Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Quarterly Report on Form 10-Q (the "Quarterly 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 Quarterly Report are forward-looking statements. Words such as "anticipates," "believes," "should," "expects," "future," "intends" and similar expressions identify forward-looking statements. Forward-looking statements reflect management'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 Quarterly Report. Certain risks and uncertainties that could cause our actual results to differ significantly from management's expectations are described in the risk factors set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the Securities and Exchange Commission (SEC) on March 3, 2025 and in the other reports we file with the SEC. These factors describe some but not all of the factors that could cause actual results to differ significantly from management's expectations. We undertake no obligation to update any forward-looking statements 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 reports that we file from time to time with the SEC.

BUSINESS OVERVIEW

International Isotopes Inc. and its wholly-owned subsidiaries (including RadQual, LLC, TI Services, LLC, RadVent, LLC, and Radnostix, LLC) (collectively, the "Company", "we", "our", or "us") manufacture a full range of nuclear medicine calibration and reference standards, manufacture a range of cobalt products, and distribute sodium iodide I-131 as a generic drug. We own 100% of RadQual, LLC (RadQual), a global supplier of molecular imaging quality control and calibration devices. As TI Services, LLC is a 50/50 joint venture between the Company and RadQual, TI Services, LLC is also a wholly-owned subsidiary of the Company.

Our core business consists of five reportable segments which include: Theranostics Products, Cobalt Products, Calibration & Reference Products, Medical Devices, and Fluorine Products.

-	In our Theranostics Products segment, which is our largest segment by revenue, we produce:

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an FDA approved generic sodium iodide I-131 drug product for the treatment of hyperthyroidism and thyroid cancer;

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radiochemicals for multiples uses in clinical research and life sciences (including Tb-161 and variations of I-131); and

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cGMP Active Pharmaceutical Ingredient ("API") supply for third party theranostics clients. "cGMP" refers to current Good Manufacturing Practice regulations that are enforced by the FDA for quality and safety control;

-	In our Cobalt Products segment, we produce a variety of cobalt-60 products for medical, research and industrial applications. Cobalt-60 is a synthetic radioactive isotope of cobalt that is produced by irradiating the stable isotope cobalt-59;

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In our Calibration & Reference Products segment (formerly referred to as Nuclear Medicine), we produce a wide range of sealed source calibration and reference standards (which are sealed to prevent the release of radioactive materials), that are used in: (i) nuclear pharmacies that specialize in preparing and dispensing radioactive pharmaceuticals for diagnostic imaging and medical treatments, (ii) nuclear medicine imaging clinics and hospitals which administer radioactive pharmaceuticals, (iii) certain laboratories and equipment that require radiation detection, and (iv) industrial settings that use radioactive sources for calibration, testing, and measurement; and

-	In our Medical Devices segment, we are currently developing products for commercial use, including an automated capsule system and medical molds and devices for applications in the theranostic medical radioisotope industry.

We are currently in the process of divesting our Fluorine Products segment, as discussed in more detail below.

We believe that we are well positioned to serve the growing radioisotope and radiopharmaceutical market segments.

Theranostics Products. This segment includes the production and distribution of various isotopically pure radiopharmaceuticals, APIs, and radiochemicals for medical, industrial, and research applications. These products are produced by us from radioisotopes supplied by our vendors. We produce and distribute various products in customized volumes, concentrations, chemical formulations, packages, and specifications tailored to meet our FDA specifications or customer and market demands. To our knowledge, our FDA approved generic sodium iodide I-131 drug product is the only generic product of this type manufactured in the U.S. and offers customers an attractive domestic alternative to the single existing foreign commercial drug manufacturer. Additionally, this segment distributes APIs, and radiochemicals from third party suppliers for pre-clinical, industrial, and research applications. According to BCC Research, the theranostics market was valued at $4.3 billion in 2024 and is expected to grow to $12.7 billion by 2029, reflecting a 24% compound annual growth rate.

The markets for most radiochemicals is highly competitive. The target markets for these products are customers who (1) incorporate them into finished industrial or medical devices; (2) use radioisotope products in clinical trials for various medical applications with the aim to further process and include the radioisotope products into pharmaceutical products approved by the U.S. FDA for labeled use in therapy or imaging, or (3) include our radioisotope products into their pharmaceutical products approved outside the U.S. for encapsulated and/or labeled use in therapy or imaging. We can ship to all 50 states and internationally. We are deploying a unique product strategy which we believe will make us the go-to API supplier for third party radiopharmaceutical products.

We believe that we are well positioned to hold a competitive advantage in the growing theranostics space because of our unique combination of high energy and high activity NRC licensing status that permits handling of high energy and high activity radioisotopes, our compliance with GMP, our FDA licensed operating facility, and experienced and skilled personnel.

