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 UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

 Washington, D.C. 20549

 FORM 10-K

 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the fiscal year ended December 31, 2023

 or

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the transition period from ___________ to ______________

 Commission file number: 000-22923

 INTERNATIONAL ISOTOPES INC.

 (Exact name of registrant as specified in its charter)

 Texas

 74-2763837

 (State or other jurisdiction of incorporation or origination)

 (IRS Employer Identification No.)

 4137 Commerce Circle
 Idaho Falls, Idaho

 83401

 (Address of principal executive offices)

 (Zip code)

 ( 208) 524-5300

 (Registrant's telephone number, including area code)

 Securities registered pursuant to Section 12(b) of the Act: None.

 Securities registered pursuant to Section 12(g) of the Act:

 COMMON STOCK, $.01 PAR VALUE

 (Title of Class)

 Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

 Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No

 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

 Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

 Large accelerated filer

 Accelerated filer

 Non-Accelerated filer

 Smaller reporting company

 Emerging growth company

 If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

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

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

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

 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No

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

 As of March 27, 2024, the number of shares outstanding of the registrant's common stock, $.01 par value, was 520,081,365 shares.

 DOCUMENTS INCORPORATED BY REFERENCE

 Certain information called for in Part III of this Annual Report on Form 10-K is incorporated by reference from the registrant's definitive proxy statement for the 2024 annual meeting of shareholders, which will be filed with the Securities and Exchange Commission not later than 120 days after the registrant's fiscal year ended December 31, 2023.

 INTERNATIONAL ISOTOPES INC.

 FORM 10-K

 Page No.

 Item 1.

 Business

 Item 1A.

 Risk Factors

 Item 1B.

 Unresolved Staff Comments

 Item 1C.

 Cybersecurity

 Item 2.

 Properties

 Item 3.

 Legal Proceedings

 Item 4.

 Mine Safety Disclosures

 Item 5.

 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item 6.

 Reserved

 Item 7.

 Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item 7A.

 Quantitative and Qualitative Disclosures About Market Risk

 Item 8.

 Financial Statements and Supplementary Data

 Item 9.

 Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

 Item 9A.

 Controls and Procedures

 Item 9B.

 Other Information

 Item 9C.

 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

 Item 10.

 Directors, Executive Officers and Corporate Governance

 Item 11.

 Executive Compensation

 Item 12.

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item 13.

 Certain Relationships and Related Transactions, and Director Independence

 Item 14.

 Principal Accountant Fees and Services

 Item 15.

 Exhibits, Financial Statement Schedules

 Item 16.

 Form 10-K Summary

 Signatures

 Cautionary Note Regarding Forward-Looking Statements

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

 Item 1. BUSINESS

 General Business and Products Description

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

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

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

 Increased total company revenues by $1,085,397 or 10%.

 Reached $12.3 million in total revenues which was the largest single year in company history.

 Increased sales in our Theranostics Products segment by 13% primarily through increases in sales of our FDA approved generic sodium iodide I-131 drug product.

 Increased sales in our Nuclear Medicine Standards by 10%.

 Developed several new products for our Nuclear Medicine products segment and expanded our range of products in this segment including Positron Emission Tomography (PET) imaging standards.

 Purchased medical devices and related assets and intellectual property rights from AMICI, Inc. that we plan to expand into an additional business segment, "Medical Devices" starting in 2024.

 Pursuant to an option agreement entered into in October 2022, we worked to complete an asset sales agreement to sell our unused assets in our FEP business segment. In February 2024, we entered an Asset Purchase Agreement to sell these assets for a total of $12.5 million. The transaction is expected to close in approximately 12 to 24 months, subject to satisfaction of certain closing conditions.

 In 2024, we plan to continue efforts to further expand and improve upon our operations in our core business segments. Additionally, we are planning an additional business segment for "Medical Devices". We intend to continue to invest in these segments and work to pursue product development, reduce production costs, and expand sales in each of our segments. The following paragraphs provide a brief description of each of our business segments. Certain financial information with respect to each of our business segments, including revenues from external customers, a measure of profit or loss, and total assets, is set forth in Note 15 to our Consolidated Financial Statements which begin on page F-7.

 Theranostics Products (formerly Radiochemical Products)

 This segment includes the production and distribution of various isotopically pure radiochemicals for medical, industrial, and research applications. These products are either directly produced by us or are purchased in bulk from other producers and distributed by us in customized packages and chemical forms tailored to meet customer and market demands. 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. We have two suppliers of sodium iodide I-131 from whom we purchased material during 2022 and 2023 in order to produce this product in the most reliable manner possible. Going forward this segment will be called the Theranostics Products segment.

 Our cobalt products segment includes the production of bulk cobalt (cobalt-60), fabrication of cobalt capsules for radiation therapy as well as various industrial applications, and recycling of expended cobalt sources.

 The year-over-year demand for cobalt products has remained strong as a result of the introduction of several new types of cobalt therapy units and we have continued to see demand for cobalt-manufactured products for those devices. We have explored, and intend to continue to explore, opportunities to further develop cobalt products and sales on an on-going basis. The production, use, transport, and import/export of these products are all heavily regulated, but we have developed an experienced staff of technicians, shipping specialists, and supervisors as part of our efforts to comply with the regulations and support cost effective, timely delivery of these products.

 At the present time, we are the sole purchaser of high activity cobalt from any of the DOE reactors in the U.S. There are a few other cobalt source manufacturers in North America. We believe both our product and service provide us with a competitive edge in competing with these other manufacturers.

 This segment consists of the manufacture and sale through our wholly-owned subsidiary, RadQual, of sources and standards associated with Single Photon Emission Computed Tomography (SPECT) and Positron Emission Tomography (PET) imaging, patient positioning, and calibration or operational testing of dose measuring equipment for the nuclear pharmacy industry. Our nuclear medicine standards products include flood sources, dose calibrators, rod sources, line sources, flexible and rigid rulers, spot markers, pen point markers, and a host of specialty design items.

 There are over 5,000 nuclear medicine centers in the United States (U.S.) that require nuclear medicine products on a regular repeat basis. We have been manufacturing these products for RadQual since 2001. Most nuclear medicine product sales are to U.S. customers. However, in recent years, because of stronger marketing efforts, we have seen an increase in foreign sales, as shown in Note 14 to the accompanying audited financial statements. 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 nuclear medicine 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 complete line of specialty packaging for the safe transportation and handling of these products.

 Fluorine Products and the Planned Uranium De-Conversion Facility

 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 ("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 U.S. Nuclear Regulatory Commission ("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. We still anticipate a potential future need for a depleted uranium conversion facility and have kept all licenses and permits current.

 On February 8, 2024, we entered into a definitive agreement to sell all of our assets related to the Fluorine Products segment and the Planned Uranium De-Conversion Facility ("DUF6 Asset Sale"). We expect to close the agreement within 12 to 24 months of signing. Closing is contingent on various conditions being met, including approvals and agreements by the NRC and other third parties.

 Industry Overview, Target Markets, and Competition

 The industries and markets that require or involve the use of radioactive material are diverse. Our current core business operations involve products that are used in a wide variety of applications and in various markets. The following provides an explanation of the markets and competitive factors affecting our current business segments.

 Theranostics Products (formerly Radiochemical Products)

 In February 2020, our abbreviated new drug application ("ANDA") for a generic radiopharmaceutical sodium iodide drug product was approved by the FDA. This product is approved for use in treatment of hyperthyroidism and carcinoma of the thyroid and is the first and only generic sodium iodide I-131 product approved by the FDA in the U.S. and only generic product of this type manufactured in the U.S. The only other supplier to the U.S. of an FDA approved sodium iodide product comes from a foreign manufacturer.

 Since the launch of this drug product in 2020, the corresponding sales have had a significant positive impact on our revenues including 2022 and 2023. We expect this significant growth in sales for this product to continue in 2024 and beyond. We are also considering other generic drug opportunities and plan to expand the range of FDA approved products offered within this business segment in the coming years.

 We also supply theranostics Products in bulk form. The markets for most radiochemicals can be 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; or (3) further process and include the radioisotope products into pharmaceutical products approved by the U.S. FDA for labeled use in therapy or imaging.

 In February 2022, we sold the improvements and equipment in an expansion that had been constructed to our manufacturing facility for cGMP processing. Using the capital from this sale, we are currently developing a business plan and exploring other opportunities that support our Theranostics and Medical Device segments. We believe that we are uniquely qualified and have a competitive advantage for future opportunities because we have a unique combination of NRC licensing, GMP compliant operating facility, and trained personnel.

 In 2014, we entered into a 10-year agreement with the DOE utilizing a new cobalt target design for high activity cobalt production to be produced at the Advanced Test Reactor ("ATR"). Due to lower than desired activity rates in the material from the DOE, we bought the low activity targets at a discounted rate. There is a high demand for lower activity cobalt. We have taken shipment of and sold this material throughout 2022 and 2023 and will continue to have supply for at least two more years. We are now working with the DOE on future purchases of both high, medium, and low specific activity cobalt after the expiration of our current DOE agreement. Our cobalt products are used in applications such as radiation therapy, security devices, radiography examination and in some commercial applications. While there are other technologies available to provide external radiation therapy, there are several new devices just gaining market approval that still depend on cobalt sources for their specialized applications.

 There has been a significant increase in regulation by the NRC in recent years that has created a significant barrier to new entrants to this market. We expect steady demand for cobalt sealed source products over the next several years but are primarily dependent upon our contract relationship with the DOE for a large portion of our cobalt production supply. An interruption in the operation of the ATR could have a negative impact on our cobalt products business segment.

 Calibration and reference standards are required for the daily operational checks and calibration of the measurement of SPECT and PET imaging devices frequently used in nuclear medicine. Calibration and quality assurance testing are required as a routine part of the normal operations of this equipment to ensure its reliability and accuracy. For years, we have been the exclusive manufacturer of RadQual reference standard products. As RadQual is now our wholly-owned subsidiary, we continue to sell these same RadQual products through distributors who make direct sales in the U.S. and internationally. We directly ship these products to all 50 states and many overseas locations. There is only one other major producer of these products in the world that competes directly with us for these products. Most of the products manufactured by our competitor are similar in design to our products because all must meet Original Equipment Manufacturer (OEM) dimensional and performance standards. However, we attempt to differentiate our products through increased levels of quality control and customer service. We are certified under ISO-9001:2015 and ISO-13485-2016 quality programs that have allowed us to start selling these products into several foreign countries that require this additional quality certification for manufacturers. We are also working to expand the number and types of products that are manufactured in this segment and expand our raw product qualified suppliers.

 Fluorine Products and the Planned Depleted Uranium De-Conversion Facility

 Our Fluorine Products segment was developed in conjunction with uranium de-conversion to take advantage of the anticipated need for depleted uranium de-conversion services. During 2013, we curtailed all further work on the de-conversion facility because of a lack of demand for uranium de-conversion services at that time. We have continued to maintain the assets and licenses related to our previously planned de-conversion facility.

 On February 8, 2024, we entered into a definitive agreement to sell all of our assets related to the Fluorine Products segment ("DUF6 Asset Sale"). We expect to close the agreement within 12 to 24 months. Closing is contingent on various conditions being met, including approvals and agreements by the U.S. Nuclear Regulatory Commission and other third parties.

 Government Regulation

 Licensing

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

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

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

 Regulation of Radioisotope Production Waste

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

 Nuclear Regulatory Commission Oversight

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

 Other Regulations

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

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

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

 Environmental Compliance

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

 Distribution Methods for Products

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

 Dependence on Customers

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

 Patents, Trademarks, Licenses and Royalty Agreements

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

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

 Employees

 As of December 31, 2023, we had 40 total employees, including 39 full-time employees.

 Available Information

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

 Item 1A. RISK FACTORS

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

 Risks Related To Our Company

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

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

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

 We are dependent upon key personnel. Our ongoing operations are currently dependent on Shahe Bagerdjian, President and Chief Executive Officer. The loss of Mr. Bagerdjian could have a material adverse effect on our business. 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.

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

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

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

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

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

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

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

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

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

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

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

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

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

 We are dependent on a limited number of customers in connection with some of our current business operations. Combined sales to our three top customers accounted for 22% and 23% of our total gross revenue during 2023 and 2022, respectively. Although we are making efforts to reduce our dependency on a small number of customers, the loss of any one of these customers could have a significant impact on our future results of operations and financial condition. Unanticipated contract terminations by any of these current customers could have a material adverse impact on operations, financial results, and cash flow.

