MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and within the safe harbor provisions 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 Quarterly Report are forward looking.  In particular, statements regarding growth in our business segments; progress on our depleted uranium de-conversion and fluorine extraction processing facility ; potential future sales of fluoride products; the potential market for de-conversion services; increased cash flow to meet operational needs; improvement in our financial strength, debt ratio and attractiveness to investors and lenders; future liquidity requirements; NRC licensing requirements; and the consequences of the loss of any of our major customers or suppliers are forward looking.  Forward-looking statements reflect management’s current 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 report.  Certain risks and uncertainties that could cause our actual results to differ significantly from management’s expectations are described in the risk factors set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 filed with the Securities and Exchange Commission on March 31, 2011.  These factors, describe some but not all of the factors that could cause actual results to differ significantly from management’s expectations.  The Company will not publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Readers are urged, however, to review the factors set forth in reports that we file from time to time with the Securities and Exchange Commission.

RESULTS OF OPERATIONS

Three months ended June 30, 2011 compared to three months ended June 30, 2010

Revenues for the three-month period ended June 30, 2011, were $2,614,744, as compared to $1,485,293 for the same period in 2010, an overall increase of $1,129,451, or approximately 76%.   All business segments reported increases in revenues for the period with the exception of the Radiological Services segment which reported a slight decrease in revenue of $241, or less than 1%. In December 2010, we entered into a 50/50 joint venture with RadQual, LLC and formed TI Services, LLC.  Total revenue generated by TI Services, LLC for the quarter ended June 30, 2011 was $723,611 and is being reported on a consolidated basis with the Nuclear Medicine Standards business segment revenue.

The Company recorded $502,533 of bulk cobalt sales for the three-month period ended June 30, 2011, and there were no bulk cobalt sales during the same period in 2010.  Fluctuations in bulk cobalt sales can create large variations in period-to-period revenue comparisons. The following table presents a period-to-period comparison of total revenue by segment, as well as a period-to-period comparison of total revenue by segment excluding bulk cobalt sales. Management believes that a comparison of total revenue excluding bulk cobalt sales provides meaningful information to investors because of the large period-to-period fluctuations in bulk cobalt sales.  However, this information has limitations as an analytical tool and you should not consider it in isolation or as a substitute for total revenue. Further discussion of the performance of each business segment is described more fully in the following paragraphs.

- 13 -

Gross profit for the three-month period ended June 30, 2011 was $999,221, compared to $736,920, for the same period in 2010.  This represents an increase of $262,301, or approximately 36%.  Cost of sales increased to $1,615,523 for the three-month period ended June 30, 2011, from $748,373 for the same period in 2010.  This increase in cost of sales is primarily due to the inclusion of the cost of goods sold of T.I. Services, LLC products. The increase was also due, to a lesser extent, by the increased costs of shielding material such as lead shield bags which are used in shipping products as well as other increases in materials costs.  The gross profit percentage for the three months ended June 30, 2011, was 38% and 50% for the same period in 2010.

Gross profit for the three-month period ended June 30, 2011, includes TI Services, LLC revenues in the amount of $723,611 and TI Services, LLC cost of sales in the amount of $576,111. 2011 is the first year of reporting TI Services, LLC activity on a consolidated basis with all other business segments, therefore there are no corresponding sales or cost of sales to report for TI Services, LLC in 2010.  

Operating expenses increased to $2,549,481 for the three-month period ended June 30, 2011, from $2,290,438 for the same period in 2010. Operating expense for the three-month period includes $156,527 of operating expense attributable to TI Services, LLC.  This overall increase from period-to-period represents an increase of $259,043 or approximately 11%.   

- 14 -

The following table shows a comparison of total operating expenses for the three-month period:

As illustrated in the above table, the increase in operating costs and expenses is primarily attributable to research and development expenses associated with the planning and licensing of the planned depleted uranium de-conversion facility. Salaries and contract labor increased by $46,836, or approximately 10%, for the three-month period ended June 30, 2011, compared to the same period in 2010.  General administrative costs decreased by $16,161, or approximately 3%, to $462,677 for the three months ended June 30, 2011,  compared to $478,838 for the same period in 2010.  Research and development costs increased by $228,368, or approximately 17%, for the three months ended June 30, 2011, compared to same period in 2010. The increase in salaries and contract labor expense was the result of reporting TI Services, LLC salary and wage expense on a consolidated basis, combined with staffing adjustments made and a decrease in the amount of equity based compensation reported for the period ended June 30, 2011,compared to the same period in 2011. The increase in research and development expense is almost entirely attributable to the continued planning and licensing activities with regard to the depleted uranium de-conversion facility. These research and development expenses have increased from period-to-period and are expected to continue to do so provided that funding for the project continues to be available. Our net loss for the three-month period ended June 30, 2011, was $1,670,186, as compared to $1,707,070 for the same period in 2010.  This is a decrease in loss of $36,884, or approximately 2%, and was attributable to controlling research and development costs related to the planned depleted uranium de-conversion and fluorine extraction processing facility.