Cobalt Products. Our Cobalt Products segment includes the production of various cobalt-60 products and services, including the fabrication of cobalt-60 sealed sources for radiation therapy, various industrial and medical applications, and recycling of expended cobalt-60 sources.

We have explored, and intend to continue to explore, opportunities to further develop cobalt-60 and other high-energy and high-activity products and sales on an ongoing basis. The production, use, transport, and import/export of these products are all heavily regulated by the NRC and DOT, state and local agencies as well as similar regulatory authorities in territories outside of the United States (i.e., EU, China, Australia, Brazil and Argentina), but we have developed a highly experienced staff of technicians, shipping specialists, and supervisors in order to comply with the regulations and to deliver these products in a cost-effective, timely manner.

We believe that our domestically manufactured products and service offerings provide us with a competitive edge over other cobalt-60 manufacturers.

Calibration & Reference Products. (formerly known as Nuclear Medicine Standards) The Calibration & Reference Products segment consists of various sealed source calibration and reference products, including our own manufactured products, jointly manufactured products, and third-party products. These products are sold through our RadQual subsidiary for use with SPECT and PET imaging equipment, patient positioning, radiopharmacy and radiopharmaceutical Contract Development and Manufacturing Organization ("CDMO") lab equipment, pre-clinical imaging equipment, clinical trial or custom geometry applications, and calibration or operational testing of measuring and/or testing equipment. Our Calibration & Reference Products include flood sources, dose calibrator sources, cylinder phantoms, annulus phantoms, rod sources, line sources, flexible and rigid rulers, spot markers, pen point markers, and a host of specialty design items. Our pre-clinical products include distribution of fillable sources from Phantech and pre-clinical sealed sources via our PhanQual joint venture with Phantech. Our Calibration and Reference sources include RadQual products for lab equipment; we also distribute non-medical sealed source calibration and reference standards manufactured by ORANO LEA, with whom we have a bilateral relationship. Our Calibration & Reference Products segment also commercializes bulk isotope sales and shielding and accessories related to our sealed source products.

According to the International Atomic Energy Agency's Medical imAGIng and Nuclear mEdicine global resources database (IMAGINE), as of September 2025, at least 131 countries have SPECT and/or PET imaging cameras, with more than 29,000 installed units in total. These installed cameras use calibration and reference sources on a regular repeat basis, with many of them requiring calibration as part of on-going certification. Most Calibration and Reference Product sales are to U.S. customers. However, in recent years, because of stronger marketing efforts, we have seen an increase in foreign sales. All these products contain radioactive isotopes that decay at a predictable rate. Therefore, customers are required to periodically replace most of these products when they reach the end of their useful lives. The useful life of these products varies depending on the isotope used in manufacture, but in most cases averages eighteen months to two years. The various isotopes used in manufacturing these Calibration & Reference Products are from several sources world-wide, and we are continually working to develop multiple sources of each isotope. In addition to the products themselves, we have developed a line of specialty packaging for the safe transportation and handling of these products.

To our knowledge there are a few small regional suppliers internationally and only one major producer of a similar catalog of products in the world that competes directly with us for this broad portfolio of products. Most of the products manufactured by our major competitor are similar in design to our products as these products must meet Original Equipment Manufacturer ("OEM") dimensional and performance standards. We attempt to differentiate our products through strategic alignment with OEMs, high levels of service, competitive pricing, patent protections, and exclusive arrangements with OEMs.

We continue working to expand the number and types of products that are manufactured in this segment and expand our qualified suppliers for the raw material used for our products. We plan to eventually manufacture some of our medical products in China through our joint-venture, Radnostix China.

Medical Devices. We started the Medical Devices segment in 2024 and many of our products in this segment remain under development. Our Medical Device segment will consist of our own medical devices and the distribution and servicing of third-party products.

In 2022 we entered a joint venture to develop the EasyFill Automated Capsule System, a robotic lab device to be paired with our Theranostics Products. The EasyFill is still in the developmental stage. We are targeting a Q3 2026 roll out and Q2 2027 commercial ramp up, including additional sales of I-131.

In 2023, we entered into an asset purchase agreement with AMICI, Inc. to purchase manufacturing molds, device registrations, trademarks, and all production rights to several AMICI, Inc. medical device and accessory products for lung ventilation; this included the Swirler Radioaerosol System and Tru-Fit mouthpiece products. In January 2025, as part of an amendment to the AMICI, Inc. asset purchase agreement, we received the manufacturing molds, device registrations, trademarks, and all production rights to the AMICI, Inc. line of Xenon System products. These acquired assets from AMICI, Inc. are currently under development and are expected to be released in 2026 to be sold through our RadVent subsidiary. In 2024, our Medical Device segment entered into a distribution and servicing agreement with Scintomics ATT for their complete line of radiosynthesis modules; to date, all of our revenue in the Medical Devices segment comes from the sale of third party products.