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

 Risks Related To Our Common Stock

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

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

 We are contractually obligated to issue shares in the future, which will dilute your interest in us. As of December 31, 2023, there were approximately 19,372,500 shares of common stock issuable upon the exercise of vested stock options, at a weighted-average exercise price of $.05 per share. An additional 34,932,090 shares were reserved for issuance under our equity plans as of December 31, 2023. Our outstanding preferred stock and certain of our outstanding debt is also convertible into shares of our common stock at the holders' option. In addition, we expect to issue additional options to purchase shares of our common stock to compensate employees, consultants and directors, and we may issue additional shares to raise capital to expand our manufacturing capability, develop additional products, or fund our planned uranium de-conversion plant. Any such issuance will have the effect of further diluting the interest of the holders of our securities.

 Item 1B. UNRESOLVED STAFF COMMENTS

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

 Item 1C. CYBERSECURITY

 The operation of our business is dependent on the secure functioning our computer infrastructure. This infrastructure is used to maintain key processes including management of sensitive company information and operation of sales, record-keeping, and accounting functions.

 We employ a specialized third-party information technology ("IT") management firm to monitor and manage our cybersecurity functions. Processes employed include real-time monitoring of company communications and IT activities and consultation and risk assessment of company procedures. Additionally, our third-party IT firm provides education to management and employees regarding our specific IT risks. All our employees receive information security training (including data protection and fraud awareness) on an annual basis. Department managers are given additional risk management training as part of periodic management meetings. Our activities are monitored at all times by our IT firm; we regularly meet with our them to review our cybersecurity response plans, discuss any needed updates, and identify risk management actions to be taken. The IT firm reports all matters of cybersecurity including any threats, breaches, or risks directly to our Chief Financial Officer who reports directly to the Chief Executive Officer. Updates regarding cybersecurity are provided to our directors at least annually and as needed for any important developments including cybersecurity breaches and risks.

 We carry a cybersecurity insurance policy to help cover any costs that may occur from a cybersecurity incident. Although risks from cybersecurity threats and implementation of our cybersecurity program have not materially affected our business strategy, business operations or our financial condition, a cybersecurity incident could have a material adverse effect in the future if it were to cause business disruption or data loss.

 Item 2. PROPERTIES

 We lease one property which serves as or main corporate headquarters and houses all of our current manufacturing operations for our core business segments. We also hold the conditional title to 640 acres of land in Lea County, New Mexico for the proposed de-conversion facility. The following paragraphs provide a brief summary of these properties.

 4137 Commerce Circle, Idaho Falls, Idaho – The facility located on this property houses our main corporate headquarters and all of our current manufacturing operations. In January 2020, we entered into a new lease agreement due to new and expanded facilities made available to us. The initial lease term is until January 2030 and provides an option to renew for an additional 5 years. The lease provides for the Company to expand its leased space as needed into additional areas of the building. The facility was new when leased in March 2001 and remains in excellent condition. We have a right of first refusal on this property that allows us to match any offer to purchase this property.

 Land - Lea County, New Mexico – In August 2011, we received land from Lea County, New Mexico, pursuant to a PPA, whereby the land was deeded to us for no monetary consideration. In return, we committed to construct a uranium de-conversion and FEP facility on the land. In order to retain title to the property, we were to begin construction of the de-conversion facility no later than December 31, 2014, and complete Phase I of the project and have hired at least 75 persons to operate the facility no later than December 31, 2015, although commercial operations need not have begun by that date. We did not meet the performance milestones set forth in the PPA and we executed a modification to the agreement extending these due dates to December 31, 2016 and 2017, respectively. We plan to work with Lea County to execute an additional modification to the agreement to further extend these dates once an estimated restart date for the project is determined. If we do not succeed in extending the commitment dates or in reaching performance dates set forth in a modified agreement then we may, at our sole option, either purchase or re-convey the property to Lea County, New Mexico. The purchase price of the property would be $776,078, plus interest at the annual rate of 5.25% from the date of the closing to the date of payment. We have not recorded the value of this property as an asset and will not do so until such time that sufficient progress on the project has been made to meet our obligations under the agreements for permanent transfer of the title. These land rights are part of the DUF6 Asset Sale as described above.

 Item 3. LEGAL PROCEEDINGS

 We are not a party to any legal proceedings that we believe to be material and we are not aware of any pending or threatened litigation against us that we believe could have a material adverse effect on our business, operating results, financial condition, or cash flows.

 Item 4. MINE SAFETY DISCLOSURES

 Not applicable.

 Item 5. MARKET FOR REGISTRANT ' S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 Our common stock is traded on the OTCQB under the trading symbol "INIS". The following table shows the high and low prices of our common stock on the OTCQB. The following quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions:

 OTC Bulletin Board (Symbol "INIS")

 High

 Low

 Period

 (US $)

 (US $)

 First Quarter 2022

 0.34

 0.04

 Second Quarter 2022

 0.15

 0.09

 Third Quarter 2022

 0.14

 0.08

 Fourth Quarter 2022

 0.11

 0.06

 First Quarter 2023

 0.10

 0.08

 Second Quarter 2023

 0.10

 0.06

 Third Quarter 2023

 0.09

 0.04

 Fourth Quarter 2023

 0.07

 0.03

 Holders of Record

 As of March 16, 2024, there were 486 holders of record of our common stock.

 Dividends

 We have never paid any cash dividends on our common stock. In the future, and based upon our profit performance, our Board of Directors (the "Board") will evaluate and determine whether to issue dividends, subject to compliance and limitations under any applicable debt or other financing agreements in effect at that time or retain funds for research and development and expansion of our business. We do not anticipate paying any dividends to shareholders of our common stock for the foreseeable future.

 Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities

 None.

 Purchases of Equity Securities by the Issuer

 None.

 Performance Graph

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

 Item 6. RESERVED

 Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 The following discussion of our results of operations and financial condition should be read in conjunction with the accompanying financial statements and related notes thereto included in Item 8, " Financial Statements and Supplementary Data, " within this Annual Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report, including information with respect to our plans and strategies for our business, statements regarding the industry outlook, our expectations regarding the future performance of our business and the other non-historical statements contained herein are forward-looking statements. See " Cautionary Note Regarding Forward-Looking Statements. " You should also review the " Risk Factors " in Item 1A. of this Annual Report for a discussion of important factors that could cause actual results to differ materially from the results described herein or implied by such forward-looking statements.

 Overview

 International Isotopes 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, and provides radiochemicals for clinical research and life sciences. The Company also produces a variety of cobalt-60 products. 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.

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

 Increased total company revenues by $1,085,397 or 10%.

 Reached $12.3 million in total revenues which was the largest single year in company history.

 Increased sales in the Theranostics Products segment (formerly Radiochemical products segment) by 13% primarily through increases in sales of our FDA approved generic sodium iodide I-131 drug product.

 Increased sales in our Nuclear Medicine Standards by 10%.

 Developed several new products for our Nuclear Medicine products segment and expanded our range of products in this segment into Positron Emission Tomography (PET) imaging standards.

 Purchased medical devices and related assets and intellectual property rights from AMICI, Inc. that we plan to expand into an additional business segment, "Medical Devices" starting in 2024.

 Pursuant to an option agreement entered into October 2022, we worked to complete an asset sales agreement to sell our unused assets in our FEP business segment. In February 2024, we entered into an Asset Purchase Agreement to sell these assets for a total of $12.5 million. The transaction is expected to close in approximately 12 to 24 months, subject to satisfaction of certain closing conditions.

 Business Strategy and Core Philosophies

 Broadly defined, our business strategy is to continue to build our reputation as a leader in radioisotope applications, such as theranostics, radiopharmaceutical, radiochemical, medical device, cobalt, and nuclear medicine product industries, and to maximize the revenue potential across our product segments. We also intend to continually seek ways to improve our customer service and expand our market share, with the ultimate goal of providing greater return to our shareholders. Specifically, we are continuously working with our customers to improve and develop new products to better serve the needs of the end user which, ultimately, we believe will boost product sales. A key part of our short-term and long-term business strategy is to develop, and enter into additional markets for our Theranostics, Nuclear Medicine, and Medical Device product segments. In addition, we will manage costs and cash flow in such a way to support further expansion of our products and services to exploit additional market opportunities.

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

 Results of Operations

 Following is a summary of results of operations for 2023:

 Revenue in 2023 was approximately $12.3 million, which was a 10% increase compared to 2022 and was the largest annual revenue generated in the company's history;

 Our 2023 sales in our Theranostics Products (formerly Radiochemical Products) increased by approximately 13% as compared to 2022;

 Our 2023 sales in our Nuclear Medicine Standards segments increased by approximately 10% and sales in our Cobalt Products segment decreased approximately 10% as compared to 2022;

 Our total gross profit rate increased to 60% in 2023 from 56% in 2022;

 Our operating costs for 2023 increased approximately 9% as compared to 2022;

 Our 2023 cash provided by operating activities was $582,589;

 Our operating loss for 2023 decreased approximately 35% as compared to 2022; and

 We had a net loss of $869,016 in 2023 as compared to a net profit of $303,238 in 2022.

 Year Ended December 31, 2023 Compared to Year Ended December 31, 2022

 The following table presents comparative revenues for the years ended December 31, 2023 and 2022:

 Revenues

 % of Total Revenues 2023

 % of Total Revenues 2022

 $

 6,842,898

 %

 $

 6,045,767

 %

 1,037,073

 %

 1,157,536

 %

 4,387,414

 %

 3,978,685

 %

 Flourine Products

 —

 %

 —

 %

 Total Segments

 $

 %

 $

 %

 Revenues

 Total revenues in 2023 were $12,267,385, compared to $11,181,988 in 2022, which represents an increase of $1,085,397, or approximately 10%. The performance of each segment is discussed in the following paragraphs.

 Revenues

 $ change

 % change

 $

 6,842,898

 $

 6,045,767

 $

 797,131

 %

 1,037,073

 1,157,536

 (120,463

)

 (10

)%

 4,387,414

 3,978,685

 408,729

 %

 Flourine Products

 —

 —

 —

 —

 %

 Total Segments

 1,085,397

 %

 Corporate revenue

 —

 —

 —

 —

 %

 Total Consolidated

 $

 $

 $

 1,085,397

 %

 Sales of theranostics Products accounted for approximately 56% of our sales revenue in 2023 as compared to 54% of our total sales revenue in 2022. Sales in this segment increased by $797,131, or approximately 13% to $6,842,898 in 2023 as compared to $6,045,767 in 2022. The increase is primarily the result of increased sales of our generic sodium iodide I-131 drug product.

 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 2024 and beyond. Within this segment, we also currently distribute sodium iodide (I-131) as a radiochemical product. The radiochemical product is being used for a variety of applications including industrial use and use in investigational and clinical trials. We believe that the market growth, new customers, and entry into new territories, in addition to the theranostics API we plan to submit to the FDA, should increase future sales in this business segment.

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

 Periodically we have been able to acquire recycled material that can be used to manufacture sealed sources for customers, and in some instances, our customers have supplied their own cobalt material for source fabrication. We will continue to have access to additional low specific activity material produced by the DOE and expect to obtain, process, and sell additional cobalt products as a result during 2024.

 We have entered into cobalt supply agreements with several customers. The terms of these cobalt contracts require some advance progress payments from each customer. The funding received under these contracts has been recorded as unearned revenue under short- and long-term liabilities in our consolidated financial statements. We recognized some of this revenue in prior years including in 2023 and 2022 when we fulfilled contract performance objectives by supplying sealed sources manufactured with cobalt from the ATR or alternate suppliers.

 Sales in the nuclear medicine standards segment accounted for approximately 36% of our total sales revenue in both 2023 and 2022. Sales in this segment increased by $408,729, or approximately 10%, to $4,387,414 in 2023, as compared to $3,978,685 in 2022. This increase in sales in 2023 is due to increased sales of our RadQual nuclear medicine standard products both domestically and internationally.

 We anticipate that our sales of RadQual products will remain strong by creating future opportunities through new product development and expanding markets.

 Fluorine Products

 In 2023 and 2022, we had no revenues related to Fluorine Products. Work on our de-conversion 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 2024, we entered into an Asset Purchase Agreement with a Company to sell the NRC license and other assets related to this business area ("DUF6 Asset Sale"). We expect to close the DUF6 Asset Sale in approximately 12 to 24 months, subject to satisfaction of certain closing conditions.

