon conversion of $780,000 of the Notes.$4,213,000. The Series C Preferred Stock accrues dividends at a rate of 6% per annum, payable annually on February 17^th of each year, commencing on February 17, 2018. Shares of Series C Preferred Stock are convertible at the option of the holder at any time into shares of our common stock at an initial conversion price equal to $0.12$0.10 per share, subject to adjustment. At any time after February 17, 2019, if the volume-weighted average closing price of our common stock over a period of 90 consecutive trading days is greater than $0.25 per share, we may redeem all or any portion of the outstanding Series C Preferred Stock at the original purchase price per share plus any accrued and unpaid dividends, payable in shares of common stock.

150 shares of Series C Preferred Stock have previously been converted to common stock at the option of the holder At December 31, 2023, 4,063 shares of Series C Preferred Stock were outstanding. All outstanding shares of Series C Preferred Stock were required to be redeemed by us on February 17, 2022 at the original purchase price per share, payable in cash or shares of common stock, at the option of the holder. In February 2022, based on approval of a majority of the Preferred C Holders, we extended the redemption date of the Series C Preferred Stock to February 17, 2023. In December 2022, based on approval of a majority of the Preferred C Holders, we extended the redemption date of the Series C Preferred Stock to February 17, 2025. Holders of Series C Preferred Stock do not have any voting rights, except as required by law and in connection with certain events as set forth in the Statement of Designation of the Series C Preferred Stock. The Class N Warrants were exercisable at an exercise price of $0.12 per share, subject to adjustment as set forth in the warrant, and expired in February 2022.

 

In December 2013, we entered into a promissory note agreement with our then Chairman of the Board and one of our major shareholders, pursuant to which we borrowed $500,000 (the 2013 Promissory Note). The 2013 Promissory Note is secured and bears interest at 6% per annum and was originally due June 30, 2014. According to the terms of the 2013 Promissory Note, at any time, the lenders may settle any or all of the principal and accrued interest with shares of our common stock.stock based on the average price of the shares over the previous 20 trading days. In connection with the 2013 Promissory Note, each of the two lenders was issued 5,000,000 Class L warrants to purchase shares of our common stock at an exercise price of $0.06 per share. The warrants were immediately exercisable. In June 2014, we renegotiated the terms of the 2013 Promissory Note. Pursuant to the modification, the maturity date was extended to December 31, 2017 and each lender was granted an additional 7,500,000 Class L warrants to purchase shares of our common stock at an exercise price of $0.06 per share. The warrants were immediately exercisable. In February 2017, the 2013 Promissory Note was further modified to extend the maturity date to December 31, 2020, with all remaining terms unchanged. On December 23, 2018, all 25,000,000 Class L warrants expired. In December 2019, the 2013 Promissory Note was further modified to extend the maturity date to December 31, 2021, with all remaining terms unchanged. In January 2022, the 2013 Promissory Note was further modified to extend the maturity date to December 31, 2023, with all remaining terms unchanged. In February 2024, the 2013 Promissory Note was further modified to extend the maturity date to March 31, 2026.

 

In April 2018, we borrowed $120,000 from our then Chief Executive Officer and Chairman of the Board pursuant to a promissory note (the 2018 Promissory Note). The 2018 Promissory Note accrues interest at 6% per annum, which is payable upon maturity of the 2018 Promissory Note. The 2018 Promissory Note was originally unsecured and originally matured on August 1, 2018. At any time, the holder of the 2018 Promissory Note may elect to have any or all the principal and accrued interest settled with shares of our common stock based on the average price of the shares over the previous 20 trading days. Pursuant to an

22 

amendment to the 2018 Promissory Note in June 2018, the maturity date was extended to March 31, 2019 with all other provisions remaining unchanged. Pursuant to a second amendment to the 2018 Promissory Note in February 2019, the maturity date was extended to July 31, 2019 with all other provisions remaining unchanged. Pursuant to a third amendment to the 2018 Promissory Note in July 2019, the maturity date was extended to January 31, 2020 with all other provisions remaining unchanged. Pursuant to a fourth amendment to the 2018 Promissory Note in December 2019, the maturity date was extended to December 31, 2021, and the note was modified to become secured by company assets, with all other provisions remaining unchanged. In December 2021, the 2018 Promissory Note was further modified to extend the maturity date to December 31, 2023, with all remaining terms unchanged. In December 2023, the 2018 Promissory Note was further modified to extend the maturity date to January 31, 2025. In February 2024, the 2018 Promissory Note was further modified to extend the maturity date to March 31, 2026.