Interest expense for the three-month period ended June 30, 2011, was $161,883, compared to $173,322 for the same period in 2010. The decrease of $11,439, or approximately 7%, is attributable to interest expense recorded in April of 2010 with regard to the convertible debentures, with no corresponding payment in 2011, as well as the pay-off of two commercial equipment loans.  The convertible debentures that were issued in February 2010 to various institutional and private investors contain a beneficial conversion feature, and accordingly, we have recorded this feature as a contra-liability while simultaneously accreting the beneficial portion of the convertible debenture as interest expense over the 18-month life of the convertible debentures. The convertible debentures mature in August 2011.

Radiochemical Products .  Revenues from the sale of radiochemical products for the three-month period ended June 30, 2011 were $475,901, compared to $404,620 for the same period in 2010.  This represents an increase in revenue of $71,281 or approximately 18%. Although competitive market conditions persist, we believe that our marketing efforts, commitment to high quality customer service, and our pricing structure have provided us with a strong competitive position in the market. Gross profit of radiochemical products for the three months ended June 30, 2011, was $81,680, compared to $53,426 for the same period in 2010.  Gross profit percentages were approximately 17% and 13%, for the three-month periods ended June 30, 2011 and 2010, respectively.  This slight increase in gross profit is attributable to marketing efforts mentioned above, to lower freight prices which were renegotiated during the first quarter of 2011, and to lower shielding costs generated by our lead pig recycling program. Operating expense for this segment for the three-month period ended June 30, 2011, was $27,221, compared to $33,634 for the same period in 2010. This decrease of $6,413, or approximately 19%, is the result of decreases in indirect wage expense and production supply expense. Net income for this segment increased for the three-month period ended June 30, 2011, to $54,459 from $19,793 for the same period in 2010, an increase of $34,666, or approximately 175%.  

- 15 -

The processing of iodine is subject to inspection and the regulatory authority of the U.S. Food and Drug Administration (FDA).  The FDA has inspected the Company’s facility and determined that the Company’s handling of iodine is considered by the FDA as manufacturing of an active pharmaceutical ingredient.  The Company will need to implement improvements in its Quality Assurance methods and controls to meet these FDA requirements.  In addition, the FDA may determine that manufacturing the iodine product will require an amended New Drug Application which would cause the Company to incur further regulatory fees and increase the cost of producing this product.  Any of these regulatory issues could impact the Company’s business decision to continue future iodine production.   

Cobalt Products .  Revenues from the sale of cobalt products for the three-month period ended June 30, 2011, were $821,409, compared to $486,377 for the same period in 2010. This represents an increase in revenue of $335,032, or approximately 69%. We recorded $502,533 of bulk cobalt sales for the three-month period ended June 30, 2011 and there were no bulk cobalt sales during the same period in 2010.  The increase in segment revenue is the result of the timing of large bulk cobalt product sales which have a dramatic affect on period-to-period comparisons, as illustrated in the table above.  Management believes that a period-to-period comparison excluding bulk cobalt sales offers a more useful comparison for the shareholder. However, this information has limitations as an analytical tool and you should not consider it in isolation or as a substitute for total revenue.  Excluding bulk cobalt sales, total cobalt product sales for the three-month period ended June 30, 2011, decreased by $167,500, or approximately 35%, compared to the same period in 2010.   This decrease in revenue can be attributed to the timing of sealed source product sales which declined during the three-months ended June 30, 2011,compared to the same period in 2010, as well as a decrease in other cobalt product sales such as services performed in connection of expended gamma knife source recovery and cobalt recycling.  The following table presents cobalt products sales for the three months ended June 30, 2011 and 2010:

Gross profit for the three months ended June 30, 2011, was $452,197, compared to $351,598 for the same period in 2010.  The increase is primarily due to the cost of sales related to the sale of bulk cobalt.  Operating expense in this segment decreased by $4,229, or approximately 7% for the three-month period ended June 30, 2011, as compared to the same period in 2010 and was attributable to decreased spending in production supplies. Net income for cobalt products was $392,070 for the three-month period ended June 30, 2011, as compared to $287,241 for the same period in 2010.  The increase in net income of $104,829, or approximately 37% is attributable to bulk cobalt sales. We anticipate strong sales in this segment for the remainder of 2011 based on current customer commitments for sealed source sales, as well as our contractual commitments for bulk cobalt sales.  We have also received certification under both ISO-9001 and ISO-13485 standards for the manufacture and design of certain cobalt-60 products.  The ISO certifications are important to the Company’s plans for continued expansion of sales of several products into international markets.  ISO certification also improves our capabilities and value as a contract manufacturer of nuclear medicine products for RadQual, LLC. We anticipate that these certifications will strengthen our teletherapy source sales internationally as well as benefit our customers in terms of the quality of our products.

We have a contract with one customer, GE-Hitachi, for 100% of our bulk cobalt sales.  This contract was renewed in April 2010 and carries a term of four years.  The contract states a minimum purchase of material each year (yearly periods are each April 1 – March 31), and any shortages in annual purchases will be invoiced to GE Hitachi. Under this contract we expect to have a minimum of $2,656,000 in bulk cobalt sales over the four-year period.

- 16 -

The production of cobalt, which we use in both bulk cobalt sales and sealed source sales, is dependent on the U.S. Department of Energy, and its prime-operating contractor which manages the Idaho reactor. Loss of the ability to use these irradiation services would significantly impact our cobalt products business segment because there is not currently another reactor available in the United States that is capable of providing this type of service for us.  Previously, our agreement with the prime-operating contractor had been on a reactor cycle-by-cycle contract basis, but in July 2010, we entered into a three-year Work For Others agreement with the DOE prime operating contractor to continue cobalt production and cask handling.  In January 2011, the Company was informed that DOE intended to transfer the existing WFO agreement to the NIDC.  Negotiations have been underway since that time between the Company and NIDC on contract terms and costs for cobalt production services.  While the Company believes it will be able to complete these contract negotiations with NIDC under reasonable contract pricing terms there is the possibility, however, that the new contract costs imposed by NIDC will make it prohibitive to continue cobalt production in the DOE reactor.  Should that happen the Company would be forced to terminate cobalt production in the DOE reactor and attempt to locate an alternate source of supply of cobalt-60 from outside the U.S. A termination of our cobalt production business would have a material adverse effect on the financial results and the operations of the Company. In addition to the continued contract issues with NIDC the Company’s continued access to the reactor for cobalt production, as always, remains subject to approval by the prime operating contractor of the reactor based upon the priorities of its experiments program.  

Nuclear Medicine Standards .  Revenues from nuclear medicine products for the three-month period ended June 30, 2011, were $1,186,399,  compared to $483,520 for the same period in 2010.  This represents an increase in revenue attributable to this segment of $702,879, or approximately 145%.  In December 2010, we formed a 50/50 joint venture, TI Services, LLC, with RadQual, LLC, to distribute products and services for nuclear medicine, nuclear cardiology, and PET imaging.  For the three-month period ended June 30, 2011, revenues from this joint venture totaled $723,611.  The following table presents total sales for this segment for the three months ended June 30, 2011 and 2010.

Gross profit for the three-month period ended June 30, 2011 was $370,564, as compared to $255,553 for the same period in 2010, an increase of $115,011, or approximately 45%. Because we are reporting our investment in TI Services, LLC on a consolidated basis, gross profit for the three months ended June 30, 2011 includes $576,111 of costs attributable to TI Services, LLC with no corresponding expense for the same period in 2010. The following table presents cost of sales for this segment for the three months ended June 30, 2011 and 2010:

- 17 -

Operating expense for this segment for the three-month period ended June 30, 2011 increased to $192,769, from $32,475 for the same period in 2010, an increase of $160,294.  Operating expense for the three months ended June 30, 2011, includes $156,527 of expense for TI Services, LLC, whereas there was no such expense to report for the same period in 2010.  Exclusive of the TI Services, LLC expense, operating expense increased approximately 12% and was primarily attributable to increased costs of general nuclear medicine production supplies used in production support as well as an increase in depreciation expense related to new equipment purchased. Net income for this segment decreased by $37,154, or approximately 17%, to $185,924 for the three-month period ended June 30, 2011, compared to $223,078 for the same period in 2010. Of the $37,154 decrease in net income, approximately $9,127 was attributable to net loss generated by TI Services, LLC.  We will continue to expand this line of business through our new joint venture, TI Services, LLC, which we anticipate will result in increased sales and profitability. In addition, we have received certification under both ISO-9001 and ISO-13485 standards for the manufacture and design of certain nuclear medicine products which will permit expansion of product sales internationally.