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

 Cost of Revenues and Gross Profit

 Cost of revenues for 2023 was $4,888,409 as compared to $4,891,927 in 2022, a decrease of $3,518, or less than 1%. Gross profit percentage increased to 60% for 2023, from 56% in 2022. The following table presents revenues and cost of revenues information:

 % of Total Revenues 2023

 % of Total Revenues 2022

 Total Revenues

 $

 %

 $

 %

 Cost of Revenues

 $

 2,370,048

 %

 $

 2,217,468

 %

 482,670

 %

 577,417

 %

 2,035,691

 %

 2,097,042

 %

 Fluorine Products

 —

 —

 %

 —

 —

 %

 Total Segments

 $

 4,888,409

 %

 $

 4,891,927

 %

 Gross Profit

 $

 7,378,976

 $

 6,290,061

 Gross Profit %

 %

 %

 During 2023, we continued to monitor and control direct costs. Raw materials used in our theranostics Products and nuclear medicine standards represented the bulk of direct costs for 2023. 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 increase in gross profit percentage in 2023 is a result of increased overall sales activity, increased sales prices, and better cost controls. Additionally, we have worked to find more effective cost controls and to increase our overall utilization of our raw materials.

 Operating Costs and Expenses

 Total operating costs and expenses for 2023 were $8,155,275, as compared to $7,492,958 in 2022. This is an increase of $662,317, or approximately 9%.

 The following table presents operating costs and expenses for 2023 as compared to 2022:

 % change

 $ change

 Operating Costs and Expenses:

 Salaries and Contract Labor

 $

 4,032,155

 $

 3,390,652

 %

 $

 641,503

 General, Administrative and Consulting

 3,545,766

 3,568,590

 (1

)%

 (22,824

)

 Research and Development

 577,354

 533,716

 %

 43,638

 Total operating expenses

 $

 8,155,275

 $

 7,492,958

 %

 $

 662,317

 Salaries and contract labor expense increased by $641,503, or approximately 19%, which was the result of an increased number of employees, increases to labor rates, and temporary increase in executive salaries during our CEO transition period. In addition, non-cash equity compensation expense recorded for the year ended December 31, 2023, was $464,041 as compared to $352,458 for the same period in 2022. 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 decreased less than 1% to $3,545,766 in 2023, as compared to $3,568,590 in 2022. Research and development expense was $577,354 for 2023, compared to $533,716 for 2022. This is an increase of $43,638, or approximately 8%. This increase in research and development expense was the result of increased costs associated with product development in our Theranostics and Nuclear Medicine Standards business segments.

 Other Income (Expense)

 The following table presents other income (expense) for 2023 as compared to 2022:

 Other income (expense)

 $

 160,173

 $

 2,110,576

 Interest income

 78,890

 9,502

 Interest expense

 (331,780

)

 (613,943

)

 Total other (expense)

 $

 (92,717

)

 $

 1,506,135

 Other income was $160,173 for 2023 as compared to other income of $2,110,576 for 2022. The large decrease is primarily due to a $1,797,978 gain on the sale of assets to Pharmalogic Idaho, LLC in 2022. In February 2022, we entered into an Asset Purchase Agreement with Pharmalogic Idaho, LLC, pursuant to which we sold certain assets for $4,000,000 in cash. The assets consisted primarily of manufacturing equipment and a sublease acquired by the Company in connection with the previously announced termination of the manufacturing and supply agreement with another company.

 Interest income in 2023 was $78,890 as compared to $9,502 in 2022. This increase of $69,388 was due to increased interest rates and increased cash balances held at banks and other institutions in interest-bearing accounts.

 Interest expense decreased during 2023, to $331,780, from $613,943 in 2022. This decrease of $282,163, or approximately 46%, was due to a decrease in non-cash interest expense. In 2022, non-cash interest expense was $274,443 with no comparable expense in 2023. Interest expense includes dividends accrued on our Series C Preferred Stock (as defined below) issued in 2017. In 2023, we recorded interest expense of $243,780 for dividends payable on our Series C Preferred Stock.

 Net Income or Loss

 Our net loss was $869,016 in 2023, compared to a net income of $303,238 in 2022. This is a decrease in net income of $1,172,254. This decrease is the result of the approximate $1.8 million gain on sale of assets in 2022 with no such gain in 2023.

 Liquidity and Capital Resources

 On December 31, 2023, we had cash and cash equivalents of $2,688,141 compared to $2,375,817 at December 31, 2022. Net cash provided by operating activities was $582,589 in 2023, compared to net cash used in operating activities of $1,497,719 in 2022. This represents an increase in cash provided by operating activities of $2,080,308. This increase is due to improved operational performance, decreases in accounts receivable, decreases in Prepaids and current assets, and an increase in accounts payable and accrued liabilities in the year over year comparison.

 Accounts receivable at December 31, 2023 were $1,469,298 as compared to $1,596,886 at December 31, 2022. Our allowance for bad debt at December 31, 2023 and at December 31, 2022 was $0.

 Inventories at December 31, 2023 were $927,111 as compared to $744,793 at December 31, 2022. Part of this increase is due to acquisition of inventory as part of our purchase of business assets from AMICI, Inc.

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

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

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

 Financing activities provided cash of $80,504 for the year ended December 31, 2023. We entered into a note payable agreement for $452,100 to finance the purchase of assets. We received proceeds from the sale of common stock in the amount of $8,398 and made principal payment on loans in the amount of $83,389 in 2023. For the year ended December 31, 2022, financing activities used cash of $472,004. We received proceeds from the sale of common stock in the amount of $76,571 and made principal payment on loans in the amount of $540,032 in 2022.

 In February 2017, we entered into subscription agreements with certain investors, including two of our directors, for the sale of (i) an aggregate of 3,433 shares of Series C Preferred Stock, and (ii) Class M warrants to purchase an aggregate of 17,165,000 shares of our common stock (Class M Warrants), for gross proceeds of $3,433,000. The Class M Warrants were exercisable at an exercise price of $0.12 per share, subject to adjustment as set forth in the warrant, and expired in February 2022. In February 2022, 515,000 Class M Warrants were exercised at a price of $0.12. The Company received $61,800 for the exercise.

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

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

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

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

 In April 2018, we borrowed $120,000 from our then Chief Executive Officer and Chairman of the Board pursuant to a promissory note (the 2018 Promissory Note). The 2018 Promissory Note accrues interest at 6% per annum, which is payable upon maturity of the 2018 Promissory Note. The 2018 Promissory Note was originally unsecured and originally matured on August 1, 2018. At any time, the holder of the 2018 Promissory Note may elect to have any or all the principal and accrued interest settled with shares of our common stock based on the average price of the shares over the previous 20 trading days. Pursuant to an amendment to the 2018 Promissory Note in June 2018, the maturity date was extended to March 31, 2019 with all other provisions remaining unchanged. Pursuant to a second amendment to the 2018 Promissory Note in February 2019, the maturity date was extended to July 31, 2019 with all other provisions remaining unchanged. Pursuant to a third amendment to the 2018 Promissory Note in July 2019, the maturity date was extended to January 31, 2020 with all other provisions remaining unchanged. Pursuant to a fourth amendment to the 2018 Promissory Note in December 2019, the maturity date was extended to December 31, 2021, and the note was modified to become secured by company assets, with all other provisions remaining unchanged. In December 2021, the 2018 Promissory Note was further modified to extend the maturity date to December 31, 2023, with all remaining terms unchanged. In December 2023, the 2018 Promissory Note was further modified to extend the maturity date to January 31, 2025. In February 2024, the 2018 Promissory Note was further modified to extend the maturity date to March 31, 2026.

 In December 2019, we entered into a promissory note agreement with our then Chief Executive Officer, Chairman of the Board, former Chairman of the Board, and one of our major shareholders (the 2019 Promissory Note). The 2019 Promissory Note authorizes us to borrow up to $1,000,000. As of December 31, 2019, we borrowed $675,000 under the 2019 Promissory Note; the remaining $325,000 was borrowed in February 2020. The 2019 Promissory Note is secured and bears interest at 4% per annum and has a maturity date of December 31, 2022. According to the terms of the 2019 Promissory Note, at any time, a holder of the 2019 Promissory Note may elect to have any or all of the principal and accrued interest settled with shares of our common stock based on the average price of the shares over the previous 20 trading days. In connection with the 2019 Promissory Note, we issued 30,000,000 Class O Warrants with a term of five years to purchase shares of our common stock at $0.045 per share (the Class O Warrants). All the Class O Warrants were exercised in January 2021. In December 2022, the 2019 Promissory Note was modified to extend the maturity date to December 31, 2024, with all remaining terms unchanged. In February 2024, the 2019 Promissory Note was further modified to extend the maturity date to March 31, 2026.

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

 Goals for 2024

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

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

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

 Launch our Medical Devices business segment beginning by offering products purchased from AMICI, Inc. in 2023.

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

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

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

 Continue efforts towards closing the DUF6 Asset Sale agreement.

 Critical Accounting Estimates

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

 Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

 Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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

 Index to Consolidated Financial Statements

 Page No.

 Report of Independent Registered Public Accounting Firm

 Financial Statements:

 Consolidated Balance Sheets as of December 31, 2023 and 2022

 Consolidated Statements of Operations for the years ended December 31, 2023 and 2022

 Consolidated Statement of Shareholders' Equity for the years ended December 31, 2023 and 2022

 Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022

 Notes to Consolidated Financial Statements

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

 None.

 Item 9A. CONTROLS AND PROCEDURES

 Evaluation of Disclosure Controls and Procedures

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

 Management, with the participation of our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), has conducted an evaluation (pursuant to Rule 13a-15(b) of the Exchange Act) of the effectiveness of our disclosure controls and procedures as of December 31, 2023. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of December 31, 2023.

 Management ' s Annual Report on Internal Control over Financial Reporting

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

 Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework and criteria established in Internal Control — Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission. This evaluation included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation. Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2023.

 Changes in Internal Control over Financial Reporting

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

 Item 9B. OTHER INFORMATION

 During the quarter ended December 31, 2023, no director or officer of the Company adopted or terminated a "Rule 10b5 - 1 trading arrangement" or "non-Rule 10b5 - 1 trading arrangement," as each term is defined in Item 408 (a) of Regulation S-K.

 Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

 None.

 PART III.

 Item 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

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

 The other information required by this item is incorporated by reference from our definitive proxy statement for our 2024 annual meeting of shareholders, which will be filed with the SEC within 120 days after December 31, 2023.

 Item 11. EXECUTIVE COMPENSATION

 The information required by this item is incorporated by reference from our definitive proxy statement for our 2024 annual meeting of shareholders, which will be filed with the SEC within 120 days after December 31, 2023.

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

 The information required by this item is incorporated by reference from our definitive proxy statement for our 2024 annual meeting of shareholders, which will be filed with the SEC within 120 days after December 31, 2023.

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

 The information required by this item is incorporated by reference from our definitive proxy statement for our 2024 annual meeting of shareholders, which will be filed with the SEC within 120 days after December 31, 2023.

 Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

 The information required by this item is incorporated by reference to our definitive proxy statement for our 2024 annual meeting of shareholders, which will be filed with the SEC within 120 days after December 31, 2023.

 Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

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

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

 (a)(3) Exhibits

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

 2.1++

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

 2.2++

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

 3.1

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

 3.2

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

 3.3

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

 3.4

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

 3.5

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

 10.1

 International Isotopes Inc. Amended and Restated Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K, filed on July 21, 2020).

 10.2

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

 10.3+

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

 10.4

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

 10.5

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

 10.6

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

 10.7

 Executive Employment Agreement, dated December 23, 2022, between the Company and Shahe Bagerdjian (as amended) (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K, filed on May 8, 2023).

 10.8

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

 10.9

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

 10.10

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

 21.1+

 Subsidiary list.

 23.1+

 Consent of Haynie & Company.

 31.1+

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

 31.2+

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

 32.1*

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

 32.2*

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

 101.INS+

 101.SCH+

 101.CAL+

 101.DEF+

 101.LAB+

 101.PRE+

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

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

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

 + Filed herewith.

 * Furnished herewith.

 Item 16. FORM 10-K SUMMARY

 None.

 SIGNATURES

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

 International Isotopes Inc.

 By: /s/ Shahe Bagerdjian

 Shahe Bagerdjian

 President, Chief Executive Officer, and Director

 Date: March 28, 2024

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

 By: /s/ Shahe Bagerdjian

 Shahe Bagerdjian

 President, Chief Executive Officer, and Director

 By: /s/ W. Matthew Cox

 W. Matthew Cox

 Chief Financial Officer, Secretary

 By: /s/ Robert Atcher

 Robert Atcher

 Director

 By: /s/ Christopher Grosso

 Christopher Grosso

 Chairman of the Board of Directors

 By: /s/ Steve Laflin

 Steve Laflin

 Director

 I NTERNATIONAL ISOTOPES INC. AND SUBSIDIARIES

 CONSOLIDATED FINANCIAL STATEMENTS

 Page No.

