Q:

Is cumulative voting permitted for the election of directors?

A:No. We do not allow you to cumulate your vote in the election of directors.  For all matters proposed for shareholder action at the Annual Meeting, each share of common stock outstanding as of the close of business on the Record Date is entitled to one vote.

Q:

What happens if additional matters are presented at the Annual Meeting?

A:Other than the five items of business described in this proxy statement, we are not aware of any other business to be acted upon at the Annual Meeting.  If you grant a proxy, the persons named as proxy holders, Christopher Grosso and Steve T. Laflin, will have the discretion to vote your shares on any additional matters properly presented for a vote at the Annual Meeting.  If for any unforeseen reason any of our nominees is not available as a candidate for director, the persons named as proxy holders will vote your proxy for such other candidate or candidates as may be nominated by the Board, unless the Board chooses to reduce the number of directors serving on the Board.

Q:

What should I do if I receive more than one set of voting materials?

A:

You may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards.  For example, if you hold your shares in more than one brokerage account, you may receive a separate voting instruction card for each brokerage account in which you hold shares.  If you are a shareholder of record and your shares are registered in more than one name, you will receive more than one proxy card.  Please complete, sign, date and return, with respect to each proxy card and voting instruction card that you receive, or vote via telephone or Internet, as applicable.

Q:

Who will bear the cost of soliciting votes for the Annual Meeting?

A:   We are making this solicitation and will pay the entire cost of preparing, assembling, printing, mailing and distributing these proxy materials and soliciting votes.  In addition to the mailing of these proxy materials, the solicitation of proxies or votes may be made in person, by telephone or by electronic communication by our directors, officers and employees, who will not receive any additional compensation for such solicitation activities.  Upon request, we will reimburse brokerage houses and other custodians, nominees and fiduciaries for forwarding proxy and solicitation materials to shareholders.  Your cooperation in promptly voting your shares and submitting your proxy by telephone, Internet or by completing and returning the enclosed proxy card will help to avoid additional expense.

Q:

Where can I find the voting results of the Annual Meeting?

A:We intend to announce the voting results of the Annual Meeting in a Current Report on Form 8-K, which we expect to file with the Securities and Exchange Commission (SEC) within four business days following the Annual Meeting.

Q:

What is the deadline to propose actions for consideration at next year's annual meeting of shareholders or to nominate individuals to serve as directors?

A:

You may submit proposals, including director nominations, for consideration at future shareholder meetings.

Shareholder Proposals: For a shareholder proposal to be considered for inclusion in our proxy statement for the 2019 Annual Meeting of Shareholders pursuant to SEC Rule 14a-8, the written proposal must be received by our Secretary at our principal executive offices no later than February 19, 2019.  If the date of the 2018 Annual Meeting of Shareholders is moved more than 30 days before or after the anniversary date of this year’s Annual Meeting, the deadline for inclusion of proposals in our proxy statement is instead a reasonable time before we begin to print and mail the proxy materials.  Such proposals must also comply with SEC regulations regarding the inclusion of shareholder proposals in company-sponsored proxy materials.  Proposals should be addressed to:

International Isotopes Inc.

Attn: Laurie McKenzie-CarterSecretary

4137 Commerce Circle

Idaho Falls, Idaho 83401

INTERNATIONAL ISOTOPES INC. | 2017 PROXY STATEMENT | 5

For a shareholder proposal that is not intended to be included in our proxy statement as described above, the shareholder must deliver a proxy statement and form of proxy to holders of a sufficient number of shares of our common stock to approve that proposal and give notice to us no later than May 5, 2019.

Nomination of Director Candidates: You may propose director candidates for consideration by the Board.  Any such recommendations should include the nominee's name and qualifications for Board membership and should be directed to our Secretary at the address of our principal executive offices set forth above.

Q:

Q:   How may I communicate with the Board or the non-employee directors on the Board?

Q:

Where can I find the voting results of the Annual Meeting?

A:Any shareholder or other interested party may contact the Board or any individual director, including any non-employee director or the non-employee directors as a group, by directing the communication by mail or fax addressed to International Isotopes Inc., Attn: Chairman of the Board of Directors, 4137 Commerce Circle, Idaho Falls, Idaho 83401, Fax: (208) 524-1411.  In general, any shareholder communication delivered to us for forwarding to the Board or specified directors will be forwarded in accordance with the shareholder’s instructions.

INTERNATIONAL ISOTOPES INC. | 2017 PROXY STATEMENT | 6

PROPOSAL NO. 1: ELECTION OF DIRECTORS

Our Board currently consists of three directors: Dr. Robert Atcher, Christopher Grosso and Steve T. Laflin. At the Annual Meeting, each director will be elected to serve until the next annual meeting of shareholders and until his or her successor is elected and qualified.  Information regarding the business experience of each nominee to the Board is provided below. There are no family relationships among our executive officers and directors.

If you are a record holder and you sign your proxy card, but do not give instructions with respect to the voting of directors, your share will be voted “FOR” the three director nominees recommended by the Board. If you wish to give specific instructions with respect to the voting of directors, you may do so by indicating your instructions on your proxy card.

The Board expects that all of the director nominees will be available to serve as directors, and each of the director nominees has consented to being named in this proxy statement. In the event that any director nominee should become unavailable, however, the proxy holders, Steve T. Laflin and Christopher Grosso, will vote for a director nominee or nominees designated by the Board, unless the Board chooses to reduce the number of directors serving on the Board.

Director Nominees

Biographical information and the business experience for our directors who were nominated by our Board for re-election at the Annual Meeting is set forth below.

Christopher Grosso, age 50,52, has served as a director since April 2002 and as the Chairman of the Board since July 2017. Mr. Grosso has been a partner of Kershner Grosso, Inc. (“Kershner Grosso”), a New York based money management firm, since 1998. Mr. Grosso is also currently a member of RadQual, LLC (“RadQual”), a global supplier of molecular imaging quality control devices, inof which we ownowned a 24.5% interest, as of December 31, 2019, and for which we act as managing member. From 1989 to 1998, Mr. Grosso was a Senior Research Analyst and Portfolio Manager with Kershner Grosso. He currently leads the firm’s investment research, stock selection and trading activities. Prior to joining Kershner Grosso, Mr. Grosso was with Howe and Rusling Investment Management and Chase Manhattan Bank. Mr. Grosso received a B.S. in Business Administration from Skidmore College. Mr. Grosso’s significant financial expertise, including extensive experience with capital markets, investment banking and venture capital transactions, provides invaluable expertise to our Board in matters regarding our capital requirements and strategic direction.

Dr. Robert Atcher, age 66,68, has served as a director since August 2017. Dr. Atcher retired in 2017 from the Los Alamos National Laboratory, a national nuclear laboratory for the U.S. Department of Energy, where, for over 20 years, he worked on various medical applications for isotopes. Dr. Atcher currently servesalso retired as the UNM/LANL Professor of Pharmacy in the College of Pharmacy at University of New Mexico. Dr. Atcher recently served as President of the Education and Research Foundation for the Society of Nuclear Medicine and Molecular Imaging, a nonprofit foundation to support research and training for professionals in the field, and he is a past president and fellow of the Society of Nuclear Medicine and Molecular Imaging. He is also a Fellow of the American Institute of Chemistry. Dr. Atcher graduated from Washington University in St. Louis with a degree in Chemistry, received his Ph.D. from the University of Rochester in Nuclear Chemistry, and his postdoctoral training was done at Harvard Medical School in Boston, Massachusetts. He also received an M.B.A. from the University of New Mexico. Dr. Atcher also holds an adjunct faculty appointment in the Radiopharmacy Program at the College of Pharmacy, University of New Mexico. Dr. Atcher is a radiopharmaceutical chemist who has focused his work on the diagnosis and treatment of cancer and heart disease. Dr. Atcher’s significant expertise nuclear medicine provides invaluable expertise to our Board in matters regarding our operations and strategic direction.

