UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

(Mark One)
[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED: March 31, 2016
OR
[  ]	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM __________ TO __________

COMMISSION FILE NUMBER 000-53497

ADVANCED MEDICAL ISOTOPE CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	80-0138937
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1021 N Kellogg Street,

Kennewick, WA 99336

(Address of principal executive offices, Zip Code)

(509) 736-4000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	[  ]	Accelerated filer	[  ]
Non-accelerated filer	[  ]	Smaller reporting company	[X]
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [X]

As of June 6, 2016, there were 1,999,998,519 shares of the registrant’s Common outstanding.

TABLE OF CONTENTS

		Page
	PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Condensed Balance Sheets as of March 31, 2016 (unaudited) and December 31, 2015	3
	Condensed Statements of Operations for the Three Months ended March 31, 2016 (unaudited) and the Three Months ended March 31, 2015 (unaudited)	4
	Condensed Statement of Changes in Stockholders’ Equity (Deficit) for the period ended March 31, 2016 (unaudited)	5
	Condensed Statements of Cash Flow for the Three Months ended March 31, 2016 (unaudited) and the Three Months ended March 31, 2015 (unaudited)	6
	Notes to Condensed Financial Statements (unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24
	PART II – OTHER INFORMATION
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 6.	Exhibits	25
SIGNATURES		26

2

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

Advanced Medical Isotope Corporation

Condensed Balance Sheets

	March 31, 2016			December 31, 2015
	(unaudited)			(audited)
ASSETS
Current assets:
Cash	$	247,937		$	179,032
Prepaid expenses		20,800			26,211
Inventory		8,475			8,475
Total current assets		277,212			213,718
Fixed assets, net of accumulated depreciation		3,682			4,420
Other assets:
Patents and intellectual property		35,482			35,482
Deposits		644			644
Total other assets		36,126			36,126
Total assets	$	317,020		$	254,264
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses	$	1,114,519		$	1,284,759
Accrued interest payable		226,255			229,246
Payroll liabilities payable		372,174			298,900
Convertible notes payable, net		1,552,229			1,788,384
Derivative liability		8,848,055			4,235,016
Related party promissory note		1,330,233			1,280,450
Liability for lack of authorized shares		399,645			852,091
Total current liabilities		13,843,110			9,968,847
Total liabilities		13,843,110			9,968,846
Commitments and contingencies
Mezzanine Equity:
Preferred stock, $.001 par value, 20,000,000 shares authorized Series A preferred stock, $.001 par value, 5,000,000 shares authorized; 2,113,054 and 1,627,000 shares issued and outstanding, respectively		6,158,999			4,617,052
Total mezzanine equity		6,158,999			4,617,052
Stockholders’ equity (deficit):
Common stock, $.001 par value; 2,000,000,000 shares authorized; 1,996,934,122 and 1,996,934,122 shares issued and outstanding, respectively		1,996,934			1,996,934
Paid in capital		32,138,423			31,685,977
Accumulated deficit		(53,820,446	)		(48,014,545	)
Total stockholders’ equity (deficit)		(19,685,089	)		(14,331,634	)
Total liabilities and stockholders’ equity (deficit)	$	317,020		$	254,264

The accompanying notes are an integral part of these condensed financial statements.

3

Advanced Medical Isotope Corporation

Condensed Statements of Operations

(unaudited)

	Three months ended March 31,
	2016			2015
Revenues	$	4,054		$	12,054
Operating expenses
Cost of materials		-			390
Sales and marketing expenses		11,836			-
Depreciation and amortization		738			2,669
Professional fees		70,969			63,993
Stock options granted		-			28,500
Payroll expenses		165,000			191,536
General and administrative expenses		438,042			53,779
Total operating expenses		686,585			340,867
Operating loss		(682,531	)		(328,813	)
Non-operating income (expense)
Interest expense		(49,209	)		(326,140	)
Net gain (loss) on settlement of debt		65,837			(3,574	)
Gain (loss) on derivative liability		(5,139,998	)		2,233,260
Non-operating income (expense), net		(5,123,370	)		1,903,546
Income (Loss) before Income Taxes		(5,805,901	)		1,574,733
Income Tax Provision		-			-
Net Income (Loss)	$	(5,805,901	)	$	1,574,733
Basic and Diluted Income (Loss) per Common Share	$	(0.0029	)	$	0.0009
Weighted average common shares outstanding		1,996,934,122			1,705,623,106

The accompanying notes are an integral part of these condensed financial statements.

4

Advanced Medical Isotope Corporation

Statements of Changes in Stockholders’ Equity (Deficit)

	Common Stock				Paid in		Accumulated
	Shares		Amount		Capital		Deficit			Total
Balances at December 31, 2015 (audited)		1,996,934,122	$	1,996,934	$	31,685,977	$	(48,014,545	)	$	(14,331,634	)
Liability for lack of authorized shares		-		-		452,446		-			452,446
Net Loss (unaudited)		-		-		-		(5,805,901	)		(5,805,901	)
Balances at March 31, 2016 (unaudited)		1,996,934,122	$	1,996,934	$	32,138,423	$	(53,820,446	)	$	(19,685,089	)

The accompanying notes are an integral part of these condensed financial statements.

5

Advanced Medical Isotope Corporation

Condensed Statements of Cash Flow

(Unaudited)

	Three months ended March 31,
	2016			2015
CASH FLOW FROM OPERATING ACTIVITIES:
Net Loss	$	(5,805,901	)	$	1,574,733
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation of fixed assets		738			1,330
Amortization of licenses and intangible assets		-			1,339
Amortization of convertible debt discount		299,773			176,380
Amortization of debt issuance costs		-			9,640
Preferred and common stock issued for loan fees		300,494			-
Stock options and warrants issued for services		-			28,500
Gain (loss) on derivative liability		5,139,998			(2,233,260	)
Loss on settlement of debt		(65,837	)		3,574
Penalties on notes payable		(332,274	)		-
Changes in operating assets and liabilities:
Prepaid expenses		5,411			910
Accounts payable		(170,241	)		(29,815	)
Payroll liabilities		73,274			63,591	)
Accrued interest		(18,290	)		139,841
Net cash used by operating activities		(572,855	)		(263,237	)
CASH FLOWS FROM INVESTING ACTIVITIES		-			-
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on capital lease		-			(39,481	)
Proceeds from convertible debt		641,760			305,000
Net cash provided by financing activities		641,760			265,519
Net increase in cash		68,905			2,282
Cash, beginning of period		179,032			203
CASH, END OF PERIOD	$	247,937		$	2,485
Supplemental disclosures of cash flow information:
Cash paid for interest	$	9,920		$	9,920
Cash paid for income taxes	$	-		$	-

The accompanying notes are an integral part of these condensed financial statements.

6

Advanced Medical Isotope Corporation

Notes to Condensed Financial Statements

(Unaudited)

NOTE 1: BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The accompanying condensed financial statements of the Company have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and disclosures required by accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations. These condensed financial statements reflect all adjustments that, in the opinion of management, are necessary to present fairly the results of operations of the Company for the period presented. The results of operations for the three months ended March 31, 2016, are not necessarily indicative of the results that may be expected for any future period or the fiscal year ending December 31, 2016.

Use of Estimates

The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Fair Value of Financial Instruments

Fair Value of Financial Instruments, requires disclosure of the fair value information, whether or not recognized in the balance sheet, where it is practicable to estimate that value. As of March 31, 2016 and December 31, 2015, the balances reported for cash, prepaid expenses, accounts receivable, accounts payable, and accrued expenses, approximate the fair value because of their short maturities.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:

Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;

Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The Company measures certain financial instruments at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis were calculated using the Black-Scholes pricing model and are as follows at March 31, 2016:

	Total		Level 1		Level 2		Level 3
Assets
Total Assets Measured at Fair Value	$	-	$	-	$	-	$	-
Liabilities
Liabilities for lack of authorized shares		399,645		-		-		399,645
Derivative Liability		8,848,055		-		-		8,848,055
Total Liabilities Measured at Fair Value	$	9,247,700	$	-	$	-	$	9,247,700

Recent Accounting Pronouncements

There are no recently issued accounting pronouncements that the Company believes are applicable or would have a material impact on the financial statements of the Company.

7

NOTE 2: GOING CONCERN

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements, the Company has suffered recurring losses and used significant cash in support of its operating activities and the Company’s cash position is not sufficient to support the Company’s operations. Historically, the Company has relied upon outside investor funds to maintain the Company’s operations and develop the Company’s business. The Company anticipates it will continue to require funding from investors for working capital as well as business expansion during this fiscal year and it can provide no assurance that additional investor funds will be available on terms acceptable to us. These factors, among others, may indicate that the Company will be unable to continue as a going concern for a reasonable time. In addition, the Company’s ability to continue as a going concern must be considered in light of the problems, expenses and complications frequently encountered by entrance into established markets and the competitive environment in which it operates.

