Good day, ladies and gentlemen, and welcome to your IsoRay Inc. Second Quarter Fiscal Year 2020 Call. All lines have been placed in a listen-only mode and the floor will be open for your questions and comments following the presentation. (Operator instructions were provided.) At this time, it is my pleasure to turn the floor over to Mark Levin, Investor Relations. Sir, the floor is yours.

Thank you, operator. Good afternoon and thank you for joining us today for the IsoRay fiscal second quarter 2020 earnings call for the quarter ended December 31, 2019. Before we get started, I will take a few minutes to read the forward-looking statements. Certain statements in this conference call constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as amended. When used in this conference call, words such as will, believe, expect, anticipate, encourage and similar expressions, as they relate to the company or its management as well as the assumptions made by information currently available to the company's management, identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s current expectations and beliefs about future events as of today, February 11, 2020. As with any projection or forecast, they are inherently susceptible to uncertainty and changes in circumstances and the company undertakes no obligation to and expressly disclaims any obligation to update or alter its forward-looking statements whether resulting from such changes, new information, subsequent events or otherwise. Additional information concerning forward-looking statements is contained under the headings of Safe Harbor statement and risk factors listed from time to time in the company's filings with the Securities and Exchange Commission. We will begin today's call with Lori Woods, IsoRay's Chief Executive Officer; and then Jonathan Hunt, IsoRay’s Chief Financial Officer, who will discuss the fiscal second quarter 2020 financial results. Following their prepared remarks, we will take questions from our analysts and institutional investors. I will now turn the call over to Lori Woods.