 Report of Independent Registered Public Accounting Firm ( Haynie & Company, Salt Lake City, UT, PCAOB ID No. 457)

 Financial Statements:

 Consolidated Balance Sheets as of December 31, 2023 and 2022

 Consolidated Statements of Operations for the years ended December 31, 2023 and 2022

 Consolidated Statement of Shareholders' Equity for the years ended December 31, 2023 and 2022

 Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022

 Notes to Consolidated Financial Statements

 INTERNATIONAL ISOTOPES INC. AND SUBSIDIARIES

 Consolidated Balance Sheets

 2023

 2022

 Assets

 Current assets

 Cash and cash equivalents

 $
 2,688,141

 $
 2,375,817

 Accounts receivable

 1,469,298

 1,596,886

 Inventories

 927,111

 744,793

 Prepaids and other current assets

 672,934

 1,023,129

 Total current assets

 5,757,484

 5,740,625

 Long-term assets

 Restricted cash

 880,752

 840,049

 Property, plant and equipment, net

 2,465,077

 2,024,486

 Capitalized lease disposal costs, net

 688,462

 228,125

 Financing lease right-of-use asset

 6,611

 12,621

 Operating lease right-of-use asset

 2,183,988

 2,311,082

 Goodwill

 1,384,255

 1,384,255

 Patents and other intangibles, net

 3,538,458

 3,703,353

 Total long-term assets

 11,147,603

 10,503,971

 Total assets

 $
 16,905,087

 $
 16,244,596

 Liabilities and Stockholders' Equity

 Current liabilities

 Accounts payable

 559,597

 $
 382,392

 Accrued liabilities

 1,482,179

 1,472,504

 Unearned revenue

 932,682

 879,365

 Current portion of operating lease right-of-use liability

 140,733

 131,572

 Current portion of financing lease liability

 2,832

 5,513

 Current portion of related party notes payable, net of debt discount

 —

 620,000

 Current installments of notes payable

 155,733

 23,348

 Total current liabilities

 3,273,756

 3,514,694

 Long-term liabilities

 Accrued long-term liabilities

 75,000

 112,500

 Related party notes payable, net of current portion and debt discount

 1,620,000

 1,000,000

 Notes payable, net of current portion

 270,732

 34,406

 Asset retirement obligation

 1,474,463

 942,378

 Financing lease liability, net of current portion

 —

 2,832

 Operating lease right-of-use liability, net of current portion

 2,091,511

 2,232,244

 Mandatorily redeemable convertible preferred stock

 4,063,000

 4,063,000

 Total long-term liabilities

 9,594,706

 8,387,360

 Total liabilities

 12,868,462

 11,902,054

 Stockholders' equity

 Common stock, $ 0.01 par value; 750,000,000 shares authorized; 519,787,870 and 514,889,916 shares issued and outstanding respectively

 5,197,879

 5,148,899

 Additional paid in capital

 126,168,605

 125,654,486

 Accumulated deficit

 ( 127,329,859
)

 ( 126,460,843
)

 Total equity

 4,036,625

 4,342,542

 Total liabilities and stockholders' equity

 $
 16,905,087

 $
 16,244,596

 See accompanying notes to consolidated financial statements.

 INTERNATIONAL ISOTOPES INC. AND SUBSIDIARIES

 Consolidated Statements of Operations

 Years ended December 31,

 2023

 2022

 Sale of product

 $

 $

 Cost of product

 4,888,409

 4,891,927

 Gross profit

 7,378,976

 6,290,061

 Operating costs and expenses:

 Salaries and contract labor

 4,032,155

 3,390,652

 General, administrative and consulting

 3,545,766

 3,568,590

 Research and development

 577,354

 533,716

 Total operating expenses

 8,155,275

 7,492,958

 Operating loss

 ( 776,299
)

 ( 1,202,897
)

 Other income (expense):

 Other income

 160,173

 2,110,576

 Interest income

 78,890

 9,502

 Interest expense

 ( 331,780
)

 ( 613,943
)

 Total other (expense) income

 ( 92,717
)

 1,506,135

 Net income (loss)

 $
)

 $

 Net income per common share - basic:

 $
 —

 $
 —

 Net income per common share - diluted:

 $
 —

 $
 —

 Weighted average common shares outstanding - basic

 517,777,847

 510,794,145

 Weighted average common shares outstanding - diluted

 517,777,847

 510,794,145

 See accompanying notes to consolidated financial statements.

 INTERNATIONAL ISOTOPES INC AND SUBSIDIARIES

 Consolidated Statement of Stockholders' Equity

 Years ended December 31, 2023 and 2022

 Common Stock

 Additional Paid-in

 Accumulated

 Total

 Shares

 Amount

 Capital

 Deficit

 Equity

 Balance December 31, 2021

 502,584,176

 $
 5,025,842

 $
 124,469,034

 $
 ( 126,764,081
)

 $
 2,730,795

 Shares issued under employee stock purchase plan

 245,081

 2,451

 12,320

 —

 14,771

 Shares issued for exercise of employee stock options

 648,948

 6,489

 ( 6,489
)

 —

 —

 Stock grant

 187,231

 1,872

 ( 1,872
)

 —

 —

 Stock issued in lieu of dividends on preferred C shares

 2,271,980

 22,720

 181,760

 —

 204,480

 Warrant exercise

 515,000

 5,150

 56,650

 —

 61,800

 Conversion of preferred B stock

 8,437,500

 84,375

 590,625

 —

 675,000

 Stock based compensation

 —

 —

 352,458

 —

 352,458

 Net income

 Balance December 31, 2022

 514,889,916

 5,148,899

 125,654,486

 ( 126,460,843
)

 4,342,542

 Shares issued under employee stock purchase plan

 316,866

 3,169

 5,229

 —

 8,398

 Shares issued for exercise of employee stock options

 —

 —

 —

 —

 —

 Stock grant

 343,560

 3,436

 ( 3,436
)

 —

 —

 Stock issued in lieu of dividends on preferred C shares

 2,266,500

 22,665

 67,995

 —

 90,660

 Shares issued for issuance of RSUs

 1,971,028

 19,710

 ( 19,710
)

 —

 —

 Stock based compensation

 -

 -

 464,041

 —

 464,041

 Net loss

)

)

 Balance December 31, 2023

 519,787,870

 $
 5,197,879

 $
 126,168,605

 $
 ( 127,329,859
)

 $
 4,036,625

 See accompanying notes to consolidated financial statements.

 INTERNATIONAL ISOTOPES INC. AND SUBSIDIARIES

 Consolidated Statements of Cash Flows

 Years ended December 31,

 2023

 2022

 Cash flows from operating activities:

 Net (loss) income

 $
)

 $

 Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 Depreciation and amortization

 350,094

 374,196

 Gain on disposal of property, plant and equipment

 —

 ( 1,797,978
)

 Accretion of obligation for lease disposal costs

 53,126

 50,292

 Accretion of beneficial conversion feature

 —

 274,443

 Equity based compensation

 464,041

 352,458

 Right-of-use amortization

 ( 4,478
)

 ( 2,528
)

 Changes in operating assets and liabilities:

 Accounts receivable

 127,588

 ( 743,211
)

 Prepaids and other current assets

 350,195

 ( 18,706
)

 Inventories

 ( 182,318
)

 179,982

 Accounts payable and accrued liabilities

 240,040

 ( 441,317
)

 Unearned revenues

 53,317

 ( 28,588
)

 Net cash provided by (used in) in operating activities

 582,589

 ( 1,497,719
)

 Cash flows from investing activities:

 Proceeds from sale of property, plant and equipment

 —

 4,000,000

 Purchase of property, plant, equipment and patents

 ( 149,058
)

 ( 120,014
)

 Net cash (used in) provided by investing activities

 ( 149,058
)

 3,879,986

 Cash flows from financing activities:

 Proceeds from sale of stock

 8,398

 76,571

 Payments on financing lease liability

 ( 5,513
)

 ( 8,543
)

 Principal payments on notes payable

 ( 83,389
)

 ( 540,032
)

 Net cash provided by (used in) financing activities

 ( 80,504
)

 ( 472,004
)

 Net increase in cash and cash equivalents and restricted cash

 353,027

 1,910,263

 Cash and cash equivalents and restricted cash at beginning of year

 3,215,866

 1,305,603

 Cash and cash equivalents and restricted cash at end of year

 $
 3,568,893

 $
 3,215,866

 Supplemental disclosure of cash flow activities:

 Cash paid for interest

 $
 163,920

 $
 54,071

 Cash paid for taxes

 10,176

 9,097

 Supplemental disclosure of noncash financing and investing transactions:

 Decrease in accrued interest and increase in equity for conversion preferred dividends to stock

 $
 90,660

 $
 204,480

 Increase in equity and decrease in liability for the conversion of preferred stock

 $
 —

 $
 675,000

 Property acquired in exchange for a note payable

 $
 452,100

 $
 —

 Non-cash increase of capitalized asset retirement obligation for increased funding plan

 $
 478,959

 $
 —

 2023

 2022

 Cash and cash equivalents

 $
 2,688,141

 $
 2,375,817

 Restricted cash included in long-term assets

 880,752

 840,049

 Total cash, cash equivalents, and restricted cash shown in statement of cash flows

 $
 3,568,893

 $
 3,215,866

 See accompanying notes to consolidated financial statements.

 INTERNATIONAL ISOTOPES INC. AND SUBSIDIARIES

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 FOR THE YEARS ENDED December 31, 2023 AND 2022

 NOTE 1 – DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

 Description of business – International Isotopes Inc. (the "Company" or "INIS") was incorporated in Texas in November 1995. The accompanying consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States of America ("GAAP") and include all operations and balances of the Company and its wholly-owned subsidiaries, International Isotopes Idaho Inc., International Isotopes Fluorine Products, Inc., and International Isotopes Transportation Services, Inc. The consolidated financial statements also include the accounts of wholly owned subsidiaries TI Services, LLC, ("TI Services"), and RadQual, LLC (RadQual). TI Services is headquartered in Youngstown, Ohio and was formed with RadQual in December 2010 to distribute products and services for nuclear medicine, nuclear cardiology and Positron Emission Tomography (PET) imaging. RadQual is a global supplier of molecular imaging quality control devices, and is now headquartered in Idaho Falls, Idaho.

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

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

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

 Significant accounting policies

 a) Financial instruments and cash equivalents

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

 Cash and cash equivalents, totaling $ 2,688,141 and $ 2,375,817 at December 31, 2023 and 2022, respectively, consist of operating accounts and money market accounts. For purposes of the consolidated statements of cash flows, the Company considers all highly-liquid financial instruments with original maturities of three months or less at date of purchase to be cash equivalents.

 At December 31, 2023 and 2022, the Company had pledged cash on deposit in a money market account valued at $ 880,752 and $ 840,049 respectively, as security for a surety bond. The surety bond is required as part of the Company's operating license agreement with the Nuclear Regulatory Commission ("NRC").

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

 F-

 b) Accounts receivable

 The Company sells products mainly to recurring customers, wherein the customer's ability to pay has previously been evaluated. The Company generally does not require collateral. The Company periodically reviews accounts receivable for amounts considered uncollectible and allowances are provided for uncollectible accounts when deemed necessary. At December 31, 2023 and December 31, 2022 the Company had no allowance for doubtful accounts.

 c) Inventories

 Inventories are carried at the lower of cost or net realizable value. Cost is determined using the first in, first out method. When indicators of inventory impairment exist, the Company measures the carrying value of the inventory against its market value, and if the carrying value exceeds the market value, the inventory value is adjusted down accordingly. No impairment was recorded for the years ended December 31, 2023 and December 31, 2022.

 d) Property, plant and equipment

 Depreciation on property, plant and equipment is computed using the straight-line method over the estimated useful life of the asset.

 Leasehold improvements are amortized over the shorter of the life of the lease or the service life of the improvements. Maintenance, repairs, and renewals that neither materially add to the value of the property nor appreciably prolong its life are charged to expense as incurred. Gains or losses on dispositions of property and equipment are included in the results of operations.

 e) Goodwill and other intangibles

 Goodwill is not amortized but is tested for impairment at least annually. Goodwill represents the excess of the purchase price over the fair value of net tangible and identifiable intangible assets recorded as a result of the change in ownership of RadQual. As of December 31, 2023 and 2022, there has been no impairment of goodwill.

