INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATE PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, For Use of the Com-
mission Only (as permitted by
Rule 14A-6(e)(2))

[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Rule 14a-12

INTERNATIONAL ISOTOPES INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[X] No Fee Required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction
applies:

- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:

- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):

- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:

- --------------------------------------------------------------------------------
(5) Total fee paid:

- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:

- --------------------------------------------------------------------------------

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.

(1) Amount previously paid:

- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:

- --------------------------------------------------------------------------------
(3) Filing Party:

- --------------------------------------------------------------------------------
(4) Date Filed:

- --------------------------------------------------------------------------------

DRAFT 8/21/01

INTERNATIONAL ISOTOPES INC.

4137 COMMERCE CIRCLE
IDAHO FALLS, IDAHO 83401
(208) 524-5300
---------------

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 24, 2001
---------------

To the Shareholders of INTERNATIONAL ISOTOPES INC.

NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
International Isotopes Inc. (the "Company"), a Texas corporation, will be held
at ______________________, Denton, Texas, on Wednesday, October 24, 2001, at
2:00 p.m., Denton, Texas time, for the following purposes:

1. To elect five directors to serve until the next succeeding
annual meeting and until their respective successors are elected and qualified;

2. To ratify the appointment by the Board of Directors of
Grant Thornton LLP as independent certified public accountants of the Company
for the fiscal year ending December 31, 2001; and

3. To approve an increase in the authorized shares of common
stock from 50,000,000 to 250,000,000 shares.

4. To transact such other business as properly may come before
the meeting or any adjournment thereof.

The close of business on July 31, 2001 has been fixed by the Board of
Directors as the record date for the Annual Meeting. Only shareholders of record
on that date will be entitled to notice of and to vote at the Annual Meeting or
any adjournment thereof, notwithstanding transfer of any stock on the books of
the Company after such record date. The stock transfer books will not be closed.

A Proxy Statement, form of Proxy, and copy of the Annual Report on Form
10-K as filed with the Securities and Exchange Commission with respect to the
Company's operations during the fiscal year ended December 31, 2000, accompany
this notice.

IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING.
IF YOU DO NOT EXPECT TO ATTEND IN PERSON, PLEASE SIGN AND DATE THE ENCLOSED FORM
OF PROXY AND RETURN IT TO THE ADDRESS SET FORTH ON THE REVERSE SIDE OF THE
PROXY. SHAREHOLDERS WHO ATTEND THE ANNUAL MEETING MAY REVOKE THEIR PROXIES AND
VOTE IN PERSON IF THEY DESIRE.

By Order of the Board of Directors

PAUL E. LANDERS
Secretary

September ___, 2001

INTERNATIONAL ISOTOPES INC.

4137 COMMERCE CIRCLE
IDAHO FALLS, IDAHO 83401
(208) 524-5300
---------------

PROXY STATEMENT

FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 24, 2001

SOLICITATION OF PROXIES

This Proxy Statement is furnished to shareholders of International
Isotopes Inc., a Texas corporation (the "Company"), in connection with the
solicitation of proxies by the Board of Directors to be voted at the Annual
Meeting of Shareholders of the Company to be held at
______________________________, Denton, Texas, on Wednesday, October 24, 2001,
at 2:00 p.m., Denton, Texas time, or at any adjournment thereof, for the
purposes set forth in the accompanying Notice of Annual Meeting of Shareholders.
References herein to the "Company" include its subsidiary, unless the context
otherwise requires.

This Proxy Statement and form of Proxy are being mailed to shareholders
on or about September ___, 2001. If the enclosed form of Proxy is executed and
returned, it may nevertheless be revoked by the shareholder at any time by
filing with the Secretary of the Company a written revocation or a duly executed
proxy bearing a later date. A shareholder who attends the meeting in person may
revoke his or her proxy at that time and vote in person if so desired. All
proxies duly signed, dated, and returned will be voted as specified therein, but
unless otherwise specified, will be deemed to grant authority to vote:

(1) FOR the election of the five nominees listed under
"Election of Directors" as nominees of the Company for election as
directors; and

(2) FOR the ratification of the appointment by the Board of
Directors of Grant Thornton LLP as independent certified public
accountants of the Company for the fiscal year ending December 31,
2000.

(3) FOR approval of an increase in the authorized shares of
common stock from 50,000,000 to 250,000,000.

