FORM 10-QSB
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
September 30, 2004
Commission file number:
0-22923
INTERNATIONAL ISOTOPES INC.
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(Exact name of registrant as specified in its charter)
Texas 74-2763837
------------------------ ------------------------------------
(State of incorporation) (IRS Employer Identification Number)
4137 Commerce Circle, Idaho Falls, Idaho 83401
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(Address of principal executive offices) (zip code)
208-524-5300
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(Registrant's telephone number, including area code)
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 [X] NO [ ]
As of November 3, 2004 the number of shares of Common Stock, $.01 par value,
outstanding was 159,066,260.
INTERNATIONAL ISOTOPES INC.
TABLE OF CONTENTS
Page No.
PART I - FINANCIAL INFORMATION:
Item 1 - Financial Statements:
Unaudited Condensed Consolidated Balance Sheets at
September 30, 2004 and December 31, 2003 3
Unaudited Condensed Consolidated Statements of Operations
for the Three Months Ended September 30, 2004 and 2003, and
for the Nine Months Ended September 30, 2004 and 2003 4
Unaudited Condensed Consolidated Statements of Cash Flows
for the Nine Months Ended September 30, 2004 and 2003 5
Notes to Unaudited Condensed Consolidated Financial
Statements 6
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
Item 3 - Controls and Procedures 11
PART II - OTHER INFORMATION:
Item 1 - Legal Proceedings 12
Item 5 - Other Information 12
Item 6 - Exhibits 12
SIGNATURES 13
CERTIFICATIONS
2
Part I. Financial Statements
Item 1. Financial Statements
INTERNATIONAL ISOTOPES INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Balance Sheets
September 30, December 31,
Assets 2004 2003
------------------------------------------------- ------------ ------------
Current assets:
Cash and cash equivalents $ 667,459 $ 160,216
Accounts receivable 502,153 203,152
Inventories 2,218,160 2,283,752
Prepaids and other current assets 67,605 190,979
------------ ------------
Total current assets 3,455,377 2,838,099
Long-term assets
Restricted certificate of deposit 152,239 150,573
Property, plant and equipment, net 844,790 617,287
Capitalized lease disposal costs, net of accumulated
amortization of $44,505 and $35,604 respectively 104,827 113,728
Patents, net of accumulated amortization 97,125 --
------------ ------------
Total long-term assets 1,198,981 881,588
------------ ------------
Total assets $ 4,654,358 $ 3,719,687
============ ============
Liabilities and Stockholders' Equity
-------------------------------------------------
Current liabilities
Accounts payable $ 301,031 $ 320,554
Accrued liabilities 211,549 150,475
Current installments of notes payable 28,000 756,725
------------ ------------
Total current liabilites 540,580 1,227,754
Long-term liabilities
Obligation for lease disposal costs 149,332 149,332
Notes payable, excluding current installments 2,260,467 898,664
Mandatorily redeemable preferred stock, $0.01
par value; 850 shares outstanding 850,000 850,000
------------ ------------
Total long-term liabilities 3,259,799 1,897,996
Stockholders' equity
Common stock, $0.01 par value; 250,000,000 shares
authorized; 159,064,660 and 139,363,046 shares
issued and outstanding, respectively 1,590,646 1,393,630
Additional paid-in capital 87,773,531 87,168,957
Accumulated deficit (88,510,198) (87,968,650)
------------ ------------
Total stockholders' equity 853,979 593,937
------------ ------------
Total liabilities and stockholders' equity $ 4,654,358 $ 3,719,687
============ ============
See accompanying notes to condensed consolidated financial statements.
