INIS 10-K & 10-Q changes, risk factors and insider trading

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

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

We are dependent upon key personnel. Our ongoing operations are currently dependent on Shahe Bagerdjian, President and Chief Executive Officer. The loss of Mr. Bagerdjian could have a material adverse effect on our business. We maintain a $4.1 million key man life insurance policy on Mr. Bagerdjian and an employment agreement that extends through JuneJuly 19,18, 2028.2030. However, there is no assurance that we will be able to retain Mr. Bagerdjian or our existing personnel or attract additional qualified employees. The loss of any of our key personnel or an inability to attract additional qualified employees could result in a significant decline in revenue.

Volatility in raw material and energy costs, interruption in ordinary sources of supply and an inability to recover unanticipated increases in energy and raw material costs from customers could result in lost sales or significantly increase the cost of doing business. Market and economic conditions affecting the costs of raw materials, utilities, energy costs, and infrastructure required for the delivery of our goods and services are beyond our control and any disruption or halt in supplies, or rapid escalations in costs could affect our ability to manufacture products or to competitively price our products in the marketplace. ForOur instance,reliance on a just-in-time supply chain for radioisotopes could cause significant and irreversible harm to our business, including delays in manufacturing and commercial operations. Unlike traditional pharmaceuticals that can be stockpiled, our business is uniquely dependent on a just-in-time supply chain for our radioisotopes and finished products. The radioisotopes we use have a medium-to-long half-lives. This physical constraint means we have limited ability to maintain inventory as a buffer against disruption. Any delay at a single point in our supply chain—from a production outage at a nuclear reactor or cyclotron to a logistics failure, an interruptionequipment in the supply of isotopes such as cobalt-57, cobalt-60,malfunction, or iodine-131a regulatory hold—could render an entire shipment partially or completely unusable. Such a failure would not only result in losta salestotal inloss Nuclearof Medicine Standards, Cobalt Product,product and Theranosticsrevenue Productsfor segments.that Weproduct but would also purchasehave somea direct, negative impact on patient care and could delay or halt customer’s clinical trials. The complexity of ourthis materialsupply chain, including reliance on specialized facilities and productshighly fromregulated overseasglobal supplierstransport, represents a fundamental and theunavoidable pricerisk ofto thoseour productsbusiness couldand befuture adversely affected through changes in currency exchange rates.growth.

We also purchase a significant portion of our raw material radioisotopes from overseas suppliers, some of which are government agencies or work with government agencies for the manufacture of radioisotopes. The price and availability of those products could be adversely affected through changes in currency exchange rates, tariffs, sanctions, geopolitics, national security classifications, embargos, regional conflicts, or other restrictions. During the year endingended December 31, 2024, there was a global shortage of cobalt-57, a key isotope for our NuclearCalibration Medicine& StandardsReference Products segment. This shortage occurred from January 2024 until the end of July 2024 and resulted in significant lost sales for this business segment. Our supply of cobalt-57 was restored in July 2024, and we have added additional suppliers in 2024. WeIn are continuing to search for additional means to produce and procure certain critical isotopes, including through our Chinese Joint Venture, which2025, we entereddid intonot inexperience Juneany 2024.shortages of cobalt-57 raw materials.

Radioactive Waste. All our manufacturing processes generate some radioactive waste.waste that is expensive to dispose of safely. For waste that cannot be decayed in storage we must handle this waste pursuant to the LLRW Policy Act, which requires the safe disposal of mildly radioactive materials. The estimated costs for storage and disposal of these materials have been included in the manufacturing and sales price of our products. However, actual disposal costs are subject to change at the discretion of the disposal site. An unexpected or material increase in these costs could have a material adverse effect on our financial condition and results of operations. InWe 2024, we experiencerecorded material waste disposal costsexpenses totalingof $229,540.$150,000 Weand anticipate similar waste disposal expenses$230,000 in 2025.2025 and 2024 respectively.