Thank you, Mark. Good afternoon, and thank you for joining us today for IsoRay's fiscal second quarter 2020 earnings conference call for the quarter ended December 31, 2019. Following my comments, our Chief Financial Officer, Jonathan Hunt, will provide a more detailed review of the fiscal second quarter financial results. We are pleased to share with you another solid quarter of growth and progress at IsoRay. Revenue for the second quarter was $2.2 million, an increase of 16% versus the year-ago quarter. Our core prostate brachytherapy revenue increased at a similar rate of 16% when compared to the fiscal second quarter of 2019. In addition to lapping tougher comparisons that began in the second quarter of fiscal 2019, we believe that the timing of the holidays in November and particularly in December negatively impacted our business in the second quarter of fiscal 2020. The fiscal second quarter 2020 started off great with October being a record sales month for IsoRay. But as we got closer to the holidays, orders became a little more inconsistent. November of 2019 did have one less selling day than the prior year. The more impactful, we believe, was the fact that Christmas and New Year's both fell on Wednesdays in 2019. We saw orders drop considerably as we entered the second half of December as it seemed many customers took off all of one or both of the last two weeks of the calendar year 2019. As we look at this current fiscal third quarter, we are off to a great start and we're excited about our growth opportunities ahead. We experienced noteworthy growth since the holidays with preliminary sales in January 2020 increasing about 45% versus December of 2019 and about 30% compared to January 2019 to another record sales month for IsoRay. We are also making continued progress in important areas relative to growth and market share. You may recall our discussion during our fiscal first quarter 2020 conference call in November; at that time we shared some more details on how IsoRay’s growing leadership role within the prostate brachytherapy industry is affording us more organic growth and consistent market share gains. The numbers tell the story. For the trailing 12 months ending December 31, 2019, our net new physician customer accounts increased 39% versus the previous 12-month period. The fact that we are reaching more and more customers gives us confidence that the strategies we have employed are working to grow IsoRay’s presence amongst a broader customer base. We are staying consistent to those strategies as we continue to educate and introduce more clinicians to the benefits of brachytherapy and the unique properties of our Cesium Blu isotope, also known as Cesium-131. We are seeing results and we expect to continue to experience further share gains and revenue growth. I am also proud to report that IsoRay’s top-line growth was complemented once again this quarter by further considerable operational improvement and prudent financial discipline. We increased gross profit 45% when compared to the second quarter of 2019; combine that with an 8% year-over-year decrease in operating expenses and we reduced our operating loss by 37% versus the second quarter of 2019. We are also taking steps to grow our path forward with our proprietary disposable delivery device Blu Build which will address the customization segment of the prostate brachytherapy market. As we've discussed, Blu Build has been in a limited market release to date as we gain feedback from physicians who have used the device. We feel that we now have the product's design complete and are ready for broader release. We continue to expect Blu Build to start contributing to revenue in a more meaningful way in the second half of fiscal 2020. We are presently evaluating our strategy around production capacity for the product which we hope will be complete by the end of the fiscal year. With the completion of that process, we expect Blu Build will be available for broader adoption. I know many of you have also been following the developments involving our customer GT Medical Technologies. I'm sure many of you are aware of their latest news. The FDA cleared the expanded indication for GammaTile therapy to include patients with newly diagnosed malignant brain cancers in January. As their manufacturer and supplier, we are hopeful that this expanded addressable patient population will lead to a more rapid adoption of GammaTile in the future. It's exciting to see the potential this holds to bring the unique benefits of our proprietary isotope to more patients battling brain cancer. Revenues from sales to GT Medical Technologies were once again nominal in the fiscal second quarter of 2020. In addition to brain cancer treatment, we are continuing to explore additional market opportunities for further surgical applications of Cesium Blu in treating other hard-to-treat cancers. In discussing our initiatives I alluded to our strategic approach earlier and this is a good juncture to explain that our strategy is rooted in a holistic approach that has three key prongs: embracing technologies, delivery economic benefits and providing the training and better awareness that will fuel adoption of our products. The facets of that strategy and its impact is evident in the progress we have made and can be clearly seen in the most recent effort that successfully culminated in the news we announced in the press release that we issued on February 5th. The press release detailed our collaboration with MIM Software. It spoke to embracing technologies to provide a new treatment program for head and neck cancers. This bundled program approach brings together MIM's planning and imaging software and IsoRay’s industry-leading Cesium Blu brachytherapy seeds. The new package provides a one-stop alternative to physicians supporting the adoption of Cesium Blu for treating head and neck cancers. We believe that this collaboration will give physicians the ability to more accurately plan and execute a precise radiation treatment with fewer adverse side effects than other radiation treatment options for patients with these types of difficult-to-treat tumors. The all-inclusive bundled treatment program provides an economically feasible option for facilities and physicians to expand adoption of Cesium Blu. Our approach in head and neck cancer serves as a great example of what we believe will be a template for future Cesium Blu brachytherapy treatment adoptions for other hard-to-treat cancers. We will continue to explore how to best work with effective treatment technologies like MIM Software which we believe will complement the unique qualities of our isotope. It makes Cesium Blu brachytherapy a more viable economic option for physicians providing an attractive incentive to grow treatment adoption and as more clinicians use Cesium Blu it feeds awareness that we believe will continue to be an important factor in expanded market adoption. You also know that we have been addressing cost effectiveness from the standpoint of reimbursement. You no doubt recall that CMS staff has recommended that IsoRay be granted the ICD-10-PCS codes we submitted last year for reimbursement in the inpatient DRG setting. We still hope to hear back from CMS this spring of the formal notification of approval for these new codes taking effect on October 1st, 2020. Finally, we will continue to support programs to effectively educate and train physicians on how to use Cesium Blu to treat their patients. We believe education, awareness and understanding will lower the barriers to adoption for physicians and help our valuable treatment reach more patients in need. In closing, I am very pleased that this quarter has been defined by continued successes and important headway. We are building adoption in our core market. We are showing the growing and important role we are playing in the treatment of other cancers. And our initiatives are creating broader awareness of the importance of Cesium Blu. We are providing hope for patients battling difficult cancers as we work to expand training for current and next-generation clinicians to embrace our pioneering technology. All of this holds what we believe is great promise for what is yet to come and what the future holds for our innovative products and programs. Now I will turn the call over to Jonathan to review the financial results of our fiscal second quarter.