 

23

---

Table of Contents

In December 2019, we entered into a promissory note agreement with our then Chief Executive Officer, Chairman of the Board, former Chairman of the Board, and one of our major shareholders (the 2019 Promissory Note). The 2019 Promissory Note authorizes us to borrow up to $1,000,000. As of December 31, 2019, we borrowed $675,000 under the 2019 promissory note;Promissory Note; the remaining $325,000 was borrowed in February 2020. The 2019 Promissory Note is secured and bears interest at 4% per annum and has a maturity date of December 31, 2022. According to the terms of the 2019 Promissory Note, at any time, a holder of the 2019 Promissory Note may elect to have any or all of the principal and accrued interest settled with shares of our common stock based on the average price of the shares over the previous 20 trading days. In connection with the 2019 Promissory Note, we are required to issue up toissued 30,000,000 Class O Warrants with a term of five years to purchase shares of our common stock at $0.045 per share (the Class O Warrants). The warrants are exercisable at an exercise price of $0.045 per share and have a term of five years.All the Class O Warrants were exercised in January 2021. In December 2022, the 2019 Promissory Note was modified to extend the maturity date to December 31, 2024, with all remaining terms unchanged.

In April 2021, we borrowed $250,000 from its Chief Executive Officer and Chairman ofFebruary 2024, the Board pursuant to a promissory note (the 2021 Promissory Note). The 2021 Promissory Note accrued interest at 6% per annum, which was payable upon maturity of the 2021 Promissory Note. The 20212019 Promissory Note was originally secured and wasfurther modified to mature on December 31, 2022. At any time,extend the holders of the 2021 Promissory Note were ablematurity date to elect to have any or all of the principal and accrued interest settled with shares of our common stock at a conversion price of $0.11 per share. On March 31, 2022, the Company repaid the 2021 Promissory Note in full. The payment included $250,000 in principal and $14,500 in interest.2026.

 

We expect that cash from operations, cash obtained through securities offerings, and our current cash balance will be sufficient to fund operations for the next twelve months. Although we may seek additional debt financing for our projects and operations in the future, there is no assurance that we will be able to secure additional debt financing on acceptable terms to us, or at all.

 

Goals for 20232024

 

Based upon the investments we have made in our facilities and investments we anticipate making, and based on projects, and products developed thus far in 2023, we have the following goals for the rest of 2023:2024:

 

· ●

Continue to expand sales of our FDA approved sodium iodide I-131 generic drug product;product, including entering new territories;

 

· ●

Complete development of and launch a fully automated I-131 capsule loading system to pharmacies in the U.S and select overseas customers;

 

· ●

Begin development of one or more new generic drug Launch our Medical Devices business segment beginning by offering products to further enhance revenue production within our Radiochemical segment and identify additional future generic product opportunities;purchased from AMICI, Inc. in 2023.

 

· ●

Expand sales of our nuclear medicine products and increase cash flow by offering new products and further expanding our international sales and distributor relationships;

 

· ●

Develop a business plan to produce additional radiopharmaceutical products or explore new contract manufacturing opportunities.

·

Explore acquisition opportunities to expand our product offerings and increase, revenue, cash flow, and profit margin;

 

· ●

Continue to expand our customer base, increase revenues, reduce production and operating costs, and attempt to achieve profitability in our core business segment operations; and

 

· ●

Continue to support essential tasks related to our de-conversion project and continue to pursue any opportunities to benefit from sale of these assets through and through royalty payment arrangements.efforts towards closing the DUF6 Asset Sale agreement.

23 

 

Critical Accounting Estimates

Asset retirement obligation– The asset retirement obligation is based on the expected future cash flows of the decommissioning funding plan. The decommissioning funding plan is based on the estimated number of hours of specific personnel, estimated wages and disposal costs. Once the decommissioning funding plan has been developed, we use a discount rate to determine the estimated current value of the liability.

 

Item 7A.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

We are a smaller reporting company, and therefore, are not required to provide the information required by this item.

 

24

---

Table of Contents

Item 8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 

The following financial statements are included herewith and are hereby incorporated by reference:

 

Index to Consolidated Financial Statements

 

	Page No.
Report of Independent Registered Public Accounting Firm	F-1
Financial Statements:
Consolidated Balance Sheets as of December 31, 20222023 and 20212022	F-2 F-3
Consolidated Statements of Operations for the years ended December 31, 20222023 and 20212022	F-3 F-4
Consolidated Statement of Shareholders’ Equity for the years ended December 31, 20222023 and 20212022	F-4 F-5
Consolidated Statements of Cash Flows for the years ended December 31, 20222023 and 20212022	F-5 F-6
Notes to Consolidated Financial Statements	F-6 F-7

 

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 

None.

 

Item 9A.    CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

We maintain disclosure controls and procedures (as defined in Rules 13a-15I and 15d-15(e) under the Exchange Act) that are designed to ensure information required to be disclosed in our reports that are filed or submitted under the Exchange Act, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

Management, with the participation of our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), has conducted an evaluation (pursuant to Rule 13a-15(b) of the Exchange Act) of the effectiveness of our disclosure controls and procedures as of December 31, 2022.2023. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of December 31, 2022.2023.

 

24 

25

---

Table of Contents

 

Management’sManagement’s Annual Report on Internal Control over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15(d)-15(f) under the Exchange Act). Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting for external purposes in accordance with accounting principles generally accepted in the U.S. Internal control over financial reporting includes maintaining records that in reasonable detail accurately and fairly reflect our transactions; providing reasonable assurance that transactions are recorded as necessary for preparation of our financial statements; providing reasonable assurance that receipts and expenditures are made in accordance with management authorization; and providing reasonable assurance that unauthorized acquisition, use or disposition of company assets that could have a material effect on our financial statements would be prevented or detected on a timely basis. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected.