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

We may be subject to NRC Licenselicense Enforcementenforcement Actions.actions. The NRC may take enforcement action in the event that we are found to be in violation of NRC regulations or in violation of any of our license requirements. Consequences of violations depend upon the severity of the violations as well as the adequacy and timeliness of corrective actions implemented by the licensee to investigate and correct the cause of the violation and to prevent reoccurrence. The NRC has discretionary authority in the action they choose to take against license violations, but these actions can include civil penalties and restrictions upon licensee operations or license suspension. The imposition of any such penalties and/or restrictions upon our operations or suspension of our license could have a material adverse effect on our financial condition and results of operations. In 2024 we incurred significant expenses related to two violations in 2021 and 2022. These violations resulted in NRC fines of $63,000, additional legal expenses of $47,636, and professional expenses for corrective actions of $123,216. In 2025 we entered into a settlement agreement with the NRC related to our 2022 sale and sublease to Pharmalogic, and such settlement carried no fines, penalties or violations. However, we will have to commit to various non-material administrative tasks as a license condition for a 36-month period. We do not anticipate any material costs from the settlement.

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

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

We are subject to competition from other companies. Each of our existing business areas has direct competition from other businesses. High-specific activity cobalt-60Cobalt-60 is supplied by other reactor facilities around the world. NuclearWe are aware that nuclear medicine calibration and reference standards are being produced by at least one other major manufacturer in the U.S. We believe we have at least one major competitor in the U.S. for our generic sodium iodide I-131 drug product. Most of our competitors have significantly greater financial resources that could give them a competitive advantage over us.

We are contractually obligated to issue shares in the future, which will dilute your interest in us. As of December 31, 2024,2025, there were approximately 17,982,50021,622,500 shares of common stock issuable upon the exercise of vested stock options, at a weighted-average exercise price of $.05 per share. An additional 32,529,29621,975,685 shares were reserved for issuance under our equity plansplan aswhen ofit Decemberterminated 31,on 2024.July 14, 2025. In 2026, we plan to submit for approval by the Company's shareholders to reinstate and extend by amendment the 2015 plan or adopt a new incentive plan. Our outstanding preferred stock and certain of our outstanding debt is also convertible into shares of our common stock at the holders’ option. In addition, we expect to issue additional options to purchase shares of our common stock to compensate employees, consultants and directors, and we may issue additional shares to raise capital to expand our manufacturing capability, develop additional products, or business segments. Any such issuance will have the effect of further diluting the interest of the holders of our securities.

International IsotopesRadnostix Inc. (the “Company”, “we”, “us” and “our”) produces an FDA approved generic sodium iodide I-131 drug product, manufactures a wide range of nuclear medicine calibration and reference standards, produces a variety of cobalt-60 products, and is in development to manufacture and sell medical devices for the nuclear medicine industry. A more detailed description of each of these product lines and services along with a description of our business segments can be found in Item 1, “Business” within this Annual Report.

Total revenues in 20242025 were $13,899,760,$13,070,336, compared to $12,267,385$13,899,760 in 2023,2024, which represents an increasedecrease of $1,632,375,$829,424, or approximately 13%.6%. The performance of each segment is discussed in the following paragraphs.

Sales of Theranostics Products accounted for approximately 58%52% of our sales revenue in 20242025 as compared to 56%58% of our total sales revenue in 2023.2024. Sales in this segment increaseddecreased by $1,163,417,$1,165,221, or approximately 17%15% to $6,841,094 in 2025 as compared to $8,006,315 in 2024 as compared to $6,842,898 in 2023.2024. The increasedecrease is primarily the result of increasedperiodic supplier outages in 2025, totaling approximately $500,000 in lost revenue and decreased sales of our generic sodium iodide I-131 drug product.product to a major customer offset partially offset by expanded sales of our generic sodium iodide I-131 drug product to a new customer and increased API product sales to a returning international customer that was offline for the majority of 2024.

Sales of our FDA-approved generic sodium iodide drug product make up the bulk of sales in this segment. We expect continued growth in sales for this product in 20252026 and beyond. Within this segment, we also currently distribute sodium iodide (I-131) as a theranostics API product and a radiochemical product. The radiochemical product is used for a variety of applications including industrial use, and the theranostics API product is being used in investigational and clinical trials.trials as well as an API for international customers, used in their approved products in their local jurisdictions. We believe that market growth, new customers, and entry into new territories, in addition to any theranostics API that we plan to submit to the FDA,FDA and European Medicines Agency ("EMA"), should increase our future sales in this business segment.