Fluorine Products. We established the fluorine products business segment in 2004 to support production and sale of various fluoride gases produced using our Fluorine Extraction Process ("FEP"). FEP was intended to be completed in conjunction with the operation of a proposed depleted uranium, or DUF6, de-conversion facility in Lea County, New Mexico. DUF6 is the waste by-product of uranium enrichment, and any uranium enrichment facility will create very large quantities of DUF6. In October 2012, we received a construction and operating license from the NRC for the planned facility. Changes in the nuclear industry near the end of 2013, however, significantly reduced commercial demand for this type of facility. Therefore, we suspended all further development work on the project, but we have maintained all licenses and permits for the project.

On February 8, 2024, we entered into a definitive agreement to sell all our assets related to the Fluorine Products segment and the Planned Uranium De-Conversion Facility to American Fuel Resources (the "DUF6 Asset Sale") for cash consideration of $12.5 million. On September 30, 2025, we and the buyer jointly submitted to the NRC a consent request to allow us to transfer our license to the buyer, we are currently waiting on NRC's consent. We expect to close the agreement by the March 2026 milestone. We are currently evaluating any effects the current government shutdown will have on this NRC review process and the approval for transfer the license transfer. Closing is contingent on various conditions being met, including approvals and agreements by the NRC and other third parties. Upon the closure of the DUF6 Asset Sale, we plan to pay down the related notes and close our Fluorine Products business segment.

Related to the Fluorine Products' assets, during 2024, we received $50,000 of other income related to the DUF6 Asset Sale and incurred $109,187 of expenses related to maintaining licenses and permits for the proposed de-conversion project, as compared to $7,920 of other income and $113,019 of expenses in 2023. The largest expense in this business segment is $104,379 for the amortization of our NRC license for this project; this amortization is approximately 96% and 92% of the total expenses for 2024 and 2023 respectively. 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. Upon the closure of the DUF6 Asset Sale, we plan to pay down the related notes and dissolve our Fluorine Products segment.

We expect the disposition of the Fluorine Products' assets to bring in $12.45 million in gross consideration, recognizing a gain on the sale of assets of $7.5 million. We currently expect to use some of the proceeds to repay various long-term notes, totaling $1.62 million in principal and approximately $618,000 in accrued interest, leaving the Company with net cash of $10.2 million. We do not consider these assets to be material to our core business segments, and there is no operational revenue from these assets. The sale of these assets will also have a positive impact on our income statement, relieving approximately $100,000 of annual operating costs for licensing and depreciation. We also expect a positive impact to our balance sheet, as closing the DUF6 Asset Sale would decrease assets by $4.85 million but improve cash by $10.2 million and also reduce long-term liabilities - notes payable, by $1.62 million and short-term liabilities for accrued interest of $618,000. The notes that we intend to repay also carry liens against our other assets and the removal of such liens would provide the company with additional future financing options, if necessary.

RESULTS OF OPERATIONS

Three Months and Nine Months Ended September 30, 2025, Compared to Three Months and Nine Months Ended September 30, 2024

Sale of Product for the three months ended September 30, 2025 was $3,277,816 as compared to $3,924,444 for the same period in 2024, an overall decrease of $646,628, or approximately 16%. This decrease in sales was the result of decreased sales in our Theranostics Products due a temporary outage of one of our isotope suppliers which ended during the period. This decrease was partially offset by increased sales in our Calibration & Reference Products and Cobalt Products segments, as discussed in more detail below. Due to temporary outages of isotope supply in our Theranostics Products segment combined with global shortages of gadolinium-153 in our Calibration & Reference Products, we estimate lost sales of approximately $400,000 in the three months ended September 30, 2025.

Sale of Product in all segments for the nine months ended September 30, 2025 was $10,172,036 compared to $9,998,135 for the same period in 2024, an overall increase of $173,901, or approximately 2%. This increase in sales was the result of increased sales in our Calibration & Reference Products segment partially offset by decreased sales in our Theranostics Products and Cobalt Products, as discussed in more detail below. Due to temporary outages of isotope supply in our Theranostics Products segment combined with global shortages of gadolinium-153 in our Calibration & Reference Products, we estimate lost sales of approximately $750,000 in the nine months ended September 30, 2025.