 

Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework and criteria established in Internal Control — Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission. This evaluation included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation. Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2022.2023.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting during the yearthree months ended December 31, 2022,2023, that have materially affected, or are reasonable likely to materially affect, our internal control over financial reporting.

 

Item 9B.      OTHER INFORMATION

 

None.During the quarter ended December 31, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

 

Item 9C.      DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

 

None.

 

PART III.

 

Item 10.      DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

 

We have adopted a Code of Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer and controller, or persons performing similar functions. Our Code of Ethics is posted on our website and can be accessed, free of charge, at http://www.intisoid.com. If we waive, or implicitly waive, any material provision of the Code of Ethics that apply to our executive officers, or substantively amend the Code of Ethics, in each case that is required to be disclosed, we will disclose that fact on our website.

 

The other information required by this item is incorporated by reference from our definitive proxy statement for our 20232024 annual meeting of shareholders, which will be filed with the SEC within 120 days after December 31, 2022.2023.

 

Item 11.      EXECUTIVE COMPENSATION

 

The information required by this item is incorporated by reference from our definitive proxy statement for our 20232024 annual meeting of shareholders, which will be filed with the SEC within 120 days after December 31, 2022.2023.

 

Item 12.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 

The information required by this item is incorporated by reference from our definitive proxy statement for our 20232024 annual meeting of shareholders, which will be filed with the SEC within 120 days after December 31, 2022.

25 2023.

 

26

---

Table of Contents

 

Item 13.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 

The information required by this item is incorporated by reference from our definitive proxy statement for our 20232024 annual meeting of shareholders, which will be filed with the SEC within 120 days after December 31, 2022.2023.

Item 14.      PRINCIPAL ACCOUNTANT FEES AND SERVICES

 

The information required by this item is incorporated by reference to our definitive proxy statement for our 20232024 annual meeting of shareholders, which will be filed with the SEC within 120 days after December 31, 2022.2023.

 

Item 15.      EXHIBITS, FINANCIAL STATEMENT SCHEDULES

 

(a)(1)and (a)(2)Financial Statements

See the index to and the financial statements beginning on page [31], which financial statements are incorporated herein by reference.

 

(a)(3) Exhibits

The following documents are filed or incorporated herein by reference as exhibits to this report:

 

2.1++

2.1++

Membership Interest Purchase Agreement, dated July 8, 2021, between RadQual, LLC, International Isotopes Inc., and each of the sellers named therein (incorporated by reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K filed on July 14, 2021).

2.2++

Asset Purchase Agreement, dated February 10, 2022, between International Isotopes Inc. and Pharmalogic Idaho, LLC (incorporated by reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K filed on February 16, 2022).

 

2.2++

Asset Purchased Agreement, dated February 8, 2024, among International Isotopes Inc., International Isotopes Fluorine Products, Inc. and American Fuel Resources, LLC (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on February 8, 2024).#

3.1	Restated Certificate of Formation of the Company, as amended (incorporated by reference to Exhibit 3.1 of the Company’s Quarterly Report on Form 10-Q for quarter ended June 30, 2010).

 

3.2

3.2

Statement of Designation of the Series C Convertible Redeemable Preferred Stock of the Company (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on February 24, 2017).

 

3.3

3.3

Certificate of Amendment to Statement of Designation of the Series C Convertible Redeemable Preferred Stock of International Isotopes Inc., dated February 16, 2022 (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on February 22, 2022).

 

3.4

3.4

Certificate of Amendment to Statement of Designation of the Series C Convertible Redeemable Preferred Stock of International Isotopes Inc., dated December 28, 2022 (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed December 28, 2022).

 

3.5

3.5

Bylaws of the Company (incorporated by reference to Exhibit 3.2 of the Company’s Registration Statement on Form SB-2 filed on May 1, 1997 (Registration No. 333-26269).

 

10.1†

10.1†

International Isotopes Inc. Amended and Restated Employee Stock Purchase Plan (incorporated by reference to Exhibit 10,110.1 of the Company’s Current Report on Form 8-K, filed on July 21, 2020).

 

10.2†

10.2†

International Isotopes Inc. Amended and Restated 2015 Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed on July 30, 2018).

 

10.3+

10.3+

Lease Agreement (4137 Commerce Circle), dated January 20, 2020, between the Company and Adrian Rand Robison and Dorothy RobisonRobison..

 

10.4†

10.4†

Form of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 99.1 of the Company’s Current Report on Form 8-K filed on September 17, 2008).

 

26 

27

---

Table of Contents

 

10.5

10.5

Memorandum of Agreement, dated October 22, 2009, between the Company and the New Mexico Environment Department (incorporated by reference to Exhibit 99.1 of the Company’s Current Report on Form 8-K filed on October 27, 2009).

 

10.6

10.6

Registration Rights Agreement, dated February 17, 2017, among the Company and the purchasers named therein (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on February 24, 2017).

