v3.26.1
Note 7 - Commitments and Contingencies
3 Months Ended
Mar. 31, 2026
Notes to Financial Statements  
Commitments and Contingencies Disclosure [Text Block]

(7)       Commitments and Contingencies

 

Dependence on Third Parties

 

Sales to the Company’s top three customers for the three months ended March 31, 2026 and March 31, 2025 were approximately 26% and 30% of its total gross revenue respectively. The Company is making efforts to reduce its dependency on a small number of customers by expanding both domestic and foreign. Approximately 17% and 18% of the Company's total gross revenue was from sales from a single customer as part of our Theranostics Products segment.

 

The production of Cobalt-60 is dependent upon the U.S. Department of Energy (DOE), and its prime operating contractor, which controls the Advanced Test Reactor (ATR) and laboratory operations at the ATR located outside of Idaho Falls, Idaho. From 2014 to 2024, the Company had a ten-year contract with the DOE for the irradiation of cobalt targets for the production of cobalt-60. The Company was able to purchase cobalt targets as available for a fixed price per target and with an annual 5% escalation in price. The contract term was October 1, 2014, through September 30, 2024, the Company and the DOE continue to work on this supply agreement with amendments. The DOE have informed the Company that they have secured additional feed stock and remain committed to production of cobalt-60, and the Company continues to source cobalt-60 from the DOE through amendments to the existing contract.

 

Sales of our most predominant Theranostics Products are dependent upon a few key suppliers. An interruption in production by any of these individual suppliers could have an immediate negative impact upon Theranostics Products sales until material could be purchased from alternate suppliers including obtaining regulatory approval to use material from alternative suppliers if necessary. During multiple weeks in 2025, the Company experienced low quantities or complete outages for our key raw material supplier which resulted in an estimated $500,000 in lost sales for the year. The Company has identified other suppliers and continues to search for additional means to produce and procure certain critical isotopes.

 

The Calibration & Reference Products sold by the Company are dependent upon certain radioisotopes that are supplied to the Company through agreements with several suppliers. A loss of any of these suppliers could adversely affect operating results by causing a delay in production or a possible loss of sales. Starting in January 2024, there has been a continuing global outage of gadolinium-153, a key isotope for the Company's Calibration & Reference Products segment. The outage has resulted in lost sales. The Company is working on establishing new suppliers and believes that it will be able to have supply restored by the end of 2026. 

 

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 operations performed or projected to be performed in the upcoming year, additional processing capabilities and license amendments could be implemented that would permit the 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 held with Swiss Re Corporate Solutions Premier Insurance Corporation which is supported by a restricted money market account held with Merrill Lynch. At  March 31, 2026, the balance of this account was $1,505,537.