The following table presents a period-to-period comparison of total revenue by segment for the three and nine months ended September 30, 2025 and 2024:

		Three months ended September 30,								Nine Months Ended September 30,
Sale of Product		2025		2024		$ Change		% Change		2025		2024		$ Change		% Change
Theranostics Products		$ 1,484,284		$ 2,183,197		$ (698,913)		(32%)		$ 5,176,740		$ 6,257,410		$ (1,080,670)		(17%)
Cobalt Products		766,682		814,845		(48,163)		(6%)		1,517,147		1,641,012		(123,865)		(8%)
Calibration & Reference Products		961,093		926,402		34,691		4%		3,301,673		2,099,713		1,201,960		57%
Medical Device Products		65,757		-		65,757		100%		176,476		-		176,476		100%
Fluorine Products		-		-		-		-%		-		-		-		-%
Total Consolidated Sale of Product		$ 3,277,816		$ 3,924,444		$ (646,628)		(16%)		$ 10,172,036		$ 9,998,135		$ 173,901		2%

Cost of product decreased to $1,337,797 for the three months ended September 30, 2025 from $1,475,016 for the same period in 2024. This is a decrease of $137,219, or approximately 9%. The decrease in cost of product was primarily due to the decreased overall sales in the three months ended September 30, 2025. Gross profit for the three months ended September 30, 2025 was $1,940,019, compared to $2,449,428 for the same period in 2024. This represents a decrease in gross profit of $509,409, or approximately 21%, compared to the same period in 2024.

Cost of product in all segments increased to $4,058,421 for the nine months ended September 30, 2025 from $3,665,085 for the same period in 2024. This is an increase of $393,336, or approximately 11%. The increase in cost of product in the nine-month comparison was primarily due to the increased sales in the nine months ended September 30, 2025. Gross profit for the nine months ended September 30, 2025 was $6,113,615, compared to $6,333,050 for the same period in 2024. This represents a decrease in gross profit of $219,435, or approximately 3%. This decrease was primarily due to decreased sales in our Theranostics Products segment.

The following table presents cost of product and gross profit data for each of our business segments for the three months and nine months ended September 30, 2025 and September 30, 2024:

		For the Three				For the Three				For the Nine				For the Nine
		Months Ended		% of		Months Ended		% of		Months Ended		% of		Months Ended		% of
		September 30,		Total Sales		September 30,		Total Sales		September 30,		Total Sales		September 30,		Total Sales
		2025		2025		2024		2024		2025		2025		2024		2024
Total Sale of Product		$ 3,277,816				$ 3,924,444				$ 10,172,036				$ 9,998,135
Cost of Product
Theranostics Products		$ 482,414		15%		$ 577,133		15%		$ 1,492,414		15%		$ 1,758,735		18%
Cobalt Products		283,794		9%		462,835		12%		755,393		7%		901,546		9%
Calibration & Reference Products		512,156		16%		435,048		11%		1,656,980		16%		1,004,804		10%
Medical Device Products		59,433		2%		-		-%		153,634		2%		-		-%
Fluorine Products		-		-%		-		-%		-		-%		-		-%
Total Cost of Product		$ 1,337,797		41%		$ 1,475,016		38%		$ 4,058,421		40%		$ 3,665,085		93%
Gross Profit		$ 1,940,019				$ 2,449,428				$ 6,113,615				$ 6,333,050
Gross Profit %		59%				62%				60%				63%

For the three months ended September 30, 2025, total operating costs and expenses in all segments decreased approximately 7% to $2,121,433 from $2,269,823 for the same period in 2024. This decrease of $148,390 was due to decreased General, Administrative, and Consulting expenses due to one-time waste disposal expenses in the three months ended September 30, 2024 partially offset by increased in Salaries and Contract Labor expenses due to increased headcount and increased payrates and increased Research and Development expenses in three months ended September 30, 2025.

For the nine months ended September 30, 2025, total operating costs and expenses in all segments decreased approximately 2% to $6,494,886 from $6,599,765 for the same period in 2024. This decrease of $104,879 was due to decreased General, Administrative, and Consulting expenses due to reduced professional fees and decreased Research and Development expenses due to reduced legal expenses, partially offset by increases in Salaries and Contract Labor expenses due to increased headcount and increased payrates in nine months ended September 30, 2025.

The following table presents a comparison of total operating expenses for the three months and nine months ended September 30, 2025 and 2024:

		Three months ended September 30,								Nine Months Ended September 30,
Operating Costs and Expenses:		2025		2024		% change		$ change		2025		2024		% change		$ change
Salaries and Contract Labor		$ 1,160,434		$ 1,074,535		8%		$ 85,899		$ 3,368,592		$ 2,976,880		13%		$ 391,712
General, Administrative and Consulting		821,588		1,082,937		(24%)		(261,349)		2,777,519		3,133,557		(11%)		(356,038)
Research and Development		139,411		112,351		24%		27,060		348,775		489,328		(29%)		(140,553)
Total operating expenses		$ 2,121,433		$ 2,269,823		(7%)		$ (148,390)		$ 6,494,886		$ 6,599,765		(2%)		$ (104,879)

Other income was $44,114 for the three months ended September 30, 2025 as compared to other income $20,718 for the same period in 2024. This is an increase of $23,396, or approximately 113% that was due to extension payments as part of the Flourine Products Asset Sale.