The enclosed Proxy is solicited by and on behalf of the Board of
Directors of the Company. The Company is unaware of any additional matters not
set forth in the Notice of Annual Meeting of Shareholders that will be presented
for consideration at the Annual Meeting. If any other matters are properly
brought before the Annual Meeting and presented for a vote of the shareholders,
the persons named in the Proxy will vote in accordance with their best judgment
upon such matters, unless otherwise restricted by law.

The cost of solicitation of proxies will be borne by the Company. In
addition to the use of the mails, proxies may also be solicited by personal
interview, facsimile transmission, and telephone by directors, officers,
employees, and agents of the Company. The Company will also supply brokers,
nominees, or other custodians with the numbers of Proxy forms, Proxy Statements,
and Annual Reports they may require for forwarding to beneficial owners, and the
Company will reimburse such persons for their expense in so doing.

OUTSTANDING CAPITAL STOCK AND STOCK OWNERSHIP OF
DIRECTORS, CERTAIN EXECUTIVE OFFICERS
AND PRINCIPAL SHAREHOLDERS

The record date for the determination of the shareholders entitled to
notice of and to vote at the Annual Meeting has been established by the Board of
Directors as the close of business on July 31, 2000. As of July 31, 2001, the
Company had issued and outstanding and entitled to vote at the Annual Meeting
17,831,696 shares of Common Stock, par value $.01 per share ("Common Stock").
(For a description of the voting rights of the Common Stock, see "Quorum and
Voting" herein.)

The following table sets forth information as of July 31, 2001,
regarding the beneficial ownership of the Company's Common Stock by each person
or group known by management of the Company to own more than five percent of the
outstanding shares of Common Stock of the Company, by each of the Company's
executive officers named in the Summary Compensation Table below, by each of the
Company's directors (and director nominees) and by all of its directors (and
nominees) and executive officers as a group.

<Table>
<Caption>
SHARES OF COMMON STOCK BENEFICIALLY
OWNED AND PERCENTAGE OF OUTSTANDING
SHARES AS OF
JULY 31, 2001
NAME NUMBER(1) PERCENT
--------------- ---------------

Brown Simpson Strategic Growth Funds(2) .................... 10,056,476 41.4%
Basso Securities Ltd.(3) ................................... 2,519,289 12.8%
AIG Soundshore Holdings Ltd. (4) ........................... 1,445,432 7.7%
John M. McCormack (5) ...................................... 1,104,000 6.0%
William W. Nicholson (6) ................................... 1,500,000 7.8%
David M.Camp (7) ........................................... 35,000 *
Tommy L. Thompson .......................................... 25,000 *
Robert J. Gary (7) ......................................... 136,667 *
Frederick J. Bonte ......................................... 100 0
Charles LeMaistre .......................................... 0 0
Paul E. Landers (7) ........................................ 20,000 0
George Butterworth ......................................... 0 0
Bryce Drake ................................................ 0 0
Steve T. Laflin (7)(8) ..................................... 500,000 2.9%
Randall O'Kane (8) ......................................... 0 0
Keith Allberg (8) .......................................... 0 0
3,261,124 16.4%
Directors and executive officers as a
group (11 persons)(7) .....................................
</Table>

* Less than 1%

(1) Unless otherwise indicated, to the knowledge of the Company, all shares
are owned directly and the owner has sole voting and investment power.

(2) Includes 5,000,000 shares convertible from redeemable convertible
preferred stock.

(3) Includes 785,789 shares of Common Stock, warrants exercisable into
875,000 shares of Common Stock and preferred stock convertible into
858,500 shares of Common Stock.

(4) Includes 438,932 shares of Common Stock, warrants exercisable into
508,000 shares of Common Stock and preferred stock convertible into
498,500 shares of Common Stock.

(5) Includes an aggregate of 954,000 shares of Common Stock beneficially
owned by Mr. McCormack's children. Mr. McCormack disclaims beneficial
ownership of the shares owned by his children.

(6) Includes warrants to purchase 500,000 shares of Common Stock and
preferred stock convertible into 1,000,000 shares of Common Stock.