 Patents and other intangibles are amortized using the straight-line method over their estimated useful lives and are evaluated for impairment at least annually or when events or circumstances arise that indicate the existence of impairment. The Company evaluates the recoverability of identifiable intangible assets whenever events or changes in circumstances indicate that an intangible asset's carrying amount may not be recoverable. Such circumstances could include but are not limited to: ( 1) a significant decrease in the market value of an asset, ( 2) a significant adverse change in the extent or manner in which an asset is used, or ( 3) an accumulation of costs significantly in excess of the amount originally expected for the acquisition of an asset. When indicators of impairment exist, the Company measures the carrying amount of the asset against the estimated undiscounted future cash flows associated with it. Should the sum of the expected future cash flows be less than the carrying value of the asset being evaluated, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying value of the asset exceeds its fair value. The evaluation of asset impairment requires the Company to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgment and actual results may differ from assumed and estimated amounts. During the years ended December 31, 2023 and 2022, the Company had no impairment losses related to intangible assets.

 f) Impairment of long-lived assets

 Long-lived assets are reviewed for impairment annually, or when events or circumstances arise that indicate the existence of impairment, using the same evaluation process as described above for patents and other intangibles. There was no impairment recorded during the years ended December 31, 2023 and 2022.

 g) Income taxes

 Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in income in the period that includes the enactment date.

 F-

 h) Use of estimates

 Management of the Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period to prepare these consolidated financial statements in conformity with GAAP. Actual results could differ from those estimates.

 i) Revenue recognition

 Revenue is recognized when products are shipped. No warranty coverage or right of return provisions are provided to customers. Amounts received as prepayment on future products or services are recorded as unearned revenues and recognized as income when the product is shipped or service performed. See Note 14 Revenue Recognition.

 j) Advertising Expenses

 Advertising expenses, which include promotional expenses, are expensed as incurred and totaled $ 142,188 and $ 118,465 for the years ended December 31, 2023 and 2022, respectively.

 k) Research and development costs

 Research and development costs are expensed as incurred and totaled $ 577,354 and $ 533,716 for the years ended December 31, 2023 and 2022, respectively. These research and development costs were incurred for corporate business development and in our Theranostics Products and Nuclear Medicine Standards business segments.

 l) Share-based compensation

 The Company accounts for issuances of share-based compensation to employees in accordance with GAAP which requires the recognition of the cost of employee services received in exchange for an award of equity instruments in the financial statements and is measured based on the grant date fair value of the award. Compensation expense is recognized over the period during which an employee is required to provide service in exchange for the award (the vesting period).

 For the years ended December 31, 2023 and 2022, the Company recognized share-based compensation expense of $ 464,041 and $ 352,458, respectively, related to stock options, stock grants, and restricted stock units. This expense is included as part of salaries and contract labor in the accompanying statements of operations.

 m) Net loss per common share – basic and diluted

 Basic loss per share is computed on the basis of the weighted-average number of common shares outstanding during the year. Diluted loss per share is computed on the basis of the weighted-average number of common shares plus all potentially dilutive issuable common shares outstanding during the year.

 The table below shows the calculation of diluted shares:

 2023

 2022

 Weighted average common shares outstanding - basic

 517,777,847

 510,794,145

 Effects of dilutive shares

 Stock options

 —

 —

 Series C redeemable convertible preferred stock

 —

 —

 Weighted average common shares outstanding - diluted

 517,777,847

 510,794,145

 For the year ended December 31, 2023, the Company had 24,787,500 stock options outstanding, and 4,063 outstanding shares of Series C redeemable convertible preferred stock (Series C Preferred Stock), each of which were not included in the computation of diluted income per common share because they would be anti-dilutive.

 For the year ended December 31, 2022, the Company had 24,993,500 stock options outstanding, and 4,063 outstanding shares of Series C redeemable convertible preferred stock (Series C Preferred Stock), each of which were not included in the computation of diluted income per common share because they would be anti-dilutive.

 F-

 The table below summarizes common stock equivalents outstanding at December 31, 2023 and 2022:

 2023

 2022

 Stock options

 24,787,500

 24,993,500

 4,063 Shares of Series C redeemable convertible preferred stock

 40,630,000

 40,630,000

 65,417,500

 65,623,500

 n) Business segments and related information

 GAAP establishes standards for the way public business enterprises are to report information about operating segments in annual financial statements and requires enterprises to report selected information about operating segments in interim financial reports issued to shareholders. It also establishes standards for related disclosure about products and services, geographic areas and major customers. The Company currently operates in four business segments.

 o) Recent accounting standards

 In August 2020, the Financial Accounting Standards Board issued ASU 2020 - 06 Debt – Debt with Conversion and Other Options (Subtopic 470 - 20) and Derivatives and Hedging – Contracts in Entity's Own Equity (Subtopic 815 - 40). The update simplifies accounting related to convertible debt instruments. The standard is effective for fiscal years beginning after December 15, 2023 including interim periods within those fiscal years. INIS is currently evaluating the effect this standard will have on its financial statements.

 NOTE 2 – BUSINESS CONDITION AND LIQUIDITY

 The Company has a history of recurring losses with an accumulated deficit of $ 127,329,859 at December 31, 2023 and net loss of $ 869,016 for the year then ended. The Company's working capital has increased by $ 257,797 from the prior year. The Company has cash flows provided by operations of $ 582,589. During 2023, the Company sought to improve future cash flows from operating activities through execution of new sales agreements, improving operating cost control measures, making improvements in current manufacturing processes, pursuing new service contracts, and developing new products. The Company's net loss was $ 869,016 in 2023, compared to net income of $ 303,238 in 2022. This is a decrease in net income of $ 1,172,254. This decrease in net income is largely the result of the approximate $ 1.8 million gain on sale of assets that occurred in 2022.

 During the year ended December 31, 2023, the Company continued to focus on its long-standing core business segments, which consist of its Theranostics Products (formerly Radiochemical Products), Cobalt Products, and Nuclear Medicine Standards, and in particular, the pursuit of new business opportunities within those segments.

 Due to changes in the nuclear industry, the Company's plans for the design and construction of a large-scale uranium de-conversion and fluorine extraction facility were placed on hold. The Company will continue to incur some costs associated with the maintenance of licenses and other necessary project investments for the proposed facility. The Company holds a Nuclear Regulatory Commission ("NRC") construction and operating license for the depleted uranium facility as well as the property agreement with Lea County, New Mexico, where the plant is intended to be constructed. The NRC license for the de-conversion facility is a forty ( 40) year operating license and is the first commercial license of this type issued in the United States. There are no other companies with a similar license application under review by the NRC. Therefore, the NRC license represents a significant competitive barrier, and the Company believes that it provides it with a very valuable asset. In February 2024, the Company entered into and Asset Purchase Agreement to sell all the assets associated with the planned de-conversion facility. The Company expects to close the transaction in approximately 12 to 24 months, subject to satisfaction of certain closing condition. Proceeds from this sale would be $ 12.5 million in total.

 The Company expects that cash from operations and its current cash balance will be sufficient to fund operations for the next twelve months. Future liquidity and capital funding requirements will depend on numerous factors, including, contract manufacturing agreements, commercial relationships, technological developments, market factors, available credit, and voluntary warrant redemption by shareholders. There is no assurance that additional capital and financing will be available on acceptable terms to the Company or at all.

 F-

 NOTE 3 – PURCHASED ASSET AND INVESTMENTS

 AMICI Asset Purchase Agreement and Medical Devices

 In June 2023, the Company acquired several medical devices with related assets and intellectual property rights from AMICI, Inc. and has been working on FDA 510k transfers, and start-up of manufacturing. The Company anticipates the assets will be part of a fifth business segment of the Company called "Medical Devices" that is planned to start by mid-year 2024.

 NOTE 4 – INVENTORIES

 Inventories at December 31, 2023 totaled $ 927,111, and inventories at December 31, 2022 totaled $ 744,793. Our inventory consists of work in process material for our Theranostics Products, Cobalt Products, and Nuclear Medicine Products segments.

 NOTE 5 – PROPERTY, PLANT AND EQUIPMENT

 Property, plant and equipment are summarized as follows at December 31, 2023 and 2022:

 2023

 2022

 Estimated Useful Lives (in years)

 Furniture and fixtures

 $
 287,463

 $
 284,020

 3 - 5

 Transportation equipment

 114,708

 114,708

 5 - 10

 Plant and improvements

 526,205

 501,334

 Production equipment

 4,569,980

 3,997,193

 5 - 10

 5,498,356

 4,897,255

 Accumulated depreciation

 ( 3,033,279
)

 ( 2,872,769
)

 $
 2,465,077

 $
 2,024,486

 Included in fixed assets are assets purchased during the planning phase for the construction of a de-conversion facility in Hobbs, New Mexico; these de-conversion facility assets are included in the DUF6 Asset Sale. Although construction of the facility is currently on hold, the Company has determined that these assets continue to have future economic value based on what it considers a strong likelihood that construction of the facility will occur in the future.

 Depreciation expense was $ 160,567 and $ 185,193 for the years ended December 31, 2023 and 2022, respectively.

 F-

 NOTE 6 – PATENTS AND OTHER INTANGIBLE ASSETS

 The Company owns certain patents and patents pending related to a fluorine extraction process (FEP), for various uses of some fluoride gases as fluorinating agents, and some of the RadQual nuclear medicine calibration sources. The FEP patents were developed in an effort to expand the potential markets for the high purity fluoride gases the Company had planned to produce with its fluorine extraction process. The feasibility of expanding the fluoride gas markets through the use of this patented technology is uncertain. The RadQual product patents were developed to give RadQual a unique competitive advantage by offering calibration standards exclusive to RadQual.

 In October 2012, the NRC issued the Company a 40 -year construction and operating license for the de-conversion facility. Capitalized costs associated with the licensing and planning process for this license are being amortized over the 40 -year life of the license.

 The following table summarizes the patent and intangible activity for the years ended December 31, 2023 and 2022:

 2023

 Beginning

 $
 5,370,878

 Additions

 —

 Disposals

 —

 Ending

 5,370,878

 Accumulated amortization

 ( 1,832,420
)

 $
 3,538,458

 During the year ended December 31, 2023 the Company recognized $ 164,895 of amortization expense, and during the year ended December 31, 2022, the Company recognized $ 164,370 of amortization expense.

 Patent and other intangible asset amortization is based on the remaining life of the asset and estimated amortization expense is as follows:

 Years ending December 31,

 2025

 $

 2026

 2027

 2028

 2029

 Thereafter

 2,713,983

 $
 3,538,458

 F-

 NOTE 7 – CONVERTIBLE DEBENTURES AND NOTES PAYABLE

 Convertible debentures

 As discussed in Note 9 below, in February 2017, pursuant to a private placement transaction with certain investors, the Company issued 3,433 shares of Series C Preferred Stock and warrants. In connection with the private placement, two investors holding convertible debentures exchanged aggregate principal totaling $ 205,000 of the convertible debentures for shares of the Series C Preferred Stock and warrants.

 Notes payable

 In December 2013, the Company entered into a promissory note agreement with its then Chairman of the Board and one of its major shareholders, pursuant to which the Company 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 the Company's common stock. In connection with the 2013 Promissory Note, each of the two lenders was issued 5,000,000 Class L warrants to purchase shares of our common stock at an exercise price of $ 0.06 per share (Class L Warrants). The Class L Warrants were immediately exercisable. The fair value of these warrants issued totaled $ 384,428 and was recorded as a debt discount amortized over the life of the 2013 Promissory Note. The Company calculated a beneficial conversion feature of $ 15,464 which was accreted to interest expense over the life of the 2013 Promissory Note. In June 2014, we renegotiated the terms of the 2013 Promissory Note. Pursuant to the modification, the maturity date was extended to December 31, 2017 and each lender was granted an additional 7,500,000 Class L Warrants to purchase shares of the Company's common stock at an exercise price of $ 0.06 per share. The Class L Warrants were immediately exercisable. In February 2017, the 2013 Promissory Note was further modified to extend the maturity date to December 31, 2020, with all remaining terms unchanged. On December 23, 2018, all 25,000,000 Class L Warrants expired. In December 2019, the 2013 Promissory Note was further modified to extend the maturity date to December 31, 2021, with all remaining terms unchanged. In January 2022, the 2013 Promissory Note was further modified to extend the maturity date to December 31, 2023, with all remaining terms unchanged. In February 2024, the 2013 Promissory Note was further modified to extend the maturity date to March 31, 2026, with all remaining terms unchanged.

 At December 31, 2023, accrued interest payable on the 2013 Promissory Note was $ 301,734.