3
INTERNATIONAL ISOTOPES INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Operations
Three Months ended September 30, Nine Months ended September 30,
------------------------------- -------------------------------
2004 2003 2004 2003
------------- ------------- ------------- -------------
Sale of product $ 985,072 $ 552,020 $ 2,195,756 $ 1,696,703
Cost of product 582,418 320,761 1,351,153 962,412
------------- ------------- ------------- -------------
Gross profit 402,654 231,259 844,603 734,291
------------- ------------- ------------- -------------
Operating costs and expenses:
Salaries and contract labor 175,735 129,196 494,425 342,948
General, administrative and consulting 215,055 172,464 744,034 726,314
Research and development 13,313 18,913 40,292 41,626
------------- ------------- ------------- -------------
Total operating expenses 404,103 320,573 1,278,751 1,110,888
------------- ------------- ------------- -------------
Operating loss (1,449) (89,314) (434,148) (376,597)
Other income (expense):
Other income (expense) 1,684 (1,986) 10,413 31,414
Interest income 493 548 1,833 3,053
Interest expense (40,591) (32,512) (119,646) (114,712)
------------- ------------- ------------- -------------
Total other expense (38,414) (33,950) (107,400) (80,245)
------------- ------------- ------------- -------------
Net Loss $ (39,863) $ (123,264) $ (541,548) $ (456,842)
============= ============= ============= =============
Net loss per common share - basic and diluted $ -- $ -- $ -- $ --
============= ============= ============= =============
Weighted common shares outstanding -
basic and diluted 159,064,660 102,871,252 147,936,831 98,007,969
============= ============= ============= =============
See accompanying notes to condensed consolidated financial statements.
4
INTERNATIONAL ISOTOPES INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Cash Flows
Nine Months ended September 30,
-------------------------------
2004 2003
----------- -----------
Cash flows from operating activities:
Net loss $ (541,548) $ (456,842)
Adjustments to reconcile net loss to net
cash used in operating activities
Depreciation and amortization 130,315 69,099
Loss on disposal of property, plant and equipment 380 394
Changes in operating assets and liabilities:
Accrued interest on restricted certificate of deposit (1,666) --
Accounts receivable (299,001) (71,467)
Prepaids and other assets 123,374 (76,999)
Inventories 65,592 69,561
Accounts payable and accrued liabilities 87,601 91,794
----------- -----------
Net cash used in operating activities (434,953) (374,460)
----------- -----------
Cash flows from investing activities:
Purchase of patents (105,000) --
Purchase of property, plant and equipment (341,422) (244,473)
Proceeds from sale of assets held for sale -- 262,235
----------- -----------
Net cash provided by (used in) investing activites (446,422) 17,762
----------- -----------
Cash flows from financing activities:
Proceeds from exercise of warrants 801,590 --
Offering costs -- (112,695)
Proceeds from issuance of debt 603,950 760,000
Principal payments on notes payable (16,922) (308,853)
----------- -----------
Net cash provided by financing activities 1,388,618 338,452
----------- -----------
Net change in cash and cash equivalents 507,243 (18,246)
Cash and cash equivalents at beginning of period 160,216 441,904
----------- -----------
Cash and cash equivalents at end of period $ 667,459 $ 423,658
=========== ===========
Supplemental disclosure of cash flow activities:
Cash paid for interest, net of amounts capitalized $ 60,893 $ 84,684
=========== ===========
Supplemental disclosure of noncash transactions:
Note payable converted from interest payable $ 46,050 $ --
Renewal/renogiation of note payable 733,595 --
Acquisition of equipment for note payable -- 17,523
Sale of assets held for sale through assumption of debt -- 345,295
Conversion of debt and accrued interest to rights offering -- 906,895
Common stock issued in rights offering for note receivable -- 406,868
See accompanying notes to condensed consolidated financial statements
5
INTERNATIONAL ISOTOPES INC. AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements
(1) The Company and Basis of Presentation
International Isotopes Inc (the Company) was incorporated in Texas in November
1995. The Company owns 100% of the outstanding common shares of International
Isotopes Idaho, Inc. (I4) and Gazelle Realty Inc. Gazelle Realty Inc. was
dissolved in December 2003.
Nature of Operations - The Company is a manufacturer of calibration and
reference standards for nuclear medicine, offers a selection of radioisotopes
(lutetium-177 and iodine-131) and radiochemicals for various applications such
as clinical research, supplies bulk cobalt-60 isotope for use in various
devices, recycles certain expended cobalt sources, and provides general
radiological measurement capability for processed gemstones. With the exception
of cobalt-60, the Company's normal operating cycle is considered to be one year.
Due to the time required to produce high specific activity (HSA) cobalt-60, the
Company's operating cycle for the cobalt-60 is considered to be three years. All
assets expected to be realized in cash or sold during the normal operating cycle
of business are classified as current assets. As of September 30, 2004, the
Company had 14 full time employees.