(7) Includes options to purchase 11,667, 20,000, 500,000 and 531,667 shares
of Common Stock granted to Messrs. Gary, Landers, Laflin and all
directors and executive officers as a group, respectively, that are
exercisable within 60 days of July 31, 2001. Does not include options
to purchase 200,000, 23,333, 40,000, 500,000, and 763,333 shares of
Common Stock granted to Messrs. Camp, Gary, Landers, Laflin and all
directors and executive officers as a group, respectively, that are not
exercisable within 60 days of July 31, 2001.

(8) Nominated to be elected director at the Company's 2001 Annual Meeting.

-2-
5

Section 16(a) Beneficial Ownership Reporting Compliance.

Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers to file reports relating to their
ownership and change in ownership of the Company's Common Stock with the
Securities and Exchange Commission and the NASD. The Company is unaware of any
officers and directors of the Company who failed to timely file a Form 4 or Form
5 in connection with their purchase or sale of Common Stock.

QUORUM AND VOTING

The presence, in person or by proxy, of the holders of a majority of
the voting power of the outstanding shares of Common Stock of the Company
entitled to vote is necessary to constitute a quorum at the meeting. The
affirmative vote of a majority of the voting power represented at the meeting,
present in person or represented by proxy, and entitled to vote is required for
the election of directors. A holder of shares of Common Stock will be entitled
to one vote per share of Common Stock as to each matter properly brought before
the meeting. Cumulative voting is not permitted in the election of directors.
Abstentions and votes "withheld" are included in the determination of the number
of shares present at the meeting for purposes of determining a quorum. Broker
non-votes are counted for purposes of determining whether a quorum is present on
any particular matter only if authority to vote on the matter is granted by the
respective proxy. Abstentions and broker non-votes have the effect of negative
votes on matters requiring approval of a specified percentage of the outstanding
shares. For matters requiring approval by the holders of a specified percentage
of the voting power represented at the meeting and entitled to vote, abstentions
will have the effect of negative votes but broker non-votes will have no effect.

PROPOSAL ONE

ELECTION OF DIRECTORS

Five directors will be elected at the Annual Meeting for terms expiring
at the next Annual Meeting. The directors will continue to serve until their
respective successors are duly elected and qualified.

Shares represented by proxies returned duly executed will be voted,
unless otherwise specified, in favor of the five nominees for the Board of
Directors named below. The proxies cannot be voted for more than five nominees.
The nominees have indicated that they are able and willing to serve as
directors. If any (or all) such persons should be unable to serve, the persons
named in the enclosed proxy will vote the shares covered thereby for such
substitute nominee (or nominees) as the Board of Directors may select.
Shareholders may withhold authority to vote for any nominee by striking a line
through the name of such nominee in the space provided for such purpose on the
form of Proxy.

NOMINEES FOR DIRECTORS

DAVID M. CAMP, PH.D., age 51, joined the Company in November 1999 as
President and Chief Executive Officer. He was appointed by his fellow Board
members to serve as Chairman of the Board in March 2001. He resigned as
President and Chief Executive Officer in August 2001. From 1998 to 1999, Dr.
Camp served as Vice President and General Manager of the Gas Systems Division of
Millipore Corporation in Allen, Texas, where he had financial responsibility for
the global semiconductor component business. From 1996 to 1998, he served as
President of Kayex Corporation, a division of General Signal, a manufacturer of
major capital equipment for the semiconductor industry. From 1992 to 1995, he
served as President and Chief Executive Officer for Evergreen Holding
Corporation, a refiner of lubricating oils for the petroleum industry. Dr. Camp
received an M.B.A. from Rensselaer Polytechnic Institute in 1984. He also
received a Ph.D. and M.S. in chemical engineering form Massachusetts Institute
of Technology in 1979 and 1974, respectively. He also received a B.S. in
chemical engineering from the University of South Carolina in 1972.

-3-
6

PAUL E. LANDERS, age 54 joined the Company in June 2000 as Chief
Financial Officer. He was elected to the Board of Directors by the directors to
fill a vacant seat in June 2001. Prior to joining the Company, Mr. Landers
served as the Chief Financial Officer of Aavid Thermalloy, LLC in Concord, New
Hampshire. Mr. Landers joined Aavid in 1994 as Corporate Controller and was
promoted to Chief Financial Officer in 1996. Mr. Landers has a B.A. in Economics
from the University of Massachusetts and an M.B.A. in Finance and Organizational
Studies from Boston College.