Radiological Services .   Revenues from radiological services for the three-month period ended June 30, 2011 were $57,635, compared to $57,876 for the same period in 2010, a decrease of $241 or less than 1%. Revenue in this segment is generated by gem stone processing and radiological service consulting work performed in conjunction with sealed source sales and expended source disposal services and is expected to remain constant through the end of the year.  Gross profit for this segment for the three-month period ended June 30, 2011, was $37,267, compared to $36,861 for the same period in 2010. Operating expense for the three months ended June 30, 2011 was $6,613, as compared to $10,124 for the same period in 2010.  This is a decrease of $3,511, or approximately 35%, and is the result of overall cost control with regard to operations.  Net income for the three-month period ended June 30, 2011 was $30,655, as compared to $26,737 for the same period in 2010. Historically, most of our radiological services have been performed in support of gemstone processing for Quali-Tech, Inc. There are very few companies in the U.S. that possess the mix of qualifications and licensing necessary to provide this type of gemstone related service, and although the volume of gemstones to be processed has not been at historical proportions we anticipate that demand for these services will improve as overall market conditions improve.

Fluorine Products .   There were no revenues to report from the fluorine products segment for the three-month period ended June 30, 2011 or for the same period in 2010.  We are developing our fluorine products in conjunction with uranium de-conversion in order to take advantage of the anticipated need for depleted uranium de-conversion services. Our Fluorine Extraction Process (FEP) patents provide a unique opportunity to provide certain high-purity fluoride compounds while also offering a “for fee” de-conversion service to the uranium enrichment industry. During the three-month period ended June 30, 2011, we incurred approximately $1,735,000 of planning, licensing, and other expense as compared to approximately $1,508,000 in 2010.  This is an increase of $227,000, or approximately 15%.  During 2011, we will continue to use our existing FEP facility in Idaho for testing individual components and analytical processes required for the planned uranium de-conversion facility in New Mexico as funding for the project permits.  We do not anticipate any revenues from sales of fluoride products in 2011.

Transportation Services.  This segment was established to provide for transportation of our products (such as cobalt sources) and to offer “for hire” transportation services of hazardous and non-hazardous cargo materials.  This business segment provides us with considerable savings for the transportation of our products and produces a small revenue stream by providing transportation of products for other companies. The transportation services segment will also provide some of the transportation services for the planned de-conversion facility. Revenues from transportation services for the three-month period ended June 30, 2011 were $73,400, compared to $52,900 for the same period in 2010. This is an increase of $20,500, or approximately 39%. This increase in revenue is the result of utilizing our transportation services segment for the transport of our cobalt products including sealed source products and expended source disposal.  Gross profit was $57,515 for the three-month period ended June 30, 2011, compared to$39,481 for the same period in 2010, or 78% and 75%, respectively, of transportation services segment revenue for these periods.  Operating expense was $44,331 for the three-month period ended June 30, 2011, compared to $62,256 for the same period in 2010.  This represents a decrease of $17,925, or approximately 29%.  This decrease in expense is the result of decreased labor costs as well as decreases in depreciation expense. For the three-month period ended June 30, 2011 net income was $13,184, compared to a net loss of $22,775 for the same period in 2010.  

- 18 -

Six months ended June 30, 2011 compared to six months ended June 30, 2010

Revenues for the six-month period ended June 30, 2011, were $5,028,059, as compared to $2,594,844 for the same period in 2010, an increase of $2,433,215, or approximately 94%. In December 2010, we entered into a 50/50 joint venture with RadQual, LLC and formed TI Services, LLC. Total revenue generated by TI Services, LLC for the six months ended June 30, 2011 was $1,555,368 and is being reported on a consolidated basis with the Nuclear Medicine Standards business segment revenue. The Company recorded $502,533 of bulk  cobalt sales for the six-month period ended June 30, 2011, but recorded no bulk cobalt sales during the same period in 2010.  Because each bulk cobalt sale represents a material dollar amount, these sales can create significant variations in period-to-period comparisons. Therefore, management believes that a comparison of total revenue excluding bulk cobalt sales provides meaningful information to investors because of these large period-to-period variations. However, this information has limitations as an analytical tool and you should not consider it in isolation or as a substitute for total revenue.