Cobalt Products sales accounted for approximately 17%13% of our total revenue in 20242025 and approximately 8%17% in 2023.2024. Sales in this segment increaseddecreased by $1,328,499,$613,355, or approximately 128%,26%, in 20242025 to $2,365,572,$1,752,217, as compared to $1,037,073$2,365,572 in 2023.2024. The increasedecrease in revenue within this segment was the partially the result of increaseda cobalt-60shutdown salesof duemanufacturing operations in Q4 of 2025 in order to increasesrefurbish our Cobalt production hot cells. As a result of the shutdown, we delayed approximately $350,000 in supplyrevenues to 2026. These refurbishments were completed in Q1 of cobalt-602026 materialand fromwill extend the ATRlife of this important production equipment, and we also expect increased customerproduction activity.efficiency and a decrease in radiological waste expenses, estimated at $150,000 per year, as a result of the repairs. Revenue in the Cobalt Products segment is subject to the variability of cobalt-60 material supply and timing of our cobalt-60 customers' various contracts that utilize our products. Our sealed source manufacturing generates the majority of our revenue within this segment and sealed source sales depend on our ability to produce or procure cobalt-60 material.

We have entered into cobalt-60 supply agreements with several customers. The terms of these cobalt-60 contracts required some advance progress payments from each customer. The funding received under these contracts has been recorded as unearned revenue under short-term liabilities in our consolidated financial statements. We recognized some of this revenue in prior years including in 20242025 and 20232024 when we fulfilled contract performance objectives by supplying sealed sources manufactured with cobalt-60 from the ATR or alternate suppliers. In December 2025, we mutually terminated one of these supply agreements. As part of the termination, we refunded $23,000 and kept $74,000 in advance payments. We were also able to take 100% ownership of mobile hot cell assets which we shared with this customer. We plan to lease the hot cell out to various customers for field service work.

In 20242025 and 2023,2024, we had no revenues related to Fluorine Products. Work on our deconversion facility project that is the entirety of this business segment has been on hold since 2013 because of a slowdown in the nuclear industry that specifically impacted fuel cycle facilities. Since that time, we have limited our expenditures to essential items such as maintenance of the NRC license, land use agreements, communication with our prospective FEP product customers, and interface with the State of New Mexico and Lea County officials. In February 8, 2024, we entered into an asset purchase agreement to sell all our assets related to the Fluorine Products segment and the Planned Uranium De-Conversion Facility to American Fuel Resources ("DUF6 Asset Sale"). We expect to close the agreement in the next 12 months subject to certain closing conditions, including approvals and agreements by the U.S. Nuclear Regulatory Commission and other third parties.

During 2024,2025, we received $50,000$100,000 of other income related to extension payment for the DUF6 Asset SaleAPA and incurred $109,187$114,573 of expenses related to maintaining licenses and permits for the proposed de-conversion project, as compared to $7,920$50,000 of other income related to the DUF6 APA and $113,019$109,187 of expenses in 2023.2024. 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%91% and 92%96% of the total expenses for 20242025 and 20232024 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. UponIf we were to sell all our assets related to the closureFluorine ofProducts the DUF6 Asset Sale,segment, we plan to pay down the related notes and dissolve our Fluorine Productsthe segment.

Cost of revenues for 20242025 was $5,251,207$5,367,680 as compared to $4,888,409$5,251,207 in 2023,2024, an increase of $362,798,$116,473, or 7%.2%. Gross profit percentage increaseddecreased to 62%59% for 2024,2025, from 60%62% in 2023.2024. The following table presents revenues and cost of revenues information:

During 2024,2025, we continued to monitor and control direct costs. Raw materials used in our Theranostics Products and NuclearCalibration Medicine& StandardsReference Products represented the bulk of direct costs for 2024.2025. In each of these business segments, we have purchase agreements in place with suppliers to obtain optimum pricing. Periodically, the cost can increase for these raw materials or we may also use alternate supply sources for our material which might not carry pricing as favorable as our contracted suppliers.