STEVE T. LAFLIN, age 44 has served as President and General Manager of
the Company's wholly owned subsidiary, I4, since April 1998. He was elected to
the Board of Directors to fill a vacant seat in June 2001. From October 1996
until April 1998 Mr. Laflin served as General Manager of MAC Isotopes, which was
purchased by I3 and reconstituted as I4. Mr. Laflin was elected by the Board to
serve as President and Chief Executive Officer in August 2001.

RANDALL O'KANE, age 42, has been nominated to be elected as a director
at the 2001 Annual Meeting. He is a founding member of RadQual, LLC, which was
founded to develop a wide range of radioactive sources for the nuclear medicine
and PET markets. From 1991 to the present he has been President and CEO of
Technology Imaging Services, which sells accessories and sources to the nuclear
medicine market. Mr. O'Kane is a 1980 graduate of Darmouth College with a degree
in biology.

KEITH ALLBERG, age 49, has been nominated to be elected as a director
at the 2001 Annual Meeting. From December 2000 to the present he has been a
principal and partner in RadQual, LLC, which was founded to develop a wide range
of radioactive sources for the nuclear medicine and PET markets. From January 1,
1990 to December 2000 he was director of the radioactive source business for
DuPont Merk/DuPont Corporations. Mr. Allberg received his B.S. in chemistry in
1976 from Lowell Technical Institute. He also has a B.S. in business
administration from the University of New Hampshire.

The Board of Directors met six times during 2000. No director attended
fewer than 75% of the aggregate of 1) the total number of meetings of the Board
of Directors and 2) the total number of meetings held by all committees of the
Board on which he served.

Executive Committee. The Executive Committee, originally established in
January 1997, during 2000 consisted of Robert J. Gary, David M. Camp and William
Nicholson. The Executive Committee is responsible for the Company's general
operations, as provided in directives from the Board of Directors. The Executive
Committee met 3 times in fiscal 2000.

Audit Committee. The Audit Committee, established in January 1997,
currently consists of John M. McCormack, Fred Bonte, and Robert J. Gary,
each of which is an "independent director" under NASD rules. The Board of
Directors has not adopted a written charter for the Audit Committee. The Audit
Committee meets with the Company's independent auditors to review the scope and
timing of their audit services, any other services they are asked to perform,
the report of independent auditors on the Company's consolidated financial
statements following completion of their audit and the Company's policies and
procedures with respect to internal accounting and financial controls. In
addition, the Audit Committee makes an annual recommendation to the Board of
Directors concerning the appointment of independent auditors for the ensuing
year. The Audit Committee met once during fiscal 2000.

Compensation Committee. The Compensation Committee, established in
January 1997, currently consists of John M. McCormack, Charles LeMaistre and
David Camp. The Compensation Committee reviews the compensation and benefits of
all officers of the Company, makes recommendations to the Board of Directors and
reviews general policy matters relating to compensation and benefits of
employees of the Company, including administration of the Company's 2000 Amended
and Restated Long Term Incentive Plan. The Compensation Committee met once
during fiscal 2000.

-4-
7

PROPOSAL TWO

RATIFICATION OF SELECTION OF AUDITOR

The Board of Directors has selected Grant Thornton LLP as independent
certified public accountants to audit the consolidated financial statements of
the Company for the fiscal year ending December 31, 2001, and has determined
that it would be desirable to request that the shareholders ratify such
selection. The affirmative vote of a majority of the outstanding shares of
Common Stock present at the Annual Meeting in person or by proxy is necessary
for the ratification of the appointment by the Board of Directors of Grant
Thornton LLP as independent certified public accountants. Representatives of
Grant Thornton LLP are expected to be present at the Annual Meeting and will
have the opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions from shareholders.

While shareholder ratification is not required for the selection of
Grant Thornton LLP since the Board of Directors has the responsibility for
selecting the Company's independent certified public accountants, the selection
is being submitted for ratification at the Annual Meeting with a view towards
soliciting the shareholders' opinions, which the Board of Directors will take
into consideration in future deliberations.

The Board of Directors recommends a vote FOR the ratification of Grant
Thornton LLP as independent certified public accountants of the Company for the
fiscal year ending December 31, 2000.