The following table presents a period-to-period comparison of total revenue by segment, as well as a period-to-period comparison of total revenue by segment excluding bulk cobalt sales. This information has limitations as an analytical tool and you should not consider it in isolation or as a substitute for total revenue.

Gross profit for the six-month period ended June 30, 2011 was $1,918,258, compared to $1,112,601, for the same period in 2010.  This represents an increase of $805,657, or approximately 72%. Gross profit for the six-month period ended June 30, 2011, includes TI Services, LLC revenues in the amount of $1,555,368 and TI Services, LLC cost of sales in the amount of $1,234,731. 2011 is the first year of reporting TI Services, LLC activity on a consolidated basis with all other business segments, therefore there are no corresponding sales or cost of sales to report for TI Services, LLC in 2010. The increase in gross profit for the six-month period is largely attributable to reporting no bulk cobalt sales for the six-month period in 2010, as compared to reporting $502,533 of bulk cobalt sales for the same period in 2011.  

- 19 -

Operating expenses were $5,046,367 for the six-month period ended June 30, 2011, compared to $3,837,049 for the same period in 2010.  This represents an increase of $1,209,318 or approximately 32%.   This increase is attributable to the increase in research and development costs generated by work related to the continued planning and licensing of the uranium de-conversion facility. The following table shows a year to year comparison of total operating expenses for the six-month period:

Our net loss for the six-month period ended June 30, 2011, was $3,385,198, as compared to $2,971,932 for the same period in 2010.  This is an increase in loss of $413,266, or 14%, and was largely attributable to the increases in research and development costs related to the planned depleted uranium de-conversion and fluorine extraction processing facility.

Radiochemical Products .  Revenues from the sale of radiochemical products for the six-month period ended June 30, 2011, were $917,201, compared to $848,660 for the same period in 2010. This represents an increase in revenue of $68,541, or approximately 8%.  Increases in this segment’s performance are attributable to increased sales of radiochemical iodine-131 which have remained strong for the six-month period. Gross profit in this segment for the six months ended June 30, 2011, was $159,190, compared to $146,164 for the same period in 2010.  Gross profit percentages for the six months ended June 30, 2011 and 2010 were approximately 17% for each period. Operating expense for this segment for the six-month period ended June 30, 2011 was $69,336, compared to $68,314 for the same period in 2010. This slight increase of less than 1% is due to minor fluctuations in various operating expense accounts. Net income for this segment increased for the six-month period ended June 30, 2011, to $89,954, an increase of $12,304 or approximately 16%, compared to net income of $77,550 for the same period in 2010.

The majority of the sales in the Radiochemical business segment are attributed to sales of radiochemical iodine.  The iodine is purchased by the Company through a sole supply agreement with NTP Radioisotopes (Pty) Ltd. of South Africa.  That agreement extends through August 2013, and includes annual provisions for price adjustment.  The termination of our relationship with NTP Radioisotopes could adversely affect operating results by causing a delay in production or a possible loss of sales in this segment.  The processing of iodine is also subject to inspection and the regulatory authority of the FDA.  The FDA has inspected the Company’s facility and determined that the Company’s handling of iodine is considered by the FDA as manufacturing of an active pharmaceutical ingredient.  The Company will need to implement improvements in its Quality Assurance methods and controls to meet the FDA requirements resulting from this determination.  In addition, the FDA may determine that manufacturing the iodine product will require an amended New Drug Application which would cause the Company to incur further regulatory fees and increase the cost of producing this product.  Any of these regulatory issues could impact the Company’s business decision to continue future iodine production.

