Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2026 and 2025 and the related notes thereto, included in Part I, Item 1 of this Quarterly Report. The following discussion should also be read alongside the Management's Discussion and Analysis of Financial Condition and Results of Operations for the years ended December 31, 2025 and 2024 included in our Current Report on Form 8-K filed with the SEC on April 16, 2026, along with the corresponding audited financial statements for such periods contained therein, and the Management's Discussion and Analysis of Financial Condition and Results of Operations for the three and six months ended June 30, 2026 and 2025 included in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 filed with the SEC on August 12, 2026. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward-looking statements involving risks and uncertainties as described under the heading "Special Note Regarding Forward-Looking Statements" elsewhere in this Quarterly Report. You should review the section titled "Risk Factors" in Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 filed with the SEC on August 12, 2026, as supplemented by Part II, Item 1A of this Quarterly Report, for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements and could otherwise affect our intended plans of operations.

Overview

Background

Ionetix Corporation (following the Merger described below, "Ionetix" or the "Company") develops superconducting cyclotron technology to produce isotopes for medical and industrial purposes. The Company's business was founded in 2009, when Legacy Ionetix (as defined below) was incorporated in the State of Delaware on the premise that this novel cyclotron technology could produce isotopes in a smaller and more cost-effective footprint. Following the Merger described below, the Company continues that business as a public reporting company. Our mission is to produce otherwise hard-to-obtain isotopes, using a combination of our proprietary cyclotron technology and equipment sourced from third parties.

Our leadership team has a combined 50+ years of direct experience with nuclear medicines, cyclotron technology solutions and engineering. Our board members include experts in pharmaceutical and biotechnology research and development and manufacturing. We believe that the depth of our expertise and our cyclotron technology solutions uniquely position us to become the market leader in the manufacturing of isotopes for medical and industrial purposes.

The Merger

On April 9, 2026, a wholly owned subsidiary of JDEV Acquisition Corp. ("JDEV") merged with and into pre-Merger Ionetix Corporation ("Legacy Ionetix"), with Legacy Ionetix continuing as the surviving corporation and our wholly owned subsidiary (the "Merger"). In connection with the Merger, JDEV changed its name to Ionetix Corporation, and we continue the existing business operations of Legacy Ionetix as a public reporting company.

Contemporaneously with the closing of the Merger, we completed the initial closing of a private placement financing, and on June 1, 2026, we completed a subsequent closing on the same terms. In the aggregate, we sold 10,962,268 shares of common stock at a purchase price of $3.00 per share for gross proceeds of $32.9 million. Transaction costs totaled $4.2 million, resulting in net proceeds of approximately $28.7 million.

For additional information regarding the Merger and related transactions, see our Current Report on Form 8-K filed with the SEC on April 16, 2026, as amended by Form 8-K/A filed with the SEC on May 20, 2026.

The October 2026 Private Placement

On October 26, 2026, we completed the initial closing of a private placement offering of our common stock, pursuant to which we sold 212,121 shares of common stock at a purchase price of $3.30 per share, generating gross proceeds of $0.7 million.

Components of Results of Operations

Revenue

Our revenues are generated primarily from (i) diagnostic drug and medical radioisotopes sales, (ii) cyclotron system and parts sales, and (iii) consulting services and system support services.

Diagnostic drug and medical radioisotopes sales represent our principal source of revenue. Under these arrangements, customers place purchase orders pursuant to master sales agreements, with each delivered dose representing a distinct performance obligation. Revenue is recognized upon delivery, when control of the product transfers to the customer. Because these products are ordered based on clinical requirements and administered as part of patient care, demand is closely tied to real-time utilization. We began sales of therapeutic radioisotopes in late 2025, and we expect revenues from the sale of diagnostic drugs to continue to represent the primary driver of our business, with future growth influenced by the development and commercialization of additional isotopes, including therapeutic isotopes, as well as continuing utilization of PET imaging products.

Cyclotron system and parts revenues are generated from the delivery of equipment together with installation and related activities necessary to verify functionality in accordance with contractual specifications, as well as the sales of parts. For cyclotron system sales, these activities are combined into a single performance obligation, and revenue is recognized upon completion of installation and formal customer acceptance. Revenue from sales of spare parts is recognized upon delivery, when control transfers to the customer. Cyclotron system sales have historically been driven by customer-specific deployment needs and the timing of system installations. Because we do not intend to pursue cyclotron system sales in the future, we do not expect to generate revenue from cyclotron system sales. However, we expect to continue to generate revenue from sales of spare parts.