The increasedecrease in gross profit percentage in 20242025 is a result of increaseda overallchange in our sales activity,mix. We had decreased sales activity in Theranostics Products and Cobalt Products segments and increased sales prices,activity andin betterour costCalibration controls.& Additionally,Reference weStandards havesegment. workedWe continue to work to find more effective cost controls and to increase our overall utilization of our raw materials.

Total operating costs and expenses for 20242025 were $8,641,652,$8,658,843, as compared to $8,155,275$8,641,652 in 2023.2024. This is an increase of $486,377,$17,191, orwhich approximatelyis 6%.less than 1%.

Salaries and contract labor expenses decreasedincreased by $10,259,$468,115, which was the result of aincreased decreaseemployee in non-cash equity compensation expense and executive salaries due to the conclusion of our CEO transition period. These decreases were partially offset by an increase to the number of our employeesheadcount and increases to labor rates due to merit raises and cost-of-living adjustments. Non-cash equity compensation expense recorded for the year ended December 31, 2024,2025, was $199,420$117,822 as compared to $464,041$199,420 for the same period in 2023.2024. This expense is for equity compensation recorded for outstanding stock options and restricted stock units granted to directors, officers, and employees.

General administrative and consulting expenses increaseddecreased 13%7% to $3,732,992 in 2025, as compared to $4,009,019 in 2024,2024. asThis compareddecrease was due to $3,545,766 in 2023.decreased Legal and professional expenses increased approximately $285,000 in 2024 as compared to 2023. We had one-time professional expenses of approximately $170,000 in 2024 related to legal consulting and rootdecreased causewaste audits for NRC enforcement and settlement for a violation that occurred in 2022. The remaining $115,000 increase in legal and professional expenses is due to increased activity in business development in all business segments and the building out of our Medical Devices segment.expenses. General and Administrative expenses also included waste disposal costs of $229,540$150,000 in 20242025 as compared to $181,804$229,540 in 2023.2024. Research and development expense was $610,737$435,840 for 2024,2025, compared to $577,354$610,737 for 2023.2024. This is ana increasedecrease of $33,383,$174,897, or approximately 6%.29%. This increasedecrease in research and development expenses was the result of increaseddecreased costs associated with product development in our Medical Device segment.

InterestOther income in 2024 was $122,385$310,838 for 2025 as compared to $78,890other inincome 2023.of $207,966 for 2024. This increase of $43,495$102,872 was due to increasedan interest rates and increased cash balances held at banks and other institutionsincrease in interest-bearingmiscellaneous accounts.income.

Interest expense decreasedincreased during 2024,2025, to $328,678,$339,281, from $331,780$328,678 in 2023.2024. This decreaseincrease of $3,102,$10,603, or approximately 1%,3%, was due to decreasedincreased interest for notes payable. Interest expense includes dividends accrued on our Series C Preferred Stock (as defined below) issued in 2017. In 20242025 and 20232024 we recorded interest expense of $243,030$243,780 and $244,530,$243,030, respectively, for dividends payable on our Series C Preferred Stock.

Our net incomeloss was $8,574$908,002 in 2024,2025, compared to a net lossincome of $869,016$8,574 in 2023.2024. This is ana increasedecrease in net income of $877,590.$916,576. This decrease is the result of increaseddecreased revenue and profit margin in 20242025 as compared to 2023.2024.

At December 31, 2024,2025, we had cash and cash equivalents of $1,945,523$1,695,158 compared to $2,688,141$1,945,523 at December 31, 2023.2024. Restricted cash, which is included in long-term assets increasedwas $1,492,227 at December 31, 2025 compared to $1,431,710 at December 31, 2024 compared to $880,752 at December 31, 2023.2024. This increase in Restricted Cash was due to requirementsinterest for increased reserved cash requirements as part of revisions to our Decommissioning Funding Plan.income. Net cash provided by operating activities was $638,783$620,163 in 2024,2025, compared to net cash provided by operating activities of $582,589$638,783 in 2023.2024. This represents ana increasedecrease in cash provided by operating activities of $56,194. This increase is due to improved operational performance, an increase in accounts payable and decreased inventory, partially offset by increased accounts receivable and decreased unearned revenues in the year over year comparison.$18,620.

