International Isotopes Inc. (International Isotopes), an in vitro diagnostics company, has reported total revenues of $5.6 million for the full year of 2008, up 19.4%, compared with the total revenues of $4.6 million in the previous year-end. It has reported net loss of $2.1 million, or $0.01 per share, for the full year of 2008, compared with the net loss of $1.7 million, or $0.01 per share, in the previous year-end.

Results of Operations

Year ended December 31, 2008 compared to year ended December 31, 2007

Cost of Revenues and Gross Profit

Cost of revenue for 2008, was $2,879,839 compared to $2,660,781 in 2007, an increase of $219,058 or 8%. Gross profit for 2008, was $2,722,604 or 49% as compared to $2,029,807 or 43% in 2007.

Operating Costs and Expenses

Total operating costs and expenses for 2008, were $4,827,985 as compared to $3,645,549 in 2007, an increase of $1,182,436 or 32.4%.

Other Income (Expense)

Other (expense) in 2008 was ($61,586) compared to other expense of ($103,313) in 2007. The difference of $41,727 was principally attributable to an increase in interest income and a decrease in interest expense.

Liquidity and Capital Resources

On December 31, 2008, the company had cash and cash equivalents of $2,149,340 compared to $121,887 at December 31, 2007. This significant increase is due primarily to the November 7, 2008 private placement offering discussed below. For the year ended December 31, 2008, our cash flows included net cash used in operating activities of $1,476,502, net cash provided by financing activities of $4,775,279 and cash used in investing activities of $1,271,324.

The company incurred a loss of $2,166,967 for the year ended December 31, 2008, and have an accumulated deficit of $94,719,673 since inception. To date, our operations and plant and equipment expenditures have been funded principally from proceeds from public and private sales of equity as well as through asset sales.

As of December 31, 2008, the company had net term borrowings of $647,262 from two loans with Compass Bank. One of these loans, with an outstanding balance of $538,263 as of December 31, 2008 matures in March 2009. The other, with a balance of $108,999 as of December 31, 2008, matures in September 2011. We also owe $840,753 to our former Chairman of the Board pursuant to a note that matures in April 2012. Principal and interest payments on this note are paid annually based upon net profits (annual principal payment to equal 30% of net pre-tax profits).

During January 2008, 13,333,331 Series D warrants were exercised for cash totaling $1,466,666. In April 2008, the holders of all Class C warrants agreed to amend the terms of the Class C warrant to allow for the company’s call of those warrants.

Subsequent to completing this modification, all 13,333,331 Class C warrants were exercised for cash totaling $1,333,333 and the company issued 13,333,331 exchange (Class E) warrants in accordance with the terms of the Class C warrant. Class E warrants entitle the holder to purchase shares of common stock, $0.01 par value per share, at an exercise price equal to $0.869 per share. Class E warrants expire March 20, 2011. On November 7, 2008, the company completed a private placement offering of 8,200,000 units consisting of (i) one (1) share of the company’s common stock and (ii) one (1) Class F Warrants exercisable for a share of the company’s common stock at an exercise price of $0.30, for an aggregate sale price of approximately $2,050,000.