The Company anticipates a requirement of $1.5 million in funds over the next twelve months to maintain current operation activities. The Company may also require up to approximately $1.5 million to retire outstanding debt and past due payables, including certain convertible promissory notes totaling approximately $500,000 that are currently due and payable (“Outstanding Notes”), in the event these amounts are not converted or otherwise exchanged for equity securities. Although no assurances can be given, management is currently negotiating with the holders of certain of the Outstanding Notes to restructure the principal and accrued interest currently due thereon. In addition certain of the principal amount due under the Outstanding Notes may be reduced do to the offset of certain amounts resulting from the previous issuance of shares of common stock upon conversions of the Outstanding Notes, which issuances are voidable under the laws of the Company’s state of incorporation.

The Company requires funding of at least $1.5 million per year to maintain current operating activities. Over the next 12-24 months, the Company believes it will cost approximately $5 million to $10 million to fund: (1) the FDA approval process and initial deployment of the brachytherapy products and (2) initiate regulatory approval processes outside of the United States. The continued deployment of the brachytherapy products and a worldwide regulatory approval effort will require additional resources and personnel. The principal variables in the timing and amount of spending for the brachytherapy products in the next 12-24 months will be the FDA’s classification of the Company’s brachytherapy products as Class II or Class III devices (or otherwise) and any requirements for additional studies which may possibly include clinical studies. Thereafter, the principal variables in the amount of the Company’s spending and its financing requirements would be the timing of any approvals and the nature of the Company’s arrangements with third parties for manufacturing, sales, distribution and licensing of those products and the products’ success in the U.S. and elsewhere. The Company intends to fund its activities through strategic transactions such as licensing and partnership agreements or additional capital raises.

As of March 31, 2016 the Company has $247,937 cash on hand. There are currently commitments to vendors for products and services purchased, plus, the employment agreements of the CFO and other employees of the Company and the Company’s current lease commitments that in the absence of additional capital would result in a liquidation of the Company. The current level of cash is not enough to cover the fixed and variable obligations of the Company.

Assuming the Company is successful in the Company’s sales/development effort it believes that it will be able to raise additional funds through strategic agreements or the sale of the Company’s stock to either current or new stockholders. There is no guarantee that the Company will be able to raise additional funds or to do so at an advantageous price.

The financial statements do not include any adjustments relating to the recoverability and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis and ultimately to attain profitability. The Company plans to seek additional funding to maintain its operations through debt and equity financing and to improve operating performance through a focus on strategic products and increased efficiencies in business processes and improvements to the cost structure. There is no assurance that the Company will be successful in its efforts to raise additional working capital or achieve profitable operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 3: FIXED ASSETS

Fixed assets consist of the following at March 31, 2016 and December 31, 2015:

	March 31, 2016			December 31, 2015
Production equipment	$	1,938,532		$	1,938,532
Building		446,772			446,772
Leasehold improvements		3,235			3,235
Office equipment		32,769			32,769
		2,421,308			2,421,308
Less accumulated depreciation		(2,417,626	)		(2,416,888	)
	$	3,682		$	4,420

8

Depreciation expense for the above fixed assets for the three months ended March 31, 2016 and 2015, respectively, was $738 and $1,330.

NOTE 4: INTANGIBLE ASSETS

Intangible assets consist of the following at March 31, 2016 and December 31, 2015:

	March 31, 2016		December 31, 2015
License Fee	$	-	$	112,500
Less accumulated amortization		-		(112,500	)
Patents and intellectual property		35,482		35,482
Intangible assets net of accumulated amortization	$	35,482	$	35,482

Amortization expense for the above intangible assets for the three months ended March 31, 2016 and 2015, respectively, was $0 and $1,339.

NOTE 5: RELATED PARTY TRANSACTIONS

Related Party Convertible Notes Payable

The Company issued various shares of preferred stock and convertible promissory notes during the three months ended March 31, 2016 to a director and major stockholder. The details of these transactions are outlined in Note 9: Stockholders’ Equity - Common Stock Issued for Convertible Debt.

Preferred Shares Issued to Officers

The Company received $10,000 from the CEO during the three months ended March 31, 2016 in exchange for an 8% Convertible Promissory Note that was converted to 10,000 shares of Series A Preferred stock during the period ended March 31, 2016. Additionally, the Company issued a total of 800 shares of Series A Preferred stock as loan fees.

Rent Expenses

On July 17, 2007, the Company entered into a five year lease for its production center from a less than 5 percent shareholder. Subsequent to July 31, 2012 the Company was renting this space on a month to month basis at $11,904 per month. Effective January 1, 2015 the Company’s lease was terminated. There had been an ongoing dispute with the landlord, Rob and Maribeth Myers, regarding the Production Center rent. During the three months ended March 31, 2016 the Company reached a Settlement Agreement with regards to this dispute resulting in a payment of $438,830 for rent, interest, and costs.

The Company rents office space from a significant shareholder and director of the Company on a month to month basis with a monthly payment of $1,500.

Rental expense for the three months ended March 31, 2016 and 2015 consisted of the following:

	Three months ended March 31, 2016		Three months ended March 31, 2015
Office and warehouse space	$	-	$	-
Corporate office		4,500		4,500
Total Rental Expense	$	4,500	$	4,500

9

NOTE 6: CONVERTIBLE NOTES PAYABLE

As of March 31, 2016 and December 31, 2015 the Company had the following convertible notes outstanding:

	March 31, 2016				December 31, 2015
	Principal (net)		Accrued Interest		Principal (net)		Accrued  Interest
July and August 2012 $1,060,000 Convertible Notes, 12% interest, due December 2013 and January 2014 (18 month notes), $165,000 and $165,000 outstanding, net of debt discount of $0 and $0, respectively	$	165,000		74,615	$	165,000	$	69,712	(1)
January 2014 $0 Convertible Note, 8% interest, due January 2015, $0 and $50,000 outstanding, net of debt discount of $0 and $0, respectively		-		-		50,000		7,682	(2)
January 2014 $55,500 Convertible Note, 10% interest, due October 2014, with a $5,500 original issue discount, $10,990 and $10,990 outstanding, net of debt discount of $0 and $0, respectively		10,990		5,730		10,990		5,457	(3)
February 2014 $46,080 Convertible Note, 10% interest, due February 2015, $0 and $0 outstanding, net of debt discount of $0 and $0, respectively		-		2,358		-		2,358	(4)
February 2014 $27,800 Convertible Note, 10% one-time interest, due February 2015, with a 10% original issue discount, $0 and $51,159 outstanding, net of debt discount of $0 and $49,626, respectively, settled remaining balance on September 30, 2015 for 5,000 shares of preferred and $20,000 cash payment due upon obtaining new financing		20,000		-		20,000		-	(5)
March 2014 $50,000 Convertible Note, 10% interest, due March 2015, $36,961 and $36,961 outstanding, net of debt discount of $0 and $0, respectively		36,961		7,491		36,961		6,572	(6)
March 2014 $165,000 Convertible Note, 10% interest, due April 2015, with a $16,450 original issue discount, $0 and $61,301 outstanding, net of debt discount of $0 and $0, respectively		-		-		61,301		24,109	(7)
April 2014 $32,000 Convertible Note, 10% interest, due April 2015, $22,042 and $22,042 outstanding, net of debt discount of $0 and $0, respectively		22,042		3,582		22,042		3,034	(8)
April 2014 $46,080 Convertible Note, 10% interest due April 2015, $5,419 and $5,419 outstanding, net of debt discount of $0 and $0, respectively		5,419		4,608		5,419		4,608	(9)
May 2014 $55,000 Convertible Note, 12% interest, due May 2015, with a $5,000 original issue discount, $0 and $46,090 outstanding, net of debt discount of $0 and $24,315, respectively, settled May 1, 2015 for $100,000, $75,000 paid in cash and the remaining $25,000 as a 10% convertible debenture due May 31, 2016		25,000		2,582		25,000		1,836	(10)
June 2014 $28,800 Convertible Note, 10% interest due June 2015, $28,800 and $28,800 outstanding, net of debt discount of $0 and $0, respectively		28,800		2,880		28,800		2,880	(11)
June 2014 $40,000 Convertible Note, 10% interest, due June 2015, $40,000 and $40,000 outstanding, net of debt discount of $0 and $0, respectively		40,000		7,045		40,000		6,049	(12)
June 2014 $40,000 Convertible Note, 10% interest, due June 2015, $38,689 and $38,689 outstanding, net of debt discount of $0 and $0, respectively		38,689		6,813		38,689		5,851	(13)
June 2014 $56,092 Convertible Note, 16% interest, due July 2015, with a $5,000 original issue discount, $0 and $56,092 outstanding, net of debt discount of $0 and $0, respectively		-		-		56,092		13,462	(14)
July 2014 $37,500 Convertible Note, 12% interest, due July 2015, $37,015 and $37,015 outstanding, net of debt discount of $0 and $0, respectively		37,015		7,481		37,015		6,377	(15)
August 2014 $36,750 Convertible Note, 10% interest, due April 2015, $36,750 and $36,750 outstanding, net of debt discount of $0 and $0, respectively		36,750		6,452		36,750		5,538	(16)
August 2014 $33,500 Convertible Note, 4% interest, due February 2015, with a $8,500 original issue discount, $33,500 and $33,500 outstanding, net of debt discount of $0 and $0, respectively		33,500		-		33,500		-	(17)
September 2014 $37,500 Convertible Note, 12% interest, due September 2015, with a $5,000 original issue discount, $0 and $36,263 outstanding, net of debt discount of $0 and $0, respectively		-		-		36,263		5,576	(18)
January through December, 2015 $615,000 Convertible Notes, 8% interest, due September 30, 2015 and October 6, 2015, $0 and $0 outstanding, net of debt discount of $0 and $0, respectively		-		18,264		-		18,264	(19)
October through December 2015 $613,000 Convertible Notes, 8% interest, due June 30, 2016, $613,000 and $613,000 outstanding, net of debt discount of $280,458 and $560,913, respectively		332,542		14,746		52,087		2,519	(20)
January through March 2016 $345,000 Convertible Notes, 8% interest, due June 30, 2016, $345,000 and $0 outstanding, net of debt discount of $325,682 and $0, respectively		19,318		573		-		-	(21)
Penalties on notes past due		700,203				1,032,475		-
Total Convertible Notes Payable, Net	$	1,552,229		165,220	$	1,788,384	$	191,884