Principles of Consolidation - The consolidated financial statements include the
accounts of the Company and its wholly owned subsidiary International Isotopes
Idaho, Inc. All significant intercompany accounts and transactions have been
eliminated in consolidation.
Information About Major Customers - The Company has two major customers which
respectively represent approximately 35% and 47% of revenues.
Interim Financial Information - The accompanying unaudited condensed
consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America for
interim financial information and pursuant to the rules and regulations of the
Securities and Exchange Commission. Accordingly, they do not include all of the
information and notes required by accounting principles generally accepted in
the United States of America for complete financial statements. In the opinion
of management, all adjustments and reclassifications considered necessary for a
fair and comparable presentation have been included and are of a normal
recurring nature. Operating results for the nine-month period ended September
30, 2004 are not necessarily indicative of the results that may be expected for
the year ending December 31, 2004. The accompanying financial statements should
be read in conjunction with the Company's annual financial statements included
in its annual report on form 10KSB as of December 31, 2003.
Stock-based Compensation Plans - The Company accounts for stock options issued
to directors, officers and employees under Accounting Principles Board Opinion
No. 25 and related interpretations ("APB 25"). The Company accounts for options
and warrants issued to non-employees at their fair value in accordance with SFAS
No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123").
6
No compensation cost has been recognized for its stock options in the
accompanying consolidated financial statements. Had the Company determined
compensation cost based on the fair value at the grant date for its stock
options under SFAS No. 123, the Company's net loss applicable to common
shareholders would have been increased to the pro forma amounts indicated below
for the three and nine months ended September 30, 2004 and 2003:
For the Three Months Ended For the Nine Months Ended
--------------------------------------- ---------------------------------------
September 30, 2004 September 30, 2003 September 30, 2004 September 30, 2003
------------------ ------------------ ------------------ ------------------
Net loss as reported $ (39,86) $ (123,264) $ (541,548) $ (456,842)
Deduct: Total stock-based employee
compensation expense determined under
fair value based method for all awards,
net of related tax effects $ (89,987) $ (20,291) $ (118,116) $ (75,029)
------------------ ------------------ ------------------ ------------------
Pro forma net loss $ (129,850) $ (143,555) $ (659,664) $ (531,871)
================== ================== ================== ==================
Loss per share, basic and diluted:
As reported $ -- $ -- $ -- $ --
================== ================== ================== ==================
Pro forma $ -- $ -- $ -- $ --
================== ================== ================== ==================
(2) Current Developments and Liquidity
Business Condition - Since inception, the Company has suffered substantial
losses. During the three and nine-month periods ended September 30, 2004 the
Company had a loss of $39,863 and $541,548 respectively compared to a loss of
$123,264 and $456,842 during the same periods ended September 30, 2003. During
the nine-month period ended September 30, 2004, the Company's operations used
cash of $434,953. During the period ended September 30, 2003, the Company's
operations used cash of $374,460. The Company has taken steps to further improve
financial performance and diversify their customer base. In the Company's main
production facility the construction of additional hot cells and new production
contracts for isotope sales, source recycling, and cobalt source fabrication
will all lead to increased revenue and improved cash flow. In addition, the
Company's Fluorine Products Division is developing manufacturing capability for
high purity fluorine gases which will begin to contribute to Company revenue in
early 2005. Therefore, management expects to generate sufficient cash flows to
meet operational needs during the remainder of 2004 through increased sales,
financing, and operating capital; however, there is no assurance that adequate
cash flow will occur to continue operations for a reasonable period of time.
(3) Net Loss Per Common Share - Basic and Diluted
As of September 30, 2004 there were 67,878,692 warrants and 17,500,000 options
outstanding respectively, and 850 shares of Series B redeemable convertible
preferred stock that were not included in the computation of diluted net loss
per common share as their effect would have been anti-dilutive, thereby
decreasing the net loss per common share.