Steve T. Laflin, age 61,63, has served as a director since June 2001. Since August 2001, Mr. Laflin has also served as our President and Chief Executive Officer. Mr. Laflin is also currently a member of RadQual. From 1996 to 2001, he served as President and General Manager of International Isotopes Idaho Inc., one of our subsidiaries. Mr. Laflin received a B.S. degree in Physics from Idaho State University and has been employed in various senior engineering and management positions in the nuclear industry since 1992. In addition to his institutional knowledge from his long tenure of service to us and his position as an executive officer, Mr. Laflin’s significant engineering and management background in the nuclear industry is invaluable to the Board.

INTERNATIONAL ISOTOPES INC. | 2017 PROXY STATEMENT | 7

CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS

We are committed to having sound corporate governance principles, which are essential to running our business efficiently and maintaining our integrity in the marketplace.  Our Code of Ethics is available atwww.internationalisotopes.com www.intisoid.com in the Investor Center section of our website.

Board Independence

The Board has determined that each of theour current directors and nominees, other than Steve T. Laflin, is “independent” under the NASDAQ listing rules.rules of The Nasdaq Stock Market (“Nasdaq”).  Mr. Laflin is not considered independent because he currently serves as our President and Chief Executive Officer. Furthermore, the Board has determined that none of the members of anyeither of our standing committees has a material relationship with us (either directly, through a family member or as a partner, executive officer or controlling shareholder of any organization that receives or makes payments from or to us) and each is “independent” within the meaning of NASDAQ’sNasdaq’s director independence standards under the NASDAQ Listing Rules.Nasdaq listing rules.

Board Structure and Committee CompositionCommittees

Our Board has three directors and the following two standing committees: (1) Audit Committee and (2) Compensation Committee.  Christopher Grosso serves as the Chairman of the Board and Mr. Laflin serves as our President and Chief Executive Officer and as a director.  The Board does not have a policy regarding separation of the roles of Chief Executive Officer and Chairman of the Board.  The Board believes it is in our best interests to make that determination based on current circumstances.  The Board has determined that having a separate Chairman and Chief Executive Officer at this time is appropriate given the current characteristics of our management and is in the best interest of our company and our shareholders.  Mr. Grosso, with his significant financial expertise and experience with the Company, is most capable of effectively identifying strategic priorities, leading Board discussions and defining our strategic objectives.  Mr. Laflin, as our President and Chief Executive Officer, is the individual selected by the Board to manage our company on a day-to-day basis, and his direct involvement in our operations allows him to provide valuable insights with respect to strategic planning, the operational requirements to meet our short- and long-term objectives, and management of risks facing our company.  Our independent directors bring experience, oversight and expertise from outside our company and the industry.

The membership and the function of each of the committees are described below.  The Audit Committee operates under a written charter adopted by the Board, which is available on our website at www.internationalisotopes.comin the Investor Center section.section of our website at www.intisoid.com. The Compensation Committee does not have a written charter.  During fiscal 2017, the Board held six meetings.  Each director attended at least 75% of all Board and applicable committee meetings.

Audit Committee

The Audit Committee assists the Board in overseeing the integrity of our financial statements, our compliance with legal and regulatory requirements, our independent registered public accounting firm’s qualifications and independence, and the performance of ourany internal audit function and our independent registered public accounting firm. The Audit Committee is comprised of two members, Christopher Grosso and Dr. Robert Atcher, with Mr. Grosso serving as the chairman. Each of Mr. Grosso and Dr. Atcher is an “independent” director for audit committee service under the NASDAQNasdaq listing rules and applicable SEC rules and regulations. The Audit Committee is directly responsible for the appointment, compensation, and oversight of our independent registered public accounting firm, and our independent auditing firm reports directly to the Audit Committee. The responsibility of the Audit Committee includes resolving disagreements between our management and the independent registered public accounting firm related to financial reporting. The Audit Committee is also responsible for establishing procedures for receipt of complaints relating to accounting, internal control, and auditing and confidential, anonymous information submitted by employees relating to questionable accounting or auditing matters. The Audit Committee has the authority to employ independent counsel and other advisors in connection with its duties. The Board has determined that each of Mr. Grosso and Dr. Atcher are “audit committee financial experts” based on their prior experience as disclosed in their respective biographies on page 7 above.in the section entitled “Proposal No. 1: Election of Directors—Director Nominees.” The Audit Committee held threeone meetings in 2017.2019.

The report of the Audit Committee is included on page 11in the section entitled “Audit Committee Report” of this proxy statement.

Compensation Committee

The Compensation Committee reviews the compensation and benefits of all of our officers annually, makes recommendations to the Board and reviews general policy matters relating to compensation and benefits of our employees, including administration of our equity compensation plans. The Compensation Committee is comprised of two members, Christopher Grosso and Dr. Robert Atcher, with Mr. Grosso serving as the chairman. The Compensation Committee held threeone meetings in 2017.2019.  We do not use any compensation consultants to determine, or recommend, any compensation for our officers or directors.  Executive officers have no role in determining their own compensation.  The non-employee directors approve the compensation of our Chief Executive Officer. The entire Board, including Mr. Laflin, our President and Chief Executive Officer, approves the compensation of our Chief Financial Officer.  The practice of the Board has been to require unanimous

INTERNATIONAL ISOTOPES INC. | 2017 PROXY STATEMENT | 8

approval to approve any action with respect to director compensation.

Nominating Committee

We do not have a standing nominating committee or committee performing similar functions or a nominating committee charter. The Board believes it is appropriate not to have such a committee because the entire Board, including both of our independent Board members, Mr. Grosso and Dr. Atcher, participateeach of whom is “independent” under Nasdaq listing rules, participates in the consideration of director nominees. Mr. Grosso and Dr. Atcher are both “independent” under NASDAQ listing rules. The Board will continue to assess the necessity of a nominating committee and will establish one, if necessary, in the future. The entire Board considers any director nominees recommended by shareholders.shareholders, as detailed below.

Consideration of Director Nominees

Shareholder Nominees.  The Board does not have a formal policy regarding the consideration of director candidates nominated by shareholders because the Board is small and there is low turnover among its members.  Shareholders may nominate director candidates in writing, including the nominee’s name and qualifications for Board membership, directed to our Secretary at the address of our principal executive offices set forth above. Assuming that appropriate and requisite information has been provided on a timely basis, the Board will evaluate shareholder-recommended candidates by following substantially the same process, and applying substantially the same criteria, as it follows for candidates submitted by others.

Director Qualifications.  Board members should have high standards of professional and personal ethics, integrity and values.  They should have relevant experience and ability with respect to making and overseeing policy in business, technology, government or education sectors.  They should be committed to acting in our best interests and to objectively assessing Board, committee and management performance.  They should have sufficient time to carry out their duties and should have the willingness and ability to serve multiple terms to develop a deeper understanding of our business affairs.  Board members should be willing to avoid activities or interests that may create a conflict of interest with the director’s responsibilities and duties to us. We do not have a separate policy regarding consideration of diversity in identifying director nominees, but the Board strives to nominate directors with a variety of skills and backgrounds so that, as a group, the Board will possess a broad perspective and the appropriate talent, skills and expertise to oversee our business.

Identifying and Evaluating Nominees for Directors.  The Board uses a variety of methods for identifying and evaluating nominees for director. In the event of a vacancy on the Board, various potential candidates for director will be considered. Candidates may come to the Board'sBoard’s attention through current Board members, professional search firms, shareholders or other persons. These candidates will be evaluated at regular or special meetings of the Board, and, may be considered at any point during the year. As noted above, properly submitted shareholder nominations for candidates to the Board will be considered. Following verification of the shareholder status of persons proposing candidates, recommendations will be aggregated and considered by the Board at a regularly scheduled meeting. If any materials are provided by a shareholder in connection with the nomination of a director candidate, such materials will be forwarded to the Board. In evaluating nominees, the Board will seek to achieve a balance of knowledge, experience and capability on the Board.