Consulting services and system support services are typically recognized over time as services are performed because the customer simultaneously receives and consumes the benefits of our performance. We measure progress using a cost-to-cost input method, recognizing revenue based on costs incurred relative to total estimated costs, with estimates updated as facts and circumstances change.

Operating Expenses

Cost of Revenue

Cost of revenue consists primarily of costs associated with the manufacture and delivery of our products and related services, including materials and components, personnel-related costs, production-related overhead and shipping and handling costs. Production-related overhead includes facility costs, utilities, depreciation of production equipment, and hosting and cloud infrastructure costs. Cost of revenue also includes manufacturing-related adjustments such as production variances, warranty costs, scrap, and write-downs of excess or obsolete components. As production volume and system deliveries increase, cost of revenue is expected to increase in absolute dollars.

Selling, General and Administrative

Selling, general and administrative expenses consist primarily of personnel-related costs, including salaries, health insurance, payroll taxes, and stock-based compensation. Selling, general and administrative expenses also include consulting and professional service fees and other general corporate and administrative expenses.

As we continue to grow our business and expand our commercial presence, we expect selling, general and administrative expenses to increase in absolute dollars. In addition, we expect selling, general and administrative expenses to increase in the near term as a result of operating as a public company, including costs associated with compliance with SEC reporting requirements, audit and legal fees, insurance, and other corporate governance and administrative expenses.

Research and Development

Research and development expenses consist of costs incurred in connection with our development activities and are expensed as incurred. These expenses primarily include personnel-related costs, such as salaries, stock-based compensation, health insurance, and other employee benefits. Research and development expenses also include depreciation and amortization of development equipment and related assets, legal and regulatory costs, and other expenses necessary to support our development activities.

We have invested, and intend to continue to invest, in research and development activities to support the expansion of our diagnostic isotope offerings and the advancement of therapeutic isotope programs, including alpha-emitting radionuclides. Research and development expenses may fluctuate from period to period based on the timing and scope of development initiatives, regulatory activities, and clinical supply programs. Beginning in December 2025, certain personnel and assets previously dedicated to research and development activities transitioned to operational activities as the related development activities progressed toward commercialization. We expect research and development expenses to increase in absolute dollars as we continue to invest in technology, production capabilities, and isotope development.

Interest Income (Expense), Net

Interest income (expense), net consists primarily of interest incurred on outstanding debt obligations, partially offset by interest income earned on our cash.

Other Income (Expense), Net

Other income (expense), net consists primarily of non-cash gains and losses from the fair value remeasurement of financial instruments, gains and losses associated with financing transactions, government grant income, and other non-operating items.

Provision for Income Taxes

We have incurred net losses since inception and maintain a full valuation allowance against our deferred tax assets. As a result, income tax expense was not material for the periods presented.

Results of Operations

The following table sets forth selected condensed consolidated statements of operations data for the periods indicated:

		Three Months Ended September 30,								Nine Months Ended September 30,
		2026				2025				2026				2025
		(in thousands)								(in thousands)
Revenue		$	1,244			$	1,141			$	3,496			$	4,814
Operating expenses
Cost of revenue			1,026				1,224				3,942				4,377
Selling, general and administrative			4,414				2,504				10,629				8,123
Research and development			854				1,311				2,269				3,956
Total operating expenses			6,294				5,039				16,840				16,456
Loss from operations			(5,050	)			(3,898	)			(13,344	)			(11,642	)
Interest income (expense), net			60				(925	)			(254	)			(2,505	)
Other income (expense), net			53				(1,869	)			(13,575	)			(2,920	)
Loss before provision for income taxes			(4,937	)			(6,692	)			(27,173	)			(17,067	)
Provision for income taxes			-				-				4				6
Net loss		$	(4,937	)		$	(6,692	)		$	(27,177	)		$	(17,073	)

Revenue

		Three Months Ended September 30,								Change				Nine Months Ended September 30,								Change
		2026				2025				%				2026				2025				%
		(in thousands)												(in thousands)
Revenue		$	1,244			$	1,141				9	%		$	3,496			$	4,814				-27	%

Total revenue was $1.2 million for the three months ended September 30, 2026 compared to $1.1 million for the three months ended September 30, 2025, representing an increase of $0.1 million, or 9%. The increase was primarily driven by sales to a new customer, partially offset by lower sales at certain of our production sites. Revenue for both periods consisted primarily of diagnostic drugs and medical radioisotopes.