 

10.7†

Amended and RestatedExecutive Employment Agreement, dated May 16, 2012,December 23, 2022, between the Company and Stephen Laflin (incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012).

10.8†

Modification #3 to the Amended and Restated Employment Agreement, dated February 22, 2023, between the Company and Stephen LaflinShahe Bagerdjian (as amended) (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed on February 28,May 8, 2023).

 

10.8

10.9

Promissory Note Agreement, dated December 23, 2013, among the Company, Ralph Richart and John McCormack (incorporated by reference to Exhibit 10.19 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2013).

 

10.9

10.10

Modification #1 to the Promissory Note Agreement, dated June 30, 2014, among the Company, Ralph M. Richart and John M. McCormack (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014).

 

10.10

10.11

Modification #2 to the Promissory Note Agreement, dated February 3, 2017, among the Company, Ralph M. Richart and John M. McCormack (incorporated by reference to Exhibit 10.18 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2016).

10.12

Isotope and Technical Service Order Form, dated October 2, 2014, between the Company and the U.S. Department of Energy (incorporated by reference to Exhibit 10.18 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2014).**

28

---

Table of Contents

21.1+

Subsidiary list.

 

23.1+

10.13

Cobalt-60 Pellet Supply Agreement, dated April 7, 2015, between Nordion (Canada) Inc., as general partner of and on behalf of Nordion Sterilization LP, and International Isotopes Inc. (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015).**

10.14

First Modification to Cobalt-60 Pellet Supply Agreement, effective April 21, 2017, between International Isotopes Inc. and Nordion (Canada) Inc., as general partner of and on behalf of Nordion Sterilization LP (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on May 10, 2017).**

10.15

Certificate of Amendment to Statement of Designation of the Series C Convertible Redeemable Preferred Stock International Isotopes Inc (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on December 28, 2022).

27 

21.1+

Subsidiary list.

23.1+

Consent of Haynie & Company.

 

31.1+

31.1+

Certification of Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002.

 

31.2+

31.2+

Certification of Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002.

 

32.1*

32.1*

Certification of Chief Executive Officer furnished under Section 906 of the Sarbanes-Oxley Act of 2002.

 

32.2*

32.2*

Certification of Chief Financial Officer furnished under Section 906 of the Sarbanes-Oxley Act of 2002.

 

101.INS+

101.INS+

Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH+

101.SCH+

Inline XBRL Taxonomy Extension Schema Document

101.CAL+

101.CAL+

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF+

101.DEF+

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB+

101.LAB+

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE+

101.PRE+

Inline XBRL Taxonomy Extension Presentation Linkbase Document

 

104

Cover Page Interactive Data File (embedded within the(formatted as Inline XBRL document and contained in Exhibit 101101)

 

† This exhibit constitutes a management contract or compensatory plan or arrangement.

 

** Confidential treatment has been granted as to certain portions, which portions were omitted and filed separately with the Securities and Exchange Commission pursuant to a confidential treatment request.

++ Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company hereby undertakes to supplementally furnish copies of any omitted schedules to the Securities and Exchange Commission upon request.

#  Certain portions of the exhibit have been omitted pursuant to Rule 601(b)(10) of Regulation S-K. The omitted information is not material and is the type of information that the registrant treats as private or confidential.

+ Filed herewith.

 

* Furnished herewith.

 

28

29

---

Table of Contents

 

Item 16.      FORM 10-K SUMMARY

 

None.

 

30

---

Table of Contents

 

29

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	International Isotopes Inc.
	By:  /s/ Steve T. LaflinShahe Bagerdjian
	Steve T. Laflin Shahe Bagerdjian
	President, Chief Executive Officer, and Director
	Date:  April 5, 2023March 28, 2024

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

April 5, 2023 March 28, 2024	By:  /s/ Steve T. LaflinShahe Bagerdjian
	Steve T. Laflin Shahe Bagerdjian
	President, Chief Executive Officer, and Director

 

April 5, 2023 March 28, 2024	By:  /s/ W. Matthew Cox
	W. Matthew Cox
	Chief Financial Officer, Secretary

 

April 5, 2023 March 28, 2024	By:  /s/ Robert Atcher
	Robert Atcher
	Director

 

April 5, 2023 March 28, 2024	By:  /s/ Christopher Grosso
	Christopher Grosso
	Chairman of the Board of Directors

 

March 28, 2024	By:  /s/ Steve Laflin
	Steve Laflin
	Director

31

---

Table of Contents

 

30

INTERNATIONAL ISOTOPES INC. AND SUBSIDIARIES

 

CONSOLIDATED FINANCIAL STATEMENTS

 

TABLE OF CONTENTS

 

	Page No.
Report of Independent Registered Public Accounting Firm (PCAOB(Haynie & Company, Salt Lake City, UT, PCAOB ID No. 457)457)	F-1
Financial Statements:
Consolidated Balance Sheets as of December 31, 20222023 and 20212022	F-3
Consolidated Statements of Operations for the years ended December 31, 20222023 and 20212022	F-4
Consolidated Statement of Shareholders’ Equity for the years ended December 31, 20222023 and 20212022	F-5
Consolidated Statements of Cash Flows for the years ended December 31, 20222023 and 20212022	F-6
Notes to Consolidated Financial Statements	F-7