Other income was $96,558 for the nine months ended September 30, 2025 as compared to other income $176,094 for the same period in 2024. This is a decrease of $79,536, or approximately 45% that was due to a decrease in miscellaneous income.

Interest expense for the three months ended September 30, 2025 was $86,285, compared to $81,884 for the same period in 2024. This is an increase of $4,401, or approximately 5%. Interest expense for the nine months ended September 30, 2025 was $252,943, compared to $244,695 for the same period in 2024. This is an increase of $8,248, or approximately 3%.

Interest expense includes dividends accrued on our Series C Preferred Stock. As discussed below, we issued Series C Preferred Stock in February 2017 and May 2017. For the three months ended September 30, 2025 and 2024, we accrued dividends payable of $60,945 and $60,945 respectively, which have been recorded as interest expense, which have been recorded as interest expense. For the nine months ended September 30, 2025 and 2024, we accrued dividends payable of $182,835 and $151,008 respectively, which have been recorded as interest expense. See Note 6 "Debt" to our unaudited consolidated financial statements in this Quarterly Report for additional information about our indebtedness and the associated interest expense.

We had a net loss of $203,601 for the three months ended September 30, 2025 compared to net income of $150,251 for the same period in 2024. This decrease in net income of $353,852 for the quarter is largely the result of decrease in sales in our Theranostics Products due a temporary outage of one of our isotope suppliers which ended during the period. This decrease was partially offset by increased sales in our Calibration & Reference Products and Cobalt Products segments partially offset by the for the three months ended September 30, 2025, as compared to the same period in 2024.

We had a net loss of $477,080 for the nine months ended September 30, 2025 compared to net loss of $237,245 for the same period in 2024. This increase in net loss of $239,835 was largely the result of decreased sales in our Theranostics Products and Cobalt Products segments for the nine months ended September 30, 2025 as compared to the same period in 2024, partially offset by increased sales in our Calibration & Reference Products segment.

Theranostics Products.

Sales of Theranostics Products for the three months ended September 30, 2025 was $1,484,284, compared to $2,183,197 for the same period in 2024. This is a decrease of $698,913, or approximately 32% during the three months ended September 30, 2025.

Sales of product in the Theranostics Products segment for the nine months ended September 30, 2025 was $5,176,740, compared to $6,257,410 for the same period in 2024. This is a decrease of $1,080,670, or approximately 17%.

The decreases in sales during the three and nine months ended September 30, 2025 are partially due to temporary outages of one of suppliers and partial loss of business of a long-standing national account. In the nine months ended September 30, 2025, we received regulatory approval for an additional supplier and in September 2025 started regularly sourcing from two suppliers. We expect stabilized sales and steady sales growth for our Theranostics Products going forward, primarily from the sale of our generic sodium iodide I-131 drug product and new sales of theranostic API product.

Cost of product for Theranostics Products decreased to $482,414 for the three months ended September 30, 2025, as compared to $577,133 for the same period in 2024. This is a decrease of $94,719, or approximately 16%, and was the result of the decreased sales. Gross profit of Theranostics Products for the three months ended September 30, 2025 was $1,001,870, compared to $1,606,064 for the same period in 2024, and gross profit percentage was approximately 67% and 74% for three months ended September 30, 2025 and 2024 respectively.

Cost of product for Theranostics Products decreased to $1,492,414 for the nine months ended September 30, 2025, as compared to $1,758,735 for the same period in 2024. This is a decrease of $266,321, or approximately 15%, and was the result of the decreased sales. Gross profit of Theranostics Products for the nine months ended September 30, 2025 was $3,684,326, compared to $4,498,675 for the same period in 2024, and gross profit percentage was approximately 71% and 72% respectively.

Operating expenses for this segment increased to $367,245 for the three months ended September 30, 2025, compared to $316,798 for the same period in 2024. This in an increase in operating expenses of $50,447, or approximately 16% due to increased salary and labor costs.

Operating costs expenses for this segment increased to $1,163,320 for the nine months ended September 30, 2025, compared to $1,024,555 for the same period in 2024. This in an increase in operating costs and expenses of $138,765, or approximately 14% due to increased salary and labor costs.

For the three months ended September 30, 2025,this segment reported net income of $634,625 as compared to net income of $1,289,266 for the same period in 2024. This is a decrease in net income of $654,641.

For the nine months ended September 30, 2025, this segment reported net income of $2,521,006 compared to net income of $3,474,120 for the same period in 2024. This is a decrease in net income of $953,114.