Thank you, Lori. I am going to discuss some of the financial information that was contained in our press release for the fiscal second quarter ended December 31, 2019 that we released a short while ago. We anticipate that our Form 10-Q will be filed with the SEC on or around February 14th. Revenue for the second quarter ended December 31, 2019 grew 16% to $2.206 million versus $1.904 million for the same period last year. Second quarter revenue was comprised of 89% for prostate brachytherapy with the balance, or 11%, of revenue attributed to other brachytherapy. The majority of other brachytherapy revenue was comprised of sales to treat brain cancer, including nominal sales of GammaTile therapy. Gross profit as a percentage of revenues for the second quarter ended December 31, 2019 increased to 15.4% compared to 40.2% for the quarter ended December 31, 2018. The gross margin increase was predominantly driven by higher sales and lower isotope unit costs when compared to the prior year comparable period. Second quarter gross profit dollars of $1.11 million increased 45% when compared to the same period last year. Total operating expenses consisting of research and development, sales and marketing and general and administrative totaled $2.01 million, or a decrease of 8% compared with total operating expenses of $2.19 million in the second quarter of 2019. Total R&D expense decreased 33% versus the comparable prior year quarter to $277,000. The decrease in total research and development expenses was primarily the result of lower overall protocol expenses combined with reduced spending related to the development of the Blu Build delivery system which is currently in limited market release, as well as the year-over-year decline in collaborative research expenses related to GammaTile therapy. Going forward, we continue to expect proprietary R&D expense to increase back to or above levels in prior recent quarters or to roughly $300,000 to $400,000 per quarter, as we are continuing to have discussions with institutions looking at the expanded use of Cesium-131. Sales and marketing expenses decreased 5% versus the comparable prior year quarter to $666,000. The decrease in sales and marketing expenses was driven primarily by lower travel costs and trade show-related expenses versus the prior year comparable period largely due to a calendar shift of the ASTRO Conference to September of 2019 from October of 2018. G&A expenses of $1.07 million represented a decrease of 3% versus $1.1 million in the fiscal second quarter 2019. The year-over-year decline was driven primarily by a decrease in legal and public company expenses compared to the prior year comparable period. IsoRay posted a net loss of $897,000 for the second quarter ended December 31, 2019, a significant improvement compared to a net loss of $1.414 million for the quarter ended December 31, 2018. The net loss per basic and diluted share was $0.01 versus the net loss of $0.02 for the quarter ended December 31, 2018. Basic and diluted share results are based on a weighted average shares outstanding of approximately 67.4 million at the fiscal second quarter 2020 versus 67.3 million for the prior year period. As of December 31, 2019 the company had cash, cash equivalents and certificates of deposit that totaled $3.18 million compared to $5.33 million at the end of fiscal 2019 ended June 30, 2019. The company has zero long-term debt. The relatively larger decrease in cash, cash equivalents and certificates of deposit this quarter compared to recent quarters was attributed to an increase in prepaid expenses in the quarter primarily related to premium payments for D&O insurance as well as a large decrease in accounts payable compared to the prior quarter due to the timing of payments made. Last month we filed an S-3 registration statement, something common for companies at our stage in the growth cycle to provide us with future financing flexibility. That being said, at this time we remain comfortable that our cash balance will be sufficient to fund operating activities through the remainder of calendar year 2020. Shareholders’ equity at the end of fiscal second quarter 2020 totaled $6.14 million versus $7.68 million at the end of fiscal 2019. I will now turn the call over to the operator to take questions from our analysts and institutional investors.

Thank you. (Operator instructions were provided.) And our first question comes from Jason Kolbert with Dawson James. Please go ahead, sir.

Hi, guys. Thank you very much and, you know, I'm very, very careful about saying congratulations to people, but, you know, in this case I do see sequential growth. And I just want to make sure I understand it of $1.9 million in the prior period, you know, up to 2.1, not as high as I'd hoped but still really good and the number that caught my attention and I'd like you to expound upon it is the number of new users and I think you said new physician count was up 30% which is phenomenal, because it's not just selling to concentrated buyers. Did I get that part right? Hello?