Board and Committee Meetings and Attendance

During 2019, the Board held three meetings.  Each director attended at least 75% of the aggregate of: (i) the total number of meetings of the Board (held during the period for which he was a director); and (ii) the total number of meetings held by all committees of the Board on which he served (during the period that he served).

Attendance of Directors at 2019 Annual Meeting of Shareholders

While we do not have a formal policy requiring our directors to attend shareholder meetings, directors are invited and encouraged to attend all meetings of shareholders. All of our directors at the time attended the 2019 Annual Meeting of Shareholders.

Board Leadership Structure

Christopher Grosso serves as the Chairman of the Board and Mr. Laflin serves as our President and Chief Executive Officer and as a director.  The Board does not have a policy regarding separation of the roles of Chief Executive Officer and Chairman of the Board. The Board believes it is in our best interests to make that determination based on current circumstances. The Board has determined that having a separate Chairman and Chief Executive Officer at this time is appropriate given the current characteristics of our management and is in the best interest of our company and our shareholders.  Mr. Grosso, with his significant financial expertise and experience with the Company, is most capable of effectively identifying strategic priorities, leading Board discussions and defining

our strategic objectives. Mr. Laflin, as our President and Chief Executive Officer, is the individual selected by the Board to manage our company on a day-to-day basis, and his direct involvement in our operations allows him to provide valuable insights with respect to strategic planning, the operational requirements to meet our short- and long-term objectives, and management of risks facing our company.  Our independent directors bring experience, oversight and expertise from outside our company and the industry.

The Board’s Role in Risk Oversight

The Board oversees our risk management activities. One of the Board’s primary responsibilities under our corporate governance guidelines is reviewing our strategic plans and objectives, including our principal risk exposures. The Board addresses, at least annually, our principal current and future risk exposures, including any cyber-security risks. The Board receives regular reports from members of its committees, senior management and professional consultants on areas of material risk to our business, including operational, financial, legal and regulatory, and strategic and reputation risks. The Audit Committee oversees our procedures for the receipt, retention and treatment of complaints relating to accounting and auditing matters and oversees our management of legal and regulatory compliance systems. The Compensation Committee oversees risks relating to our compensation plans and programs. The Compensation Committee has reviewed and considered our compensation policies and programs in light of the Board’s risk assessment and management responsibilities and will do so in the future on an annual basis. The Compensation Committee believes that we have no compensation policies and programs that give rise to risks reasonably likely to have a material adverse effect on us.

Attendance of Directors at 2017 Annual Meeting of Shareholders

While we do not have a formal policy requiring our directors to attend shareholder meetings, directors are invited and encouraged to attend all meetings of shareholders.  All of our directors at the time of the meeting attended the 2017 Annual Meeting of Shareholders.

Code of Ethics

We have adopted a Code of Ethics for our principal executive officer, principal financial officer, principal accounting officer or controller, and directors. The Code of Ethics is available under the Investor Center of our website at www.internationalisotopes.com.www.intisoid.com. We intend to disclose any changes in or waivers from the Code of Business Conduct and Ethics that are required to be disclosed by posting such information on our website.

INTERNATIONAL ISOTOPES INC. | 2017 PROXY STATEMENT | 9

PROPOSAL NO. 2: RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Eide Bailly LLP (“Eide Bailly”)

Haynie & Company has been appointed by the Audit Committee to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2018.  Eide Bailly2020. Haynie & Company has served as our independent registered public accounting firm since September 2013.November 2018. Representatives of Eide BaillyHaynie & Company are expected to attend the Annual Meeting in person or via teleconference, where they will be available to respond to appropriate questions and, if they desire, to make a statement.

Although shareholder approval is not required, we desire to obtain from our shareholders an indication of their approval or disapproval of the Audit Committee’s action in appointing Eide BaillyHaynie & Company as our independent registered public accounting firm of our company for 2018.2020. If our shareholders do not ratify and approve this appointment, the Audit Committee will consider whether it should select other independent auditors.

Change in Independent Registered Public AccountantAccounting Firm

On November 16, 2018, the Audit Committee dismissed Eide Bailly LLP (“Eide Bailly”) as our independent registered public accounting firm. In addition, on November 16, 2018, the Audit Committee engaged Haynie & Company as our independent registered public accounting firm to audit our consolidated financial statements as of and for the fiscal year ended December 31, 2018.

The audit reports of Eide Bailly on our consolidated financial statements as of and for the years ended December 31, 2016 and 2017 did not contain any adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles.

During the two fiscal years ended December 31, 2016 and 2017, and the subsequent interim period through the dismissal of Eide Bailly, there were: no (1) disagreements with Eide Bailly on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements if not resolved to their satisfaction would have caused Eide Bailly to make reference in connection with their opinion to the subject matter of the disagreement, or (2) “reportable events” within the meaning of Item 304(a)(1)(v) of Regulation S-K.

During the two most recent years ended December 31, 2016 and 2017, and the subsequent interim period preceding Haynie & Company’s engagement, we did not consult with Haynie & Company regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on our financial statements, and no written or oral advice was provided to us by Haynie & Company that Haynie & Company concluded was an important factor considered by us in reaching a decision as to any accounting, auditing, or financial reporting issue; or (ii) any matter that was subject of a disagreement, as that term is defined in Item 304(a)(1)(iv) of Regulation S-K, or other reportable event of the types described in Item 304(a)(1)(v) of Regulation S-K.

Independent Registered Public Accounting Firm Fees

Fees billed by Haynie & Company in fiscal years 2018 and 2019 were as follows:

______________

Fees billed by Eide Bailly in fiscal years 2016 and 2017year 2018 were as follows:

______________

For professional services for auditing our annual financial statements and reviewing the financial statements included in our other periodic reports filed with the SEC.

Pre-Approval Policies and Procedures

The Audit Committee is required to pre-approve all audit and non-audit services provided by our independent registered public accounting firm. The Audit Committee approved the engagementengagements of Eide Bailly LLPand Haynie & Company, as applicable, to provide audit services prior to their engagementrespective engagements and approvedpre-approved all of the services and fees of our independent registered public accounting firmfirms for 20162018 and 2017.2019.

INTERNATIONAL ISOTOPES INC. | 2017 PROXY STATEMENT | 10

AUDIT COMMITTEE REPORT

The Audit Committee has reviewed and discussed our audited financial statements for the fiscal year ended December 31, 20162019 with our management and Eide Bailly LLP,Haynie & Company, our independent registered public accounting firm. Management is responsible for the preparation, presentation and integrity of the financial statements, accounting and financial reporting principles and internal control over financial reporting. Eide Bailly LLPHaynie & Company is responsible for performing an independent audit of the financial statements in accordance with generally accepted auditing standards and for expressing opinions on the conformity of the financial statements with accounting principles generally accepted in the United States.

The Audit Committee has discussed with Eide Bailly LLPHaynie & Company the matters required to be discussed by PCAOB AS Section 1301, Communications with Audit Committees,the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and related regulations,the SEC, and has received the written disclosures and the letter from Eide Bailly LLP regarding its independence asHaynie & Company required by applicable requirements of the Public Company Accounting Oversight BoardPCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence.  The Audit Committeeindependence, and has discussed with Eide Bailly LLPHaynie & Company their independence.

Based on the review and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 20172019 for filing with the SEC.  