PROPOSAL THREE

APPROVAL OF INCREASE IN AUTHORIZED
SHARES OF COMMON STOCK FROM
50,000,000 TO 250,000,000 SHARES

The Company proposes to amend Article IV of its Articles of
Incorporation to increase the number of authorized shares of Common Stock from
50,000,000 shares, par value $.01 per share, to 250,000,000 shares. The increase
is necessary to allow the Company to continue to use shares of its common stock
instead of cash to pay interest on and to redeem at maturity its cumulative
preferred stock. The Company currently has a total of 17,831,696 shares
outstanding and has reserved for issuance an additional 16,420,876 shares to be
issued in connection with the exercise of outstanding warrants and the
conversion of outstanding Preferred Stock. The Company anticipates that it will
have to issue up to 27,631,650 additional shares of common stock as dividend
payments on its Series A and B Preferred Stock through the year 2003, and
another 200 million shares to redeem the Series A Preferred Stock in 2002,
based on the current market price of the Company's common stock.

EXECUTIVE OFFICERS OF THE COMPANY

The executive officers of the Company are as follows:

<Table>
<Caption>
NAME AGE POSITION WITH COMPANY
---- --- ---------------------

David M. Camp 51 Chairman of the Board

Steve T. Laflin 44 President, Chief Executive Officer
and Director

Paul E. Landers 54 Executive Vice President, Chief
Financial Officer and Director
</Table>

Information concerning the business experience of Messrs. Camp, Landers
and Laflin is provided under the caption "Election of Directors" above.

All executive officers are elected annually by the Board of Directors
to serve until the next annual meeting of the Board of Directors and until their
respective successors are chosen and qualified.

-5-
8

EXECUTIVE COMPENSATION AND OTHER MATTERS

The following information summarizes annual and long-term compensation
for services in all capacities to the Company for the fiscal years ended
December 31, 1998, 1999 and 2000 of the Chief Executive Officer during those
respective years and the other four most highly compensated executive officers
of the Company with annual income of $100,000 or more (collectively, the "Named
Executive Officers"):

-6-
9

SUMMARY COMPENSATION TABLE

<Table>
<Caption>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------ SECURITIES
UNDERLYING ALL OTHER
NAME AND BONUS OPTIONS STOCK COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) ($) (#) GRANTS($)(1) ($)(2)
- ------------------------------ ------------ ------------ ------------ ------------ ------------ ------------

David M. Camp (4)
President, Chief Executive 1999 $ 20,731(3) -0- 35,000 $ 172,601
Officer and Director 2000 $ 137,321 -0- -0- -0-

Tommy L. Thompson (4) 1998 $ 172,383 -0- -0- -0- --
(Former) Executive Vice 1999 $ 169,950 -0- -0- -0- --
President and Chief 2000 $ 157,402 -0- -0- $ 43,750 --
Operating Officer

George Butterworth 2000 $ 111,316 -0- -0- -0- --
Vice President

Bryce Drake 2000 $ 106,327 -0- -0- -0- --
Vice President

Steve T. Laflin (5) 1998 $ 95,000 -0- -0- -0- --
President of I 4 1999 $ 95,000 -0- -0- -0- --
2000 $ 95,000 -0- -0- -0- --
</Table>

- ---------------
(1) Represents the difference between the price paid by the named executive
officer and the fair market value of such security on the date of
purchase.

(2) None of the named executive officers received any perquisites or other
personal benefits in 1998, 1999 or 2000 that in the aggregate exceeded
$50,000 or 10% of such named executive officer's salary and bonus for
such year. See Note (1) above.

(3) Represents salary for 2 months.

(4) Resigned as President and Chief Executive Officer in August 2001. Mr.
Camp continues to serve as Chairman of the Board. Mr. Thompson resigned
as Executive Vice-President, Chief Operating Officer and Director in
November, 2000. Mr. Butterworth resigned as Vice President in
January, 2001. Mr. Drake resigned as Vice President in
January 2001.

(5) Mr. Laflin was elected by the Board of Directors to serve as President
and Chief Executive Officer of I3 in August 2001.

-7-
10

OPTION GRANTS IN LAST FISCAL YEAR

The following table provides information regarding options to purchase
Common Stock of the Company granted during the fiscal year ended December 31,
2000 to the Named Executive Officers.