- 20 -

Cobalt Products .  Revenues from the sale of cobalt products for the six-month period ended June 30, 2011 were $1,234,244, compared to $646,262 for the same period in 2010. This represents an increase in revenue of $587,982, or approximately 91%. This increase in segment revenue is largely the result of the timing of large bulk cobalt product sales which have a dramatic effect on period-to-period comparisons, as illustrated in the Sale of Product table above. Management believes that a period-to-period comparison excluding bulk cobalt sales offers a more useful comparison for the shareholder.  However, this information has limitations as an analytical tool and you should not consider it in isolation or as a substitute for total revenue. Excluding bulk cobalt sales, total cobalt product sales increased to $731,711 for the six months ended June 30, 2011, compared to $646,262 for the same period in 2010. This is an increase of $85,449, or approximately 13%. This increase in sales, excluding bulk cobalt sales, reflects the on-going marketing efforts of cobalt products into new markets; particularly our sealed source sales.  Gross profit for the six-month period ended June 30, 2011 was $744,566, as compared to $383,801 for the same period in 2010. This increase in gross profit is primarily the result of reporting bulk cobalt sales of $502,533 for this period in 2011, compared to reporting no bulk cobalt sales for the six months ending June 30, 2010.  Operating expense in this segment increased slightly by $528, to $120,987 for the six-month period ended June 30, 2011, from $120,459 for the same period in 2010. Net income for the six months ended June 30, 2011 was $623,579, compared to $263,342 for the same period in 2010. This increase of $360,237, or approximately 137%, is attributable to reporting bulk cobalt sales for the six-month period ended June 30, 201, and no bulk cobalt sales during the same period in 2010. We believe that both the continued development of our Quality Program  as well as our recent ISO-9001 and ISO-13485 certification will enhance our efforts to expand teletherapy source sales into international markets and we anticipate continued strong performance in our cobalt products line of products.

The production of cobalt is dependent upon the DOE, and its prime operating contractor, which controls the reactor operations and, therefore, controls the continued production of cobalt in the government funded reactor.  Previously, the Company’s agreement with the prime operating contractor had been on a reactor cycle-by-cycle contract basis.  In July 2010, the Company entered into a three-year Work For Others (WFO) agreement with the DOE prime operating contractor to continue cobalt production and cask handling.  In January 2010, the Company was informed that DOE intended to transfer the existing WFO agreement to the NIDC.  Negotiations have been underway since that time between the Company and NIDC on contract terms and costs for cobalt production services.  While the Company believes it will be able to complete these contract negotiations with NIDC under reasonable contract pricing terms there is the possibility, however, that the new contract costs imposed by NIDC will make it prohibitive to continue cobalt production in the DOE reactor.  Should that happen the Company would be forced to terminate cobalt production in the DOE reactor and attempt to locate an alternate source of supply of cobalt-60 from outside the U.S.  A termination of our cobalt production business would have a material adverse effect on the financial results and the operations of the Company.  In addition to the continued contract issues with NIDC the Company’s continued access to the reactor for cobalt production, as always, remains subject to approval by the prime operating contractor of the reactor based upon the priorities of its experiments program.

Nuclear Medicine Standards .  Revenues from nuclear medicine products for the six-month period ended June 30, 2011 were $2,579,556, compared to $917,039 for the same period in 2010.  This represents an increase in revenue attributable to this segment of $1,662,517, or approximately 181%.  In December 2010, we formed a 50/50 joint venture, TI Services, LLC, with RadQual, LLC, to distribute products and services for nuclear medicine, nuclear cardiology, and PET imaging.  For the six-month period ended June 30, 2011, revenues from this joint venture totaled $1,555,368.  The following table presents total sales for this segment for the six months ended June 30, 2011 and 2010.

- 21 -

Gross profit for the six-month period ended June 30, 2011 was $796,443, as compared to $460,080 for the same period in 2010, an increase of $336,361, or approximately 73%. Because we are reporting our investment in TI Services, LLC on a consolidated basis, gross profit for the six months ended June 30, 2011 includes $1,234,731 of costs attributable to TI Services, LLC with no corresponding expense for the same period in 2010. The following table presents cost of sales and gross profit for this segment for the six months ended June 30, 2011 and 2010.

Operating expense for this segment for the six-month period ended June 30, 2011 increased to $396,479, from $63,476 for the same period in 2010, an increase of $333,003.  Operating expense for the six months ended June 30, 2011 includes $312,408 of expense for TI Services, LLC, whereas there was no such expense to report for the same period in 2010.  Exclusive of the TI Services, LLC expense, operating expense increased approximately 33% and was primarily attributable to increased costs of general nuclear medicine labor support and production supplies used in production support. Net income for this segment increased by $3,361, or less than 1%, to $399,964 for the six-month period ended June 30, 2011, compared to $396,603 for the same period in 2010. The increase in net income included $8,129 attributable to net income generated by TI Services, LLC.  We anticipate that sales of our nuclear medicine products will continue to increase as we expand this line of business through our new joint venture, TI Services, LLC. We believe our recent ISO certifications will also strengthen our value as a contract manufacturer of nuclear medicine products for RadQual, LLC as well as enhancing overall financial performance of this business segment by permitting expansion of international sales.