Audit Committee Report Submitted by:

Christopher Grosso, Chairman

Robert Atcher

PROPOSAL NO. 3: APPROVAL OF THE INTERNATIONAL ISOTOPES INC. | 2017 PROXY STATEMENT | 11AMENDED AND RESTATED

EMPLOYEE STOCK PURCHASE PLAN

PROPOSAL NO. 3: ADVISORY VOTE TO APPROVE THE COMPENSATION

OF OUR NAMED EXECUTIVE OFFICERS

Pursuant to Section 14AOur Board is seeking shareholder approval of the Securities Exchange ActInternational Isotopes Inc. Amended and Restated Employee Stock Purchase Plan (as amended and restated, the “A&R ESPP”). The A&R ESPP allows employees to purchase shares of 1934,our common stock at a discount using payroll deductions. Shareholder approval of the A&R ESPP would entitle employees in the United States to receive special tax treatment provided by the Internal Revenue Code of 1986, as amended (the “Exchange Act”“Code”),.

The Board adopted the A&R ESPP, upon recommendation of the Compensation Committee, to amend and restate the International Isotopes Inc. Employee Stock Purchase Plan (the “ESPP”) and increase the number of shares authorized for issuance by 3,000,000 shares, subject to shareholder approval at the Annual Meeting, resulting in an aggregate share authorization of up to 5,000,000 shares. As of April 15, 2020, and prior to the requested increase, there were a total of approximately 233,454 shares available for future issuance under the ESPP.

If the A&R ESPP is approved by shareholders, it will replace the ESPP and no additional shares will be available for purchase under the ESPP. If stockholders do not approve the A&R ESPP, the ESPP will remain available for employees purchase shares thereunder, to the extent shares are available. As of April 15, 2020, we are asking our shareholders to vote to approve, on a nonbinding, advisory basis, the compensationhad outstanding 423,709,226 shares of our named executive officers, commonly referredcommon stock.

A copy of the A&R ESPP is attached to this proxy statement asAppendix A. The description below is a summary and not intended to be a complete description of the “say-on-pay” vote. In accordance withA&R ESPP. Please read the Exchange Act requirements, we are providing our shareholdersA&R ESPP for more detailed information.

Description of the A&R ESPP

The purpose of the A&R ESPP is to provide employees with an opportunity to express their views on our named executive officers’ compensation.  Although this advisory votepurchase shares of common stock. The A&R ESPP has two portions—one portion for employees in the United States and one portion for international employees.

The portion of the A&R ESPP for employees in the United States is nonbinding, our Board and Compensation Committee will review and considerintended to qualify as an “employee stock purchase plan” under Section 423 of the voting results when making future decisions regarding our named executive officer compensation and related executive compensation programs.   Our current policy is to provide shareholders with an opportunity to approve the compensation of our named executive officers each year at the annual meeting of shareholders until the next required shareholder vote on the frequencyCode. The provisions of such votes, which will occur at our 2019 Annual Meeting of Shareholders.

At our 2017 Annual Meeting of Shareholders in July 2017, we held our annual vote on an advisory resolution to approve the compensation of our named executive officers. The compensation of our named executive officers reported in our 2017 proxy statement was approved by approximately 99%portion of the votes cast atA&R ESPP, accordingly, will be construed so as to extend and limit participation in a manner consistent with the 2017 Annual Meetingrequirements of Shareholders.  Our Boardthat section of the Code.

A total of 5,000,000 shares of common stock will be available for issuance and purchase under the A&R ESPP. If any purchase right terminates for any reason without having been exercised, the shares of common stock not purchased under such purchase right shall again become available for the A&R ESPP.

The A&R ESPP will be administered by the Compensation Committee believe this affirms our shareholders’ support of our approach to executive compensation, and therefore,Board or any other committee appointed by the Board andto administer the A&R ESPP. References to the “committee” below are, as applicable, to the Compensation Committee did not change their approachor other committee appointed by the Board. The committee has the full and exclusive discretionary authority to, executive compensation in 2017. The Boardamong other things, construe and interpret the A&R ESPP and the Compensation Committee will continuerights granted under it, to consider the outcomedesignate from time-to-time which of our say-on-pay votes when makingsubsidiaries will participate in the A&R ESPP, to establish offering and purchase periods under the A&R ESPP, to establish rules and regulations for the administration of the A&R ESPP, to amend the A&R ESPP to satisfy applicable laws, to obtain any exemption under such laws or to reduce or eliminate any unfavorable legal, accounting or other consequences and to permit payroll withholding adjustments to adjust for delays or mistakes in processing of withholding elections. The committee also may adopt special rules for employees of our international subsidiaries to conform to the particular laws and practices of the countries in which such employees reside. Members of the committee will receive no compensation for their services in connection with the administration of the A&R ESPP, other than standard fees as established from time to time by the Board for services rendered by Board members serving on Board committees. All expenses incurred in connection with the administration of the A&R ESPP will be paid by the Company.

Eligibility

Generally, all employees whose customary employment is for more than 20 hours per week and whose customary employment is for more than five months in any calendar year are eligible to participate in the A&R ESPP. Employees of designated subsidiaries outside the United States may have different eligibility requirements as determined appropriate by the committee, for example, to accommodate local requirements and practices. However, any employee who would own or have options to acquire 5% or more of the total combined voting power or value of all classes of stock of the Company or any subsidiary is excluded from participating in the A&R ESPP. As of April 15, 2020, there would have been approximately 35 employees eligible to participate in the A&R ESPP.

Purchase of Shares of Common Stock

Pursuant to procedures established by the committee, eligible employees may elect to have a portion of their compensation used to purchase shares of common stock. Purchase periods are established and purchases of shares of common stock are made on the last trading day of the purchase period with compensation amounts withheld from employees during the purchase period. Pursuant to procedures established by the committee, employees may withdraw with respect to a future purchase period. If an employee withdraws from a future purchase period, such employee may not recommence withholding of compensation decisions for the purchase of shares of common stock until the following purchase period.

On each purchase date (the last trading day of each purchase period), any amounts withheld from an employee’s compensation during the applicable purchase period for purposes of the A&R ESPP will be used to purchase the greatest number of whole shares of common stock that can be purchased with such amounts. The purchase price for a share of common stock will be the lesser of (i) 85% of the fair market value of a share of common stock on the first trading day of the purchase period and (ii) 85% of the fair market value of a share of common stock on the purchase date, unless the committee determines a higher percentage. For purposes of the A&R ESPP, “fair market value” generally means the closing sales price of a share of common stock for the day. As of April 15, 2020, the closing sales price of a share of our named executive officers.common stock as reported on the OTCBB was $0.06 per share.

The Code limits the aggregate fair market value of the shares of common stock (determined as of the beginning of the purchase period) that any employee in the United States may purchase under the A&R ESPP during any calendar year to $25,000. In addition, the committee may, in its discretion, limit the maximum number of shares an employee can purchase in any single purchase period, subject to adjustment as provided under the A&R ESPP. Employees in the United States must notify us if shares of common stock are disposed of in a disposition that does not satisfy the holding period requirements of Section 423 of the Code (generally, as discussed below, two years from the beginning of the applicable purchase period). In addition, the committee may require employees to hold any shares purchased under the A&R ESPP for a specified period of time from the purchase date.

We encourage shareholders to readwill pay the section titled “Compensation of Directors and Executive Officers” in this proxy statement, includingadministrative costs associated with the compensation tables and the related narrative disclosure, which describes the structure and amountsoperation of the compensationA&R ESPP. The employees will pay any brokerage commissions that result from their sales of our named executive officers in fiscal year 2017.  The compensationshares of our named executive officers is designed to enable us to attract and retain talented and experienced executives to lead us successfully in a competitive environment.  The Compensation Committee and our Board believe that our executive compensation strikes the appropriate balance between utilizing responsible, measured pay practices and effectively incentivizing our named executive officers to dedicate themselves fully to value creation for our shareholders.common stock.