<Table>
<Caption>
PERCENT OF
NO. OF SECURITIES TOTAL OPTIONS
UNDERLYING OPTIONS GRANTED TO EMPLOYEES EXERCISE PRICE EXPIRATION
NAME GRANTED (#) IN FISCAL YEARS (1) PER SHARE DATE
- ---------------------------- ------------------ ------------------ ------------------ ------------------

David M. Camp -0- -- -- --

Tommy L. Thompson -0- -- -- --

George Butterworth -0- -- -- --

Bryce Drake -0- -- -- --

Steve T. Laflin (1) -0- -- -- --
</Table>

(1) Mr. Laflin was granted options to purchase 1,000,000 shares of Common
Stock in June 2001.

AGGREGATED OPTION EXERCISES IN
LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES

None of the Named Executive Officers exercised options to purchase Common Stock
in 2000. The following table sets forth certain information with regard to the
outstanding options to purchase Common Stock as of the end of the year ended
December 31, 2000 for the persons named in the Summary Compensation Table above.

<Table>
<Caption>
SHARES
ACQUIRED ON VALUE
NAME EXERCISE (#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------- ------------- ------------- ------------- ------------- ------------- --------------
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS
YEAR-END(#) AT FISCAL YEAR-END($)(1)
---------------------- ------------------------

David M. Camp -0- -0- -0- 200,000 -0- $ 31,240

Tommy L. Thompson ....... -0- -0- -0- -0- -0- -0-

Dr. Ira Lon Morgan ...... -0- -0- -0- -0- -0- -0-

George Butterworth ...... -0- -0- 33,333 46,667 5,207 7,289

Bryce Drake ............. -0- -0- 20,000 40,000 3,124 6,248

Steve T. Laflin ......... -0- -0- -0- -0- -0- -0-
</Table>

(1) Based on the last sale price of $ 0.1562 of the Company's Common Stock on
the Nasdaq Small Cap Market on December 31, 2000. The exercise price of the
options in this table is $4.94, $5.88 and $6.00 per share.

-8-
11

EMPLOYMENT AGREEMENTS

In November 1999, the Company entered into an Employment Agreement with
David M. Camp to serve as President and Chief Executive Officer of the Company.
The Agreement was for a term of years and provided for a base salary of $150,000
with bonuses payable at the discretion of the Board of Directors and the
Compensation Committee. Pursuant to his agreement, Mr. Camp also received stock
options to purchase 200,000 shares of the Company's Common Stock. Mr. Camp
resigned his position as President and Chief Executive Office in August 2001,
but continues to serve as the Company's Chairman of the Board. In accordance
with his Employment Agreement, Mr. Camp received a lump sum payment equal to
twelve months of his base compensation.

In June 2000, the Company entered into an Employment Agreement with
Paul E. Landers to serve as the Company's Chief Financial Officer. The Agreement
provided for a term of two years with base compensation equal to $135,000
annually. Bonuses were payable at the discretion of the Board of Directors and
the Compensation Committee. Mr. Landers received 60,000 stock options to
purchase shares of the Company's Common Stock and if certain Company performance
goals were met he was entitled to a stock grant of an additional 40,000 shares.
The Company did not achieve the performance objectives and no shares were
granted. Mr. Landers has informed the Board of Directors that he intends to
resign as Chief Financial Office effective August 31, 2001. Mr. Landers will
continue to serve as a member of the Board of Directors of the Company. In
accordance with his Employment Agreement, Mr. Landers was paid a severance
benefit equal to six months of his base salary.

In April 2001, the Company entered into an Employment Agreement with
Steve Laflin to serve as the Company's new President and Chief Executive Officer
upon Mr. Camp's resignation and Mr. Laflin's election to the President and CEO
position by the Board of Directors. Mr. Laflin was elected President and Chief
Executive Officer by the Board of Directors in August 2001. Mr. Laflin's
agreement provides for a four-year term at a base salary of $120,000. Mr. Laflin
is entitled to bonus compensation at the discretion of the Board of Directors
and the Compensation Committee. In connection with his Employment Agreement, Mr.
Laflin was granted stock options to purchase 1,000,000 shares of the Company's
Common Stock at an exercise price of $.076 per share, the fair market value of
the Company's Common Stock on the date of grant. Of this amount, 500,000 options
vested immediately with the remainder vesting in two equal installments of
250,000 in April 2002 and April 2003, respectively.