Decreases in net income for the three months and nine months ended September 30, 2025 were the result of decreased sales due to a temporary supplier outage and partial loss of business of a long-standing national account combined with increased operating expenses during the nine months ended September 30, 2025.

In April 2025, an FDA inspection at our Idaho Falls facility resulted in an Official Action Indicated (OAI). INIS has developed and implemented corrective actions and submitted our 15-day, 90-day, and 180-day updates and is working with the FDA to complete applicable manufacturing changes. Upon the completion of our corrective actions, the FDA will reinspect the facilities. There is a risk of additional action by the FDA up to and including a manufacturing and distribution hold. INIS continues to manufacture and distribute during the on-going corrective action implementation, and we believe we are on a pathway to implement and finalize our corrective actions without any adverse effect on our business, results of operations and financial condition. While we believe that our corrective actions in response to the OAI will be deemed satisfactory, there can be no assurance that the FDA will not require additional corrective actions or take further action. See Item 1A "Risk Factors" of this Quarterly Report for more information.

Cobalt Products.

Sales of product in the Cobalt Products segment for the three months ended September 30, 2025 was $766,682, compared to $814,845 for the same period in 2024. This represents a decrease of $48,163, or approximately 6%.

Sales of product in the Cobalt Products segment for the nine months ended September 30, 2025 was $1,517,147, compared to $1,641,012 for the same period in 2024. This represents a decrease of $123,865, or approximately 8%.

The decreases in sales of product were primarily due to the timing of cobalt sealed source manufacturing sales. Large value sales of high activity cobalt sources occur at various times throughout the year. Frequently the timing of these sales can have a significant impact on period comparisons.

Calibration & Reference Products (formerly Nuclear Medicine Standards)

Sales of product in the Calibration & Reference Products segment for the three months ended September 30, 2025, was $961,093, compared to $926,402 for the same period in 2024. This represents an increase in sales of $34,691, or approximately 4%.

Sales from Calibration & Reference Products for the nine months ended September 30, 2025, was $3,301,673, compared to $2,099,713 for the same period in 2024. This represents an increase in sales of $1,201,960, or approximately 57%.

The increases in sales were due to a global shortage of Cobalt-57 radioisotope during 2024 with no such shortage in 2025. The Cobalt-57 shortage began in January of 2024 and was restored in the third quarter of 2024. We added additional suppliers of Cobalt-57 in 2024.

Due to an ongoing global shortage of Gadolidium-153 radioisotope beginning in January 2025, we have been unable to manufacture any products that utilize this radioisotope. We expect these sales to return with a period of catch-up once we have been able to source this radioisotope.

Cost of product for our Calibration & Reference Products segment for the three months ended September 30, 2025, was $512,156, as compared to $435,048 for the same period in 2024. The increase in cost of product in the period-to-period comparison of $77,108, or 18%, was due to increased total sales and charges during the three-month period ended September 30, 2025 compared to the same period in 2024. Gross profit for our Calibration & Reference Products segment for the three months ended September 30, 2025 was $448,937 compared to $491,354 for the same period in 2024. This is a decrease in gross profit of $42,417, or approximately 9%.

Cost of product for our Calibration & Reference Products segment for the nine months ended September 30, 2025, was $1,656,980, as compared to $1,004,804 for the same period in 2024. The increase in cost of sales in the period-to-period comparison of $652,176, or 65%, was due to increased sales during the nine-month period ended September 30, 2025, as compared to the same period in 2024. Gross profit for our Calibration & Reference Products segment for the nine months ended September 30, 2025 was $1,644,693 compared to $1,094,909 for the same period in 2024. This is an increase in gross profit of $549,784, or approximately 50%.

Operating costs and expenses for this segment for the three months ended September 30, 2025 increased to $548,055, from $451,835 for the same period in 2024. This is an increase of $96,220, or approximately 21%, and was the result of increased salaries and wages and rent during the three months ended September 30, 2025. Net loss for this segment for the three months ended September 30, 2025 was $99,118, compared to net income of $39,519 for the same period in 2024. This is an increase in net loss of $138,637 and was largely the result of increased operating expenses.

Operating expenses for this segment for the nine months ended September 30, 2025 increased to $1,514,635, from $1,423,652 for the same period in 2024. This is an increase of $90,983, or approximately 6%. Net income for this segment for the nine months ended September 30, 2025 was $130,058, compared to net loss of $328,743 for the same period in 2024. This is an increase in net income of $458,801 and is the result of increased sales.

Medical Device Products.

For the three months ended September 30, 2025 we had sale of product in the Medical Device Products segment of $65,757 with no sales in the same period ending September 30, 2024.

For the nine months ended September 30, 2025 we had sale of product in the Medical Device Products segment of $176,476 with no sales in the same period ending September 30, 2024.