10

(1) Convertible Debt instruments accrue interest at an annual rate of 12% and a conversion price of $0.06. The Convertible Debt instruments also include Additional Investment Rights to enter into an additional convertible note with a corresponding amount of warrants equal to forty percent of the convertible note principal.

During the twelve months ending December 31, 2015 the holders of the Convertible Debt instruments received a repayment of $5,000 and $0 of the outstanding principal and accrued interest balances.

During the twelve months ending December 31, 2015, total amortization was recorded in the amount of $0 and principal of $5,000 and accrued interest of $0 was repaid to the note holder. After repayments, conversions and amortization, principal totaled $165,000 and debt discount totaled $0 at December 31, 2015. During the three months ending March 31, 2016 and the twelve months ending December 31, 2015 interest expense of 4,903 and $20,398, respectively, was recorded for the Convertible Debt Instruments. The $165,000 balance of the notes reached maturity during the year ended December 31, 2014 and are currently past due.

(2) The Company borrowed $50,000 January 2014, due January 2015, with interest at 8%. The holder of the note has the right, after the first one hundred eighty days of the note (July 27, 2014), to convert the note and accrued interest into common stock at a price per share equal to the lesser of $0.09 or 58% of the lowest trade price in the 10 trading days previous to the conversion. The Company recorded a debt discount of $50,000 related to the conversion feature and original issue discount, along with a derivative liability at inception (see Note 11: Derivative Liability). Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ended December 31, 2015, total amortization was recorded in the amount of $0. After amortization, principal totaled $50,000, debt discount totaled $0. The Company accrued an additional $372 and $3,989 interest for the three months ending March 31, 2016 and the twelve months ended December 31, 2015, respectively. During the three months ending March 31, 2016 the Company reached a settlement agreement with the noteholder for the $50,000 debt plus the $8,054 of accrued interest.

(3) The Company borrowed $55,500 January 2014, due October 2014, with interest at 10%. The holder of the note has the right, after the first one hundred eighty days of the note (July 23, 2014), to convert the note and accrued interest into common stock at a price per share equal to the lesser of $0.28 or 60% of the lowest trade price in the 25 trading days previous to the conversion. The note has an original issue discount of $5,500 which has been added to the principal balance of the note and is being recognized in interest expense over the life of the note. The Company recorded a debt discount of $55,000 related to the conversion feature and original issue discount, along with a derivative liability at inception (see Note 11: Derivative Liability). Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. The Company accrued an additional $276 and $1,096 interest for the three months ending March 31, 2016 and twelve months ended December 31, 2015, respectively. The balance of the note reached maturity during the year ended December 31, 2014 and is currently past due.

(4) The Company borrowed $50,000 February 2014, due February 2015, with interest at 8%. The holder of the note has the right, after the first one hundred eighty days of the note (August 10, 2014), to convert the note and accrued interest into common stock at a price per share equal to the lesser of $0.07 or 58% of the lowest trade price in the 10 trading days previous to the conversion. The Company recorded a debt discount of $50,000 related to the conversion feature and original issue discount, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ending December 31, 2015, total principal of $46,080 and accrued interest of $3,358 was converted into shares of common stock (see Note 9: Stockholders’ Equity), resulting in a decrease to the debt discount of $19,577. After conversions and amortization, principal totaled $0, debt discount totaled $0, and accumulated interest totaled $2,358 at March 31, 2016 and December 31, 2015.

(5) The Company borrowed $27,800 February 2014, due February 2015, with a one-time interest charge of 10%. The holder of the note has the right to convert the note and accrued interest into common stock at a price per share equal to the lesser of $0.195 or 60% of the lowest trade price in the 25 trading days previous to the conversion. The note has an original issue discount of $2,800 which has been added to the principal balance of the note and is being recognized in interest expense over the life of the note. Additionally, the holder of the note added a market price adjustment of $53,192 on the note due to delay in issuance of conversion shares. The Company increased the amount of the note by $53,192 and recorded a debt discount of $53,192. Interest expense for the amortization of the debt discounts is calculated on a straight-line basis over the nine month life of the note. During the twelve months ending December 31, 2015, total amortization was recorded in the amount of $25,877 and an additional $0 of interest was accrued. The balance of the note reached full maturity during the quarter ended June 30, 2015 and was settled September 30, 2015 for 5,000 shares of Series A Preferred Stock having a stated value of $5.00 per share and $20,000 cash payment due upon the consummation of a debt or equity financing resulting in gross proceeds to the Company of at least $500,000.

(6) The Company borrowed $50,000 March 2014, due March 2015, with interest at 10%. The holder of the note has the right, after the first one hundred eighty days of the note (September 18, 2014), to convert the note and accrued interest into common stock at a price per share equal to 60% of the lowest trade price in the 25 trading days previous to the conversion. The Company recorded a debt discount of $50,000 related to the conversion feature and original issue discount, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. After conversions and amortization, principal totaled $36,961 and debt discount totaled $0 for the periods ending March 31, 2016 and December 31, 2015. The Company accrued an additional $919 and $3,686 interest for the three months ending March 31, 2016 and twelve months ended December 31, 2015, respectively. The balance of the note reached full maturity during the quarter ended June 30, 2015 and is currently past due.

11

(7) The Company borrowed $165,000 March 2014, due April 2015, with interest at 10%. The holder of the note has the right to convert the note and accrued interest into common stock at a price per share equal to the lesser of $1.00 or 65% of the average of the three lowest trading prices in the 20 trading days previous to the conversion. The note has an original issue discount of $15,000 which has been added to the principal balance of the note and is being recognized in interest expense over the life of the note. The Company recorded a debt discount of $165,000 related to the conversion feature and original issue discount, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ending December 31, 2015, total principal of $23,211 was converted into shares of common stock, resulting in a decrease to the debt discount of $6,991. After conversions and amortization, principal totaled $61,301, debt discount totaled $0, and accumulated interest totaled $24,109 at December 31, 2015. The Company accrued an additional $348 for the three months ending March 31, 2016. During the three months ending March 31, 2016 the Company reached a settlement agreement with the note holder for the $61,301 debt plus the $24,457 of accrued interest.

(8) The Company borrowed $32,000 April 2014, due April 2015, with interest at 10%. The holder of the note has the right, after the first one hundred eighty days of the note (October 1, 2014), to convert the note and accrued interest into common stock at a price per share equal to 60% of the lowest trade price in the 25 trading days previous to the conversion. The Company recorded a debt discount of $32,000 related to the conversion feature and original issue discount, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. After conversions and amortization, principal totaled $22,042, debt discount totaled $0, and accumulated interest totaled $3,034 at December 31, 2015. The Company accrued an additional $548 and $2,198 interest for the three months ending March 31, 2016 and twelve months ended December 31, 2015, respectively. The balance of the note reached full maturity during the quarter ended June 30, 2015 and is currently past due.

(9) The Company borrowed $46,080 April 2014, due April 2015, with interest at 10%. The holder of the note has the right, after the first one hundred eighty days of the note (October 11, 2014), to convert the note and accrued interest into common stock at a price per share equal to the lesser of $0.08 or 60% of the lowest trade price in the 25 trading days previous to the conversion. The Company has the right to prepay the note during the first ninety days following the date of the note. The Company recorded a debt discount of $46,080 related to the conversion feature and original issue discount, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. After conversions and amortization, principal totaled $5,419, debt discount totaled $0, and accumulated interest totaled $4,608 at March 31, 2016 and December 31, 2015. The balance of the note reached full maturity during the quarter ended June 30, 2015 and is currently past due.