Accordingly, we ask our shareholders to vote “FOR” the following resolution at the Annual Meeting:

“RESOLVED, that the stockholders approve, on an advisory basis, the compensation of our named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the compensation tables and any other related disclosure in this proxy statement.”

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PROPOSAL NO. 4: APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE

INTERNATIONAL ISOTOPES INC. 2015 INCENTIVE PLAN

We may deduct or withhold or require employees to pay to us any federal, state, local and other taxes we are asking shareholdersrequired to approve an amendment and statementwithhold with respect to any event arising as a result of the International Isotopes 2015 Incentive Plan (as amended,A&R ESPP. We may also deduct those amounts from the “employees’ wages or compensation.

2015 Plan”).  Effect of Certain Corporate Events

The 2015 Plan amended and restated our 2006 Equity Incentive Plan.  The sole purposeA&R ESPP provides for adjustment of the amendment and restatement of the 2015 Plan is to increase the number of shares of common stock available for issuancewhich may be granted under the 2015 Plan by 20,000,000 shares.

The purpose ofA&R ESPP as well as the 2015 Plan is to attract, retain and motivate employees, officers, directors, and other service providers of the Company and its affiliated companies by providing them the opportunity to acquire a proprietary interest in the Company and to align their interests and efforts to the long-term interests of the Company’s shareholders.  The Company currently has no other plan from which it can grant equity awards to employees.  As of April 18, 2018, 12,501,331 sharespurchase price per share of common stock remained available for future grants of equity awards under the 2015 Plan.

The amendment and restatement of the 2015 Plan was approved by the Board of Directors on April 19, 2018 and will become effective upon shareholder approval at the Annual Meeting.

The Board of Directors believes that additional shares of common stock should be reserved for use under the 2015 Plan to enable the Company to attract and retain key employees through the granting of awards under the Plan.  In the event that the required votes to approve the amendment and restatement of the 2015 Plan are not obtained, the amended 2015 Plan will not become effective and the Company will continue to make grants of awards pursuant to the terms of the 2015 Plan as currently in effect and subject to applicable law.

In setting the number of proposed additional shares issuable under the 2015 Plan, the Board considered a number of factors including: shares currently available under the 2015 Plan and how long the shares available (both currently and assuming the approval by the shareholders of this Proposal No. 4) are expected to last, historical equity award granting practices, impact of equity awards under the 2015 Plan and dilution.

Summary of the Plan

A copy of the 2015 Plan is attached to this Proxy Statement as Appendix A and is incorporated herein by reference. The following description is a summary and does not purport to be a complete description and is qualified in its entirety by reference to the text of the 2015 Plan set forth in Appendix A.

Administration - The Compensation Committee

The 2015 Plan is administered by the Company’s Board of Directors or Compensation Committee of the Company’s Board of Directors (the “committee”). The committee has the authority to administer the plan, including, among other things, the power to select individuals to whom awards are granted, to determine the types of awards and the number of shares subject toof common stock covered by each award, to set the terms, conditions and provisions of such awards, to cancelpurchase right for any increase or suspend awards and to establish procedures pursuant to which the payment of any such awards may be deferred.  To the extent consistent with applicable law, the committee may delegate to one or more of the Company’s officers or a committee of one or more directors the right to grant to employees awards based on grant guidelines approved in advance by the committee.

Eligibility

Awards may be granted under the 2015 Plan to employees, officers and directors, including non-employee directors, and consultants, agents, advisors and independent contractors of the Company and its affiliates. As of April 18, 2018, approximately 30 employees and 2 non-employee directors were eligible to participatedecrease in the 2015 Plan.

Types of Awards

The 2015 Plan permits the granting of any or all of the following types of awards: (1) incentive and nonqualified stock options, (2) stock appreciation rights, (3) stock awards restricted stock and stock units, (4) performance shares and performance units conditioned upon meeting performance criteria and (5) other stock or cash-based awards.

Stock Options. Stock options entitle the holder to purchase a specified number of shares of the Company’s common stock atresulting from a specified price, which is called the exercise price, subject to the terms and conditions of the option grant. The exercise price of stock options under the 2015 Plan must be at least 100% of the fair market value of thesplit, reverse stock for the date of grant, except for certain grants madesplit, stock dividend, extraordinary cash dividend, combination or adjusted to assume or convert awards in connection with acquisition transactions. The committee will fix the term of each

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option, but no option under the 2015 Plan will be exercisable more than ten years after the option is granted. Each option will be exercisable at such time or times as determined by the committee. Options may be exercised, in whole or in part, by payment in full of the purchase price either in cash, delivery or withholdingreclassification of the common stock or deliveryrecapitalization, reorganization, consolidation, split-up, spin-off or any other increase or decrease in the number of othershares of common stock effected without receipt of consideration or by any combination of cash, stock and other consideration as may be determined byus.

In the committee. Options may also be exercised by meansevent of a broker-assisted cashless exercise.

After terminationproposed sale of service withall or substantially all of the assets of the Company or its affiliates, a participantthe merger of the Company with or into another corporation, outstanding rights to purchase shares will be ableassumed or an equivalent right to exercisepurchase shares substituted by the vested portionsuccessor corporation or a parent or affiliate of histhe successor corporation. If the successor corporation refuses to assume or her option forsubstitute the right to purchase shares, any purchase period then in progress will be shortened by setting a new purchase date and any purchase period then in progress will end on the new purchase date.

In the event of time statedany corporate transaction, the committee may make such adjustment it deems appropriate to prevent dilution or enlargement of rights in the option agreement. If noA&R ESPP, in the number, class of or price of shares of common stock available for purchase under the A&R ESPP and in the number of shares of common stock which an employee is entitled to purchase and any other adjustments it deems appropriate. In the event of any transaction, the committee may elect to have the purchase rights under the A&R ESPP assumed or such periodpurchase rights substituted by a successor entity, to terminate all outstanding purchase rights either prior to their expiration or upon completion of the purchase of shares of common stock on the next purchase date, or to take such other action deemed appropriate by the committee.

Amendment or Termination

The Board may amend the A&R ESPP at any time, is stated in a participant’s option agreement, a participant will generally be able to exercise his or her option for (i) three months following his or her termination for reasons other thanprovided such amendment does not cause retirement, death or disability and (ii) one year following his or her termination due to retirement, death or disability. If a participant is terminated for cause, all options generally will automatically expire. If a participant dies after termination of service but while an option is still exercisable,rights issued under the portion of the option that was vestedA&R ESPP for United States employees to fail to meet the requirements of Section 423 of the Code. Moreover, any amendment for which shareholder approval is required under Section 423 of the Code or any securities exchange on which the shares are traded must be submitted to the shareholder for approval. The Board may suspend or terminate the A&R ESPP ESPP at any time.

U.S. Federal Income Tax Consequences

The following discussion is only a brief summary of the United States federal income tax consequences to us and exercisableour employees under the portion of the A&R ESPP applicable to employees in the United States. It is based on the Code as in effect as of the date of terminationthis proxy statement. The discussion relates only to United States federal income tax treatment; state, local, foreign, estate, gift and other tax consequences are not discussed. The summary is not intended to be a complete analysis or discussion of all potential tax consequences.

The amounts deducted from an employee’s pay pursuant to the A&R ESPP will generally expire onbe included in the one-year anniversaryemployee’s compensation and be subject to federal income and employment tax. Generally, no additional income will be recognized by the employee either at the beginning of the participant’s death. In no event will an option be ablepurchase period when purchase rights are granted pursuant to be exercised later than the expirationA&R ESPP or at the time the employee purchases shares of its term.common stock pursuant to the A&R ESPP.