Sale of product in 2025 included distribution of various third-party products. We plan to commercialize additional third-party medical devices and accessories related to the radiopharmaceutical and theranostics spaces and provide engineering, installation, and preventative maintenance and services related to those medical devices. We are also in development for our Swirler® and Tru-Fit™ Mouthpiece products which will be under the branding of RadVent. These products are based on assets and intellectual property rights we acquired previously from AMICI, Inc. Due to the impact of tariff issues, we expect these RadVent products to release in early 2026 instead of late 2025 as previously reported. We also are under development of our EasyFill Automated Iodine Capsule System through a joint venture.

Operating costs and expenses for this segment for the three months ended September 30, 2025 were $193,939 compared to $167,451 in the same period in 2024.

Operating costs and expenses for this segment for the nine months ended September 30, 2025 were $593,431 as compared to $279,801 in the same period in 2024.

These increases in operating expenses of $26,488 and $313,630 for the three months and nine months ended September 30, 2025 respectively were due to increased activity including labor, professional services, and research and development related to the startup of this new business segment.

Net loss for this segment for the three months ended September 30, 2025 was $187,615, compared to net loss of $167,451 for the same period in 2024. This is an increase in net loss of $20,164 due to the increased development activity in the segment.

Net loss for this segment for the nine months ended September 30, 2025 was $570,589, compared to net loss of $279,801 for the same period in 2024. This is an increase in net loss of $290,788 due to the increased development activity in the segment.

Fluorine Products.

For the three months and nine months ended September 30, 2025 and the three months and nine months ended September 30, 2024, we had no sales in our Fluorine Products segment.

During the three months and the nine months ended September 30, 2025, we incurred $26,095 and $82,330 of expenses related to maintenance of plans, designs, and other assets for a proposed de-conversion facility, as compared to $26,095 and $80,941 for the same periods in 2024.

On February 8, 2024, we entered into the Fluorine Products Asset Sale. Upon closing of the Fluorine Products Asset Sale, the costs of maintenance for the assets in this segment would not continue. With no assets nor operating activities, this business segment would be phased out. During the three months and the nine months ended September 30, 2025, we received $30,000 and $60,000 respectively in extension payments related to the Fluorine Products Asset Sale. These payments were included in Other Income on our Statement of Operations.

LIQUIDITY AND CAPITAL RESOURCES

At September 30, 2025, we had cash and cash equivalents of $1,651,548 as compared to $1,945,523 at December 31, 2024. This is a decrease of $293,975 or approximately 15% was largely due to purchases of property, plant, and equipment in addition to principal payments on notes payable. For the nine months ended September 30, 2025, net cash provided by operating activities was $210,043 and for the nine months ended September 30, 2024, net cash provided by operating activities was $568,215. The decrease in cash provided by operating activities was a result of an increase in net loss in the nine months ended September 30, 2025.

Inventories at September 30, 2025 totaled $1,049,671, and inventories at December 31, 2024 totaled $820,893. Our inventory consists of work in process material for our Theranostics Products, Cobalt Products, Calibration & Reference Products, and Medical Device Products segments.

Cash used in investing activities was $254,391 for the nine months ended September 30, 2025, and cash used in investing activities was $231,307 for the same period in 2024. The cash used in both periods was for the purchase of equipment.

Cash used in financing activities was $203,652 during the nine months ended September 30, 2025, and cash used in financing activities for the same period in 2024 was $118,041. During the nine months ended September 30, 2025, cash paid for interest was $160,973 as compared to cash paid for interest of $157,320 for the same nine-month period in 2024. Additionally, during the nine months ended September 30, 2025, we received $14,883 in proceeds from the sale of our common stock through our Employee Stock Purchase Plan, as compared to $8,627 in proceeds from the sale of our common stock through our Employee Stock Purchase Plan in the nine months ended September 30, 2024. During the nine months ended September 30, 2025, principal payments on notes payable were $264,050, as compared to $124,364 for the same period in 2024.

In February 2025, we declared our annual dividend on the Series C Preferred Stock. Dividends payable totaled $243,780 at that time. Some holders of the Series C Preferred Stock elected to settle their dividend payments with shares of the Company's common stock in lieu of cash. The Company issued 1,743,457 shares of common stock in lieu of a dividend payment of $90,660. $153,120 of dividend payable was settled with cash.

Total decrease in cash for the nine months ended September 30, 2025, was $248,000 compared to a cash increase of $218,867 for the same period in 2024.

We expect that cash from operations, cash raised via equity financing, and our current cash balance will be sufficient to fund operations for the next twelve months. Our future liquidity and capital funding requirements will depend on numerous factors, including commercial relationships, technological developments, market factors, available credit, and preferred stock shareholders. There is no assurance that additional capital and financing will be available on acceptable terms to the Company or at all.