 

32

---

Table of Contents

 

 

31

F-1

---

Table of Contents

F-2

---

Table of Contents

 

F-1

Haynie & Company

Salt Lake City, Utah

 F-2

INTERNATIONAL ISOTOPES INC. AND SUBSIDIARIES

Consolidated Balance Sheets

 

		December 31,				December 31,				December 31,				December 31,
		2022				2021				2023				2022
Assets
Current assets
Cash and cash equivalents		$	2,375,817			$	474,851			$	2,688,141			$	2,375,817
Accounts receivable			1,596,886				853,675				1,469,298				1,596,886
Inventories			744,793				924,775				927,111				744,793
Prepaids and other current assets			1,023,129				1,004,423				672,934				1,023,129
Total current assets			5,740,625				3,257,724				5,757,484				5,740,625
Long-term assets
Restricted cash			840,049				830,752				880,752				840,049
Property, plant and equipment, net			2,024,486				4,299,937				2,465,077				2,024,486
Capitalized lease disposal costs, net			228,125				246,748				688,462				228,125
Financing lease right-of-use asset			12,621				18,631				6,611				12,621
Operating lease right-of-use asset			2,311,082				2,429,622				2,183,988				2,311,082
Goodwill			1,384,255				1,384,255				1,384,255				1,384,255
Patents and other intangibles, net			3,703,353				3,859,473				3,538,458				3,703,353
Total long-term assets			10,503,971				13,069,418				11,147,603				10,503,971
Total assets		$	16,244,596			$	16,327,142			$	16,905,087			$	16,244,596
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable		$	382,392			$	1,424,028				559,597			$	382,392
Accrued liabilities			1,472,504				1,189,165				1,482,179				1,472,504
Unearned revenue			879,365				907,953				932,682				879,365
Current portion of operating lease right-of-use liability			131,572				121,069				140,733				131,572
Current portion of financing lease liability			5,513				8,542				2,832				5,513
Current portion of related party notes payable, net of debt discount			620,000				993,735				—				620,000
Current installments of notes payable			23,348				290,017				155,733				23,348
Total current liabilities			3,514,694				4,934,509				3,273,756				3,514,694
Long-term liabilities
Accrued long-term liabilities			112,500				—				75,000				112,500
Related party notes payable, net of current portion and debt discount			1,000,000				620,000				1,620,000				1,000,000
Notes payable, net of current portion			34,406				57,769				270,732				34,406
Asset retirement obligation			942,378				892,086				1,474,463				942,378
Financing lease liability, net of current portion			2,832				8,346				—				2,832
Operating lease right-of-use liability, net of current portion			2,232,244				2,363,815				2,091,511				2,232,244
Mandatorily redeemable convertible preferred stock, net of current portion and discount			4,063,000				4,719,822
Mandatorily redeemable convertible preferred stock											4,063,000				4,063,000
Total long-term liabilities			8,387,360				8,661,838				9,594,706				8,387,360
Total liabilities			11,902,054				13,596,347				12,868,462				11,902,054
Stockholders' equity
Common stock, $0.01 par value; 750,000,000 shares authorized; 514,889,916 and 502,584,176 shares issued and outstanding respectively			5,148,899				5,025,842
Common stock, $0.01 par value; 750,000,000 shares authorized; 519,787,870 and 514,889,916 shares issued and outstanding respectively											5,197,879				5,148,899
Additional paid in capital			125,654,486				124,469,034				126,168,605				125,654,486
Accumulated deficit			(126,460,843	)			(126,764,081	)			(127,329,859	)			(126,460,843	)
Total equity			4,342,542				2,730,795				4,036,625				4,342,542
Total liabilities and stockholders' equity		$	16,244,596			$	16,327,142			$	16,905,087			$	16,244,596

 

See accompanying notes to consolidated financial statements.

 

F-3

F-3

---

Table of Contents

 

INTERNATIONAL ISOTOPES INC. AND SUBSIDIARIES

Consolidated Statements of Operations

 

		Years ended December 31,
		2022				2021
Sale of product		$	11,181,988			$	9,661,942
Cost of product			4,891,927				3,924,142
Gross profit			6,290,061				5,737,800
Operating costs and expenses:
Salaries and contract labor			3,390,652				2,687,735
General, administrative and consulting			3,568,590				3,459,143
Research and development			533,716				271,714
Total operating expenses			7,492,958				6,418,592
Operating loss			(1,202,897	)			(680,792	)
Other income (expense):
Other income			2,110,576				683,253
Interest income			9,502				111
Interest expense			(613,943	)			(791,532	)
Total other (expense) income			1,506,135				(108,168	)
Net income (loss)			303,238				(788,960	)
Income attributable to noncontrolling interest			—				113,387
Net income (loss) attributable to International Isotopes Inc.		$	303,238			$	(902,347	)
Net income per common share - basic:		$	—			$	—
Net income per common share - diluted:		$	—			$	—
Weighted average common shares outstanding - basic			510,794,145				477,723,996
Weighted average common shares outstanding - diluted			510,794,145				477,723,996

See accompanying notes to consolidated financial statements.