(10) The Company borrowed $55,000 May 2014, due May 2015, with interest at 12%. The holder of the note has the right to convert the note and accrued interest into common stock at a price per share equal to the lesser of $0.03 or 55% of the lowest trade price in the 25 trading days previous to the conversion. The note has an original issue discount of $5,000 which has been added to the principal balance of the note and is being recognized in interest expense over the life of the note. The Company recorded a debt discount of $55,000 related to the conversion feature and original issue discount, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ending December 31, 2015, total amortization was recorded in the amount of $24,315 and an additional $2,131 of interest was accrued. This note was settled May 1, 2015 for $100,000, $75,000 paid in cash and the remaining $25,000 as a 10% convertible debenture due May 31, 2016. The $25,000 convertible debenture is convertible at 55% of the lowest close for the last 270 days prior to the conversion notice or $0.03, but not less than $0.001. This settlement resulted in a reduction to notes payable of $46,090 and accrued interest payable of $5,516, an increase to note payable of $100,000 and a resulting $48,394 loss on settlement of debt. The Company accrued an additional $746 and $3,967 interest for the three months ending March 31, 2016 and twelve months ended December 31, 2015, respectively.

(11) The Company borrowed $28,800 June 2014, due June 2015, with interest at 10%. The holder of the note has the right, after the first one hundred eighty days of the note (December 20, 2014), to convert the note and accrued interest into common stock at a price per share equal to the lesser of $0.08 or 60% of the lowest trade price in the 25 trading days previous to the conversion. The Company has the right to prepay the note during the first ninety days following the date of the note. The Company recorded a debt discount of $28,800 related to the conversion feature and original issue discount, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note.

12

(12) The Company borrowed $40,000 June 2014, due June 2015, with interest at 10%. The holder of the note has the right, after the first one hundred eighty days of the note (December 23, 2014), to convert the note and accrued interest into common stock at a price per share equal to 60% of the lowest trade price in the 25 trading days previous to the conversion. The Company has the right to prepay the note and accrued interest during the first one hundred eighty days following the date of the note. During that time the amount of the prepayment is 145% of the outstanding amounts owed. The Company recorded a debt discount of $40,000 related to the conversion feature and original issue discount, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ending December 31, 2015, total amortization was recorded in the amount of $19,398 and an additional $3,989 of interest was accrued. The Company accrued an additional $995 interest for the three months ending March 31, 2016. The balance of the note reached full maturity during the quarter ended June 30, 2015 and is currently past due.

(13) The Company borrowed $40,000 June 2014, due June 2015, with interest at 10%. The holder of the note has the right, after the first one hundred eighty days of the note (December 23, 2014), to convert the note and accrued interest into common stock at a price per share equal to 60% of the lowest trade price in the 25 trading days previous to the conversion. The Company has the right to prepay the note and accrued interest during the first one hundred eighty days following the date of the note. During that time the amount of any repayment is 145% of the outstanding amounts owed. The Company recorded a debt discount of $40,000 related to the conversion feature and original issue discount, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ending December 31, 2015, total amortization was recorded in the amount of $18,554 and an additional $3,858 of interest was accrued. The Company accrued an additional $962 interest for the three months ending March 31, 2016. The balance of the note reached full maturity during the quarter ended June 30, 2015 and is currently past due.

(14) The Company borrowed $56,092 July 2014, due July 2015, with interest at 16%. The holder of the note has the right to convert the note and accrued interest into common stock at a price per share equal to the lesser of $1.00 or 65% of the average of the three lowest trading prices in the 20 trading days previous to the conversion. The note has an original issue discount of $5,000 which has been added to the principal balance of the note and is being recognized in interest expense over the life of the note. The Company recorded a debt discount of $51,092 related to the conversion feature and original issue discount, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ending December 31, 2015, total amortization was recorded in the amount of $27,816 and an additional $8,950 of interest was accrued. The Company accrued an additional $319 interest for the three months ending March 31, 2016 and reached a settlement agreement with the note holder for the $56,092 note balance plus $13,761 of accrued interest.

(15) The Company borrowed $37,500 July 2014, due July 2015, with interest at 12%. The holder of the note has the right to convert the note and accrued interest into common stock at a price per share equal to 50% of the lowest of the lowest trading price in the 15 trading days previous to the conversion. The Company recorded a debt discount of $37,500 related to the conversion feature and original issue discount, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ending December 31, 2015, total amortization was recorded in the amount of $20,737 and an additional $4,430 of interest was accrued. The Company accrued an additional $1,104 interest for the three months ending March 31. The balance of the note reached full maturity during the quarter ended September 30, 2015 and is currently past due.

(16) The Company borrowed $36,750 August 2014, due August 2015, with interest at 10%. The holder of the note has the right, after the first one hundred eighty days of the note (February 10, 2014), to convert the note and accrued interest into common stock at a price per share equal to 60% (representing a discount rate of 40%) of the lowest trading price for the Common Stock during the twenty five trading day period including the date of the Conversion Notice. The Company has the right to prepay the note and accrued interest during the first one hundred eighty days following the date of the note. During that time the amount of any prepayment is 145% of the outstanding amounts owed. The Company recorded a debt discount of $36,750 related to the conversion feature and original issue discount, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ending December 31, 2015, total amortization was recorded in the amount of $22,755 and an additional $3,665 of interest was accrued. The Company accrued an additional $914 interest for the three months ending March 31. The balance of the note reached full maturity during the quarter ended September 30, 2015 and is currently past due.

(17) The Company borrowed $33,500 August 2014, due February 2015, with interest at 4%. The Company may prepay the note for a net payment of $33,500 at any time prior to November 27, 2014. After November 27, 2014, the holder has the right to refuse any further payments and to convert this note when it matures, February 27, 2015. The holder of the note has the right to convert the note and accrued interest into common stock at a price per share equal to 60% (represents a 40% discount) of the average three lowest trade prices in the 20 trading days previous to the conversion. The note has an original issue discount of $6,500 which has been added to the principal balance of the note and is being recognized in interest expense over the life of the note. The Company recorded a debt discount of $32,807 related to the conversion feature and original issue discount, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ending December 31, 2015, total amortization was recorded in the amount of $10,367. The balance of the note reached full maturity during the quarter ended March 31, 2015 and is currently past due.

13

(18) The Company borrowed $37,500 September 2014, due September 2015, with interest at 12%. The holder of the note has the right to convert the note and accrued interest into common stock at a price per share equal to 55% (represents a 45% discount) of the lowest trade prices in the 15 trading days previous to the conversion. The note has an original issue discount of $5,000 which has been added to the principal balance of the note and is being recognized in interest expense over the life of the note. The Company recorded a debt discount of $37,500 related to the conversion feature and original issue discount, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve month life of the note. During the twelve months ending December 31, 2015, total amortization was recorded in the amount of $25,927 and an additional $4,341 of interest was accrued. The Company accrued an additional $333 interest for the three months ending March 31, 2016 and reached a settlement agreement with the note holder for the $36,263 note balance plus $5,908 of accrued interest.

(19) The Company borrowed $615,000 during the twelve months ending December 31, 2015, due September and October 2016, with interest at 8%. The holders of the notes have the right to convert the note and accrued interest into preferred stock at any time at a price per share of $1. The Company issued the note holders 48,200 Series A preferred shares as a loan origination fee. The Company recorded a debt discount of $615,000 related to the preferred shares issued as a loan origination fee, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the twelve-month life of the note. During the twelve months ending December 31, 2015 total amortization in the amount of $615,000 and accrued interest in the amount of $18,264 was recorded towards these notes. As of December 31, 2015 these notes were converted into 615,000 Series A Convertible Preferred Shares.

(20) The Company borrowed $613,000 October through December 2015, due June 2016, with interest at 8%. The holders of the notes have the right to convert the note and accrued interest into preferred stock at any time at a price per share of $1. The Company issued the note holder 49,040 Series A preferred shares as a loan origination fee. The Company recorded a debt discount of $613,000 related to the conversion feature, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the life of the notes. During the three months ending March 31, 2016 and the twelve months ending December 31, 2015, total amortization was recorded in the amount of $280,457 and $52,087 and an additional $12,226 and $2,350 of interest was accrued, respectively.

(21) The Company borrowed $345,000 January through March 2016, due June 2016, with interest at 8%. The holders of the notes have the right to convert the note and accrued interest into preferred stock at any time at a price per share of $1. The Company issued the note holder 29,200 Series A preferred shares as a loan origination fee. The Company recorded a debt discount of $345,000 related to the conversion feature, along with a derivative liability at inception. Interest expense for the amortization of the debt discount is calculated on a straight-line basis over the life of the notes. During the three months ending March 31, 2016 and the twelve months ending December 31, 2015, total amortization was recorded in the amount of $19,318 and $0 and an additional $573 and $0 of interest was accrued, respectively.