Total revenue was $3.5 million for the nine months ended September 30, 2026 compared to $4.8 million for the nine months ended September 30, 2025, representing a decrease of $1.3 million, or 27%. The decrease was primarily driven by a $1.6 million decrease in cyclotron system sales, reflecting the absence of cyclotron system sales in the current period, partially offset by higher diagnostic drug and medical radioisotopes sales. Because we do not intend to pursue cyclotron system sales in the future, we do not expect to generate revenue from cyclotron system sales in future periods. Diagnostic drug and medical radioisotopes sales were $3.5 million for the nine months ended September 30, 2026 compared to $3.2 million for the nine months ended September 30, 2025.

Cost of Revenue

		Three Months Ended September 30,								Change				Nine Months Ended September 30,								Change
		2026				2025				%				2026				2025				%
		(in thousands)												(in thousands)
Cost of revenue		$	1,026			$	1,224				-16	%		$	3,942			$	4,377				-10	%

Cost of revenue was $1.0 million for the three months ended September 30, 2026 compared to $1.2 million for the three months ended September 30, 2025, representing a decrease of $0.2 million, or 16%. The decrease was primarily driven by a $0.1 million decrease in overhead allocation costs among production sites due to changes in revenue generation, and a $0.1 million decrease in the cost of spare parts sold.

Cost of revenue was $3.9 million for the nine months ended September 30, 2026 compared to $4.4 million for the nine months ended September 30, 2025, representing a decrease of $0.5 million, or 10%. The decrease was primarily driven by a $0.8 million decrease in costs associated with cyclotron system sales, as no cyclotron system sales were recognized during the current period, partially offset by a $0.3 million net increase in overhead costs allocated to cost of revenue, primarily related to a newly operational production site that commenced commercial activities in December 2025.

Selling, General and Administrative

		Three Months Ended September 30,								Change				Nine Months Ended September 30,								Change
		2026				2025				%				2026				2025				%
		(in thousands)												(in thousands)
Selling, general and administrative		$	4,414			$	2,504				76	%		$	10,629			$	8,123				31	%

Selling, general and administrative expenses were $4.4 million for the three months ended September 30, 2026 compared to $2.5 million for the three months ended September 30, 2025, representing an increase of $1.9 million, or 76%. The increase was primarily driven by a $0.8 million increase in professional fees, primarily corporate legal fees and consulting fees associated with operating as a public company; a $0.3 million increase in personnel-related costs and a $0.2 million increase in depreciation expense, primarily reflecting employees and assets that were redeployed from research and development activities to support our newly operational production site, the costs of which were largely not allocated to cost of revenue during the period because production volumes at the site were lower while we completed an expansion of the facility, as well as stock-based compensation for new equity awards granted in 2026; a $0.2 million increase in insurance expense, mainly associated with the new public company insurance policies obtained in connection with the Merger on April 9, 2026; and a $0.1 million increase in the provision for credit losses.

Selling, general and administrative expenses were $10.6 million for the nine months ended September 30, 2026 compared to $8.1 million for the nine months ended September 30, 2025, representing an increase of $2.5 million, or 31%. The increase was primarily driven by a $1.0 million increase in professional fees, primarily corporate legal fees and consulting fees associated with operating as a public company; a $0.6 million increase in depreciation and amortization expense, as described above; a $0.4 million increase in personnel-related costs; a $0.4 million increase in insurance expense; and a $0.3 million increase in the provision for credit losses. These increases were partially offset by a $0.3 million increase in overhead costs allocated to cost of revenue, as described above under "Cost of Revenue."

Research and Development

		Three Months Ended September 30,								Change				Nine Months Ended September 30,								Change
		2026				2025				%				2026				2025				%
		(in thousands)												(in thousands)
Research and development		$	854			$	1,311				-35	%		$	2,269			$	3,956				-43	%

Research and development expenses were $0.9 million for the three months ended September 30, 2026 compared to $1.3 million for the three months ended September 30, 2025, representing a decrease of $0.4 million, or 35%. The decrease was primarily driven by a $0.3 million decrease in personnel-related costs and a $0.2 million decrease in depreciation expense, reflecting the transition of certain facility-related costs and employees from research and development activities associated with alpha-emitting isotopes to the newly operational production site beginning in December 2025, as the related facility progressed toward operational readiness.

Research and development expenses were $2.3 million for the nine months ended September 30, 2026 compared to $4.0 million for the nine months ended September 30, 2025, representing a decrease of $1.7 million, or 43%. The decrease was primarily driven by a $0.9 million decrease in personnel-related costs and a $0.5 million decrease in depreciation and amortization expense, resulting from the transition described above.