 In April 2018, the Company borrowed $ 120,000 from its then Chief Executive Officer and Chairman of the Board pursuant to a promissory note (the 2018 Promissory Note). The 2018 Promissory Note accrues interest at 6 % per annum, which is payable upon maturity of the 2018 Promissory Note. The 2018 Promissory Note was originally unsecured and originally matured on August 1, 2018. At any time, the holder of the 2018 Promissory Note may elect to have any or all of the principal and accrued interest settled with shares of our common stock based on the average price of the shares over the previous 20 trading days. In June 2018, the 2018 Promissory Note was modified to extend the maturity date to March 31, 2019 with all other provisions remaining unchanged. In February 2019, the 2018 Promissory Note was modified to extend the maturity date to July 31, 2019 with all other provisions remaining unchanged. In July 2019, the 2018 Promissory Note was modified to extend the maturity date to January 31, 2020 with all other provisions remaining unchanged. In December 2019, the 2018 Promissory Note was modified to extend the maturity date to December 31, 2021 and the 2018 Promissory Note was modified to become secured by company assets, with all other provisions remaining unchanged. In December 2021, the 2018 Promissory Note was modified to extend the maturity date to December 31, 2023 with all other provisions remaining unchanged. In December 2023, the 2018 Promissory Note was modified to extend the maturity date to January 31, 2025. In February 2024, the 2018 Promissory Note was modified to extend the maturity date to March 31, 2026.

 At December 31, 2023, accrued interest on the 2018 Promissory Note totaled $ 40,970.

 On December 20, 2019, the Company entered into a promissory note agreement with four of the Company's major shareholders (the 2019 Promissory Note). The 2019 Promissory Note authorizes the Company to borrow up to $ 1,000,000. As of December 31, 2019, the Company had borrowed $ 675,000 under the 2019 promissory note. In February 2020, the Company borrowed an additional $ 325,000. 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 trading days preceding the payment. In connection with the 2019 Promissory Note, the lenders were issued warrants totaling 30,000,000 warrants to purchase shares of the Company's common stock at $ 0.045 per share (Class O Warrants). In January 2023, 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 extend the maturity date to March 31, 2026.

 At December 31, 2023, accrued interest on the 2019 Promissory Note totaled $ 159,131.

 F-

 Notes payable as of December 31, 2023 and 2022 consist of the following:

 2023

 2022

 Note payable to related parties bearing interest at 6 % all principal and interest due on March 31, 2026, secured

 $
 120,000

 $
 120,000

 Note payable to related parties bearing interest at 4 % all principal and interest due on March 31, 2026, secured

 1,000,000

 1,000,000

 Note payable to related parties bearing interest at 6 % all principal and interest due on March 31, 2026, secured

 500,000

 500,000

 Note payable to a financial institution bearing interest at 5.99 % monthly installments of $ 1,046, secured

 34,365

 44,521

 Note payable for purchase contract bearing interest at 5 % monthly installments of $ 4,442, secured

 —

 13,233

 Note payable for purchase contract bearing no interest until the 25th month after the anniversary of the closing interest at 8 % thereafter monthly installments of $ 10,000

 392,100

 Total notes payable

 2,046,465

 1,677,754

 Less: current maturities

 ( 155,733
)

 ( 643,348
)

 Notes payable, net of current installments and debt discount

 $
 1,890,732

 $
 1,034,406

 Maturities of convertible debt and notes payable, excluding debt discount and debt issuance costs, at December 31, 2023, are as follows:

 Years ending December 31,

 2024

 $
 155,733

 2025

 124,838

 2026

 1,745,595

 2027

 20,299

 Thereafter

 —

 $
 2,046,465

 F-

 NOTE 8 – LEASE OBLIGATIONS

 The Company leases office and warehouse space under operating leases. Right-of-use assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments under the lease. Operating lease, right-of-use assets, and liabilities are recognized at the lease commencement date based on the present value of lease payments over the reasonably certain lease term. The implicit rates with the Company's operating leases are generally not determinable and the Company uses its incremental borrowing rate at the lease commencement date to determine the present value of its lease payments. The determination of the Company's incremental borrowing rate requires judgement. The company determines its incremental borrowing rate for each lease using its then-current borrowing rate. Certain of the Company's leases include options to extend or terminate the lease. The Company establishes the number of renewal options periods used in determining the operating lease term based upon its assessment at the inception of the operating lease. The option to renew the lease may be automatic, at the option of the Company, or mutually agreed to between the landlord and the Company. Once the facility lease term has begun, the present value of the aggregate future minimum lease payments is recorded as a right-of-use asset. Lease expense is recognized on a straight-line basis over the term of the lease.

 Year Ended

 2023

 2022

 Operating lease costs

 $

 $
 285,159

 Short-term operating lease costs

 7,200

 12,066

 Financing lease expense:

 Amortization of right-of-use assets

 6,023

 4,172

 Interest on lease liabilities

 Total financing lease expense

 6,418

 4,821

 Total lease expense

 $
 300,726

 $
 302,046

 Right-of-use assets obtained in exchange for new operating lease liabilities

 $
 —

 $
 —

 Right-of-use assets obtained in exchange for new financing lease liabilities

 $
 —

 $
 —

 Weighted-average remaining lease term (years) - operating leases

 11.1

 12.1

 Weighted-average remaining lease term (years) - financing leases

 1.2

 1.1

 Weighted-average discount rate - operating leases

 6.75
 %

 6.75
 %

 Weighted-average discount rate - financing leases

 6.75
 %

 7.93
 %

 Maturities of lease liabilities as of December 31, 2023, were as follows:

 Operating leases

 Finance leases

 For the years ended December 31,

 2024

 $

 $
 2,929

 2025

 —

 2026

 —

 2027

 —

 2028

 —

 Thereafter

 1,738,084

 —

 Total minimum lease obligations

 3,173,624

 2,929

 Less-amount representing interest

 ( 941,380
)

 ( 97
)

 Present value of minimum lease obligations

 2,232,244

 2,832

 Current maturities

 ( 140,733
)

 ( 2,832
)

 Lease obligations, net of current maturities

 $
 2,091,511

 $
 —

 F-

 NOTE 9 – SHAREHOLDERS' EQUITY, REDEEMABLE CONVERTIBLE PREFERRED STOCK, OPTIONS AND WARRANTS

 Warrants

 On February 14, 2022, 515,000 Class M Warrants were exercised for an exercise price of $ 0.12 per share. The Company received $ 61,800 of proceeds as a result of the exercise. On February 17, 2022 the 3,625,000 remaining unexercised Class M Warrants expired. On May 12, 2022, the 2,925,000 remaining unexercised Class N Warrants expired.

 The following table summarizes warrant activity for the years ended December 31, 2023 and 2022:

 Warrants

 Outstanding Shares

 Weighted Average Exercise

 Outstanding at December 31, 2021

 7,065,000

 $
 0.11

 —

 —

 ( 515,000
)

 0.12

 ( 6,550,000
)

 0.11

 Outstanding at December 31, 2022

 —

 —

 —

 —

 —

 —

 —

 —

 Outstanding at December 31, 2023

 —

 $
 —

 At December 31, 2023 and December 31, 2022 there were no outstanding warrants.

 Mandatorily Redeemable Convertible Preferred Stock

 The Company is authorized to issue up to 5,000,000 shares of preferred stock, par value $ 0.01 per share. The Board is authorized to set the distinguishing characteristics of each series prior to issuance, including the granting of limited or full voting rights, rights to the payment of dividends and amounts payable in event of liquidation, dissolution or winding up of the Company.

 At December 31, 2021, there were 675 shares of the Series B Convertible Redeemable Preferred Stock (the "Series B Preferred Stock") outstanding with a mandatory redemption date of May 2022 at $ 1,000 per share, or $ 675,000 in aggregate redemption value. The Series B Preferred Stock were convertible into common stock at a conversion price of $ 2.00 per share. These preferred shares carried no dividend preferences. Due to the mandatory redemption provision, the Series B Preferred Stock were classified as a liability in the accompanying consolidated balance sheets. In 2021, 175 shares of Series C Preferred Stock were converted into shares of common stock. On May 31, 2022, the Company paid with shares of the Company's common stock all 675 outstanding Series B Preferred Stock outstanding with a mandatory redemption date of May 2022 at $ 1,000 per share or $ 675,000. The May 31, 2022 average price of the Company's common stock was $ 0.08 per share. The Company issued 8,437,500 shares of common stock to satisfy the $ 675,000 redemption amount.

 At December 31, 2022 and December 31, 2023, there were 4,063 total shares of the Series C Preferred Stock outstanding. The Series C Preferred Stock are convertible at the option of the investors at any time into shares of the Company's common stock at an initial conversion price equal to $ 0.10 per share, subject to adjustment. At any time after February 17, 2019, if the volume-weighted average closing price of the Company's common stock over a period of 90 consecutive trading days is greater than $ 0.25 per share, the Company may redeem all or any portion of the outstanding Series C Preferred Stock at the original purchase price per share ($ 1,000) plus any accrued and unpaid dividends, payable in shares of common stock. All outstanding shares of Series C Preferred Stock were to be redeemed by the Company on February 17, 2022 at the original purchase price per share, payable in cash or shares of common stock, at the option of the holder. In February 2022, based on approval of a majority of the Preferred C Holders, the Company extended the redemption date of the Series C Preferred Stock to February 17, 2023. In December 2022, based on approval of a majority of the Preferred C Holders, the Company extended the redemption date of the Series C Preferred Stock to February 17, 2025. Holders of Series C Preferred Stock do not have any voting rights, except as required by law and in connection with certain events as set forth in the Statement of Designation of the Series C Preferred Stock.

 The Company pays dividends on the Series C Preferred Stock in February each year. Dividends payable totaled $ 243,780 in February 2023 and February 2022. 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 2,266,500 shares of common stock in lieu of a dividend payment of $ 90,660 in 2023 and 2,271,980 shares of common stock in lieu of a dividend payment of $ 204,480 in 2022. $ 153,120 of dividend payable was settled with cash in 2023 and $ 39,300 was settled with cash in 2022.

 F-

 The outstanding 4,063 shares of Series C Preferred Stock originated as follows:

 On February 17, 2017, the Company entered into subscription agreements with certain investors, including two of the Company's directors, for the sale of (i) an aggregate of 3,433 shares of Series C Preferred Stock, and (ii) Class M warrants to purchase an aggregate of 17,165,000 shares of the Company's common stock (the Class M Warrants), for gross proceeds of $ 3,433,000. The Series C Preferred Stock accrues dividends at a rate of 6 % per annum, payable annually on February 17 th of each year, commencing on February 17, 2018.

 The Class M Warrants were immediately exercisable at an exercise price of $ 0.12 per share, subject to adjustment as set forth in the warrant, and expired in February 2022.

 The Company allocated the proceeds to the Series C Preferred Stock and Class M Warrants based on their relative fair value, which resulted in $ 2,895,379 being allocated to the Series C Preferred Stock and $ 537,621 being allocated to the Class M Warrants. The allocated Class M Warrant value was recorded as a discount to the Series C Preferred Stock and will be amortized to interest expense over the five -year life of the warrants. At December 31, 2022, the balance of the discount to the Series C Preferred Stock was $ 13,440 and the net carrying value of these 3,433 shares of Series C Preferred Stock was $ 3,419,560. At December 31, 2023, the balance of the discount to the Series C Preferred Stock was $ 0 and the net carrying value of these 3,433 shares of Series C Preferred Stock was $ 3,433,000.

 On March 24, 2017, the Company entered into an Amendment to the 8 % Convertible Notes (the Amendment), pursuant to which the 8 % Convertible Notes (the Notes) issued by the Company in July 2012 were amended to give noteholders certain additional rights. Pursuant to the Amendment, the Notes were modified to provide each holder the right, at the holder's option and exercisable prior to May 12, 2017, to convert all or any portion of the principal amount of the Notes, plus accrued but unpaid interest, into shares of Series C Preferred Stock at a conversion price of $ 1,000 per share. Holders that elected to convert their Notes into Series C Preferred Stock received a Class N Warrant to purchase up to 3,750 shares of the Company's common stock for each share of Series C Preferred Stock received upon conversion of the Notes, with each Warrant having a five -year term, a cashless exercise feature, and an exercise price of $ 0.10 per share of common stock. On May 12, 2017, the Company completed the retirement of $ 1,835,000 of the Notes in early cash redemptions, and $ 780,000 of the Notes were converted into an aggregate of 780 shares of Series C Preferred Stock and Class N Warrants to purchase an aggregate of 2,925,000 shares of the Company's common stock. In 2021, 150 shares of Series C Preferred Stock were converted into shares of common stock.

 The Class N Warrants were immediately exercisable at an exercise price of $ 0.10 per share, subject to adjustment as set forth in the warrant, and expired in May 2022.