As of March 31, 2016, certain convertible promissory notes described in this Note 7 not otherwise converted into common stock of the Company, totaling approximately $455,000, were due and payable (“Outstanding Notes”). Although no assurances can be given, management is currently negotiating with the holders of certain of the Outstanding Notes to restructure the principal and accrued interest currently due and payable. The principal amount due under certain of the Outstanding Notes may be reduced do to the offset of certain amounts resulting from the previous issuance of shares of common stock by the Company upon conversions of the Outstanding Notes, which were issued based on a conversion price below $0.001 per share. The issuances are voidable under the laws of the State of Delaware, the Company’s state of incorporation. The Company has issued a demand letter requiring the return to the Company of that number of shares of common stock issued upon conversion of Outstanding Notes equal to the value of the shares issued upon such conversion at a value below $0.001 per share (the “Excess Amount”). In the event the holder of such shares fails to return the shares, the Company intends to unilaterally and without further action by the parties reduce the principal amount of the Outstanding Notes by the Excess Amount. However the Company recorded an additional $700,203 in penalties and interest accrued on these notes to reflect the potential that the Company would be unable to prevail in reducing the amount of the notes for the shares of common stock delivered below $0.001 per share and the Company was unable to negotiate a settlement with these note holders.

NOTE 7: COMMON STOCK OPTIONS AND WARRANTS

Common Stock Options

The Company recognizes in the financial statements compensation related to all stock-based awards, including stock options and warrants, based on their estimated grant-date fair value. The Company has estimated expected forfeitures and is recognizing compensation expense only for those awards expected to vest. All compensation is recognized by the time the award vests.

14

The following schedule summarizes the changes in the Company’s stock options:

					Weighted				Weighted
	Options Outstanding				Average				Average
	Number		Exercise		Remaining		Aggregate		Exercise
	Of		Price		Contractual		Intrinsic		Price
	Shares		Per Share		Life		Value		Per Share
Balance at December 31, 2015		5,135,000	$	0.12-0.15		7.12 years	$	-	$	0.15
Options granted		-	$	-		-			$	-
Options exercised		-	$	-		-			$	-
Options expired		1,785,000	$	0.15		-			$	0.15
Balance at March 31, 2016		3,350,000	$	0.12-0.15		6.67 years			$	0.15
Exercisable at March 31, 2016		3,350,000	$	0.12-0.15		6.67 years	$	-	$	0.15

Common Stock Warrants

The following schedule summarizes the changes in the Company’s stock warrants:

						Weighted			Weighted
	Warrants Outstanding					Average			Average
	Number			Exercise		Remaining	Aggregate		Exercise
	Of			Price		Contractual	Intrinsic		Price
	Shares			Per Share		Life	Value		Per Share
Balance at December 31, 2015		679,100,302		$	0.001-0.10	1.9 years	$	2,052,699	$	0.0081
Warrants granted		1,000,000		$	0.001	2.0 years		-	$	0.001
Warrants exercised		-		$	-	-			$	-
Warrants expired/cancelled		(324,358,186	)	$	0.0011-0.0015	-			$	-
Balance at March 31, 2016		355,742,116		$	0.001-0.10	1.36 years	$	74,000	$	0.0448
Exercisable at March 31, 2016		355,742,116		$	0.001-0.10	1.36 years	$	74,000	$	0.0448

NOTE 8: STOCKHOLDERS’ EQUITY

Common Stock Issued for Cash and the Exercise of Options and Warrants

As of March 31, 2016 and December 31, 2015 there was an insufficient amount of the Company’s authorized common stock to satisfy the potential number of shares that would be required to satisfy the outstanding options, warrants and convertible debt into common stock. As a result the Company recorded a liability in the amount of $852,091, offset by $852,091 of equity for the period ending December 31, 2015 and $399,645, offset by $399,645 of equity for the period ending March 31, 2016. There are ongoing discussions with some of the Company’s lenders regarding alternatives to rectify the situation. There can be no assurance that a reasonable outcome will be reached.

Preferred Stock Issued for the Exercise of Warrants

In March 2016, the Company issued 50,000 restricted shares of its Series A preferred stock in exchange for the cancellation of the warrants attached to the convertible notes received in July 2012.

Preferred Stock Issued for Loan Fees on Convertible Debt

During the three months ending March 31, 2016 the Company issued 63,077 shares of its Series A preferred stock as loan fees on convertible promissory notes totaling $300,494.

15

Preferred Stock Issued for Debt Converted

During the three months ending March 31, 2016 the Company issued 216,977 Series A preferred stock in exchange for $216,977 received from a major shareholder and Director of the Company.

During the three months ending March 31, 2016 the Company issued 20,000 Series A preferred stock in exchange for $20,000 of convertible debt.

During the three months ending March 31, 2016 the Company issued 10,000 Series A preferred stock in exchange for $10,000 of convertible debt, to the CEO of the Company.

Preferred Stock Issued for Debt Settled

During the three months ending March 31, 2016 the Company issued 126,000 Series A preferred stock in exchange for $86,262 of convertible debt, plus $13,962 of accrued interest.

NOTE 9:  SUPPLEMENTAL CASH FLOW INFORMATION

During the three months ending March 31, 2016 the Company issued 63,077 shares of its Series A preferred stock as loan fees on convertible promissory notes totaling $300,494.

During the three months ending March 31, 2016 the Company issued 10,000 Series A preferred stock in exchange for $10,000 of convertible debt, to the CEO of the Company.

During the three months ending March 31, 2016 the Company issued 196,000 Series A preferred stock in exchange for $106,262 of convertible debt, plus $13,962 of accrued interest, plus surrender of outstanding warrants.

During the three months ending March 31, 2016 the Company issued 216,977 Series A preferred stock in exchange for $216,977 of convertible debt received from a major shareholder and Director of the Company.

NOTE 10: SUBSEQUENT EVENTS

In April 2016 the Company issued 3,064,397 common stock shares as a cashless exercise.

In April 2016 the Company received $221,853 from a major share holder and Director, in exchange for an 8% convertible promissory note due June 30, 2016. The Company issued 17,750 series A preferred stock as a loan fee on this note. This note was converted into 221,853 Series A preferred stock in April 2016.

In April 2016 the Company settled $70,000 of convertible note plus $7,557 of accrued interest in exchange for 27,000 of Series A preferred stock.

In April 2016 the Company settled a $1,055,535 convertible promissory note plus $47,658 of accrued interest from a major shareholder and Director in exchange for 73,556 of Series A preferred stock.

In April and May of 2016 the Company received $223,000 in exchange for 8% convertible notes due June 30, 2016.

In May 2016 the Company issued 250,000 Series A preferred shares pursuant to a warrant exercise.

In May 2016 the Company received $142,415 from a major share holder and Director, in exchange for an 8% convertible promissory note due June 30, 2016. This note was converted into 142,415 Series A preferred stock in May 2016.

In May 2016 the Company received $199,695 from a major share holder and Director in exchange for 10% promissory notes due in May 2017.

In May 2016 the Company issued 11,840 Series A preferred shares as loan fees on $148,000 of debt.

In May of 2016, the Company established a wholly-owned subsidiary, IsoPet Solutions Corporation, to focus on the veterinary oncology market. IsoPet Solutions Corporation has not yet had any activity to date.

Subsequent to the reporting period, in support of the Company’s efforts to focus resources on the development and commercialization of its yttrium-90 brachytherapy products, the Company permanently closed its Production Facility located in Kennewick Washington. The key piece of equipment, the Company’s linear accelerator is currently being marketed for sale.

The Company has evaluated subsequent events pursuant to ASC Topic 855 and has determined that there are no additional subsequent events to disclose.

16

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Except for statements of historical fact, certain information described in this Form 10-K report contains “forward-looking statements” that involve substantial risks and uncertainties. You can identify these statements by forward-looking words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “should,” “will,” “would” or similar words. The statements that contain these or similar words should be read carefully because these statements discuss the Company’s future expectations, including its expectations of its future results of operations or financial position, or state other “forward-looking” information. Advanced Medical Isotope Corporation believes that it is important to communicate its future expectations to its investors. However, there may be events in the future that the Company is not able to accurately predict or to control. Further, the Company urges you to be cautious of the forward-looking statements which are contained in this Form 10-K report because they involve risks, uncertainties and other factors affecting its operations, market growth, service, products and licenses. The risk factors in the section captioned “Risk Factors” in Item 1A of the Company’s Form 10-K, as well as other cautionary language in this Form 10-K report, describe such risks, uncertainties and events that may cause the Company’s actual results and achievements, whether expressed or implied, to differ materially from the expectations the Company describes in its forward-looking statements. The occurrence of any of the events described as risk factors could have a material adverse effect on the Company’s business, results of operations and financial position.