Stock Appreciation Rights (“SARs”). SARs may be granted alone (“freestanding”) or in additionIf the shares of common stock are disposed of at least two years after the first day of the purchase period to other awardswhich the shares of common stock relate and may, but need not, relate to a specific option grantedat least one year after the shares of common stock were acquired under the 2015 Plan. Upon exerciseA&R ESPP (the “holding period”), or if the employee dies while holding the shares of common stock, the employee (or in the case of the employee’s death, the employee’s estate) will recognize ordinary income in the year of disposition or death in an SAR,amount equal to the holder is entitled to receivelesser of (a) the excess of the fair market value of the shares for which the right is exercised over the grant price of the SAR. The committee may impose any conditions or restrictions on the exercise of an SAR as it deems appropriate, however, under the 2015 Plan the grant price of a freestanding SAR may not be less than the fair market value of the Company’s common stock for the date of grant, except for certain grants made or adjusted to assume or convert awards in connection with acquisition transactions, and the term will not be more than ten years. Payment upon such exercise will be in cash, stock, other property or any combination of cash, stock or other property as determined by the committee and set forth in the instrument evidencing the SAR. Any related option will no longer be exercisable to the extent the SAR has been exercised, and the related SAR will generally be canceled to the extent the option has been exercised.

Stock Awards, Restricted Stock and Stock Units. Awards of shares of stock, or awards designated in units of stock, may be granted under the 2015 Plan.  These awards may be made subject to forfeiture restrictions at the committee’s discretion, and the committee may waive any such restriction at any time in its sole discretion. Such restrictions may be based on continuous service with the Company or its affiliates and/or the achievement of performance criteria, as determined by the committee.  Until the lapse of the restrictions, recipients may not dispose of their restricted stock. Upon termination of employment during the restriction period, all shares of restricted stock still subject to restriction will be forfeited, subject to any exceptions that may be authorized by the committee.

Performance Awards. Performance awards may be in the form of performance shares, which are units valued by reference to shares of stock, or performance units, which are units valued by reference to cash or property other than stock. Performance shares or performance units may be payable upon the attainment of performance criteria and other terms and conditions as established by the committee, and the amount of any payment may be adjusted on the basis of such further conditions as the committee determines. Performance awards may be paid entirely in cash or in any combination of cash, stock or other property, in the discretion of the committee.

Other Stock or Cash-Based Awards. The committee is also authorized to grant to participants under the 2015 Plan, either alone or in addition to other awards granted under the 2015 Plan, incentives payable in cash or in shares of common stock subject to terms and conditions determined by the committee.

Shares Subject to the 2015 Plan

Number of Shares Reserved for Issuance. The 2015 Plan authorizes the issuance of up to 80,000,000 shares of common stock, plus 11,089,967 shares previously reserved but not issued under the2002 Long-Term Incentive Plan.  Shares of common stock covered by an award granted under the 2015 Plan will not be counted as used unless and until they are actually issued and delivered to a participant. Shares relating to awards granted under the 2015 Plan that are forfeited, settled for cash or otherwise terminated and shares withheld by or tendered to the Company in connection with the exercise of an option or other award granted under the 2015 Plan or in connection with the satisfaction of tax withholding obligations relating to awards or exercises of options or other awards will become available for issuance under the 2015 Plan. Awards made or adjusted to assume or convert awards in connection with acquisition transactions will not reduce the number of shares authorized for issuance under the 2015 Plan. The shares of stock deliverable under the 2015 Plan may consist in whole or in part of authorized and unissued shares or shares purchased in the open market or otherwise. The committee may adjust the aggregate number of shares or the number of shares subject to awards under the 2015 Plan in the event of a change affecting shares of common stock, such as stock dividends, recapitalization, reorganization or mergers.

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Limitations on Use of Shares Subject to the 2015 Plan. The committee may not make awards under the 2015 Plan to any single participant in any calendar year that relate to more than 5 million shares of common stock, subject to adjustment as described above. In addition, the committee may not grant performance units to any single covered employee in any one calendar year with a maximum dollar value greater than $500,000.  The maximum number of shares that may be issued pursuant to the exercise of incentive stock options under the 2015 Plan is the total stated number of shares authorized for issuance under the 2015 Plan.

Nonassignability of Awards

Unless the committee determines otherwise for certain permitted transferees, no award granted under the 2015 Plan may be sold, assigned, transferred, pledged or otherwise encumbered by a participant, other than by will, by designation of a beneficiary in a manner established by the committee or by the laws of descent and distribution. Each award may be exercisable, during the participant’s lifetime, only by the participant, or, if permissible under applicable law, by the participant’s guardian or legal representative.

Term, Termination and Amendment

Unless earlier terminated by the Company’s Board of Directors or the committee, the 2015 Plan will terminate on July 14, 2025, assuming approval of the 2015 Plan at the Annual Meeting. The Company’s Board of Directors or the committee may generally amend, alter, suspend, discontinue or terminate all or a portion of the 2015 Plan at any time, as long as the rights of a participant are not materially impaired without the participant’s consent, subject to shareholder approval to the extent necessary to comply with applicable law, stock exchange rule or regulatory requirements or, as determined by the committee, to qualify with tax requirements. The committee may amend the terms of any award granted, prospectively or retroactively, but cannot materially impair the rights of any participant without the participant’s consent. The committee may reprice options or SARs without shareholder approval.Generally, no change or adjustment may be made to an outstanding incentive stock option, without the consent of the participant that would cause the incentive stock option to fail to continue to qualify as an incentive stock option under the Code.

Change in Control

Under the 2015 Plan, to maintain all of the participants’ rights in the event of a merger or consolidation where the Company is not the surviving company; the dissolution of the Company, or a transfer of all or substantially all of the assets of the Company:

·

Any options and stock appreciation rights will become fully exercisable and vested to the full extent of the original grant and any restrictions applicable to any restricted stock or stock units will lapse, unless provision is otherwise made in writing in connection with the transaction for the substitution of securities of another corporation,

·

All performance shares and performance units then vested will be immediately settled or distributed, and

·

The committee can provide a cash-out for awards in connection with the transaction.

Other Information

The market price of the Company’s common stock as reported on the OTCQB market on April 18, 2018, was $0.057 per share.

All awards under the 2015 Plan are made at the discretion of the Administrator. Therefore, the benefits and amounts that will be received or allocated under the 2015 Plan are not determinable at this time.  

As of April 18. 2018, there were 31,850,000 shares of common stock subject to outstanding options under the 2015 Plan.

As of April 18, 2018, the following number of stock options have been granted under the 2015 Plan (which amended and restated our 2006 Equity Incentive Plan) to the individuals and groups described in the table.

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U.S. Federal Income Tax Consequences

The following briefly describes the U.S. federal income tax consequences of the 2015 Plan generally applicable to the Company and to participants who are U.S. citizens.

Stock Options

Nonqualified Stock Options. A participant generally will not recognize taxable income upon the grant or vesting of a nonqualified stock option with an exercise price at least equal to the fair market value of the common stock on the datefirst trading day of grant and no additional deferral feature. Upon the exercisepurchase period over the purchase price of a nonqualifiedthe share of common stock, option, a participant generally will recognize taxable ordinary income equal toor (b) the difference between theexcess of fair market value of the shares on the date of exercise and the option exercise price. When a participant sells the shares, the participant will have short-term or long-term capital gain or loss, as the case may be, equal to the difference between the amount the participant received from the sale and the tax basis of the shares sold. The tax basis of the shares generally will be equal to the greater of the fair market value of the shares on the exercise date or the option exercise price.

Incentive Stock Options. A participant will not recognize taxable income upon the grant of an incentivecommon stock option. If a participant exercises an incentive stock option during employment or within three months after his or her employment ends other than as a result of death (12 months in the case of disability), the participant will not recognize taxable income at the time of exercise (althoughsuch disposition over the participant generally will have taxable income for alternative minimum tax purposes at that time as if the option were a nonqualified stock option). If a participant sells or exchanges the shares after the later of (a) one year from the date the participant exercised the option and (b) two years from the grant date of the option, the participant will recognize long-term capital gain or loss equal to the difference between the amount the participant received in the sale or exchange and the option exercise price. If a participant disposespurchase price of the shares of common stock.