 The Company allocated the proceeds to the Series C Preferred Stock and Class N Warrants based on their relative fair value, which resulted in $ 675,947 being allocated to the Series C Preferred Stock and $ 104,053 being allocated to the Class N Warrants. The allocated Class N Warrant value was recorded as a discount to the Series C Preferred Stock and will be amortized to interest expense over the five -year life of the warrants. At December 31, 2022, the balance of the discount to the Series C Preferred Stock was $ 4,737 and the net carrying value of 630 outstanding shares of Series C Preferred Stock was $ 625,263. At December 31, 2023, the balance of the discount to the Series C Preferred Stock was $ 0 and the net carrying value of 630 shares of Series C Preferred Stock was $ 630,000.

 Employee Stock Purchase Plan

 In September 2004, the Company's Board approved an employee stock purchase plan for an aggregate of up to 2,000,000 shares of the Company's common stock. The plan allows employees to deduct up to 15 % of their salary or wages each pay period to be used for the purchase of common stock at a discounted rate. The common shares will be purchased at the end of each three -month offering period or other period as determined by the Board. The plan is intended to qualify as an "employee stock purchase plan" under Section 423 of the Internal Revenue Code. An amendment and restatement of the plan was approved in July 2020 by the Company's shareholders, which increased the number of shares available for purchase by 3,000,000 shares. At December 31, 2023 there were 2,224,544 shares available under the employee stock purchase plan.

 During 2023 and 2022, the Company issued 316,866 and 245,081 shares of common stock to employees for proceeds of $ 8,398 and $ 14,771, respectively, in accordance with the employee stock purchase plan.

 F-

 2015 Incentive Plan

 In April 2015, the Company's Board of Directors approved the International Isotopes Inc. 2015 Incentive Plan (as amended, the "2015 Plan") which was subsequently approved by the Company's shareholders in July 2015. The 2015 Plan was amended and restated in July 2018 to increase the number of shares authorized for issuance under the 2015 plan by an additional 20,000,000 shares. The 2015 Plan provides for the grant of incentive and non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and units, and other stock or cash-based awards. The 2015 Plan amends and restates the Company's Amended and Restated 2006 Equity Incentive Plan (the "2006 Plan").

 The 2015 Plan authorizes the issuance of up to 80,000,000 shares of common stock, plus 11,089,967 shares authorized, but not issued under the 2006 Plan. Unless earlier terminated, the 2015 Plan will terminate on July 13, 2025. At December 31, 2023 there were 20,292,546 shares available for issuance under the 2015 Plan.

 Non-Vested Stock Grants

 Pursuant to an employment agreement with its Chief Executive Officer, the Company awarded 560,000 fully vested shares of common stock to its then Chief Executive Officer in February 2023 under the 2015 Plan. The number of shares awarded was based on a $ 28,000 stock award using a price of $ 0.05 per share. The employment agreement provides that the number of shares issued will be based on the average closing price of common stock for the 20 trading days prior to issue date but not less than $ 0.05 per share. Compensation expense recorded pursuant to this stock grant was $ 22,400, which was determined by multiplying the number of shares awarded by the closing price of the common stock on February 28, 2023, which was $ 0.04 per share. The Company withheld 216,440 shares of common stock to satisfy the employee's payroll tax obligations in connection with this issuance. The net shares issued on February 28, 2023 totaled 343,560.

 Pursuant to an employment agreement with its Chief Executive Officer, the Company awarded 307,692 fully vested shares of common stock to its Chief Executive Officer in February 2022 under the 2015 Plan. The number of shares awarded was based on a $ 28,000 stock award using a price of $ 0.091 per share. The employment agreement provides that the number of shares issued will be based on the average closing price of common stock for the 20 trading days prior to issue date but not less than $ 0.05 per share. Compensation expense recorded pursuant to this stock grant was $ 27,692, which was determined by multiplying the number of shares awarded by the closing price of the common stock on February 28, 2021, which was $ 0.09 per share. The Company withheld 120,461 shares of common stock to satisfy the employee's payroll tax obligations in connection with this issuance. The net shares issued on February 28, 2022 totaled 187,231.

 Stock Options

 A summary of the stock options issued under the Company's equity plans is as follows:

 Stock Options

 Outstanding Shares

 Weighted Average Exercise Price

 Weighted Average Remaining Contractual Life

 Average Intrinsic Value

 Outstanding at December 31, 2021

 20,777,500

 0.06

 627,615

 8,150,000

 0.09

 ( 1,200,000
)

 0.04

 57,000

 ( 1,734,000
)

 0.08

 Outstanding at December 31, 2022

 24,993,500

 0.07

 —

 3,100,000

 0.04

 —

 ( 3,306,000
)

 0.08

 Outstanding at December 31, 2023

 24,787,500

 0.05

 5.4

 17,000

 Exercisable at December 31, 2023

 19,372,500

 $
 0.05

 4.6

 $
 16,000

 The total intrinsic value of stock options outstanding at December 31, 2023 was $ 16,000. The intrinsic value for stock options outstanding is calculated as the amount by which the quoted price of $ 0.04 of the Company's common stock as of the end of 2023 exceeds the exercise price of the options.

 F-

 The Company recognized $ 199,554 and $ 280,393 of compensation expense related to these options for the years ended December 31, 2023 and 2022, respectively. At December 31, 2023, the remaining compensation expense was $ 99,768 and will be recognized over 1.71 years.

 During the year ended December 31, 2023, no qualified stock options were exercised.

 In March 2022, 1,000,000 qualified stock options were exercised under a cashless exercise. The company withheld 388,889 shares to satisfy the exercise price and issued 611,111 shares of common stock. The options exercised were granted under the 2015 Plan, and, accordingly, there was not any income tax effect in the condensed consolidated financial statements for the year ended December 31, 2023.

 In August 2022, 200,000 qualified stock options were exercised under a cashless exercise. The company withheld 162,163 shares to satisfy the exercise price and issued 37,837 shares of common stock. The options exercised were granted under the 2015 Plan, and, accordingly, there was not any income tax effect in the condensed consolidated financial statements for the year ended December 31, 2023.

 During the year ended December 31, 2023, the Company granted an aggregate of 3,100,000 qualified stock options to 32 of its employees. These options vest over a five -year period with the first vesting at the date of grant and expiration at ten -year anniversary for all grants. The exercise price for these granted options was $ 0.04 and $ 0.06 per share. The options issued during the year ended December 31, 2023 have a fair value of $ 82,176, as estimated on the date of issue using the Black-Scholes options pricing model with the following weighted-average assumptions: risk free interest rate of 3.94 % to 4.26 %, expected dividend yield rate of 0 %, expected volatility of 68.65 % to 79.21 % and an expected life between 5 and 7 years.

 During the year ended December 31, 2022, the Company granted an employee 1,000,000 qualified stock options with an exercise price of $ 0.10 per share and 25,000 qualified stock options with an exercise price of $ 0.08 per share to one of its employees and a total of 125,000 qualified stock options with an exercise price of $ 0.03 per share to two other employees. These options vest over a five -year period with the first vesting at the one -year anniversary of the grant and expiration at ten -year anniversary for all grants. On February 21, 2022, the Compensation Committee granted 3,000,000 qualified stock options to the Company's executive officers and 4,000,000 non-qualified stock options to members of the Board. The exercise price for these options was $ 0.09 per share. 2,000,000 of the options granted to an executive officer vest one half immediately and one half at the one -year anniversary of the grant. The remaining executive officer and board member options vest one fourth immediately and one fourth each subsequent year. All these granted options expire at the ten -year anniversary of the grant. The options issued during the year ended December 31, 2022 have a fair value of $ 442,295 as estimated on the date of issue using the Black-Scholes options pricing model with the following weighted-average assumptions: risk free interest rate of 1.37 % to 4.14 %, expected dividend yield rate of 0 %, expected volatility of 65.19 % to 70.09 % and an expected life between 5 and 7.5 years.

 All options exercised were issued under a qualified plan and accordingly, there is no income tax effect in the accompanying financial statements.

 F-

 Restricted Stock Units

 A summary of the non-vested restricted stock units issued under the Company's equity plans is as follows:

 Non-Vested Restricted Stock Units

 Number of restricted stock units

 Weighted average grant-date fair value

 Outstanding at December 31, 2020

 —

 $ —

 —

 —

 —

 Outstanding at December 31, 2021

 —

 —

 Vested

 —

 Forfeited / Cancelled

 —

 Outstanding at December 31, 2022

 —

 7,250,000

 0.04

 Vested

 ( 250,000

)
 0.04

 Forfeited / Cancelled

 —

 Outstanding at December 31, 2023

 7,000,000

 $ 0.04

 The Company recognized $ 121,202 and $ 0 of compensation expense related to these restricted stock units ("RSU") for the years ended December 31, 2023 and 2022, respectively. At December 31, 2023, the remaining compensation expense was $ 168,798 and will be recognized over 1.72 years.

 On March 3, 2023, the Compensation Committee of our Board of Directors approved the cancellation of 1,000,000 outstanding stock options held by a member of the Board in exchange for the grant of 750,000 RSUs. The RSUs vest over a three -year period beginning on the grant date.

 On May 8, 2023, pursuant to an executive employment agreement entered into with its newly appointed President, the Company granted 6,500,000 RSUs to its President. 1,500,000 RSUs vest on April 17, 2024, 2,000,000 RSUs vest on April 17, 2025, and 3,000,000 RSUs vest on April 17, 2026. Each RSU represents the contingent right to receive one share of the Company's common stock.

 On September 5, 2023, pursuant to an employment agreement with its President, the Company awarded 2,500,000 fully vested RSUs under the 2015 Plan to the Company's President upon his promotion to Chief Executive Officer. Compensation expense recorded pursuant to this RSU award was $ 150,000, which was determined by multiplying the number of shares awarded by the closing price of the common stock on September 5, 2023, which was $ 0.06 per share. The Company withheld 778,972 shares of common stock to satisfy payroll tax obligations in connection with this issuance. The net shares issued on September 5, 2023 totaled 1,721,028.

 F-

 NOTE 10 – INCOME TAXES - TO BE UPDATED

 The Company paid no federal or state income taxes during 2023 and 2022. Income tax benefit on losses differed from the amounts computed by applying the recently enacted U.S. federal income tax rate of 21 % to pretax losses as a result of the following:

 2023

 2022

 Income tax expense (benefit)

 $
 ( 182,493
)

 $
 72,207

 Book and tax differences

 40,577

 ( 72,207
)

 State taxes net of federal benefit

 —

 —

 Change in valuation allowance

 141,916

 —

 $
 —

 $
 —

 The tax effects of temporary differences that give rise to significant portions of the Company's deferred tax assets (liabilities) as of December 31, 2023 and 2022 are presented below:

 2023

 2022

 Deferred income tax asset

 $
 —

 $
 —

 Net operating loss carryforward

 7,918,996

 7,736,618

 Valuation allowance

 ( 7,476,180
)

 ( 7,363,815
)

 Total deferred income tax asset

 442,816

 372,803

 Deferred income tax liability - depreciation

 ( 442,816
)

 ( 372,803
)

 Deferred tax asset (liability)

 $
 —

 $
 —

 At December 31, 2023, the Company had net operating losses of approximately $ 37,000,000 that will begin to expire in 2024. The valuation allowances for 2023 and 2022 have been applied to offset the deferred tax assets in recognition of the uncertainty that such benefits will be realized.

 In accordance with GAAP, the Company has analyzed its filing positions in all jurisdictions where it is required to file income tax returns for the open tax years in such jurisdictions. The Company currently believes that all significant filing positions are highly certain and that all of its significant income tax filing positions and deductions would be sustained upon audit. Therefore, the Company has no significant reserves for uncertain tax positions, and no adjustment to such reserves was required by GAAP. No interest or penalties have been levied against the Company and none are anticipated, therefore no interest or penalty has been included in the provision for income taxes in the consolidated statements of operations.

 The Internal Revenue Code contains provisions which reduce or limit the availability and utilization of net operating loss carry forwards in the event of a more than 50% change in ownership. If such an ownership change occurs with the Company, the use of these net operating losses could be limited.

 F-

 NOTE 11 – COMMITMENTS AND CONTINGENCIES

 Dependence on Third Parties

 Sales during 2023 to the Company's top three customers was approximately 22 % of its total gross revenue. The Company is making efforts to reduce its dependency on a small number of customers by expanding both domestic and foreign.

 The production of Cobalt is dependent upon the DOE, and its prime operating contractor, which controls the reactor and laboratory operations at the ATR located outside of Idaho Falls, Idaho. On October 2, 2014, the Company signed a ten -year contract with the DOE for the irradiation of cobalt targets for the production of cobalt- 60. The Company will be able to purchase cobalt targets for a fixed price per target and with an annual 5 % escalation in price. The contract term is October 1, 2014, through September 30, 2024. However, the DOE may end the contract if it determines termination is necessary for the national defense, security or environmental safety of the U.S. If this were to occur, all payments made by the Company would be refunded.