(4) Inventories
Inventories consist of the following at September 30, 2004 and December 31,
2003:
September 30, 2004 December 31, 2003
------------------ -----------------
Raw materials $ 268,265 $ 268,265
Work in progress 1,946,897 2,007,066
Finished goods 2,998 8,421
------------------ -----------------
$ 2,218,160 $ 2,283,752
================== =================
7
(5) Acquisition of license rights
During the nine months ended September 30, 2004, the Company completed the
purchase of certain assets, patents and intellectual property related to the
fluorine extraction process. The patents were acquired for $105,000 and the
equipment for $10,000. The patents and equipment will be amortized/depreciated
over their estimated useful lives, which are 10 years for the patents and 5
years for the equipment.
(6) Notes Payable
The Company completed an unsecured note purchase agreement on January 21, 2004
with certain of the Company's principal shareholders and Directors totaling
$650,000. This is an unsecured note accruing interest at 6% per year with a
maturity date of December 31, 2005. Interest is to be paid on this note on a
semi-annual basis and the Company has the option to prepay the principal balance
at any time prior to maturity. The principal of the note and any accrued
interest is convertible into shares of the Company's common stock at any time at
the option of the holder prior to maturity. The conversion price for this
conversion option is $0.18 per share, which was the market value of the common
stock on the date the note was issued.
In July 2004, the Company renewed the terms of a note with a bank. The new terms
extend the due date of the note to February 1, 2006 and set the interest rate at
7.5% through July 1, 2005 and then at a variable rate through maturity. At June
30, 2004 the balance outstanding that was renewed was $733,595. The Company also
renewed with the same bank its $250,000 revolving line of credit changing the
due date to July 1, 2005 and fixing the interest rate at the bank's prime rate
plus 1% ($0 outstanding at September 30, 2004). The loans are secured with
accounts receivables, inventory and equipment.
(7) Stockholders' Equity and Warrants
For the nine-months ended September 30, 2004, 19,701,614 warrants were exercised
and exchanged for 19,701,614 shares of the Company's common stock. The Company
received $801,590 for the exercise of these warrants.
During August 2004, the Company granted 1,500,000 options to a new employee to
purchase shares of common stock with an exercise price of $0.17 per share, which
was equal to the closing market price of the common stock on the date of grant.
These options vest through August 2007 in increments of 25% per year.
(8) Commitments and Contingencies
Litigation
8
During February 2004, a lawsuit was filed by Iso-Science Laboratories, Inc. dba
Isotope Products Laboratories in the Superior Court of the State of California
for the County of Los Angeles against the Company, the Company's President and
CEO, a significant customer of the Company and certain officers of this
significant customer. The lawsuit contains numerous allegations against the
defendants relating to the manufacture and sale of calibration and reference
standards for nuclear medicine. The lawsuit alleges the defendants are using
information and equipment that the plaintiff acquired from a previous employer
of one of the defendants. The lawsuit also alleges unfair trade practices,
interference with prospective business relationships, and conspiracy. The
plaintiff seeks an injunction to restrain the Company from manufacturing,
marketing, or selling any of the products in question; a 55% royalty of the
price of all related products sold by the Company; the return of all equipment
and information in question; disgorgement of profits received for the
manufacture and sale of the products in question; and general and punitive
damages in an amount to be shown at the time of trial. In March 2004, the
Company filed a response to the lawsuit in which the Company denied all of the
allegations made in the suit. In addition, the Company has filed a counterclaim
against Isotopes Products Laboratories on the basis that Isotopes Products
Laboratories filed the suit against the Company with the knowledge that it has
no basis in law or fact and the lawsuit was calculated to interfere with the
Company's contractual arrangements and prospective business between the Company
and its customers. On July 29, 2004 the court granted the Company's motion to
dismiss all charges against the Company's President and CEO, Steve T. Laflin. On
October 25, 2004 the court established an anticipated trial start date of
December 5, 2005. The Company will continue to vigorously defend itself in the
lawsuit; however, an outcome favorable to the Company is not determinable at
this time. Should this lawsuit be settled in a manner unfavorable to the
Company, the Company could lose its major line of revenues and could be required
to make substantial payments to the plaintiff. The Company has a manufacturing
agreement in place with this significant customer, which indemnifies the Company
and its officers from any loss arising from this suit. However, there is no
guarantee that this significant customer can bear the financial burden arising
from defending and possible settlement of this lawsuit.
Dependence on Third Parties
The production of HSA Cobalt is dependent upon the Department of Energy, and its
prime-operating contractor, who controls the reactor and laboratory operations.