If the shares of common stock are sold or disposed of (including by way of most gifts) before thesethe expiration of the holding period, requirements are satisfied, the disposition will constitute a disqualifying disposition, and the participant generallyemployee will recognize taxable ordinary income in the year of disposition equal to the excess, as of the date of exercise of the option, of the fair market value of the shares received over the option exercise price (or, if less, the excess of the amount realized on the sale of the shares over the option exercise price). Additionally, the participant will have long-term or short-term capital gain or loss, as the case may be, equal to the difference between the amount the participant received upon disposition of the shares and the option exercise price increased by the amount of ordinary income, if any, the participant recognized.

With respect to both nonqualified stock options and incentive stock options, special rules apply if a participant uses shares already held by the participant to pay the exercise price or if the shares received upon exercise of the option are subject to a substantial risk of forfeiture by the participant.

Stock Appreciation Rights

A participant generally will not recognize taxable income upon the grant or vesting of a SAR with a grant price at least equal to the fair market value of the common stock on the date of grant and no additional deferral feature. Upon the exercise of a SAR, a participant generally will recognize taxable ordinary income equal to the difference between the fair market value of the underlying shares on the date of exercise and the grant price of the SAR.

Stock Awards

Upon receipt of a stock award, a participant generally will recognize taxable ordinary income in an amount equal to the excess of the sales price over the purchase price. Even if the shares of common stock are sold for less than their fair market value on the purchase date, the same amount of ordinary income is included in income.

In addition, the shares at such time over the amount, if any, paid to the Company by the participant for the shares. When a participant sells the shares, the participantemployee generally will have short-term or long-termrecognize capital gain or loss as the case may be,in an amount equal to the difference between the amount the participant received fromrealized upon the sale of shares of common stock and the employee’s tax basis ofin the shares sold. The tax basis of common stock (generally, the amount the employee paid for the shares generally will be equal toof common stock plus the amount, if any, paid totaxed as ordinary income). Capital gain or loss recognized on a disposition of shares of common stock will be long-term capital gain or loss if the Company by the participantemployee’s holding period for the shares plusof common stock exceeds one year. The purchase date begins the amountholding period for determining whether the gain or loss realized is short or long term.

If the employee disposes of taxable ordinaryshares of common stock purchased pursuant to the A&R ESPP after the holding period, we will not be entitled to any federal income recognized bytax deduction with respect to the participant upon receiptshares of common stock issued under the A&R ESPP. If the employee disposes of such shares of common stock prior to the expiration of the shares.

Restricted Stock Awards

Upon receipt of a restricted stock award, a participantholding period, we generally will recognize taxable ordinarybe entitled to a federal income when the shares cease to be subject to restrictionstax deduction in an amount equal to the excess of the fair market value of the shares at such time over the amount, if any, paid to the Company by the participant for the shares. However, no later than 30 days after a participant receives the restricted stock award, the participant may elect to recognize taxable ordinary income in an amount equal to the fair market value of the shares at the time of receipt. Provided that the election is made in a timely manner, when the restrictions on the shares lapse, the participant will not recognize any additional income. When a participant sells the shares, the participant will have short-term or long-term capital gain or loss, as the case may be, equal to the difference between the amount the participant received from the sale and the tax basis of the shares sold. The tax basis of the shares generally will be equal to the amount, if any, paid to the Company by the participant for the shares plus the amount of taxable ordinary income recognized by the participant either at the time the restrictions lapsed or at the time of election, if an election was made by the participant. If the participant forfeits the shares to the Company (e.g., upon the participant’s

INTERNATIONAL ISOTOPES INC. | 2017 PROXY STATEMENT | 16

termination prior to expiration of the restriction period), the participant may not claim a deduction with respect to the income recognizedemployee as a result of such disposition.

New Plan Benefits

Participation in the election.

Any dividends paid with respect to shares of restricted stock generally will be taxable as ordinary income toA&R ESPP is entirely within the participant at the time the dividends are received.

Performance Awards and Other Stock Unit Awards

A participant generally will not recognize taxable income upon the grant of a performance award.  Upon the distribution of cash, shares or other property to a participant pursuant to the terms of a performance award, the participant generally will recognize taxable ordinary income equal to the excessdiscretion of the amounteligible employees. Because we cannot presently determine the participation levels by employees, the rate of cash orcontributions by employees and the fair marketeventual purchase price under the A&R ESPP, it is not possible to determine the value of any property transferred to the participant over any amount paid to the Company by the participant with respect to the award. The tax consequences of other stock unit awards will depend upon the specific terms of each award.

Section 409A of the Code

If an award under the 2015 Plan constitutes nonqualified deferred compensation that is subject to Section 409A of the Code, certain requirements must be met (e.g., rules regarding deferral elections, distributions and acceleration of benefits). If the requirements are not satisfied, the participant may have to include an amount in income currently (or, if later, when no longer subject to a substantial risk of forfeiture), andbenefits which may be subject to an additional tax equal to 20% of the amount included in income plus interest from the date of deferral (at the IRS underpayment rate plus 1%).  Restricted stock and options are generally exempted from the requirements of Section 409A of the Code if certain requirements are satisfied (e.g., if the option exercise price can never be less than the fair market value of the stock on the grant date).

Tax Consequences to the Company

In the foregoing cases, the Company generally will be entitled to a deduction at the same time and in the same amount as a participant recognizes ordinary income, subject to the limitations imposed under Section 162(m) of the Code. As discussed above, as a public company, the Company is subject to the tax-deduction rule of Section 162(m) of the Code (applicable to compensation in excess of $1 million paid to certain of the Company’sobtained by executive officers during any year). The Plan includes a limitation on the number of shares that may be granted subject to awards made to an employee during any fiscal year to permit, but not require, the Company to qualify certain awards granted under the Plan as performance-based compensation, which is excepted from the general tax-deduction rule. The Section 162(m) stock limit in the Plan is 5,000,000 shares for an employee per fiscal year. Under the Plan, there is a limit of $500,000 cash award for an employee during a year. Stock options issued under the Plan will generally qualify as performance-based compensation with an exercise price equal to at least the fair market value of the underlying stock on the date of grant, while stock awards with service based vesting will generally not qualify as performance-based compensation, and therefore compensation amounts arising in connection with stock units and stock awards with service based vesting may be subject to the Section 162(m) tax deduction rule.

Tax Withholding

The Company is authorized to withhold from any award granted or payment due under the 2015 Plan the amount of any withholding taxes due in respect of the award or payment and to take such other action as may be necessary to satisfy all obligations for the payment of applicable withholding taxes. The committee is authorized to establish procedures for election by participants to satisfy their obligations for the payment of withholding taxes by delivery of shares of the Company’s stock or by directing the Company to retain stock otherwise deliverable in connection with the award.

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Equity Compensation Plan Information

We currently maintain three equity compensation plans that provide for the issuance of our common stock to officers and other employees under the A&R ESPP. Non-employee directors are not eligible to participate in the A&R ESPP.

Shares Issued Under the ESPP Since Inception

Since the inception of the ESPP through April 15, 2020,Steve T. Laflin, our President and consultants, each of which have been approved byChief Executive Officer, purchased 0 shares under the ESPP,Matthew Cox, our shareholders:Chief Financial Officer and Secretary, purchased 95,330 shares under the ESPP,Laurie McKenzie-Carter, our 2002 Long Term Incentive Plan, our Employee Stock Purchase Planformer Chief Financial Officer and Secretary, purchased 0 shares under the 2015 Plan (which amended and restated our 2006 Equity Incentive Plan).  EachESPP, all of our equity compensation plans were previously approved by our shareholders.  The following table sets forth information regarding outstanding options andcurrent executive officers as a group purchased 95,330 shares reserved for future issuance under the foregoing plansESPP, and all employees, including all current officers who are not executive officers, as a group, purchased 1,766,546 shares under the ESPP. Our non-employee directors are not eligible to participate in the plan.