F-4

		Years ended December 31,
		2023				2022
Sale of product		$	12,267,385			$	11,181,988
Cost of product			4,888,409				4,891,927
Gross profit			7,378,976				6,290,061
Operating costs and expenses:
Salaries and contract labor			4,032,155				3,390,652
General, administrative and consulting			3,545,766				3,568,590
Research and development			577,354				533,716
Total operating expenses			8,155,275				7,492,958
Operating loss			(776,299	)			(1,202,897	)
Other income (expense):
Other income			160,173				2,110,576
Interest income			78,890				9,502
Interest expense			(331,780	)			(613,943	)
Total other (expense) income			(92,717	)			1,506,135
Net income (loss)		$	(869,016	)		$	303,238
Net income per common share - basic:		$	—			$	—
Net income per common share - diluted:		$	—			$	—
Weighted average common shares outstanding - basic			517,777,847				510,794,145
Weighted average common shares outstanding - diluted			517,777,847				510,794,145

INTERNATIONAL ISOTOPES INC AND SUBSIDIARIES

Consolidated Statement of Stockholders' Equity

Years ended December 31, 2022 and 2021

																		Equity
																		Attributable				Equity
																		to				Attributable
										Additional								Internat'l				to
		Common Stock								Paid-in				Accumulated				Isotopes				Noncontrolling				Total
		Shares				Amount				Capital				Deficit				Shareholders				Interest				Equity
Balance December 31, 2020			424,344,298			$	4,243,443			$	122,191,837			$	(125,861,734	)		$	573,546			$	2,313,706			$	2,887,252
Shares issued under employee stock purchase plan			313,420				3,135				15,753				—				18,888				—				18,888
Shares issued for exercise of employee stock options			2,024,798				20,248				(20,248	)			—				—				—				—
Stock grant			118,315				1,183				(1,183	)			—				—				—				—
Stock issued in lieu of dividends on preferred C shares			1,398,200				13,982				193,498				—				207,480				—				207,480
Warrant exercise			32,621,409				326,214				(326,214	)			—				—				—				—
Conversion of preferred C stock			1,500,000				15,000				135,000				—				150,000				—				150,000
Conversion of preferred B stock			87,500				875				174,125				—				175,000				—				175,000
Stock based compensation			—				—				84,566				—				84,566				—				84,566
Shares issued for purchase of 75.5% of RadQual			40,176,236				401,762				2,021,900								2,423,662				(2,423,662	)			—
Distribution to non-controlling interest			—				—				—				—				—				(3,431	)			(3,431	)
Net (loss) income															(902,347	)			(902,347	)			113,387				(788,960	)
Balance December 31, 2021			502,584,176				5,025,842				124,469,034				(126,764,081	)			2,730,795				—				2,730,795
Shares issued under employee stock purchase plan			245,081				2,451				12,320				—				14,771				—				14,771
Shares issued for exercise of employee stock options			648,948				6,489				(6,489	)			—				—				—				—
Stock grant			187,231				1,872				(1,872	)			—				—				—				—
Stock issued in lieu of dividends on preferred C shares			2,271,980				22,720				181,760				—				204,480				—				204,480
Warrant exercise			515,000				5,150				56,650				—				61,800				—				61,800
Conversion of preferred B stock			8,437,500				84,375				590,625				—				675,000				—				675,000
Stock based compensation			—				—				352,458				—				352,458				—				352,458
Net (loss) income															303,238				303,238				—				303,238
Balance December 31, 2022			514,889,916			$	5,148,899			$	125,654,486			$	(126,460,843	)		$	4,342,542			$	—			$	4,342,542