General Statement of Business

Advanced Medical Isotope Corporation (the “Company,” “AMI” or “we”) was incorporated under the laws of Delaware on December 23, 1994 as Savage Mountain Sports Corporation (“SMSC”). On September 6, 2006, the Company changed its name to Advanced Medical Isotope Corporation. AMI has authorized capital of 2,000,000,000 shares of Common Stock, $0.001 par value per share and 20,000,000 shares of Preferred Stock, $0.001 par value per share (ADMD: OTCQB).

AMI is a late stage radiation oncology focused medical device company engaged in the development of yttrium-90 based brachytherapy devices for the treatment of non-resectable tumors. Brachytherapy uses radiation to destroy cancerous tumors by placing a radioactive isotope inside or next to the treatment area. A prominent team of radiochemists, scientists and engineers, collaborating with strategic partners, including national laboratories, universities and private corporations, lead the Company’s development efforts. AMI has been recognized as a leader in the development of new isotope technologies by local, state and federal agencies. The Company’s overall vision is to globally empower physicians, medical researchers and patients by providing them with new isotope technologies that offer safe and effective treatments for cancer.

Since late 2013, AMI has focused its resources on developing a proposed line of yttrium-90 based brachytherapy products for the treatment of non-resectable tumors and on endeavoring to secure FDA clearance with respect to the initial proposed brachytherapy product. AMI’s proposed brachytherapy products incorporate patented technology developed for Battelle Memorial Institute (“Battelle”) at Pacific Northwest National Laboratory, a leading research institute for government and commercial customers. Battelle has granted AMI an exclusive license to patents covering these developments for manufacturing, processing and applications for medical isotopes (the “Battelle License”).

The Company’s lead product is the Y-90 RadioGel™ device. The Company is currently conducting additional bench and animal tests requested by the FDA to support a new de novo filing with the FDA that would request marketing clearance for the device as a Class II medical device in the United States. The Company is also exploring the pathway to regulatory clearance in other international markets.

In May of 2016, the Company established a wholly-owned subsidiary, IsoPet Solutions Corporation, to focus on the vibrant and expanding veterinary oncology market. IsoPet Solutions will focus on bringing AMI’s yttrium-90 brachytherapy products to veterinary oncologists to treat animals such as dogs and cats suffering from tumor cancers. IsoPet Solutions is currently establishing the infrastructure necessary to provide product to veterinary clinics including regulatory clearances and compliance.

Research and development of the Company’s brachytherapy product line has been funded with proceeds from the sale of equity and debt securities as well as a series of grants. On October 28, 2010, the Company received $1,215,000 net proceeds from a Department of Energy grant for the Proposed Congressionally Directed Project entitled “Research to Develop and Test an Advanced Resorbable Brachytherapy Seed Research for Controlled Delivery of Yttrium-90 Microspheres in Cancer Treatment.” On October 29, 2010, the Company received notification it had been awarded $244,479 grant funds from the Qualified Therapeutic Discovery Project Program for this same Brachytherapy Project. Additionally, on September 1, 2015, the Company received notification it had been awarded from Washington State University, $42,019 grant funds from the sub-award project entitled “Optimized Injectable Radiogels for High-dose Therapy of Non-Resectable Solid Tumors”.

17

The Company requires funding of approximately $1.5 million annually to maintain current operating activities. Over the next 12-24 months, the Company believes it will cost approximately $5 million to $10 million to fund: (1) the FDA approval process and initial deployment of the brachytherapy products and (2) initiate regulatory approval processes outside of the United States. The continued deployment of the brachytherapy products and a worldwide regulatory approval effort will require additional resources and personnel. The principal variables in the timing and amount of spending for the brachytherapy products in the next 12-24 months will be the FDA’s classification of the Company’s brachytherapy products as Class II or Class III devices (or otherwise) and any requirements for additional studies which may possibly include clinical studies. Thereafter, the principal variables in the amount of the Company’s spending and its financing requirements would be the timing of any approvals and the nature of the Company’s arrangements with third parties for manufacturing, sales, distribution and licensing of those products and the products’ success in the U.S. and elsewhere. The Company intends to fund its activities through strategic transactions such as licensing and partnership agreements or additional capital raises.

Following receipt of required regulatory approvals and financing, in the United States, the Company intends to outsource material aspects of manufacturing, distribution, sales and marketing. Outside of the United States, the Company intends to pursue licensing arrangements and/or partnerships to facilitate its global commercialization strategy.

In the longer-term, subject to the Company receiving adequate funding, regulatory approval for brachytherapy products and thereafter being successful in commercializing brachytherapy products, the Company intends to consider resuming research efforts with respect to other products and technologies. The Company’s core goal is to develop and commercialize isotopes, businesses and technologies intended to help improve the diagnosis and treatment of cancer and other illnesses. Among those longer-term projects being considered by the Company are potential solutions for the impending severe shortages of Molybendum-99 and its derivative product Technetium-99m, the most widely used isotopes for diagnostic purposes.

Based on the Company’s financial history since inception, its auditor has expressed substantial doubt as to the Company’s ability to continue as a going concern. The Company has limited revenue, nominal cash, and has accumulated deficits since inception. If the Company cannot obtain sufficient additional capital, the Company will be required to delay the implementation of its business strategy and not be able to continue operations.

18

Products

Brachytherapy

Pursuant to the Battelle License, the Company has licensed certain exclusive rights to yttrium-90 (Y-90) polymer composite technology developed at Pacific Northwest National Laboratory, a leading research institute for government and commercial customers. The license agreement grants the Company the exclusive right to manufacture and market products using the yttrium-90 isotope carried by an injectable water-based biodegradable polymer. The use of yttrium 90 (Y-90) for the treatment of cancers is well established.

Subject to receipt of all required regulatory approvals from the FDA in the United States and analogous regulators outside of the United States, the Company plans to introduce a new Y-90-based brachytherapy product line for a range of applications for the delivery of a prescribed dose of radiation to a target site. If the Company receives FDA clearance for the Y-90 RadioGel™ device, subject to receipt of adequate financing, the Company will commence production, sales, and distribution of that product. Also, subject to receipt of adequate financing, the Company intends then to seek FDA clearance for the two additional products described below, each of which also incorporates the patented technologies licensed from Battelle. Even if the FDA grants clearance for the Y-90 RadioGel™ device there can be no assurance the FDA would also grant clearance for either or both of the foregoing products.

Y-90 RadioGel™ device - combines Y-90 particles with a polymer carrier that may be injected directly into the tumor.

Y-90 Fast-Resorbable Polymer Seeds - Y-90 contained within a polymer seed, as opposed to metal or glass. This product would be used in place of treating cancers with currently marketed titanium or glass seeds.

Y-90 Polymer Topical Paste – designed to be applied directly to tissue surfaces after surgical tumor removals (also referred to as “resections”) to treat residual tumor cells.

Based upon its studies and analyses, or general application of experience with current brachytherapy devices and yttrium-90, the Company believes that if it is able to obtain regulatory approval and adequate financing to commercialize our products, our brachytherapy products are likely to offer the following benefits, among others, for patients and medical professionals:

● Maximizing Therapeutic Index: The short-range beta particles emitted by Y-90 deliver radiation energy within a tight range. This enables radiation to be selectively delivered to target tissues while minimizing radiation dose to nearby normal tissues. High therapeutic indices imply that more radiation energy may be imparted to cancer tissues, with less radiation reaching adjacent normal tissues.

● Half Life: The industry-standard products have a half-life of 17 days, meaning the patient is radioactive for over two months. The Company’s brachytherapy products use the yttrium-90 isotope, which has a half-life of just 2.7 days. A patient treated with Y-90 would be close to radiation free in 10 days.

● Optimized Delivery Method: Current brachytherapy devices place permanent metal particles seeds in the prostate by using up to 30 large gauge needles. By contrast, the Company’s biodegradable polymer carrying Y-90 particles may be administered with small-gauge needles.

● No Permanent Seeds Remaining: Other brachytherapy devices place permanent metal seeds in the tumor. The Company’s Y-90 RadioGel™ device utilizes a biodegradable, non-toxic polymer that is ultimately absorbed by the body. This eliminates the possibility of a long-term seed migration or other problems that may sometimes arise when seeds remain in the body.

● Good Safety Profile: Many current brachytherapy devices utilize isotopes that emit x-rays (akin to gamma radiation). X-rays or gamma radiation travels within and outside of the body and the isotopes used in current brachytherapy products can remain radioactive for more than two months. The Company’s brachytherapy products use the yttrium-90 isotope, which is a beta-emitter. The yttrium-90 beta-emissions travel only a short distance and have a short half life of 2.7 days.