No person has purchased 5% or more of December 31, 2017:

(1)

Includes 12,922,267the total number of shares available for issuance under the 2015 PlanESPP, and 703,708we are not aware that any associate of any executive officer or director has purchased shares available for issuance under our Employee Stock Purchase Plan. Shares available for issuance under the 2015 Incentive Plan may be grantedESPP. Because participation in the form of stock options, stock awards, restricted stock awards, restricted stock units, stock appreciation rights or any other form of equity compensation approved byplan is voluntary, the Board orpersons and groups listed above may purchase additional shares under the Compensation Committee.ESPP.

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PROPOSAL NO. 5:  APPROVAL OF AN AMENDMENT TO OUR RESTATED CERTIFICATE OF FORMATION TO EFFECT A REVERSE STOCK SPLIT

The Board has adopted a resolution approving, and recommends to the shareholders for their approval, a proposed amendment to our Restated Certificate of Formation to authorize the Board to effect a reverse stock split with the primary intent to reduce the number of issued and outstanding shares of our common stock and to increase the per share trading value of our common stock, and for other purposes as described below in this proxy statement. Under this proposed amendment, a certain number of outstanding shares of our common stock, as determined by the applicable ratio, would be combined into one share of our common stock (the “Reverse Stock Split”).

If approved by the shareholders, the Board would have discretion to implement the Reverse Stock Split within a ratio range of 1-for-20 up to 1-for-150. The Board believes that shareholder approval of a range of ratios (as opposed to approval of a specified ratio) would provide the Board with maximum flexibility to achieve the purposes of the Reverse Stock Split and, therefore, is in the best interests of us and our shareholders. The actual timing for implementation of the Reverse Stock Split would be determined by the Board based upon its evaluation as to when such action would be most advantageous to us and our shareholders.  Furthermore, notwithstanding shareholder approval, the Board also would have the discretion not to implement a Reverse Stock Split.  If the Board were to elect to implement a Reverse Stock Split, the Board will set the exchange ratio within the range approved by the shareholders. The Board would base such a determination upon the then current trading price of our common stock, among other things. No further action on the part of the stockholders will be required to either implement or abandon the Reverse Stock Split.

The text of the form of amendment to our Restated Certificate of Formation that would be filed with the Secretary of State of the State of Texas to effect the Reverse Stock Split is set forth in Appendix B to this proxy statement; provided, however, that such text is subject to amendment to include such changes as may be required by the office of the Secretary of State of the State of Texas and as the Board deems necessary and advisable to effect the Reverse Stock Split.  If the Reverse Stock Split is approved by the shareholders and following such approval the Board determines that a Reverse Stock Split is in the best interest of us and our shareholders, our Restated Certificate of Formation would be amended accordingly.

The Board recommends the Reverse Stock Split for the following reasons:

·

The Board believes that a reduction of the number of issued and outstanding shares of our common stock and a higher per share market price of our common stock could encourage investor interest in us and promote greater liquidity for our shareholders;

·

The Board believes that the Reverse Stock Split is the most effective means of increasing the per share market price of our common stock in order to facilitate our ability to meet the closing per share price criteria required to be listed on a major stock exchange, such as the New York Stock Exchange or the Nasdaq Stock Market; and

·

The Board believes that a reduction in the number of issued and outstanding shares of our common stock would be in our best interests as our capital structure would be more comparable to other publicly traded companies of similar size.

Reverse Stock Split

Our common stock is traded on the OTCQB market under the symbol “INIS.OB”.  The closing price of our common stock on the OTCQB on April 18, 2018 was $0.057 per share and during the period April 18, 2017 through April 18, 2018 ranged from a low of $0.057 per share to a high of $0.11 per share.

We may determine that it is in our shareholders’ best interests to list on a major stock exchange, such as the New York Stock Exchange or the Nasdaq Stock Market.  Many major stock exchanges have listing criteria that require companies to satisfy minimum average closing prices over a threshold amount during a consecutive trading period in order to gain or maintain listing eligibility. The Nasdaq Stock Market, for example, currently requires that a company’s common stock have a bid price that is greater than or equal to $4.00 per share over a period of time. The Reverse Stock Split would give us additional flexibility and ability to reach these levels.

We also believe that an increase in the per share price of our common stock could encourage increased investor interest in our common stock and possibly promote greater liquidity for our shareholders. We believe that the current low per share price of our common stock has had a negative effect on the marketability of our common stock. We believe there are several reasons for this effect. First, many institutional investors view stocks trading at low prices as unduly speculative in nature and, as a result, avoid investing in such stocks. Second, because the brokers’ commissions on lower-priced stocks generally represent a higher percentage of the stock price than commissions on higher priced stocks, the current per-share price of our common stock can result in individual shareholders paying transaction costs (commissions, markups or markdowns) that constitute a higher percentage of their total share value than would be the case if the share price of our common stock were substantially higher. This factor may also limit the

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willingness of institutional investors to purchase our common stock. Third, a variety of policies and practices of brokerage firms discourage individual brokers within those firms from dealing in low-priced stocks. These policies and practices pertain to the payment of brokers’ commissions and to time-consuming procedures that make the handling of low-priced stocks unattractive to brokers from an economic standpoint. Fourth, many brokerage firms are reluctant to recommend low-priced stocks to their customers. Finally, the analysts at many brokerage firms do not monitor the trading activity or otherwise provide coverage of low-priced stocks.

Reducing the number of outstanding shares of our common stock through the Reverse Stock Split is intended, absent other factors, to simplify our capital structure and to increase the per share market price of our common stock. However, other factors, such as our financial results, market conditions and the market perception of our business may harm the market price of our common stock. As a result, there can be no assurance that the Reverse Stock Split, if completed, will result in the intended benefits described above, that the market price of our common stock will increase following the Reverse Stock Split, that the market price of our common stock will remain at such higher value for any significant length of time or that we will qualify for listing on a major stock exchange.

Board Discretion to Implement the Reverse Stock Split

If the Reverse Stock Split is approved by our shareholders at the Annual Meeting, the Reverse Stock Split will be effected, if at all, only upon a determination by the Board that the Reverse Stock Split at the applicable ratio (with such ratio determined by the Board as described above) is in the best interests of us and our shareholders.  We believe the availability of a range of reverse stock split ratios will provide us with the flexibility to implement the Reverse Stock Split in a manner designed to maximize the anticipated benefits for us and our shareholders. In determining the reverse stock split ratio to implement, if any, following the receipt of stockholder approval, the Board may consider, among other factors:

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the historical trading price and trading volume of our common stock;

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the then-prevailing trading price and trading volume of our common stock and the anticipated impact of the Reverse Stock Split on the trading market for our common stock;

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our satisfaction of the requirements, and ability, to list on a major stock exchange; and

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prevailing general market conditions.

Notwithstanding approval of the Reverse Stock Split by the shareholders, the Board may, in its sole discretion, abandon all of the proposed amendments and determine prior to the effectiveness of any filing with the Secretary of State of the State of Texas not to effect the Reverse Stock Split, as permitted under Section 21.052 of the Texas Business Organizations Code.

Impact of the Proposed Reverse Stock Split If Implemented

Except to the extent that whole shares will be exchanged in lieu of fractional shares as described below, the Reverse Stock Split would affect all of our shareholders uniformly and would not affect any shareholder’s percentage ownership interest or proportionate voting power.  The principal effects of the Reverse Stock Split will be that: