International Isotopes (INIS) Risk Analysis

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

Penalties for non-compliance can be significant, and violations can result in adverse publicity. Because of increasing security controls and regulations, it is likely that we may encounter additional regulations affecting the transportation, storage, sale, and import/export of radioactive materials.

We are subject to regulations governing the approval and certification of Type B packages authorized for the transport of our high activity (Type B quantities) cobalt-60 products and bulk materials. Foreign approved Type B packages may only be utilized for imports and exports of these products and bulk materials if the Type B package certificate has been revalidated by the DOT, which may take several months, but is currently provided at no cost. Domestic shipments of Type B quantities of radioactive materials require approval and certification through the NRC, which can cost millions of dollars and take years to complete. Given the cost difference to obtain a DOT revalidation of a foreign-approved Type B package, the availability of NRC certified Type B packages authorized for the domestic transport of cobalt-60 products and bulk materials is very limited. We are currently working with private and government parties to address the limited availability of Type B packages authorized for domestic use by the Company.

We are subject to ongoing FDA regulations, including complying with the FDA's current Good Manufacturing Practice (cGMP) requirements, and are subject to regular inspections of our facilities. If the FDA concludes that we have failed to comply with applicable regulations, it could take various actions including: issuing warning letters, imposing civil or criminal penalties, suspending or withdrawing regulatory product approvals, requiring product recalls, seizing products, enjoining future violations, or suspending or withdrawing some or all FDA facility approvals and licenses. Such enforcement actions could have a material adverse effect on our business, results of operations and financial condition. In April 2025, an FDA inspection at our Idaho Falls facility resulted in an Official Action Indicated ("OAI"). RNX developed and implemented corrective actions and submitted our 15-day, 90-day, and 180-day, 270-day, and subsequently submitted our 1-year updates. In response to the FDA Form 483 issued in April 2025, the Company completed all planned corrective and preventive actions. A request for inspection closeout was submitted to the FDA on June 19, 2026. In addition, the Company continues to execute initiatives designed to strengthen its Quality Management System, with all actions scheduled for completion in July 2026 completed on time. There is a risk of additional action by the FDA up to and including a manufacturing and distribution hold or a warning letter. While we believe that our corrective actions in response to the OAI will be deemed satisfactory, there can be no assurance that the FDA will not require additional corrective actions or take further actions as listed above. In the three months ended March 31, 2026, we had two product recalls. Both recalls are being conducted with the knowledge of the FDA. The first was a voluntary recall of our Generic Sodium Iodide I-131 due to the discovery of septum in our finished product vials on January 26, 2026. We had recently been approved by the FDA to implement new septum for our finished products, with this change we discovered the septum did not perform equivalent to our previous testing and validation. The impact from this recall was limited to that first batch. The second recall was on February 19, 2026. We discovered during an internal review that specific lots of our Dibasic Sodium Phosphate Capsules that may be provided with our Generic Sodium Iodide I-131 kits manufactured between 2022 and 2025 were out of specification for final capsule weight. We initiated a voluntary recall of specific lots of our Dibasic Sodium Phosphate Capsules shipped between August 19, 2024 to February 17, 2026. We notified affected pharmacies, clinics, and veterinarians of the voluntary recall. We continue to provide Generic Sodium Iodide I-131, which was not impacted, to the majority of our customers. Both voluntary recalls have been fully executed and are currently awaiting formal closeout by the FDA.