Interest Income (Expense), Net

		Three Months Ended September 30,								Change				Nine Months Ended September 30,								Change
		2026				2025				%				2026				2025				%
		(in thousands)												(in thousands)
Interest income (expense), net		$	60			$	(925	)			-106	%		$	(254	)		$	(2,505	)			-90	%

Interest income, net was $0.1 million for the three months ended September 30, 2026, compared to interest expense, net of $0.9 million for the three months ended September 30, 2025, representing a change of $1.0 million, or 106%. The change was primarily driven by a $0.6 million decrease in interest expense and related amortization of deferred financing fees following the conversion of the convertible notes on October 31, 2025, and a $0.4 million decrease following the repayment in full of the 2023 Term Loan and promissory notes in connection with the Merger.

Interest expense, net was $0.3 million for the nine months ended September 30, 2026, compared to $2.5 million for the nine months ended September 30, 2025, representing a change of $2.2 million, or 90%. The change was primarily driven by a $1.6 million decrease in interest expense and related amortization of deferred financing fees following the conversion of the convertible notes on October 31, 2025 and a $0.7 million decrease in interest expense following the repayment in full of the 2023 Term Loan and promissory notes in connection with the Merger, which reduced interest-bearing obligations outstanding for a substantial portion of the 2026 period.

Other income (expense), net

		Three Months Ended September 30,								Change				Nine Months Ended September 30,								Change
		2026				2025				%				2026				2025				%
		(in thousands)												(in thousands)
Other income (expense), net		$	53			$	(1,869	)			-103	%		$	(13,575	)		$	(2,920	)			365	%

Other income (expense), net was income of $0.1 million for the three months ended September 30, 2026, compared to other expense, net of $1.9 million for the three months ended September 30, 2025, a change of $2.0 million, or 103%. The change was primarily driven by the absence of fair value remeasurement changes related to SAFE liabilities following the conversion of all outstanding SAFEs into Legacy Ionetix Series F redeemable convertible preferred stock on March 31, 2026, compared to a $1.9 million loss from changes in the fair value of SAFE liabilities during the three months ended September 30, 2025, and $0.1 million of government grant income recognized during the three months ended September 30, 2026.

Other expense, net was $13.6 million for the nine months ended September 30, 2026, compared to $2.9 million for the nine months ended September 30, 2025, an increase of $10.7 million, or 365%. The increase was primarily driven by the $10.5 million non-cash loss recognized in connection with the settlement of investor agreements, a $2.2 million upfront loss recognized in connection with the issuance of SAFEs with common stock warrant coverage, and $0.9 million write-off of unamortized debt discount and issuance costs in connection with the repayment in full of the outstanding loans and notes. These increases were partially offset by lower fair value remeasurement losses related to SAFE liabilities, which were $0.1 million for the nine months ended September 30, 2026 compared to $2.9 million for the nine months ended September 30, 2025, following the conversion of all outstanding SAFEs into Legacy Ionetix Series F redeemable convertible preferred stock on March 31, 2026.

Liquidity and Capital Resources

Since inception, we have financed our operations primarily through the issuance of redeemable convertible preferred stock, SAFEs, convertible notes and short-term debt and, most recently, through the private placement financing completed in connection with the Merger (including the June 2026 subsequent closing) and the initial closing of the private placement offering of our common stock in October 2026, each as described above. Our primary requirements for liquidity and capital are to fund working capital, capital expenditures, research and development, manufacturing, sales and marketing, site deployment, commercial expansion and general corporate purposes.

We have incurred significant operating losses and negative cash flows since inception and expect to continue to incur losses for the foreseeable future. For the three and nine months ended September 30, 2026, we incurred a net loss of $4.9 million and $27.2 million, respectively. As of September 30, 2026, we had an accumulated deficit of $213.7 million and $5.6 million in cash and $0.7 million in restricted cash.

Based on our current operating plan, we believe that our existing cash, together with the proceeds from the initial closing of the private placement offering in October 2026, will not be sufficient to fund our operations for at least the next twelve months from the date the condensed consolidated financial statements included elsewhere in this Quarterly Report are issued. These conditions raise substantial doubt about our ability to continue as a going concern. To address these conditions, we intend to seek additional capital through equity or debt financings, strategic collaborations or other arrangements and, if necessary, to reduce or defer discretionary operating and capital expenditures. Our future capital requirements will depend on many factors, including the timing and extent of our research and development activities, the scale-up of manufacturing operations, the pace of commercial expansion and the timing of site deployments. There can be no assurance that additional financing will be available on favorable terms, or at all.