And I apologize. We're having a little technical difficulty, just one moment please.

(Technical difficulty) so coming onboard give us in the fall - in the future months additional revenue and sales that we will expect to see from those people starting. So trying to give you some color there.

A new user account at 30 - up 30%, I'm sorry to ask you to repeat that briefly.

I'm sorry, you cut off, I didn't get the first part of your question Jason.

I was just saying that, you know, congratulations because the numbers are up sequentially, but the thing that really caught my attention was the fact that you called out a 30% growth rate in new physician users which is something new and different for IsoRay, right? We've been - you and I have been at this a long time and so that's a very high sequential growth rate. And I wondered if you could expand upon that and how important was Cesium Blu, the new loader. Help me understand kind of what that means in terms of future trajectory?

Got you. Thank you. So as we've been disclosing Cesium Blu is still in limited market release and so we aren't breaking out those numbers specifically but it is a limited market release. So I would not attribute that growth to Cesium Blu, or Blu Build. What I would attribute it to is our prostate brachytherapy core business and our growth and the number of physicians you're seeing being added on to our net physician customer accounts. Did that answer your question?

Well, it does. But, you know, as you and I know IsoRay has struggled to grow that base and that's a mountain. But once you start to increase the number of physician users, I assume that there is a reorder rate associated with them. And so do you feel like you're really starting to penetrate that brachytherapy market and that physician users are kind of looking at Cesium-131 as a, you know, a very special isotope with differences versus what's been traditionally dominating the space?

Yeah, I think we are and one of the things I'll give an example of that is when we go to these conferences, the physician conferences used to be that people, if they talked about Cesium, kind of talked about it back in a corner somewhere else. Now we see them openly talking and asking questions in these large forums of physicians saying, 'Well, I use Cesium; why don't you?' or 'Wouldn't Cesium be a good idea for this?' So we're seeing a lot of momentum in the areas that physicians actually talk about it to their peers. And I think that has been very helpful for us.

Okay. And, you know, I'm also excited about, you know, news that we could see GT Medical and GammaTile really start to come online. Is there going to be any coordination in terms of kind of the sales effort and, you know, how will they give you a heads up in terms of what they're going to need to order as they start to come online?

Well, so they have recently given us news that they are increasing their sales force and they are hiring directly. I believe they're up to five now and maybe looking at an additional salesperson who will directly work with the company. We work with them very closely to stay on top of what they expect their sales to be and look like because we have to do things like purchase isotope and other things that we need to do to support them. So we do communicate with them, but they are handling their sales and marketing and we don't actually—our sales force isn't directly selling their product.

Yeah, I hope to see those things link in the future because it just makes sense. But I do understand what you're saying and then look - there is a lead time, right, it's not like Cesium-131 is just lying around. So they're going to have to be coordinating with you as their expectations rise and as they start to use GammaTile, that's right, isn't it?

Yes, absolutely.

Okay. Thank you so much. I really appreciate it. Keep going. This is the progress we're looking for.

Thanks Jason so much.

And our next question comes from Ed Woo with Ascendiant Capital. Please go ahead.

Yeah, thank you for taking my question. And congratulations. Was that correct that you said sales for January that just passed was up 30% year-over-year from January 2019?

Yes, that is correct.

Great. And then looking forward into this year, I know you guys don't give specific guidance, but you guys will have tougher comps, as you guys—it's kind of a high-class problem to have. You guys will have tougher comps to strongly perform. Will that be more of an issue do you think in the back half of this year?

You know, Ed, as we reiterate before, we don't give forward-looking guidance because there are so many variables out there right now. But we are encouraged by the direction that we're headed both in terms of the revenue growth that we've seen in the past, a little bit of color that we gave as far as our January sales and also in terms of just the net increase in the physician count. We feel those are all positive directions that we're moving that will propel us into the future, as well as once GammaTile moves into full production, particularly with their indication to now use on a first-line basis as opposed to a secondary basis. And, you know, we also hope to have, you know, increases from Blu Build. None of that is obviously guaranteed, but those are all factors that we look at and are hopeful for the future.