Revenue associated with the sale of HSA Cobalt and nuclear medicine calibration
and reference standards are largely dependent on two major customers. A loss of
any of these customers or vendors could adversely affect operating results by
causing a delay in production or a possible loss of sales.
Contingencies
The Company conducts its operations under an operating license from the Nuclear
Regulatory Commission ("NRC"). The details of this license determine the scope
of permitted operations and amendments are required to either increase the
amount of material permitted or change the types of activities conducted within
the facility. The Company is required to maintain a funding reserve adequate to
address future decommissioning of the facility. An irrevocable, automatically
renewable letter of credit against a $152,239 Certificate of Deposit at Texas
State Bank has been used to provide this financial assurance.
(9) Subsequent Events
In October 2004, the Company aquired all the intellectual property associated
with detailed design of a Type B transportation container.
In October 2004, the Company submitted an application for sealed source
registration to the Nuclear Regulatory Commission for a wide range of cobalt
teletherapy source capsules. These are generic sealed sources compatible with a
wide range of commercially available teletherapy units.
During October 2004, 1,600 warrants were exercised and exchanged for 1,600
shares of the Company's common stock. The Company received $72 for the exercise
of these warrants.
9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Except for historical information contained herein, the following contains
forward-looking information that is subject to certain risks and uncertainties.
The Company's actual results could differ materially from those anticipated in
these forward-looking statements as a result of certain factors including those
set forth in the "Risk Factors" section included in the Company's Form 10-KSB,
filed with the Securities Exchange Commission (SEC) on March 24, 2004 ("Form
10-KSB"). The following discussion should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included in the Form 10-KSB.
RESULTS OF OPERATIONS
Three and nine-month periods ended September 30, 2004 and 2003. The Company's
losses from operations for the three and nine-month periods ended September 30,
2004 were $39,863 and $541,548 respectively, as compared to loss from operations
of $123,264 and $456,842 for the comparable periods of 2003. The decrease in net
loss for the three-month period was attributable to increased revenue from sales
during the period. The increase in net loss for the nine months is attributable
to increased cost of goods sold and operational expense for new products, such
as the Fluorine Extraction Process (FEP) production operation that was being
developed during the period.
Revenue for the three and nine-month periods ended September 30, 2004 were
$985,072 and $2,195,756 respectively, as compared to $552,020 and $1,696,703 for
the same periods in 2003. These represent an increase of $433,052 (or 78%) and
$499,053 (or 29%) respectively. The increase in revenue for both periods was
attributable to increased sale of HSA cobalt and new revenues resulting from the
sale of newly developed products such as radiochemicals and cobalt source
recycling. Gross profit for the three and nine-month periods ended September 30,
2004 was $402,654 and $844,603 respectively, as compared to $231,259 and
$734,291 for the same periods in 2003 representing increases of 74% and 15%
respectively. However, gross profit, as a percentage of revenues, declined by 1%
and 5% respectively for the three and nine-month periods ended September 30,
2004 compared to the same periods for 2003. This slight decline in gross profit
percentage was attributable to slightly higher cost of goods sold for new
products.
Operating expenses were $404,103 and $1,278,751 respectively for the three and
nine-month periods ended September 30, 2004 compared to $320,573 and $1,110,888
for the same periods of 2003. Salaries and contract labor expenses for the three
and nine-month periods ended September 30, 2004 were $175,735 and $494,425
respectively, as compared to $129,196 and $342,948for the same periods of 2003,
an increase of $45,539 and $151,477 respectively. General, administrative and
consulting expenses totaled $215,055 and $744,034 respectively for the three and
nine-month periods ended September 30, 2004 as compared to $172,464 and $726,314
for the same periods of 2003, an increase of $42,591 and $17,720 respectively.
The overall increase in operating expense was largely attributable to increased
expenditures, such as wages and marketing consultants, associated with
development of new products and start-up of the Company's new FEP product
division.
Interest expense for the three and nine-month period ended September 30, 2004
was $40,591 and $119,646 as compared to $32,512 and $114,712 for the comparable
periods in 2003, an increase of $8,079 and $4,934 respectively.