Common Stock

Additional Paid-in Capital

Accumulated Deficit

Equity Attributable to Internat’l Isotopes Shareholders

Equity Attributable to Noncontrolling Interest

F-5

INTERNATIONAL ISOTOPES INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

		Years ended December 31,
		2022				2021
Cash flows from operating activities:
Net income (loss)		$	303,238			$	(788,960	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization			374,196				581,274
Gain on disposal of property, plant and equipment			(1,797,978	)			—
Accretion of obligation for lease disposal costs			50,292				43,266
Accretion of beneficial conversion feature			274,443				401,077
Equity based compensation			352,458				84,564
Right-of-use amortization			(2,528	)			23,989
Changes in operating assets and liabilities:
Accounts receivable			(743,211	)			(57,547	)
Prepaids and other current assets			(18,706	)			243,007
Inventories			179,982				(86,988	)
Unearned revenues			(28,588	)			(106,249	)
Accounts payable and accrued liabilities			(441,317	)			(499,347	)
Net cash used in operating activities			(1,497,719	)			(161,914	)
Cash flows from investing activities:
Proceeds from sale of property, plant and equipment			4,000,000				—
Purchase of property, plant, equipment and patents			(120,014	)			(205,474	)
Net cash provided by (used in) investing activities			3,879,986				(205,474	)
Cash flows from financing activities:
Proceeds from sale of stock			76,571				18,890
Proceeds from issuance of notes payable			—				101,253
Proceeds from issuance of debt - related party			—				250,000
Distribution to non-controlling interest			—				(3,431	)
Payments on financing lease liability			(8,543	)			(7,786	)
Principal payments on notes payable			(540,032	)			(437,627	)
Net cash used in financing activities			(472,004	)			(78,701	)
Net change in cash and cash equivalents			1,910,263				(446,089	)
Cash and cash equivalents at beginning of year			1,305,603				1,751,692
Cash and cash equivalents at end of year		$	3,215,866			$	1,305,603
Supplemental disclosure of cash flow activities:
Cash paid for interest		$	54,071			$	75,786
Supplemental disclosure of noncash financing and investing transactions:
Decrease in accrued interest and increase in equity for conversion preferred dividends to stock		$	204,480			$	207,480
Increase in operating lease right-of-use asset and right-of-use liability for new lease		$	—			$	1,603
Increase in equity and decrease in liability for the conversion of preferred stock		$	675,000			$	325,000
Non-cash increase of capitalized asset retirement obligation for increased funding plan		$	—			$	260,715
Decrease in unearned revenue and increase in notes payable for repayment plan		$	—			$	146,072
Increase in equity and decrease in non-controlling interest for acquisition of non-controlling interest in RadQual and TI Services		$	—			$	2,423,662

		December 31,
		2022				2021
Cash and cash equivalents		$	2,375,817			$	474,851
Restricted cash included in long-term assets			840,049				830,752
Total cash, cash equivalents, and restricted cash shown in statement of cash flows		$	3,215,866			$	1,305,603

 

See accompanying notes to consolidated financial statements.

 

F-6

F-4

---

Table of Contents

 

INTERNATIONAL ISOTOPES INC AND SUBSIDIARIES

Consolidated Statement of Stockholders' Equity

Years ended December 31, 2023 and 2022

		Common Stock								Additional Paid-in				Accumulated				Total
		Shares				Amount				Capital				Deficit				Equity
Balance December 31, 2021			502,584,176			$	5,025,842			$	124,469,034			$	(126,764,081	)		$	2,730,795
Shares issued under employee stock purchase plan			245,081				2,451				12,320				—				14,771
Shares issued for exercise of employee stock options			648,948				6,489				(6,489	)			—				—
Stock grant			187,231				1,872				(1,872	)			—				—
Stock issued in lieu of dividends on preferred C shares			2,271,980				22,720				181,760				—				204,480
Warrant exercise			515,000				5,150				56,650				—				61,800
Conversion of preferred B stock			8,437,500				84,375				590,625				—				675,000
Stock based compensation			—				—				352,458				—				352,458
Net income															303,238				303,238
Balance December 31, 2022			514,889,916				5,148,899				125,654,486				(126,460,843	)			4,342,542
Shares issued under employee stock purchase plan			316,866				3,169				5,229				—				8,398
Shares issued for exercise of employee stock options			—				—				—				—				—
Stock grant			343,560				3,436				(3,436	)			—				—
Stock issued in lieu of dividends on preferred C shares			2,266,500				22,665				67,995				—				90,660
Shares issued for issuance of RSUs			1,971,028				19,710				(19,710	)			—				—
Stock based compensation			-				-				464,041				—				464,041
Net loss															(869,016	)			(869,016	)
Balance December 31, 2023			519,787,870			$	5,197,879			$	126,168,605			$	(127,329,859	)		$	4,036,625

See accompanying notes to consolidated financial statements.

F-5

---

Table of Contents

INTERNATIONAL ISOTOPES INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

		Years ended December 31,
		2023				2022
Cash flows from operating activities:
Net (loss) income		$	(869,016	)		$	303,238
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization			350,094				374,196
Gain on disposal of property, plant and equipment			—				(1,797,978	)
Accretion of obligation for lease disposal costs			53,126				50,292
Accretion of beneficial conversion feature			—				274,443
Equity based compensation			464,041				352,458
Right-of-use amortization			(4,478	)			(2,528	)
Changes in operating assets and liabilities:
Accounts receivable			127,588				(743,211	)
Prepaids and other current assets			350,195				(18,706	)
Inventories			(182,318	)			179,982
Accounts payable and accrued liabilities			240,040				(441,317	)
Unearned revenues			53,317				(28,588	)
Net cash provided by (used in) in operating activities			582,589				(1,497,719	)
Cash flows from investing activities:
Proceeds from sale of property, plant and equipment			—				4,000,000
Purchase of property, plant, equipment and patents			(149,058	)			(120,014	)
Net cash (used in) provided by investing activities			(149,058	)			3,879,986
Cash flows from financing activities:
Proceeds from sale of stock			8,398				76,571
Payments on financing lease liability			(5,513	)			(8,543	)
Principal payments on notes payable			(83,389	)			(540,032	)
Net cash provided by (used in) financing activities			(80,504	)			(472,004	)
Net increase in cash and cash equivalents and restricted cash			353,027				1,910,263
Cash and cash equivalents and restricted cash at beginning of year			3,215,866				1,305,603
Cash and cash equivalents and restricted cash at end of year		$	3,568,893			$	3,215,866
Supplemental disclosure of cash flow activities:
Cash paid for interest		$	163,920			$	54,071
Cash paid for taxes			10,176				9,097
Supplemental disclosure of noncash financing and investing transactions:
Decrease in accrued interest and increase in equity for conversion preferred dividends to stock		$	90,660			$	204,480
Increase in equity and decrease in liability for the conversion of preferred stock		$	—			$	675,000
Property acquired in exchange for a note payable		$	452,100			$	—
Non-cash increase of capitalized asset retirement obligation for increased funding plan		$	478,959			$	—