Radiological Services .  The radiological services segment reported revenues of $134,250 for the six-month period ended June 30, 2011 and $105,533 for the same period in 2010.  This is an increase of $28,707, or approximately 27%. Gross profit was $96,458 for this segment for the six months ended June 30, 2011 and $62,386 for the same period in 2010.  This is an increase in gross profit of $34,069, or approximately 55%. Operating costs were $12,898 and $26,960 for 2011 and 2010, respectively, for the same six-month period.  Topaz gemstone processing revenues continue to remain modest compared to historical levels, however there are very few companies in the U.S. that possess the qualifications and licensing necessary to perform this type of gemstone related service and management believes that demand will improve as economic conditions improve.  Although the performance of this segment is largely dependent on topaz gemstone processing, both radiological source disposal services and radiological consulting services have reported increased revenues for the six months ended June 30, 2011, as compared to the same period in 2010.  Radiological consulting work and expended source disposal services are performed in conjunction with sealed source sales in our cobalt products segment and we anticipate that along with cobalt product sales, our radiological services segment’s performance will continue to improve based on customer orders and contractual customer obligations.

Fluorine Products .  There were no revenues to report for our fluorine products segment for the six-month period ended June 30, 2011.  We are developing our fluorine products in conjunction with uranium de-conversion in order to take advantage of the anticipated need for depleted uranium de-conversion services. Our Fluorine Extraction Process (FEP) patents provide a unique opportunity to provide certain high-purity fluoride compounds while also offering a “for fee” de-conversion service to the uranium enrichment industry and, based on market studies, we believe that as funding becomes available continued financial investment in the uranium de-conversion facility is justified. During the six month period ended June 30, 2011, we incurred approximately $2,998,884 of planning, licensing, and other expense as compared to approximately $2,018,970 for the same period in 2010. This is an increase of $979,914, or approximately 49%.  During 2011 we will continue to use the FEP facility in Idaho for testing individual components and analytical processes required for the planned uranium de-conversion facility in New Mexico.  We do not anticipate any revenues from the sales of fluoride products in 2011.  

- 22 -

Transportation Services .  Revenues from the transportation services segment for the six-month period ended June 30, 2011, were $162,808, compared to $77,350 for the same period in 2010. This is an increase of $85,458, or approximately 110% and is largely the result of increased “for hire” revenues. Gross profit for this segment was $121,605 for the six-month period ended June 30, 2011, and $60,170 for the same period in 2010. This is an increase in gross profit of $61,435, or approximately 102%.  Operating expense for this segment was $98,140 for the six-month period ended June 30, 2011, and $111,142 for the same period in 2010.  This represents a decrease of $13,002 or approximately 12%. The transportation services business segment continues to provide hazardous and non-hazardous transportation services to us at significant savings as compared to outside commercial carriers.  Our specially trained drivers and equipped vehicles are well suited to meeting the security and regulatory requirements necessary for the transport of these types of shipments while significantly reducing the costs of transport to our Company. It is anticipated that this segment will also provide some of the transportation services for the planned de-conversion facility.

LIQUIDITY AND CAPITAL RESOURCES

On June 30, 2011 we had cash and cash equivalents of $2,057,578.  For the six months ended June 30, 2011, net cash used in operating activities was $2,135,081.  Use of cash in operating activities is a combination of typical operating purchases, including inventory purchases as well as cash paid for services in support of the planned de-conversion facility.

Inventories at June 30, 2011 totaled $1,552,655, and inventories at December 31, 2010 totaled $1,681,840.  This significant investment in inventory is due to the time required to produce some cobalt products and the operating cycle for those products is considered to be approximately three years. Irradiation costs paid to the Department of Energy’s prime contractor account for approximately 84% of total work in process inventory cost for the six-month period ended June 30, 2011, and approximately 86% of total inventory cost for the same period in 2010.

Increases in accounts receivable reflect normal fluctuations in segment sales as well as payment terms.  Historically, we have not written off any accounts receivable and we expect that trend to continue.  For the six-month period ended June 30, 2011, we used $17,037 in investing activities.  During this six-month period we purchased a new computer server, transportation equipment, and other capital equipment used in our manufacturing processes for a total of approximately $150,000. We sold assets for proceeds of $18,500.  Financing activities used $27,607 of cash during the six months ended June 30, 2011, primarily for loan payments.  We borrowed $45,000 from RadQual, LLC, for the purchase of a camera for use in the quality assurance processes related to the manufacture of flood source products.  The loan is for one year and bears an interest rate of 8.5%.