In June 2015, the FDA notified the Company that the de novo submitted on December 23, 2014 for its Y-90 RadioGel™ device pursuant to Section 513(f)(2) of the U.S. Food, Drug and Cosmetic Act (the “Act”)was not accepted. The Company had several formal and informal interactions with the FDA during the second half of 2015 to clarify the agency’s expectations for data and testing to be provided in a future filing. The Company has incorporated the feedback from the FDA into its continued and active product development and commercialization efforts, utilizing its partnership with IsoTherapeutics Group.

Competitors and Markets

There are established competitors in all of the markets in which the Company has products or currently plans to have products.

Brachytherapy

Brachytherapy is the use of radiation to destroy cancerous tumors by placing a radiation source inside or next to the treatment area. According to the 2014 MEDraysintell report, the global market for brachytherapy reached US$ 680 million in 2013 and is projected to reach $2.4 billion by 2030. It is estimated that the U.S. market represents approximately half of the global market. The Company believes there are significant opportunities in prostate, breast, liver, pancreatic, head and neck cancers. The 2014 U.S. estimated new cases of cancer according to the American Cancer Society are 233,000 prostate, 235,030 breast, 31,190 liver, and 46,420 pancreas.

19

There are a wide variety of cancer treatments approved and marketed in the U.S. and globally. General categories of treatment include surgery, chemotherapy, radiation therapy and immunotherapy. These products have a diverse set of success rates and side effects. The Company’s products fall into a particular type of radiation therapy called brachytherapy. There are a number of brachytherapy devices currently marketed in the U.S. and globally. The traditional iodine-125 (I-125) and palladium-103 (Pd-103) technologies for brachytherapy are well entrenched with powerful market players controlling the market. The industry-standard I-125-based therapy was developed by Oncura, which is a unit of General Electric Company (NYSE:GE) Additionally, C.R. Bard, a major industry player competes in the I-125 brachytherapy marketplace. These market competitors are also involved in the distribution of Pd-103 based products. Cs-131 brachytherapy products are sold by IsoRay (AMEX:ISR). Several Y-90 therapies have been FDA approved including SIR-Spheres by Sirtex (OTC:SXMDF), TheraSphere by Biocompatibles UK (OTC:BCTBF) and Zevalin by Spectrum Pharmaceuticals (NASDAQ:SPPI).

Veterinary Brachytherapy

There are about 150 million pet dogs and cats in the United States. Nearly half of dogs and one third of cats are diagnosed with cancer at some point in their lifetime. The Veterinary Oncology & Hermatology Center in Norwalk, CT reports that cancer is the number one natural cause of death in older cats and dogs, accounting for nearly 50 percent of pet deaths each year. The American Veterinary Medical Association reports that half of the dogs ten years or older will die because of cancer. The National Cancer Institute reports that about six million dogs are diagnosed with cancer each year, translating to more than 16,000 a day. The average cost of treating tumors in dogs using radiation is $5,000-7,000 according to petcarerx.com.

There are oncology treatments available currently in the U.S. and globally for the veterinary market represent a similar, but smaller set of products than is available for the human market.

Employees

As of March 31, 2016, the Company had six employees, including three full-time employees. The Company utilizes eight to ten independent contractors to assist with its operations. The Company does not have a collective bargaining agreement with any of its employees, and believes its relations with its employees are good. The Company is not current on payroll and requires additional funding to make past and current payroll payments.

Raw Materials

The Company manufactures research quantities of brachytherapy products or components of these products. The Company obtains supplies, hardware, handling equipment and packaging from several different U.S. and foreign suppliers. Some of the products the Company manufactures or intend to manufacture require purchasing raw materials from a limited number of suppliers, many of which are international suppliers.

Customers

The Company anticipates that potential customers for our potential brachytherapy products likely would include those institutions and individuals that currently purchase brachytherapy products or other oncology treatment products.

Government Regulation

Significant areas of regulation and intervention include the following:

Environmental and Health Compliance.

The Company is committed to conducting its activities so that there is no or only minimal impact to the environment; there is no assurance, however, that the Company’s activities will not at times result in liability under environmental and health regulations.

The current ongoing continuing costs of compliance are immaterial. Future costs and expenses resulting from such liability may, however, materially negatively impact the Company’s operations and financial condition. Overall, environmental and health laws and regulations will continue to affect the Company’s businesses worldwide.

Medical Device Regulation

In the United States, radioactive medical devices are regulated by the U.S. Food and Drug Administration (FDA) Center for Devices and Radiological Health (CDRH) under the Food and Drugs Act (CFR Title 21). Three categories of medical devices, Class I, Class II and Class III each of specific regulations that apply to the testing, approvals and marketing of such devices. In other countries there are also regulatory bodies that oversee the testing, approval and marketing of radiological devices.

20

Import/Export Regulation.

The Company is subject to significant regulatory oversight of the Company’s import and export operations due to the nature of its product offerings. Penalties for non-compliance can be significant, and violation can result in adverse publicity and financial risk for the Company.

Financial Accounting Standards.

The Company’s financial results can be impacted by new or modified financial accounting standards.

Other Regulations.

The Company’s operations are subject to rules and regulations administered by the U.S. Nuclear Regulatory Commission, Department of Energy, Food and Drug Administration, Department of Transportation, Department of Homeland Security, the Washington State Department of Health and other regulatory bodies. To the extent that these regulations are or become burdensome, business development could be adversely affected.

Available Information

The Company prepares and files annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and certain other information with the United States Securities and Exchange Commission (the “SEC”). Persons may read and copy any materials the Company files with the SEC at the SEC’s public reference room at 100 F Street, NE, Washington D.C. 20549, on official business days during the hours of 10 a.m. to 3 p.m. Eastern Time. Information may be obtained on the operation of the public reference room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov. Moreover, the Company maintains a website at http://www.isotopeworld.com that contains important information about the Company, including biographies of key management personnel, as well as information about the Company’s business. This information is publicly available (i.e., not password protected) and is updated regularly. The content on any website referred to in this Form 10-K report is not incorporated by reference into this Form 10-K report, unless (and only to the extent) expressly so stated herein.

21

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. - continued

Results of Operations

Comparison of the Three Months Ended March 31, 2016 and 2015

The following table sets forth information from our statements of operations for the three months ended March 31, 2016 and 2015.

	Three Months Ended March 31, 2016			Three Months Ended March 31, 2015
Revenues	$	4,054		$	12,054
Operating expenses		(686,585	)		(340,867	)
Operating loss		(682,531	)		(328,813	)
Non-operating income (expense):
Gain (loss) on derivative liability		(5,139,998	)		2,233,260
Net gain (loss) on settlement of debt		65,837			(3,574	)
Interest expense		(49,209	)		(326,140	)
Net income (loss)	$	(5,805,901	)	$	1,574,733

Revenue

Revenue was $4,054 for the three months ended March 31, 2016 and $12,054 for the three months ended March 31, 2015. The decrease was a result of a decrease in Consulting revenues which consist of providing a company with assistance in strategic targetry services, and research into production of radiopharmaceuticals and the operations of radioisotope production facilities. No proprietary information belonging to our Company is shared during the process of this consulting.

Revenue for the three months ended March 31, 2016 and 2015 consists of the following:

	Three months ended March 31, 2016		Three months ended March 31, 2015
Consulting	$	4,054	$	12,054
TOTAL	$	4,054	$	12,054

Operating Expenses

Operating expenses for the three months ended March 31, 2016 and 2015 was $686,585 and $340,867, respectively. The increase in operating expenses from 2015 to 2016 can be attributed to the increase in Professional Fees expenses ($63,993 for the three months ended March 31, 2015 versus $70,969 for the three months ended March 31, 2016); an increase in Sales and Marketing expenses from 2015 to 2016 ($0 for the three months ended March 31, 2015 versus $11,836 for the three months ended March 31, 2016); and the increase in General and Administrative Expenses ($53,779 for the three months ended March 31, 2015 versus $438,042 for the three months ended March 31, 2016). The main contributors to the increase in General and Administrative Expenses was an increase in Loan Fees ($300,494 for the three months ended March 31, 2016 versus $9,640 for the three months ended March 31, 2015); an increase in Research Expense ($95,544 for the three months ended March 31, 2016 versus $11,600 for the three months ended March 31, 2015); and an increase in Travel and Entertainment Expense ($18,560 for the three months ended March 31, 2016 versus $300 for the three months ended March 31, 2015). These increases were partially offset by a decrease in Payroll expense ($191,536 for the three months ended March 31, 2015 versus $165,000 for the three months ended March 31, 2016); and a decrease in Stock Options Granted ($28,500 for the three months ended March 31, 2015 versus $0 for the three months ended March 31, 2016).