COMPENSATION OF DIRECTORS

Employee directors of the Company do not receive additional
compensation for their services as directors. Prior to its initial public
offering, the Company did not pay director's fees but did reimburse directors
for their expenses. Following the Company's initial public offering, the Company
paid each non-employee director $500 per meeting for their services as
directors. The Company continues to reimburse directors for all expenses
incurred in connection with their activities as directors. Non-employee
directors and employee directors of the Company are entitled to receive certain
stock option awards under the Company's 2000 Amended and Restated Long Term
Incentive Plan.

CERTAIN TRANSACTIONS

Mr. Randall O'Kane and Mr. Keith Alberg, nominees for election as
directors at the Company's 2001 annual meeting, are each founding members of
RadQual, LLC. The Company and entered into a contract with RadQual pursuant to
which I3 will manufacture flood sources for RadQual. The contract has an
estimated yearly value of $1,000,000 to RadQual.

The Company believes that all prior transactions and loans between the
Company and its officers, directors and 5% or greater stockholders have been on
terms no less favorable than could be obtained by the Company from unaffiliated
third parties. All future transactions and loans between the Company and its
officers, directors and 5% or greater stockholders will be on terms no less
favorable than can be obtained by the Company from unaffiliated third parties
and will be approved by a majority of the independent, disinterested directors
of the Company.

-9-
12

REPORT ON EXECUTIVE COMPENSATION GENERAL

The Compensation Committee currently consists of three members, one of
which serves as an executive officer of the Company. No executive officer of the
Company serves or served on the compensation committee of another entity and no
executive officer of the Company serves or served as a director of another
entity which has or had an executive officer serving on the board of directors
of the Company.

Decisions on compensation of the Company's executive officers generally
are made by the Compensation Committee of the Board, subject to review and
approval by the full Board of Directors. Decisions with respect to awards under
the Company's Long Term Incentive Plan are also made by the Compensation
Committee, subject to review and approval by the Board of Directors. Set forth
below is a report prepared by Messrs. McCormack, LeMaistre and Camp in their
capacity as the Compensation Committee addressing the Company's compensation
policies for the fiscal year 2000 as they affected the Company's executive
officers, including the Company's Chief Executive Officer, David M. Camp. Mr.
Camp did not participate in decisions concerning his own compensation.

The Compensation Committee's executive compensation policies are
designed to provide competitive levels of compensation that integrate pay with
the Company's annual and long term performance goals, review above average
corporate performance, recognize initiative and achievements, and assist the
Company in attracting and retaining qualified executives. Targeted levels of
total executive compensation are generally set at levels that the Compensation
Committee believes to be consistent with others in the Company's industry,
although actual compensation levels in any particular year may be above or below
those of the Company's competitors, depending upon the Company's performance.

The Compensation Committee is mindful of grants or awards made to the
Company's executive officers under the Company's Long Term Incentive Plan. The
Compensation Committee endorses the position that stock ownership by management
and stock based performance compensation arrangements are beneficial in aligning
management's and shareholders' interest in the enhancement of shareholder value.
Thus, the Compensation Committee takes into account the stock based elements in
designing the compensation packages of the Company's executive officers.

In 1993, Congress amended the Internal Revenue Code to Section 162(m).
This section provides that publicly held companies may not deduct compensation
paid to certain executive officers in excess of $1,000,000 annually, with
certain exceptions. The Company has examined its compensation policies in view
of Section 162(m) and the regulations adopted by the Internal Revenue Service to
implement this section and has determined that these provisions will not affect
the deductibility of executive compensation for fiscal 2000. It is currently not
expected that any part of the Company's deduction for executive compensation
will be disallowed for fiscal 2001.

The principal components of the Company's non-stock based compensation
program are base salary and bonus. Bonuses are at the discretion of the
Compensation Committee and the board, based on performance criteria and
production. No bonus or other incentive based compensation was paid in fiscal
year 2000.

FISCAL 2000 AND EXECUTIVE OFFICER COMPENSATION

Mr. Camp's compensation for fiscal year 2000 as President and Chief
Executive Officer of the Company consisted solely of his base salary. No bonus
or other incentive based compensation was provided. the Compensation Committee
believes that Mr. Camp's compensation package was set at a level that is
consistent with others in the Company's industry. Mr. Camp is a member of the
Compensation Committee, but did not participate in the Compensation Committee's
decision regarding his compensation.