 The key isotope materials used to manufacture our radiopharmaceutical product and nuclear medicine reference standards are supplied to the Company through agreements with several suppliers. The loss of any of these suppliers could adversely affect operating results by causing a delay in production or a possible loss of sales.

 Contingencies

 Because all the Company's business segments involve the handling or use of radioactive material, the Company is required to have an operating license from the NRC and specially trained staff to handle these materials. The Company has amended this operating license numerous times to increase the amount of material permitted within the Company's facility. Although this license does not currently restrict the volume of business operation performed or projected to be performed in the upcoming year, additional processing capabilities and license amendments could be implemented that would permit processing of other reactor-produced radioisotopes by the Company. The financial assurance required by the NRC to support this license has been provided for with a surety bond and a restricted money market account, in the amount of $ 880,752, held with North American Specialty Insurance Company and Merrill Lynch, respectively.

 In August 2011, we received land from Lea County, New Mexico, pursuant to a PPA, whereby the land was deeded to us for no monetary consideration. In return, we committed to construct a uranium de-conversion and FEP facility on the land. In order to retain title to the property, we were to begin construction of the de-conversion facility no later than December 31, 2014, and complete Phase I of the project and have hired at least 75 persons to operate the facility no later than December 31, 2015, although commercial operations need not have begun by that date. In 2015 the Company negotiated a modification to the PPA agreement that extended the start of construction date to December 31, 2015, and the hiring milestone to December 31, 2016. Those dates were not met and the Company is currently in the process of renegotiating a second modification to the agreement to further extend those dates. If we do not succeed in reaching an amendment to extend the performance dates in the agreement then we may, at our sole option, either purchase or re-convey the property to Lea County, New Mexico. The purchase price of the property would be $ 776,078, plus interest at the annual rate of 5.25 % from the date of the closing to the date of payment. We have not recorded the value of this property as an asset and will not do so until such time that sufficient progress on the project has been made to meet our obligations under the agreements for permanent transfer of the title.

 Defined Contribution Pension Plan

 The Company has a 401 (k) defined-contribution pension plan (the "401 (k) Plan"). Employees are eligible to participate in the Plan after completing six months of full-time service. Participants, under provision of Internal Revenue Code § 401 (k), may elect to contribute up to $ 23,000 of their compensation to the 401 (k) Plan which includes both before-tax and Roth after-tax contribution options. There was no employer matching contributions made for 2022. Beginning in 2023, the Company began matching contributions according to safe harbor 401 (k) rules. All amounts withheld for employee contributions for 2023 were paid into the 401 (k) Plan. The employer reserves the right to terminate the 401 (k) Plan at any time.

 F-

 NOTE 12 – ASSET RETIREMENT OBLIGATION

 As part of the Company's NRC operating license and as part of the Company's facility lease agreements, the Company is responsible for decommissioning any facilities upon termination or relocation of operations. The Company has developed a decommissioning funding plan using guidelines provided by the NRC and has estimated the cost of decommissioning the facility in Idaho Falls. The decommissioning cost estimate is reviewed at least annually to validate the assumptions and is revised as necessary when changes in the facility processes or radiological characteristics would affect the cost of decommissioning.

 In accordance with GAAP, the Company has recognized future estimated decommissioning costs as an asset retirement obligation and a related capitalized lease disposal cost. The Company has recognized period-to-period changes in the liability (accretion) in the statement of operations as amortization expense. Changes resulting from revisions to the original estimate are recorded as an increase or decrease to the capitalized lease disposal cost. Capitalized lease disposal cost is amortized on a straight-line basis over the remaining life of the facility operating lease agreement.

 The following summarizes the activity of the asset retirement obligation for the years ended December 31, 2023 and 2022:

 Obligation for Lease Disposal Cost

 Balance at December 31, 2021

 892,087

 Increase in lease disposal costs

 —

 Accretion expense/amortization expense

 50,291

 Balance at December 31, 2022

 942,378

 Increase in lease disposal costs

 478,959

 Accretion expense/amortization expense

 53,126

 Balance at December 31, 2023

 $
 1,474,463

 NOTE 13 – FAIR VALUE MEASUREMENTS

 At December 31, 2023 and 2022, the Company had no assets carried at fair value.

 F-

 NOTE 14 – REVENUE RECOGNITION

 Revenue from Product Sales

 The following tables present the Company's revenue disaggregated by business segment and geography, based on management's assessment of available data:

 Twelve Months Ended December 31, 2023

 Twelve Months Ended December 31, 2022

 U.S.

 Outside U.S.

 Total Revenues

 % of Total Revenues

 U.S.

 Outside U.S.

 Total Revenues

 % of Total Revenues

 $
 5,685,244

 $
 1,157,654

 $
 6,842,898

 %

 $
 5,338,010

 $
 707,757

 $
 6,045,767

 %

 932,915

 104,158

 1,037,073

 %

 1,137,066

 20,470

 1,157,536

 %

 Nuclear Medicine Products

 3,405,508

 981,906

 4,387,414

 %

 3,173,755

 804,930

 3,978,685

 %

 Fluorine Products

 —

 —

 —

 %

 —

 —

 —

 %

 $
 10,023,667

 $
 2,243,718

 $

 %

 $
 9,648,831

 $
 1,533,157

 $

 %

 Prior period amounts have not been adjusted under the modified retrospective approach.

 Under ASC Topic 606, the Company recognizes revenue when it satisfies a performance obligation by transferring control of the promised goods or services to its customers, in an amount that reflects the consideration the Company expects to receive in exchange for the product or service.

 Product sales consist of a single performance obligation that the Company satisfies at a point in time. All transactions in the Theranostics Products and nuclear medicine standards segments fall into this category. Most sales transactions in the cobalt products business segment fall into this category but other cobalt product sales are recorded as deferred income as discussed below. The Company recognizes product revenue when the following events have occurred: (a) the Company has transferred physical possession of the products, (b) the Company has a present right to payment, (c) the customer has legal title to the products, and (d) the customer bears significant risks and rewards of ownership of the products. Based on the Company's historical practices and shipping terms specified in the sales agreements and invoices, these criteria are generally met when the products are:

 •

 Invoiced.

 •

 Shipped from the Company's facilities ("FOB shipping point", which is the Company's standard shipping term). For these sales, the Company determined that the customer is able to direct the use of, and obtain substantially all of the benefits from, the products at the time the products are shipped.

 The Company's revenue consists primarily of products manufactured for use in the nuclear medicine industry, distribution of radiochemicals and radiopharmaceuticals, and cobalt source manufacturing. With the exception of certain unique products, the Company's normal operating cycle is considered to be one year. Due to the time required to produce some cobalt products, the Company's operating cycle for those products is considered to be two to three years. Accordingly, preliminary payments received on cobalt contracts, where shipment will not take place for greater than one year, have been recorded as unearned revenue on the Company's consolidated balance sheets and classified under current or long-term liabilities, depending upon estimated ship dates. For the year ended December 31, 2023, the Company reported current unearned revenue of $ 932,682. For the period ended December 31, 2022, the Company reported current unearned revenue of $ 879,365. These unearned revenues will be recognized as revenue in the periods during which the cobalt shipments take place.

 Contract Balances

 The Company records a receivable when it has an unconditional right to receive consideration after the performance obligations are satisfied. As of December 31, 2023, and December 31, 2022, accounts receivable totaled $ 1,469,298 and $ 1,596,886, respectively.

 Practical Expedients

 The Company has elected the practical expedient not to determine whether contacts with customers contain significant financing components.

 F-

 NOTE 15 – SEGMENT INFORMATION

 Information related to the Company's reportable operating business segments is shown below. The Company's reportable segments are reported in a manner consistent with the way management evaluates the businesses. The Company identifies its reportable business segments based on differences in products and services. The accounting policies of the business segments are the same as those described in the summary of significant accounting policies.

 The Company has identified the following business segments:

 The Nuclear Medicine Standards segment consists of the manufacture of sources and standards associated with Single Photon Emission Computed Tomography (SPECT) and Positron Emission Tomography (PET) imaging, patient positioning, and calibration or operational testing of dose measuring equipment for the nuclear pharmacy industry and includes consolidated reporting of the wholly-owned subsidiaries RadQual and TI Services.

 The Cobalt Products segment includes management of a cobalt irradiation contract, fabrication of cobalt capsules for teletherapy or irradiation devices, and recycling of expended cobalt sources.

 The Theranostics Products Segment (formerly called the Radiochemical Products Segment) includes production and distribution of Iodine- 131 generic drug product and various isotopically pure radiochemicals for medical, industrial, or research applications. These products are either directly produced by the Company or are purchased in bulk from other producers and distributed by the Company in customized packages and chemical forms tailored to customer and market demands. Iodine- 131 is the predominant radiochemical sold in this segment.

 The Fluorine Products segment historically involved the production of small-scale qualification samples of high purity fluoride gas for various industrial applications, as well as development of laboratory and analytical processes required to support the planned uranium de-conversion and fluorine extraction facility. During 2013, these testing activities were completed, and the pilot plant facility was closed. The Company has developed or acquired all patent rights to these processes. Future work in this segment will involve license support and, as financing permits, further work related to the de-conversion facility.

 F-

 The following presents certain segment information as of and for the years ended December 31, 2023 and 2022:

 Sale of product

 2023

 2022

 $
 6,842,898

 $
 6,045,767

 1,037,073

 1,157,536

 4,387,414

 3,978,685

 —

 —

 Corporate revenue

 —

 —

 $

 $

 Depreciation and amortization

 2023

 2022

 $
 25,287

 $
 63,493

 53,331

 49,202

 114,833

 114,990

 115,879

 115,598

 309,330

 343,283

 Corporate depreciation and amortization

 40,764

 30,913

 $
 350,094

 $
 374,196

 Segment income (loss)

 2023

 2022

 $
 3,037,375

 $
 4,182,151

 ( 126,504
)

 ( 95,779
)

 386,592

 39,223

 ( 105,099
)

 ( 139,860
)

 3,192,364

 3,985,735

 Corporate loss

 ( 4,061,380
)

 ( 3,682,497
)

 $
)

 $

 Expenditures for segment assets

 2023

 2022

 $
 3,420

 $
 3,379

 49,774

 17,105

 35,137

 75,478

 —

 4,100

 88,331

 100,062

 Corporate purchases

 60,727

 19,952

 $
 149,058

 $
 120,014

 Segment assets

 2023

 2022

 $
 849,351

 $
 1,075,252

 274,513

 406,629

 3,538,558

 2,744,394

 4,980,118

 5,147,325

 9,642,540

 9,373,600

 Corporate assets

 7,262,547

 6,870,996

 $
 16,905,087

 $
 16,244,596

 F-

 NOTE 16 – SUBSEQUENT EVENTS

 On February 8, 2024, International Isotopes Inc. ("INIS") and its wholly-owned subsidiary International Isotopes Fluorine Products, Inc. (together with INIS, the "Company") entered into an Asset Purchase Agreement (the "APA") with American Fuel Resources, LLC ("AFR"), pursuant to which the Company agreed to sell to AFR all the assets and certain specified liabilities of the Company's depleted uranium deconversion and fluorine extraction plant (the "DUF 6 Plant"), subject to the terms and conditions set forth in the APA (the "Transaction"). The Company expects to close the Transaction in approximately 12 to 24 months, subject to satisfaction of certain closing conditions (the "Closing").

 The purchase price to be paid by AFR in the Acquisition will consist of (i) $ 50,000 to be paid within five business days of execution of the APA (the "Prepayment"), and (ii) $ 12,500,000 paid at the Closing, less the Prepayment. The APA contains customary representations and warranties, covenants and indemnification provisions for a transaction of this nature. Closing of the Transaction is also subject to certain closing conditions, including (i) transfer of the U.S. Nuclear Regulatory Commission (NRC) license related to the DUF 6 Plant (the "NRC License Transfer") and (ii) transfer of Purchased Assets (as defined in the APA), which includes licenses, patents, agreements, and other records of the DUF 6 Plant.

 The APA may be terminated, among other things, (i) upon mutual written consent by the parties to the APA, (ii) by either party upon material breach of the APA by the other party, subject to applicable cure periods, and (iii) by AFR if there is reason to believe that the NRC License Transfer will not be completed by March 31, 2026.

 In February 2024, the 2013 Promissory Note was modified to extend the maturity date to March 31, 2026, with all remaining terms unchanged.

 In February 2024, the 2018 Promissory Note was modified to extend the maturity date to March 31, 2026, with all remaining terms unchanged.

 In February 2024, the 2019 Promissory Note was modified to extend the maturity date to March 31, 2026, with all remaining terms unchanged.