Operating expenses for the three months ended March 31, 2016 and 2015 consists of the following:

	Three months ended March 31, 2016		Three months ended March 31, 2015
Cost of materials	$	-	$	390
Depreciation and amortization expense		738		2,669
Professional fees		70,969		63,993
Stock options granted		-		28,500
Payroll expenses		165,000		191,536
General and administrative expenses		438,042		53,779
Sales and marketing expense		11,836		-
	$	686,585	$	340,867

22

Non-Operating Income (Expense)

Non-operating income (expense) for the three months ended March 31, 2016 varied from the three months ended March 31, 2015 primarily due to a loss on derivative liability of $5,139,998 for the three months ended March 31, 2016 versus a gain of $2,233,260 for the three months ended March 31, 2015. This was partially offset by a decrease in interest expense of $326,140 for the three months ended March 31, 2015 versus interest expense of $49,209 for the three months ended March 31, 2016; and a net loss on settlement of debt of $3,574 for the three months ended March 31, 2015 versus a net gain on settlement of debt of $65,837 for the three months ended March 31, 2016.

Non-Operating income (expense) for the three months ended March 31, 2016 and 2015 consists of the following:

	Three months ended March 31, 2016			Three months ended March 31, 2015
Interest expense	$	(49,209	)	$	(326,140	)
Net gain (loss) on settlement of debt		65,837			(3,574	)
Gain (loss) on derivative liability		(5,139,998	)		2,233,260
	$	(5,123,370	)	$	1,903,546

Net Loss

Our net income (loss) for the three months ended March 31, 2016 and 2015 was $(5,805,901) and $1,574,733, respectively.

Liquidity and Capital Resources

At March 31, 2016, the Company had negative working capital of $13,565,898, as compared to $21,220,530 at March 31, 2015. During the three months ended March 31, 2016 the Company experienced negative cash flow from operations of $572,855 and it expended $0 for investing activities while adding $641,760 of cash flows from financing activities. As of March 31, 2016, the Company had $0 commitments for capital expenditures.

Cash used in operating activities increased from $263,237 for the three month period ending March 31, 2015 to $572,855 for the three month period ending March 31, 2016. Cash used in operating activities was primarily a result of the Company’s net loss, partially offset by non-cash items, such as loss on derivative liability and amortization and depreciation, included in that net loss and preferred and common stock issued for services and other expenses. The Company had no cash used in investing activities for the three month periods ended March 31, 2016 and 2015. Cash provided from financing activities increased from $265,519 for the three month period ending March 31, 2015 to $641,760 for the three month period ending March 31, 2016. The decrease in cash provided from financing activities was primarily a result of decrease in proceeds from convertible debt, partially offset with a decrease in payments on capital lease.

The Company has generated material operating losses since inception. The Company had a net loss of $5,805,901 for the three months ended March 31, 2016, and a net gain of $1,574,733 for the three months ended March 31, 2015. The Company expects to continue to experience net operating losses. Historically, the Company has relied upon investor funds to maintain its operations and develop the Company’s business. The Company anticipates raising additional capital within the next twelve months from investors for working capital as well as business expansion, although the Company can provide no assurance that additional investor funds will be available on terms acceptable to the Company. If the Company is unable to obtain additional financing to meet its working capital requirements, it may have to curtail its business.

The Company anticipates raising additional capital within the next twelve months from investors for working capital as well as business expansion, although the Company can provide no assurance that additional investor funds will be available on terms acceptable to the Company. If the Company is unable to obtain additional financing to meet its working capital requirements, it may have to cease operations.

23

The Company requires funding of at least $1.5 million per year to maintain current operating activities. Over the next 12-24 months, the Company believes it will cost approximately $5 million to $10 million to fund: (1) the FDA approval process and initial deployment of the brachytherapy products and (2) initiate regulatory approval processes outside of the United States. The continued deployment of the brachytherapy products and a worldwide regulatory approval effort will require additional resources and personnel. The principal variables in the timing and amount of spending for the brachytherapy products in the next 12-24 months will be the FDA’s classification of the Company’s brachytherapy products as Class II or Class III devices (or otherwise) and any requirements for additional studies which may possibly include clinical studies. Thereafter, the principal variables in the amount of the Company’s spending and its financing requirements would be the timing of any approvals and the nature of the Company’s arrangements with third parties for manufacturing, sales, distribution and licensing of those products and the products’ success in the U.S. and elsewhere. The Company intends to fund its activities through strategic transactions such as licensing and partnership agreements or additional capital raises.

Although the Company is seeking the foregoing funding and have engaged in numerous discussions with potential finders, investment bankers and investors with respect to the initial portion thereof, the Company has not received firm commitments for the required funding. Based upon its discussions, the Company anticipates that if the Company is able to obtain the funding required to retire outstanding debt, pay past due payables and maintain its current operating activities that the terms thereof will be materially dilutive to existing shareholders.

The recent economic events, including the inherent instability and volatility in global capital markets, as well as the lack of liquidity in the capital markets, could impact its ability to obtain financing and its ability to execute its business plan. The Company believes healthcare institutions will continue to purchase the medical solutions that it distributes.

Legal Contingencies

There Company has an ongoing dispute with BancLease and Washington Trust Bank regarding application of lease payments to the principal loan amount for the linear accelerator, and the Company believes it has overpaid by approximately $300,000. At this time, the Company believes it will prevail in this matter, however there can be no assurance as to the outcome of this event.

In addition, there are disputes related to approximately $180,000 principle value of convertible toxic notes. The Company believes it has affirmative defenses and is actively working to address these disputes.

Accounting Policies and Estimates

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from these estimates under different assumptions or conditions. During the period ended March 31, 2016, we believe there have been no significant changes to the items disclosed as significant accounting policies in management’s notes to the consolidated financial statements in our annual report on Form 10-K for the year ended December 31, 2054, filed on May 26, 2016.

Off-Balance Sheet Arrangements

The Company does not have any off balance sheet arrangements that are reasonably likely to have a current or future effect on the Company’s financial condition, revenues, results of operations, liquidity or capital expenditures.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

This item is not applicable to us because we are a smaller reporting company as defined by Rule 12b-2 under the Securities Exchange Act of 1934.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

Based on an evaluation as of the date of the end of the period covered by this report, the Company’s Chief Executive Officer and Chief Financial Officer conducted an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures, as required by Exchange Act Rule 13a-15. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that, because of the disclosed material weaknesses in the Company’s internal control over financial reporting, the Company’s disclosure controls and procedures were ineffective as of the end of the period covered by this report to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the Company’s reports filed under the Exchange Act is accumulated and communicated to management, including the Company’s Chief Executive Officer and the Company’s Chief Financial Officer, to allow timely decisions regarding required disclosure.

24

Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting that occurred during the Company’s last fiscal quarter (the Company’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

The term “internal control over financial reporting” is defined as a process designed by, or under the supervision of, the registrant’s principal executive and principal financial officers, or persons performing similar functions, and effected by the registrant’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

(a)	Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the registrant;
(b)	Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the registrant are being made only in accordance with authorizations of management and directors of the registrant; and
(c)	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the registrant’s assets that could have a material effect on the financial statements.

PART II

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

During the three months ending March 31, 2016 the Company issued 63,077 shares of its Series A preferred stock as loan fees on convertible promissory notes totaling $300,494.

During the three months ending March 31, 2016 the Company issued 10,000 Series A preferred stock in exchange for $10,000 of convertible debt, to the CEO of the Company.

During the three months ending March 31, 2016 the Company issued 196,000 Series A preferred stock in exchange for $106,262 of convertible debt, plus $13,962 of accrued interest, plus surrender of outstanding warrants.

During the three months ending March 31, 2016 the Company issued 216,977 Series A preferred stock in exchange for $216,977 of convertible debt received from a major shareholder and Director of the Company.

In connection with the above stock sales, we did not pay any underwriting discounts or commissions. None of the sales of securities described or referred to above was registered under the Securities Act of 1933, as amended (the “Securities Act”). We had or one of our affiliates had a prior business relationship with each of the purchasers, and no general solicitation was used in connection with the sales. In making the sales without registration under the Securities Act, we relied upon the exemption from registration contained in Section 4(a)(2) of the Securities Act.

Item 6. Exhibits.

Exhibit
Number		Description
10.1		Form of Non-Statutory Stock Option Agreement (incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on March 15, 2012).
31.1	*	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes – Oxley Act of 2002
31.2	*	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes – Oxley Act of 2002
32.1	*	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema
101.CAL		XBRL Taxonomy Extension Calculation Linkbase
101.DEF		XBRL Taxonomy Extension Definition Linkbase
101.LAB		XBRL Taxonomy Extension Label Linkbase
101.PRE		XBRL Taxonomy Extension Presentation Linkbase

* Filed herewith.

25

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ADVANCED MEDICAL ISOTOPE CORPORATION
Date: June 10, 2016	By:	/s/ James C. Katzaroff
	Name:	James C. Katzaroff
	Title:	Chairman and Chief Executive Officer
		(Principal Executive Officer)

Date: June 10, 2016	By:	/s/ L. Bruce Jolliff
	Name:	L. Bruce Jolliff
	Title:	Chief Financial Officer
		(Principal Financial and Accounting Officer)

26