Debt

In December 2013, we entered into a promissory note agreement with the chairman of our board of directors at the time 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. Pursuant to four modifications in the time period between June 2014 and January 2022, the 2013 Promissory Note was modified to extend the maturity date to December 31, 2023, with all remaining terms unchanged. In February 2024, the 2013 Promissory Note was modified again to (i) extend the maturity date to March 31, 2026, (ii) remove the security provision to allow for the sale of all our assets related to the Fluorine Products segment and the Planned Uranium De-Conversion Facility to American Fuel Resources, LLC (the "DUF6 Asset Sale"), (iii) if reasonably possible, to reinstate a security provision against our Sodium iodide abbreviated new drug application ("ANDA") and Iodine-131 Processing Hot Cell, and (iv) to reinstate all security interests if the DUF6 Asset Sale does not close by March 31, 2026, with all remaining terms unchanged. To date, we have not yet removed the security interests against any of our assets related to this note. In August 2025, the 2013 Promissory Note was modified again to extend the maturity date to March 31, 2028, with all remaining terms unchanged. At September 30, 2025, accrued interest payable on the 2013 Promissory Note was $354,234.

In April 2018, we borrowed $120,000 from our chief executive officer and the current chairman of our board of directors ("Chairman") through an affiliated entity pursuant to a promissory note (the "2018 Promissory Note"). The 2018 Promissory Note is secured and accrues interest at 6% per annum, which is payable upon maturity of the 2018 Promissory Note. At any time, the holders of the 2018 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. The 2018 Promissory Note was originally due August 1, 2018. Pursuit to six modifications within the period of June 2018 and December 2023, the 2018 Promissory Note was modified to extend the maturity date to January 31, 2025, with all remaining terms unchanged. In February 2024, the 2018 Promissory Note was modified to (i) extend the maturity date to March 31, 2026, (ii) remove the security provision to allow for the DUF6 Asset Sale, (iii) if reasonably possible, to reinstate a security provision against our sodium iodide ANDA and iodine-131 Processing Hot Cell, and (iv) to reinstate all security interests if the DUF6 Asset Sale does not close by March 31, 2026, with all remaining terms unchanged. To date, we have not yet removed the security interests against any of our assets related to this note. In August 2025, the 2018 Promissory Note was modified again to extend the maturity date to March 31, 2028, with all remaining terms unchanged. At September 30, 2025, accrued interest on the 2018 Promissory Note totaled $53,570.

In December 2019 and February 2020, we borrowed an aggregate of $1,000,000 from our chief executive officer, Chairman, former Chairman, and one of our major shareholders pursuant to a promissory note (the "2019 Promissory Note"). The 2019 Promissory Note bears an interest rate of 4% annually and was originally due December 31, 2022. According to the terms of the 2019 Promissory Note, at any time, the lenders may settle any or all of the principal and accrued interest with shares of the Company's common stock based on the average closing price of the Company's common stock for the 20 days preceding the payment. In December 2022, the 2019 Promissory Note was modified to extend the maturity date to December 31, 2024, with all remaining terms unchanged. In February 2024, the 2019 Promissory Note was modified to (i) extend the maturity date to March 31, 2026, (ii) remove the security provision to allow for the DUF6 Asset Sale, (iii) if reasonably possible, to reinstate a security provision against our sodium iodide ANDA and Iodine-131 Processing Hot Cell, and (iv) to reinstate all security interests if the DUF6 Asset Sale does not close by March 31, 2026, with all remaining terms unchanged. To date, we have not yet removed the security interests against any of our assets related to this note. In August 2025, the 2019 Promissory Note was modified again to extend the maturity date to March 31, 2028, with all remaining terms unchanged. At September 30, 2025, the accrued interest on the 2019 Promissory Note totaled $229,131.

In June 2023, we executed an asset purchase agreement with AMICI, Inc. for the purchase of medical devices and related assets and intellectual property rights. In connection with the asset purchase agreement, we entered a promissory note to AMICI, Inc. with a principal amount of $558,593. According to the terms of the note, we made an initial cash payment of $100,000 into escrow, issued the seller $25,000 in shares of the Company's common stock, and paid the seller $6,493 in a closing cash reimbursement payment. For the remaining principal balance of the promissory note of $427,100, we are required to pay the seller a minimum of $10,000 per month for a period of 45 months. The amount due was not subject to interest until the 25th month after the anniversary of the closing of the transaction. At September 30, 2025, the balance of this promissory note was $157,100.

CRITICAL ACCOUNTING POLICIES

From time-to-time, management reviews and evaluates certain accounting policies that are considered to be significant in determining our results of operations and financial position.

A description of the Company's critical accounting policies that affect the preparation of the Company's financial statements is set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 3, 2025.