		December 31,
		2023				2022
Cash and cash equivalents		$	2,688,141			$	2,375,817
Restricted cash included in long-term assets			880,752				840,049
Total cash, cash equivalents, and restricted cash shown in statement of cash flows		$	3,568,893			$	3,215,866

See accompanying notes to consolidated financial statements.

F-6

---

Table of Contents

INTERNATIONAL ISOTOPES INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED December 31, 20222023 AND 20212022

 

NOTE 1 – DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

 

Description of business – International Isotopes Inc. (the “Company” or “INIS”) was incorporated in Texas in November 1995. The accompanying consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include all operations and balances of the Company and its wholly-owned subsidiaries, International Isotopes Idaho Inc., International Isotopes Fluorine Products, Inc., and International Isotopes Transportation Services, Inc. The consolidated financial statements also include the accounts of wholly owned subsidiaries TI Services, LLC, (“TI Services”), and RadQual, LLC (RadQual). TI Services is headquartered in Youngstown, Ohio and was formed with RadQual in December 2010 to distribute products and services for nuclear medicine, nuclear cardiology and Positron Emission Tomography (PET) imaging. RadQual is a global supplier of molecular imaging quality control devices, and is now headquartered in Idaho Falls, Idaho. In addition, the Company had a 24.5% interest in RadQual. In August 2017, affiliates of the Company purchased the remaining 75.5% of RadQual and at the time the Company was named as one of the two managing members of RadQual. As a result of this ownership change, the Company has significant influence in management decisions with regard to RadQual’s business operations. In July 2021, the Company purchased the remaining 75.5% of RadQual. RadQual and TI Services are now wholly-owned subsidiaries of the Company.

Affiliates 

Nature of Operations – INIS and its subsidiaries, (collectively, the “Company,” “we,” “our” or “us”) manufacture a full range of nuclear medicine calibration and reference standards, a wide range of products, including cobalt teletherapy sources, and a varied selection of radioisotopes and radiochemicals for medical research, pharmacy compounding, and clinical applications. The Company also distributes a varied selection of radioisotopes and radiochemicals for medical and clinical research applications.an FDA-approved radiopharmaceutical drug product. The Company also holds several patents for a fluorine extraction process that it plans to usewould be used in conjunction with a proposed commercial depleted uranium de-conversion facility which would be located in Lea County, New Mexico (the “De-Conversion Facility”). The Company’s business consists of four major business segments: Theranostics Products (formerly Radiochemical Products), Cobalt Products, Nuclear Medicine Standards, Cobalt Products, Radiochemical Products, and Fluorine Products. The Company’s headquarters and all operations, with the exception of TI Services, are located in Idaho Falls, Idaho.

 

With the exception of certain unique products, the Company’s normal operating cycle is considered to be one year. Due to the time required to produce some cobalt products, the Company’s operating cycle for those products is considered to be two to three years. Accordingly, preliminary payments received on cobalt contracts, where shipment will not take place for greater than the operating cycle, have been recorded as unearned revenue and, depending upon estimated ship dates, classified under current or long-term liabilities on the Company’s consolidated balance sheets. These unearned revenues will be recognized as revenue in the future period during whichwhen the cobalt shipments begin.shipment takes place. All assets expected to be realized in cash or sold during the normal operating cycle of the business are classified as current assets.

 

Principles of Consolidation– The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, including RadQual and TI Services. All significant intercompany accounts and transactions have been eliminated during consolidation.

 

Significant accounting policies

 

a)Financial instruments and cash equivalents

 

The carrying value of notes payable approximates fair value because they bear interest at rates which approximate market rates.

 

Cash and cash equivalents, totaling $2,375,817$2,688,141 and $474,851$2,375,817 at December 31, 20222023 and 2021,2022, respectively, consist of operating accounts and money market accounts. For purposes of the consolidated statements of cash flows, the Company considers all highly-liquid financial instruments with original maturities of three months or less at date of purchase to be cash equivalents.

 

At December 31, 20222023 and 2021,2022, the Company had pledged cash on deposit in a money market account valued at $840,049$880,752 and $830,752$840,049 respectively, as security for a surety bond.  The surety bond is required as part of the Company’s operating license agreement with the Nuclear Regulatory Commission (“NRC”).

 

The Company maintains its cash accounts in various deposit accounts, the balances of which are periodically in excess of federally insured limits.

 

F-7

F- 7

---

Table of Contents