Cash Flows

The following table summarizes our cash flows for the periods presented:

		Nine Months Ended September 30,
		2026				2025
		(in thousands)
Net cash used in operating activities		$	(13,711	)		$	(8,746	)
Net cash used in investing activities		$	(5,551	)		$	(2,910	)
Net cash provided by financing activities		$	25,093			$	7,010

Operating Activities

Net cash used in operating activities for the nine months ended September 30, 2026 was $13.7 million, which resulted from a net loss of $27.2 million, adjusted for non-cash charges of $17.7 million and net cash outflows from changes in operating assets and liabilities of $4.2 million. Non-cash charges of $17.7 million primarily consisted of losses of $10.5 million recognized on the settlement of a contingent equity arrangement and a termination agreement, initial loss of $2.2 million recognized in connection with the issuance of SAFEs with common stock warrant coverage, reflecting the excess of the aggregate fair value of the instruments issued over the proceeds received, depreciation and amortization of $2.6 million, amortization and write-off of debt discount and issuance costs of $0.9 million, and stock-based compensation of $0.5 million. Cash outflows from changes in operating assets and liabilities were $4.2 million, primarily due to a decrease of $1.7 million in accounts payable reflecting the timing of payments, an increase of $1.1 million in prepaid expenses and other assets reflecting insurance premiums under new public company policies and deposits paid to a vendor for an upcoming installation, and an increase of $0.9 million in accounts receivable.

Net cash used in operating activities for the nine months ended September 30, 2025 was $8.7 million, which resulted from a net loss of $17.1 million, adjusted for non-cash charges of $6.6 million and net cash inflows from changes in operating assets and liabilities of $1.8 million. Non-cash charges of $6.6 million primarily consisted of a $2.9 million loss on the change in the fair value of SAFE liabilities, depreciation and amortization expense of $2.5 million, stock-based compensation of $0.4 million, amortization of operating lease right-of-use assets of $0.4 million, and amortization of debt discount and issuance costs of $0.4 million. Net cash inflows from changes in operating assets and liabilities of $1.8 million were primarily due to a $1.3 million increase in accrued expenses and other liabilities, primarily reflecting the timing of accruals and settlements, a $1.1 million increase in accounts payable, reflecting the timing of payments, and a $0.6 million decrease in inventory, partially offset by a $0.7 million increase in accounts receivable and a $0.4 million decrease in operating lease liabilities.

Investing Activities

Net cash used in investing activities for the nine months ended September 30, 2026 and 2025 was $5.6 million and $2.9 million, respectively, and consisted primarily of purchases of property and equipment to support ongoing operational and capacity expansion.

Financing Activities

Net cash provided by financing activities was $25.1 million for the nine months ended September 30, 2026. Cash inflows consisted primarily of $28.7 million of net proceeds from the private placement financing completed in connection with the Merger, including the June 2026 subsequent closing, together with $2.4 million from the issuance of SAFEs, $0.7 million from promissory notes and $0.7 million from related party advances. These were partially offset by repayments, principally $5.7 million on the 2023 Term Loan, $1.6 million of promissory notes and $0.4 million of related party advances.

Net cash provided by financing activities was $7.0 million for the nine months ended September 30, 2025, primarily consisting of $5.4 million of proceeds from the issuance of SAFEs, $1.8 million of proceeds from related party advances and $0.4 million of proceeds from promissory notes, partially offset by $0.8 million of repayments of related party advances.

Contractual Obligations and Commitments

As of September 30, 2026, our material contractual obligations consisted primarily of operating lease commitments.

Our operating lease obligations extend beyond September 30, 2026 in accordance with the respective lease terms. As of September 30, 2026, we had aggregate future minimum operating lease commitments of $1.3 million, of which $0.5 million is payable within the next 12 months. All short-term debt obligations outstanding prior to the Merger, including accrued interest, were repaid in full in connection with the closing of the Merger.

We do not have any off-balance sheet arrangements and have no material purchase commitments.

Critical Accounting Policies and Estimates

Our condensed consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of condensed consolidated financial statements also requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from the estimates made by management. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows will be affected.

There have been no material changes to our critical accounting policies and estimates as compared to those described in the section titled "Critical Accounting Policies and Estimates" in Management's Discussion and Analysis of Financial Condition and Results of Operations in our Current Report on Form 8-K filed with the SEC on April 16, 2026, as amended, except for the addition of our accounting policy for government grants, as described in Note 2, "Basis of Presentation and Summary of Significant Accounting Policies," to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report.

Emerging Growth Company Status and Smaller Reporting Company Status

We are an emerging growth company and a smaller reporting company, as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and we may rely on certain reduced disclosure requirements available to such companies. For additional information, see our Current Report on Form 8-K filed with the SEC on April 16, 2026, as amended.