Quarterly Report for Quarter Ending March 31, 2026 (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, 2025 filed with the Securities and Exchange Commission (SEC) on March 31, 2026 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

Radnostix Inc. and its wholly-owned subsidiaries (including RadQual, LLC, TI Services, LLC, RadVent, LLC, International Isotopes Idaho Inc., International Isotopes Fluorine Products, Inc., and International Isotopes Transportation Services, Inc.) (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 multiple 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. We also sell bulk isotopes through this segment;

-	In our Medical Devices segment, we are currently sell various 3rd party products and we are developing our own products for commercial use, including an I-131 encapsulation system and Radvent devices.

-	In our Fluorine Products segment, we are currently evaluating the possibility of fund raising, joint venturing, or divesting these assets, 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 Q3 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 March 11, 2026, we executed a mutual termination of the DUF6 Asset Sale dated February 8, 2024 to sell all our assets related to the Fluorine Products segment and the Planned Uranium De-Conversion Facility to AFR. AFR contacted the Company requesting a 1-year extension due to AFR being unable to make payment of the balance of the purchase price by the Outside Date of March 31, 2026 in order to meet the Condition to Seller's Obligations as defined in the DUF6 Asset Sale. The parties were in the final stages of the NRC consent process and were on the cusp of receiving NRC consent to transfer; however, the parties mutually agreed to withdraw the application and terminate the APA. AFR already made a non-refundable $50,000 prepayment and twelve non-refundable NRC extension fee payments totaling $120,000 and was to pay an additional $12,450,000 at closing. We decided it was in the best interest of the shareholders to regain control of the assets as we believe they have appreciated in value since we had entered the DUF6 Asset Sale and we had low confidence that AFR would be able to secure funding to close the deal by the requested extension date. We will evaluate all possible options for the DUF6 Plant and related assets. Given the recent boom in nuclear energy and fuel cycle industry and related global investments, the Company will evaluate all possible options for the DUF6 Plant and related assets, including keeping the assets and developing them into an operating entity focused on uranium deconversion. The company will also explore the potential to amend the current NRC approved license to include additional up-stream and down-stream uranium related activities.

RESULTS OF OPERATIONS

Three Months Ended March 31, 2026, Compared to Three Months Ended March 31, 2025

Sale of Product for the three months ended March 31, 2026 was $2,378,924 as compared to $3,238,900 for the same period in 2025, an overall decrease of $859,976, or approximately 27%. This decrease in sales was the result of lost sales in our Theranostics Products segment due to voluntary recalls of our Generic Sodium Iodide I131 on January 26, 2026, and of our Dibasic Sodium Phosphate Capsules on February 19, 2026 as discussed in more detail below, decreased sales in our Cobalt Products segment due to operational shutdown for the rehabilitation of our process hot cells during the three months ended March 31, 2026, and decreased sales in our Calibration & Reference Products, as discussed in more detail below.

The following table presents a period-to-period comparison of total revenue by segment for the three months ended March 31, 2026:

		For the Three				For the Three
		Months Ended				Months Ended
		March 31,				March 31,
Sale of Product		2026				2025				$ Change				% Change
Theranostics Products		$	1,397,282			$	1,787,054			$	(389,772	)			-22	%
Cobalt Products			9,739				72,450				(62,711	)			-87	%
Calibration & Reference Products			882,790				1,326,766				(443,976	)			-33	%
Medical Device Products			89,113				52,630				36,483				69	%
Fluorine Products			-				-				-				-	%
Total Consolidated Sale of Product		$	2,378,924			$	3,238,900			$	(859,976	)			-27	%

Cost of product increased to $1,227,976 for the three months ended March 31, 2026 from $1,206,863 for the same period in 2025. This is an increase of $21,113, or approximately 2%. The increase in cost of product was partially due to adjustments for accounting for labor hours beginning in the three months ended March 31, 2026. We evaluated and updated our policies for classifying and recording direct labor hours. The adjustments resulted in an increased allocation of these labor costs to cost of product. We believe these updates will better reflect costs allocation for our current operations. Gross profit for the three months ended March 31, 2026 was $1,150,948, compared to $2,032,037 for the same period in 2025. This represents a decrease in gross profit of $881,089, or approximately 43%, compared to the same period in 2025. This decrease is due to decreased sale of product and increased cost of product.

The following table presents cost of product and gross profit data for each of our business segments for the three months ended March 31, 2026:

		For the Three								For the Three
		Months Ended				% of				Months Ended				% of
		March 31,				Total Sales				March 31,				Total Sales
		2026				2026				2025				2025
Total Sale of Product		$	2,378,924							$	3,238,900
Cost of Product
Theranostics Products		$	558,266				23	%		$	505,168				16	%
Cobalt Products			76,154				3	%			38,872				1	%
Calibration & Reference Products			546,794				23	%			615,470				19	%
Medical Device Products			46,762				2	%			47,353				1	%
Fluorine Products			-				-	%			-				-	%
Total Cost of Product		$	1,227,976				52	%		$	1,206,863				37	%
Gross Profit		$	1,150,948							$	2,032,037
Gross Profit %			48	%							63	%

For the three months ended March 31, 2026, total operating costs and expenses in all segments increased approximately 17% to $2,460,980 from $2,097,053 for the same period in 2025. This increase of $363,927 in the three months ended March 31, 2026 was due to increased General, Administrative, and Consulting expenses due increases in professional expenses, increased Salaries and Contract Labor expenses due to increases in stock-based compensation expense which included an out-of-period adjustment of $102,441, and increased Research and Development expenses due to increased development activity in our Medical Device Products segment.

The following table presents a comparison of total operating expenses for the three months ended March 31, 2026 and 2025:

		For the three				For the three
		months ended				months ended
		March 31,				March 31,
Operating Costs and Expenses:		2026				2025				% change				$ change
Salaries and Contract Labor		$	1,297,617			$	1,119,326				16	%		$	178,291
General, Administrative and Consulting			1,014,235				871,024				16	%			143,211
Research and Development			149,128				106,703				40	%			42,425
Total operating expenses		$	2,460,980			$	2,097,053				17	%		$	363,927

Other income was $32,475 for the three months ended March 31, 2026 as compared to other income $14,349 for the same period in 2025. This is an increase of $18,126, or approximately 126% that was due to extension payments as part of the Flourine Products Asset Sale.

Interest expense for the three months ended March 31, 2026 was $84,869, compared to $83,851 for the same period in 2025. This is an increase of $1,018, or approximately 1%.

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 March 31, 2026 and 2025, we accrued dividends payable of $60,945 and $60,945 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 $1,348,086 for the three months ended March 31, 2026 compared to net loss of $112,694 for the same period in 2025. This increase in net loss of $1,235,392 for the quarter was the result of lost sales in our Theranostics Products due to two voluntary recalls of our Generic Sodium Iodide I131 on January 26, 2026 and of our Dibasic Sodium Phosphate Capsules on February 19, 2026 as discussed in more detail below, decreased sales in our Cobalt Products segment due to the rehabilitation of our process hot cells during the three months ended March 31, 2026, and decreased sales in our Calibration & Reference Products, as discussed in more detail below. Additionally, the increase in net loss was due to increased operating expenses due to increases in professional expenses, stock-based compensation expense which included an out-of-period adjustment of $102,441, and increased Research and Development expenses due to increased development activity in our Medical Device Products segment.

Theranostics Products.

Sales of Theranostics Products for the three months ended March 31, 2026 were $1,397,282, compared to $1,787,054 for the same period in 2025. This is a decrease of $389,772, or approximately 22% during the three months ended March 31, 2026.

The decreases in sales during the three months ended March 31, 2026 was partially due to two voluntary recalls: The first was a voluntary recall of our Generic Sodium Iodide I-131 due to the discovery of septum in our finished product vials on January 26, 2026. We had recently been approved by the FDA to implement new septum for our finished products, with this change we discovered the septum did not perform equivalent to our previous testing and validation. The impact from this recall was limited to that first batch and resulted in $60,000 of lost revenue. The second voluntary recall was due to the finished specifications of Dibasic Sodium Phosphate Capsules on February 19, 2026. On February 19, 2026, the Company, which is a manufacturer of its Generic Sodium Iodide I-131, discovered during an internal review that specific lots of our Dibasic Sodium Phosphate Capsules that may be provided with our Generic Sodium Iodide I-131 kits manufactured between 2022 and 2025 were out of specification for final capsule weight. We initiated a voluntary recall of specific lots of our Dibasic Sodium Phosphate Capsules shipped between August 19, 2024 to February 17, 2026 and a Field Alert Report for the expired lots from 2021 to 2024. We have notified affected pharmacies, clinics, and veterinarians of the voluntary recall. Both recalls have been conducted with the knowledge of the FDA. We issued customer credits of approximately $50,000 in the first quarter of 2026 related to refunds to certain customers. We wrote off our impaired capsule inventory of approximately $75,000 in 4Q 2025 and will restore our capsule inventory in Q2 2026. We continue to provide Generic Sodium Iodide I-131, which was not impacted. The majority of our customers have continued to order this material despite the lack of capsule inventory. But we are currently losing approximately $65,000 per week in sales for the customers that require capsules with their orders. We believe the impact from the recall will not extend beyond the 2nd quarter. Our business has not been impacted by the recall beyond the impacts addressed above.

Cost of product for Theranostics Products increased to $558,266 for the three months ended March 31, 2026, as compared to $505,168 for the same period in 2025. This is an increase of $53,098, or approximately 11%, and was the result of the cost associated with the two recalls. Gross profit of Theranostics Products for the three months ended March 31, 2026 was $839,016, compared to $1,281,886 for the same period in 2025, and gross profit percentage was approximately 60% and 72% for three months ended March 31, 2026 and 2025 respectively.

Operating expenses for this segment increased to $432,118 for the three months ended March 31, 2026, compared to $404,892 for the same period in 2025. This in an increase in operating expenses of $27,226, or approximately 7% due to increased salary and labor costs.

For the three months ended March 31, 2026,this segment reported net income of $406,898 as compared to net income of $876,994 for the same period in 2025. This is a decrease in net income of $470,096.

Decreases in net income for the three months ended March 31, 2026 were the result of decreased sales due to voluntary recalls.

Cobalt Products.

Sales of product in the Cobalt Products segment for the three months ended March 31, 2026 was $9,739, compared to $72,450 for the same period in 2025. This represents a decrease of $62,711, or approximately 87%.

The decreases in sales of product were primarily due shut down of Cobalt-60 manufacturing operations to prepare and repair the window gaskets of both our process hot cells. This is a significant and necessary rebuild to ensure the Cobalt-60 process hot cell can remain operational for the considerable future. In 2022 we noticed an issue with our hot cell window gasket. The issue was manageable, but it significantly hampered operational efficiency. While the issue affected only one of our process hot cell windows, we made a strategic decision to repair all the gaskets for the windows on all our process hot cells as the gaskets had reached their prescribed end-of-life. In the three months ended March 31, 2026, we removed both sets of Cobalt hot cell windows and a 3rd party vendor rehabilitated the windows and gaskets on site. Work was completed in the three months ended March 31, 2026,, and we returned to regular manufacturing operations at the end of March. The cost for the rehabilitation was approximately $100,000. We believe the rehabilitation work to have extended the useful life of our Cobalt-60 process hot cell by 15 to 20 years and estimate we will save approximately $150,000 in annual radiological waste costs (management, storage and disposal) by resolving the gasket issues.

Calibration & Reference Products (formerly Nuclear Medicine Standards)

Sales of product in the Calibration & Reference Products segment for the three months ended March 31, 2026, were $882,790, compared to $1,326,766 for the same period in 2025. This represents an decrease in sales of $443,976, or approximately 33%.

We had a decrease in sales in the three months ended March 31, 2026 because of catch-up revenue that occurred in the three months ended March 31, 2025 due to pent up demand from a global shortage of Cobalt-57 radioisotope during 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 March 31, 2026, was $546,794, as compared to $615,470 for the same period in 2025. The decrease in cost of product in the period-to-period comparison of $68,676, or 11%, was due to decreased total sales and charges during the three-month period ended March 31, 2026 compared to the same period in 2025. Gross profit for our Calibration & Reference Products segment for the three months ended March 31, 2026 was $335,996 compared to $711,296 for the same period in 2025. This is a decrease in gross profit of $375,300, or approximately 53%.

Operating costs and expenses for this segment for the three months ended March 31, 2026 increased to $453,648, from $443,733 for the same period in 2025. This is an increase of $9,915, or approximately 2%, and was the result of increased license costs during the three months ended March 31, 2026. Net loss for this segment for the three months ended March 31, 2026 was $117,652, compared to net income of $267,563 for the same period in 2025. This is a decrease of net loss of $385,215 and was largely the result of decreased sales.

Medical Device Products.

For the three months ended March 31, 2026 we had sale of product in the Medical Device Products segment of $89,113 compared to $52,630 for the same period ending March 31, 2025. This represents an increase in sales of $36,483, or approximately 69%.

Cost of product for our Medical Device Products segment for the three months ended March 31, 2026, was $46,762, as compared to $47,353 for the same period in 2025. The decrease in cost of product in the period-to-period comparison of $591, or 1%, was due to sales of higher margin products during the three-month period ended March 31, 2026 compared to the same period in 2025. Gross profit for our Medical Device Products segment for the three months ended March 31, 2026 was $42,351 compared to $5,277 for the same period in 2025. This is an increase in gross profit of $37,074, or approximately 703%.

Sale of product includes 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 Q3 2026. We are also continuing the development of our EasyFill Iodine Encapsulation System.

Operating costs and expenses for this segment for the three months ended March 31, 2026 were $205,945 compared to $181,669 in the same period in 2025.

This increase in operating expenses of $24,276 for the three months ended March 31, 2026 was due to increased research and development related to the startup of this new business segment.

Net loss for this segment for the three months ended March 31, 2026 was $163,594, compared to net loss of $181,669 for the same period in 2025. This is an increase in net loss of $18,075 due to the increased development activity in the segment.

Fluorine Products.

For the three months ended March 31, 2026 and the three months ended March 31, 2025, we had no sales and cost of product in our Fluorine Products segment.

During the three months ended March 31, 2026, we incurred $31,384 of expenses related to maintenance of plans, designs, and other assets for a proposed de-conversion facility, as compared to $26,159 for the same periods in 2025.

During the three months ended March 31, 2026 and 2025 we received $30,000 in extension payments related to the DUF6 Asset Sale, which was terminated in February as described in more detail above. These payments were included in Other Income on our Statement of Operations.

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 2026, we had cash and cash equivalents of $1,347,394 as compared to $1,695,158 at December 31, 2025. This is a decrease of $347,764 or approximately 21% was largely due to increased net loss and purchases of property, plant, and equipment. For the three months ended March 31, 2026, net cash used in operating activities was $72,442 and for the three months ended March 31, 2025, net cash used in operating activities was $5,119. The increase in cash used in operating activities was a result of an increase in net loss in the three months ended March 31, 2026.

Inventories at March 31, 2026 totaled $831,943, and inventories at December 31, 2025 totaled $875,449. 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 $205,175 for the three months ended March 31, 2026, and cash used in investing activities was $128,881 for the same period in 2025. The cash used in both periods was for the purchase of equipment.

Cash used in financing activities was $56,837 during the three months ended March 31, 2026, and cash used in financing activities for the same period in 2025 was $150,591. During the three months ended March 31, 2026, cash paid for interest was $43,800 as compared to cash paid for interest of $39,954 for the same three-month period in 2025. Additionally, during the three months ended March 31, 2026, we received $9,446 in proceeds from the sale of our common stock through our Employee Stock Purchase Plan, as compared to $3,894 in proceeds from the sale of our common stock through our Employee Stock Purchase Plan in the three months ended March 31, 2025. During the three months ended March 31, 2026, principal payments on notes payable were $66,283, as compared to $200,000 for the same period in 2025.

In February 2026, 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 573,570 shares of common stock in lieu of a dividend payment of 48,180. $39,300 of dividend payable was settled with cash. $156,300 in dividends will be settled in the second quarter of 2026.

Total decrease in cash for the three months ended March 31, 2026, was $334,454 compared to a cash decrease of $284,591 for the same period in 2025.

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 (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 March 31, 2026, accrued interest payable on the 2013 Promissory Note was $369,234.

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 March 31, 2026, accrued interest on the 2018 Promissory Note totaled $57,170.

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 March 31, 2026, the accrued interest on the 2019 Promissory Note totaled $249,131.

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 March 31, 2026, the balance of this promissory note was $97,100.

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, 2025, filed with the SEC on March 31, 2026.