We recognized net incomeloss of $8,574,$908,002, for the year ended December 31, 2024,2025, and have an accumulated deficit of $127,321,285$128,229,287 since inception. To date, our operations and plant and equipment expenditures have been funded principally from proceeds from public and private sales of debt and equity as well as through asset sales.

Net cash used in investing activities was $534,155 for 2025 and net cash used in investing activities was $685,215 for 20242024. During 2025, we used $534,155 to purchase equipment and netleasehold cashimprovements. used in investing activities was $149,058 for 2023. During 2024, weWe used $551,215 to purchase equipment and leasehold improvements and $170,000 towards our purchase of land. We used $149,058 to purchase equipmentland in 2023.2024. We had proceeds from sale of equipment of $36,000 in 2024, and we had no proceeds from sale of equipment in 2023.2025.

In DecemberApril 2019,2018, we enteredborrowed into$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 agreement with our then Chief Executive Officer, Chairman of the Board, former Chairman of the Board, and one of our major shareholders (the 2019“2018 Promissory Note”). The 2019 Promissory Note authorizes us to borrow up to $1,000,000. As of December 31, 2019, we borrowed $675,000 under the 2019 Promissory Note; the remaining $325,000 was borrowed in February 2020. The 20192018 Promissory Note is secured and bearsaccrues interest at 4%6% per annumannum, andwhich hasis apayable upon maturity date of December 31, 2022. According to the terms of the 20192018 Promissory Note,Note. atAt any time, athe holderholders of the 20192018 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. InThe connection2018 withPromissory Note was originally due August 1, 2018. Pursuit to six modifications within the 2019 Promissory Note, we issued 30,000,000 Class O Warrants with a termperiod of fiveJune years2018 toand purchaseDecember shares of our common stock at $0.045 per share (the Class O Warrants). All2023, the Class O Warrants were exercised in January 2021. In December 2022, the 20192018 Promissory Note was modified to extend the maturity date to DecemberJanuary 31, 2024,2025, with all remaining terms unchanged. In February 2024, the 20192018 Promissory Note was furthermodified 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, 2026.2028, with all remaining terms unchanged. At December 31, 2025, accrued interest on the 2018 Promissory Note totaled $55,370.

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

Based upon the investments we have made in our facilities and investments we anticipate making, and based on projects, and products we developed in 2024,2025, we have the following goals for 20252026:

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

In April 2025, an FDA inspection at our Idaho Falls facility resulted in an Official Action Indicated ("OAI"). RNX has developed and implemented corrective actions and submitted our 15-day, 90-day, and 180-day, 270-day, and subsequently submitted our 1-year updates. UponIn the completion of our corrective actions, we will submitresponse to the FDA Form 483 issued in April 2025, the Company completed all planned corrective and willpreventive actions. A request afor reinspectioninspection ofcloseout was submitted to the facilities.FDA on June 19, 2026. In addition, the Company continues to execute initiatives designed to strengthen its Quality Management System, with all actions scheduled for completion in July 2026 completed on time. There is a risk of additional action by the FDA up to and including a manufacturing and distribution hold or a warning letter. RNX 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 within Q2 of 2026, and 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 actions as listed above.

In the three months ended March 31, 2026, we had two product recalls. Both recalls are being conducted with the knowledge of the FDA. 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. The second recall was on February 19, 2026. We 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. We notified affected pharmacies, clinics, and veterinarians of the voluntary recall. We continue to provide Generic Sodium Iodide I-131, which was not impacted, to the majority of our customerscustomers. Both voluntary recalls have been fully executed and are currently awaiting formal closeout by the FDA.

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.