10
Liquidity and Capital Resources
On September 30, 2004 the Company had cash and cash equivalents of $667,459
compared to $160,216 at December 31, 2003. For the nine months ended September
30, 2004, operating activities used cash of $434,953, investing activities used
cash of $446,422 and financing activities provided cash of $1,388,618. Cash from
financing activities consisted primarily of notes provided by several principals
and directors and the conversion of warrants to common stock.
The Company has financed its operations since inception primarily by bank loans,
sales of accelerator components and excess equipment, its initial public
offering, sales of shares of common and preferred stock in private placements to
investors, and loans from stockholders and directors.
The Company's future liquidity and capital funding requirements will depend on
numerous factors, including, but not limited to, contract manufacturing
agreements, commercial relationships, technological developments, and certain
market factors. The Company still has a significant amount of Series A and B
warrants that remain outstanding from the Company's Rights Offering conducted in
2003. Funds from the additional conversion of those warrants should be adequate
to pay down certain of the Company's long-term liabilities and to generate
additional cash for the acquisition of assets and continued development of the
Fluorine Extraction Process (FEP). This should continue to improve the Company's
financial strength, debt ratio, and attractiveness to investors or lending
institutions.
Although there can be no assurances, the Company expects that revenues will
continue to increase. These increased revenues will provide sufficient funds for
operations and capital expenditures. The Company has made significant
investments into assets necessary to carry out new revenue-producing operations
and to manufacture new products. These include radiochemical sales and the
installation of a large cobalt-60 processing hot cell that will support a wide
range of cobalt products such as cobalt source recycling services and
teletherapy source manufacturing. The Company expects these new business areas
to make a significant contribution towards further growth in revenue and our
customer base in 2005. In addition, the Company continues to make significant
investments in and advancement towards, the start of fluorine producing
operations utilizing the patented FEP process. The first of the Company FEP
products is expected to be launched by the second quarter of 2005.
ITEM 3. CONTROLS AND PROCEDURES
(a) The Company maintains controls and procedures designed to ensure that
information required to be disclosed in the reports that the Company files or
submits under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in the rules and forms
of the Securities and Exchange Commission. Based upon their evaluation of those
controls and procedures performed within 90 days of the filing date of this
report, the chief executive officer and the principal financial officer of the
Company concluded that the Company's disclosure controls and procedures were
adequate.
(b) Changes in internal controls. The Company made no significant changes in
its internal controls or in other factors that could significantly affect these
controls subsequent to the date of the evaluation of those controls by the chief
executive officer and principal financial officer.
11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
During February 2004, a lawsuit was filed by Iso-Science Laboratories, Inc. dba
Isotope Products Laboratories in the Superior Court of the State of California
for the County of Los Angeles against the Company, the Company's President and
CEO, a significant customer of the Company and certain officers of this
significant customer. The lawsuit also alleges unfair trade practices,
interference with prospective business relationships, and conspiracy. The
plaintiff seeks an injunction to restrain the Company from manufacturing,
marketing, or selling any of the products in question; a 55% royalty of the
price of all related products sold by the Company; the return of all equipment
and information in question; disgorgement of profits received for the
manufacture and sale of the products in question; and general and punitive
damages in an amount to be shown at the time of trial. In March 2004, the
Company filed a response to the lawsuit in which the Company denied all of the
allegations made in the suit. In addition, the Company has filed a counterclaim
against Isotopes Products Laboratories on the basis that Isotopes Products
Laboratories filed the suit against the Company with the knowledge that it has
no basis in law or fact and the lawsuit was calculated to interfere with the
Company's contractual arrangements and prospective business between the Company
and its customers. On July 29, 2004 the court granted the Company's motion to
dismiss all charges against the Company's President and CEO, Steve T. Laflin. On
October 25, 2004 the court established an anticipated trial start date of
December 5, 2005. The Company will continue to vigorously defend itself in the
lawsuit; however, an outcome favorable to the Company is not determinable at
this time.
Item 5. Other Information
None
Item 6. Exhibits
Exhibits:
31 Certification by the Chief Executive and Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32 Certification by the Chief Executive and Chief Financial Officer
Pursuant to 18 U.S.C. Section 1350 Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
International Isotopes Inc.
(Registrant)
By: /s/ Steve T. Laflin
-------------------------------------
Steve T. Laflin
President and Chief Executive Officer
Date: November 3, 2004
13