At June 30, 2011, we had two outstanding loans with Compass Bank.  One loan carries an outstanding balance of $11,085 with an interest rate of 9.25%, maturing on September 15, 2011.  The second loan, with an outstanding balance of $366,788 (the “Term Loan”) matured April 20, 2011, but was extended to August 29, 2011.   In June 2011 we received a notice of non-renewal from Compass Bank with respect to the Term Loan, therefore the outstanding balance of the Term Loan is expected to be paid in full with cash from our existing accounts by August 29, 2011. We also have an unsecured note payable totaling $500,000 which is payable to the former Chairman of the Board.  The loan requires annual interest payments on the principal balance at 7% per year, payable each April 1st, and the note matures on April 1, 2012. 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.

We are continuing to pursue the planning, licensing and construction of a depleted uranium de-conversion and fluorine extraction processing facility.  We spent approximately $3,300,000 during the first six months of 2011 on planning, licensing, and other expense for this project, and will continue this work as funding becomes available to us.  During the first six months of 2011, we continued work in support of the licensing process with the NRC, worked on the transfer of property for the facility, completed contract negotiations and selected a design and build contractor for the project, and continued to work towards completing sales agreements for the sale of products from the proposed facility. In July 2011, we announced the selection of Parsons as the design-build contractor for the facility and completed a letter of intent documenting the contract terms.

- 23 -

It will require significant capital and time to design, license, and construct such a uranium de-conversion facility. Nonetheless, the Company believes that the commercial opportunity will justify this investment and it has taken several actions in 2010 and 2011, to put this plan in place. In February 2010, the Company issued convertible debentures with an aggregate principal balance of $3,075,000 and in October 2010 completed a private offering generating proceeds of approximately $5,800,000. These funds were raised to provide continuing support for the costs associated with the construction and licensing of the de-conversion facility, and it is planned, as funds become available, that significant costs will continue to be incurred.

We are exploring several options for funding of the project at this time including a loan under the Department of Energy Loan Guarantee Program solicitation for renewable energy, and energy savings in manufacturing projects. Under that program the DOE makes relatively low interest loans through the federal bank to approved projects. We have submitted an application under this program and anticipate some indication from the DOE of award status in 2012. We have submitted an application to the DOE Loan Guarantee Office for a loan for the construction of our de-conversion and FEP facility. There can be no guarantee that the DOE will determine our project to be a qualifying project or that the DOE will award us a loan. If the loan application is unsuccessful, we will have to raise the balance of the funds required for the planned facility through additional equity or debt financing. There can be no assurance that we will be able to secure additional equity or debt financing on acceptable terms, or at all, if the DOE loan is not available.

We have a long term investment of $1,414,747, which represents a 24.5% ownership in units of RadQual, LLC. The value of this asset is based upon the purchase price of those shares and the continued business performance of RadQual, LLC. We purchased these shares with the intent to eventually acquire the remaining shares of RadQual, LLC and thus improve the revenues and profit margin for the nuclear medicine business segment.  At the present time there is no immediate action pending or planned to acquire the remainder of those shares.  Future plans to complete this acquisition will depend upon our ability to obtain additional capital and RadQual, LLC stockholders being willing to sell.

Our 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.

On October 29, 2010 we completed a private placement for cash proceeds of $5,815,000.  We issued 29,075,000 units with each unit consisting of one share of common stock and one warrant to purchase one share of common stock for an exercise price of $0.40.  The warrants expire in five years and contain a call provision that permits the Company to call the warrants in the event that the Company's closing stock price is greater than $0.80 per share for any 20 consecutive trading days.  The proceeds of this offering will be used to continue our efforts on the licensing and design of our planned uranium de-conversion and fluorine extraction processing facility in New Mexico.  At June 30, 2011, there were 56,552,970 outstanding warrants to purchase common stock.  Included in these are 8,200,000 Class F warrants issued in November 2008, with an exercise price of $0.30 per share and an expiration date of November 10, 2013.  On March 20, 2011, 13,333,331 Class E warrants expired pursuant to the terms of the warrant agreement. On March 25, 2011, we issued 13,333,331 Class J Warrants, to previous holders of Class E warrants, with an exercise price of $0.43 per share and an expiration date of September 25, 2011.