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.basis, including new suppliers of cobalt-60 and the applications of cobalt-60 in radioisotope thermoelectric generators (RTGs). 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 foreign cobalt-60 manufacturers.

We are currently in development of the EasyFill Iodine Encapsulation System, a robotic lab device to be paired with our Theranostics Products. The EasyFill is still in the developmental stage. We are targeting a Q1 2027 roll out and Q3 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 Q3Q1 20262027 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. On June 25, 2026 the Company entered into an Asset Purchase Agreement with Lucerno Dynamics, LLC for certain assets related to the Lara System technology platform and the Ellexa Explorer Software, and all related accessories, parts, consumables, equipment, software, regulatory approval, intellectual property, and hardware associated with these systems. The Company has been working on asset transfers and registrations related to the sale. In addition to revenue from the existing Lara and Ellexa platform, the acquired IP carries additional applications in radiation detection, such as uptake, dosimetry, quantification, and integration into auto-infusion drug delivery systems, which the Company currently plans to explore the feasibility of developing and commercializing such IP.

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 SaleSale, and we had low confidence that AFR would be able to secure funding to close the deal by the requested extension date. We willare evaluatereviewing 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 willactively evaluateworking alltowards possible options formonetizing the DUF6NRC Plantlicense 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.assets.

Three and Six Months Ended MarchJune 31,30, 2026, Compared to the Three and Six Months Ended MarchJune 31,30, 2025

InterestSale expenseof Product for the three months ended MarchJune 31,30, 2026 was $84,869,$2,671,785 as compared to $83,851$3,655,320 for the same period in 2025. This is2025, an increaseoverall decrease of $1,018,$983,535, or approximately 1%.27%.

WeThis haddecrease ain net loss of $1,348,086sales for the three months and six months ended MarchJune 31,30, 2026 , as compared to net loss of $112,694 for the same periodperiods in 2025. This increase in net loss of $1,235,392 for the quarter2025 was the result of lost sales in our Theranostics Products segment due to the effects from two voluntary product recalls of our Generic Sodium Iodide I131 onduring January 26, 2026 and of our Dibasic Sodium Phosphate Capsules on February 19,of 2026 as discussed in more detail below,below and 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, 2026,2026 andalong decreasedwith timing of cobalt projects. For the three months ended June 30, 2026 there was an increase to sales in our Calibration & Reference Products,Products and decrease in sales for our Medical Device Products segment. For the six months ended June 30, 2026 we had a decrease in sales in our Calibration & Reference Products segment and an increase in sales in our Medical Device Products segment, 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.

Sales of Theranostics Products for the three months ended MarchJune 31,30, 2026 were $1,397,282,$1,078,127, compared to $1,787,054$1,905,402 for the same period in 2025. This is a decrease of $389,772,$827,275, or approximately 22%43% during the three months ended MarchJune 31,30, 2026.

OperatingSales expensesof forTheranostics this segment increased to $432,118Products for the threesix months ended MarchJune 31,30, 2026,2026 were $2,475,409, compared to $404,892$3,692,456 for the same period in 2025. This inis ana increase in operating expensesdecrease of $27,226,$1,217,047, or approximately 7%33% dueduring tothe increasedsix salarymonths andended laborJune costs.30, 2026.

Sales of product in the Cobalt Products segment for the three months ended MarchJune 31,30, 2026 was $9,739,$497,670, compared to $72,450$678,015 for the same period in 2025. This represents a decrease of $62,711,$180,345, or approximately 87%.27%. Sales of product in the Cobalt Products segment for the six months ended June 30, 2026 was $507,409, compared to $750,465 for the same period in 2025. This represents a decrease of $243,056, or approximately 32%.

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 threefirst monthsquarter ended March 31,of 2026, we removed both sets of Cobalt hot cell windowswindows, and a 3rd party vendor rehabilitated the windows and gaskets on site. Work was completed in the threefirst monthsquarter endedof March 31, 2026,,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.