Submitted by the Compensation Committee of
the Board of Directors

John M. McCormack
David M. Camp
Charles LeMaistre

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13

PERFORMANCE GRAPH

The following graph compares the annual cumulative total shareholder
return on an investment of $100 on December 31, 1997 in the Company's common
stock, based on the market price of the common stock, with the cumulative total
of a similar investment in the Nasdaq composite stock market index (U.S.
companies) and Nasdaq's index for pharmaceutical industry stocks.

[PERFORMANCE GRAPH]

<Table>
<Caption>
1997 1998 1999 2000 2001
---- ---- ---- ---- ----

International Isotopes Inc. 100 183 63 2

NASDAQ Stock Market (US Companies) 100 141 255 158

NASDAQ Pharmaceuticals Stocks 100 127 238 298
</Table>

ANNUAL REPORT ON FORM 10-K

UPON WRITTEN REQUEST OF ANY BENEFICIAL SHAREHOLDER OR SHAREHOLDER OF
RECORD, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED DECEMBER 31, 2000 (INCLUDING THE EXHIBITS, FINANCIAL STATEMENTS, AND THE
SCHEDULES THERETO) REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 13A-1 UNDER THE SECURITIES EXCHANGE ACT OF 1934, MAY
BE OBTAINED, WITHOUT CHARGE, FROM PAUL E. LANDERS, SECRETARY, 4137 COMMERCE
CIRCLE, IDAHO FALLS, IDAHO 83401. A COPY OF SUCH FORM 10-K ACCOMPANIED THIS
PROXY STATEMENT SENT TO SHAREHOLDERS IN CONNECTION WITH THE ANNUAL MEETING.

SHAREHOLDER PROPOSALS

Shareholder proposals to be presented at the 2002 Annual Meeting of
Shareholders, for inclusion in the Company's Proxy Statement and form of Proxy
relating to that meeting, must be received by the Company at its offices in
Idaho Fall, Idaho addressed to the Secretary of the Company, not later than
December 31, 2001. Such proposals must comply with the Bylaws of the Company and
the requirements of Regulation 14A of the Securities Exchange Act of 1934.

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14

OTHER MATTERS

At the date of this Proxy Statement, management was not aware that any
matters not referred to in this Proxy Statement would be presented for action at
the meeting. If any other matters should come before the meeting, the persons
named in the accompanying form of Proxy will have discretionary authority to
vote all proxies in accordance with their best judgment, unless otherwise
restricted by law.

By Order of the Board of Directors

/s/ Paul E. Landers
-------------------
PAUL E. LANDERS
Secretary

Dated: September ____, 2001

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PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF INTERNATIONAL ISOTOPES INC.

The undersigned hereby appoints: David M. Camp and Paul E. Landers, as
proxies, and hereby authorizes each of them to represent and to vote, as
designed on the reverse side, all of the shares of Common Stock of International
Isotopes Inc. held of record by the undersigned on July 31, 2001 at the Annual
Meeting of Shareholders to be held on October 24, 2001, or any adjournment
thereof.

The Board of Directors recommends that you vote FOR the nominees and
the proposals listed hereon. This proxy when properly executed will be voted in
the manner directed herein by the undersigned shareholder. If no direction is
given, this proxy will be voted FOR the nominees and the proposals.

(Please see reverse side)

1. To elect four Directors.

WITHHOLD
FOR all nominees AUTHORITY
listed below to vote for all
(except as marked nominees
to contrary) listed below

[ ] [ ]

INSTRUCTION: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name in the list below:

David M. Camp, Steve T. Laflin, Paul E. Landers, Randall O'Kane, Keith Allberg.

2. Proposal to ratify the Board of Directors selection of Grant Thornton LLP as
independent auditors.

FOR AGAINST ABSTAIN

[ ] [ ] [ ]

3. Proposal to approve an increase in the Company's authorized common stock from
50,000,000 to 250,000,000 shares.

FOR AGAINST ABSTAIN

[ ] [ ] [ ]

4. In their direction to vote upon such other business as may properly come
before the meeting.

DATED:_____________________________, 2001.

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16

- --------------------------------------------------------------------------------
(SIGNATURE OF SHAREHOLDER)

- --------------------------------------------------------------------------------
(SIGNATURE IF HELD JOINTLY)

Please sign exactly as name appears hereon. When shares are held by joint
tenants both should sign. when signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign full corporate name by president or other officer. If a partnership, please
sign in partnership name by authorized person.

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