Cost of product for the three months ended MarchJune 31,30, 2026, was $76,154,$205,236, as compared to $38,872,$432,727, for the same period in 2025.2025 for a decrease of 53%. Gross profit for cobalt products for the three months ended MarchJune 31,30, 2026 was ( $66,415)$292,434 compared to $33,578$245,288 for the same period in 2025. Gross profit percentages were 59% and 36% respectively. This is aan decreaseincrease of $99,993,$47,146, or approximately 298%.19%. The increasedecrease in cost of product was partially due to improved margins in the sale of product partially offset by adjustments for accounting for labor hours beginning in the three months ended March 31, 2026. We evaluated and updated our policies for classifyingall andsegments recording direct labor hours. The adjustments resulted in anthat increased allocation of these labor costs to costCost of product.Product Webeginning believein these2026 updatesas willdiscussed better reflect costs allocation for our current operations.above.

Operating costs and expenses in this segment were $180,388$229,161 for the three months ended MarchJune 31,30, 2026, compared to $181,804$342,328 for the same period in 2025. This decrease in operating costs and expenses is due to waste expense of $129,000 in the three months ended June March 31,30, 2025 compared to no such expense in 2026. We had a net lossincome for Cobalt Products of $246,803$63,273 for the three months ended MarchJune 31,30, 2026, as compared to net loss of $148,226$97,040 for the same period in 2025. The increase in net lossincome of $98,577,$160,313, or approximately 67%,165%, was attributable to decreased salesoperating andcosts increasedfrom costreduced ofwaste product.expense.

Sales of product in the Calibration & Reference Products segment for the three months ended MarchJune 31,30, 2026, were $882,790,$1,055,031, compared to $1,326,766$1,013,814 for the same period in 2025. This represents an decreaseincrease in sales of $443,976,$41,217, or approximately 33%.4%. This increase in sales for the three months ended June 30, 2026 was due sales growth as we continue to develop additional products.

Sales of product in the Calibration & Reference Products segment for the six months ended June 30, 2026, were $1,937,821, compared to $2,340,580 for the same period in 2025. This represents a decrease in sales of $402,759, or approximately 17%. We had a decrease in sales in the threesix months ended MarchJune 31,30, 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 2024.2024 that resulted in increased sales in the first quarter of 2025.

Cost of product for our Calibration & Reference Products segment for the three months ended MarchJune 31,30, 2026, was $546,794,$621,073, as compared to $615,470$529,354 for the same period in 2025. The decreaseincrease in cost of product in the period-to-period comparison of $68,676,$91,719, or 11%,17%, was partially due to decreasedadjustments totalfor salesaccounting for labor hours to increase allocation to Cost of Product all segments beginning in 2026 as discussed in more detail above and chargespartially due to increased sales during the three-month period ended MarchJune 31,30, 2026 compared to the same period in 2025. Gross profit for our Calibration & Reference Products segment for the three months ended MarchJune 31,30, 2026 was $335,996$433,958 compared to $711,296$484,460 for the same period in 2025. This is a decrease in gross profit of $375,300,$50,502, or approximately 53%.10% due to the increase to cost of product.

OperatingCost costsof and expensesproduct for thisour Calibration & Reference Products segment for the threesix months ended MarchJune 31,30, 20262026, increasedwas $1,167,868, as compared to $453,648, from $443,733$1,144,824 for the same period in 2025. This is anThe increase in cost of $9,915,product in the period-to-period comparison of $23,044, or approximately 2%, and was thepartially resultdue to adjustments for accounting for labor hours to increase allocation to Cost of increasedProduct licensefor costsall duringsegments thebeginning three months ended March 31,in 2026. NetGross lossprofit for thisour Calibration & Reference Products segment for the threesix months ended MarchJune 31,30, 2026 was $117,652,$769,953 compared to net income of $267,563$1,195,756 for the same period in 2025. This is a decrease ofin netgross lossprofit of $385,215$425,803, andor wasapproximately largely36% thedue result ofto decreased sales.

For the three months ended MarchJune 31,30, 2026 we had sale of product in the Medical Device Products segment of $89,113$40,957 compared to $52,630$58,089 for the same period ending MarchJune 31,30, 2025. This represents ana increasedecrease in sales of $36,483,$17,132, or approximately 69%.29%.