Great. You say that Blu Build release broadly in the second half or will it be released in the first quarter of next year?

So we're talking about increasing the release of Blu Build in the third and fourth fiscal quarters of 2020 and we think then it will have more impact on our sales numbers at that point in time. However, we're going to be careful as we launch this product because it's a really exciting product. We want to make sure that we don't have any hiccups with it and also that there's no reason for it not to continue to grow and benefit the company and physicians and patients in the future.

Great. Well, thank you and good luck.

Thanks so much.

And our next question comes from Swayampakula Ramakanth with H.C. Wainwright. Please go ahead.

Thank you. This is RK from H.C. Wainwright. Good afternoon Lori and Jonathan. A couple of quick questions. On the GammaTile, so in general so far what have you kind of seen in terms of adoption and usage with this additional indication, how should we think about it, you know, in the next coming months and quarters in terms of adoption and also in terms of how the growth rate for yourselves and within your revenue lines?

Hi, RK. So I think, you know, we've been reporting that the revenues have been nominal and that's about all the color I can give on that. What I will say about this new indication is we're excited about the potential there; it certainly gives GammaTile a broader base of patients from which to draw, it gives physicians and patients another—what we believe is a really great option—to treat their tough cancer. So we're excited about what it looks like for GammaTile and really hope that this will open up some of the doors for them. But we do understand that this is a process and it takes time and as much as we would love it to work overnight and just happen overnight, they have things like hospital logistics and licensing and administration requirements— all kinds of stuff that can be cumbersome and time-consuming. So I also think that we have to temper our excitement a little bit with knowing that this is a process that can take a little bit of time.

Fair enough. Talking about, you know, taking time for processes to start their head and neck software deal that you know you're just recently announced end of last week. So how should we think about that indication, what are the next steps or what is it that investors like us need to be looking out for to get a feel for what growth could come from that indication?

So we're looking at—let me take a step back. In putting this program together we really wanted to make sure we addressed all of the things that could keep physicians from adopting us. And so in working with MIM one of the things we did was we wanted to put together something that was economically feasible to help physicians who were just starting out with the new program, maybe they couldn't justify to their hospital getting new software or some of these other things that they would have to go through lots of committees. We want to make this accessible and easy for them. So in joining with MIM what we're doing is we're making a bundled package available to them in a cost-effective way; we're trying to lower the barriers to entry. Now having said that, this is something that we have tried to do without a formal agreement in the past. So I think this formal agreement with MIM has a lot more ability to really bring focus to a program and be able to put it in front of a physician and get him to try it for his patients who need it, and adding on the training and the support on that side we really want them to then have a good experience and lower the barrier to repeating that. So this program is really aimed at how do we lower the barriers and get people to try it and use it and continue to use it without having any reason to slow down.

Fair enough. Then on the operating lines you know you have been working with your supply chain improving or making changes within your supply lines. So how much of that conversion has happened and what is still left from the legacy supplier?

So we evaluate our suppliers all the time and we will continue to always do that and we look for areas to bring costs down and I do want to say that that's never going to be at the expense of growth. We want to manage our business with a lot of fiscal responsibility but with a look to growing. And so we're going to continue to look at those suppliers, be it the reactors who supply our radioactive isotope or someone who supplies strands for some of our products, we're going to continue to evaluate them, we're going to continue to work to keep our costs down. And that's just part of the ongoing business in the future.

Thank you. Thank you for taking all my questions.

Absolutely.

And our next question comes from William Urschel with Accord Partners. Please go ahead. Mr. Urschel, your line is open.

Can you hear me now?

Yes, we can.

Thank you, small technical difficulty on our end. Congratulations on a number Lori, Jonathan, those are really great. Two questions. On January 13th you released an announcement that there was a change in the supply agreement with GT Medical but we couldn't figure out what that change was. First question. Second question is can you talk at all about your plans and timing for your shelf offering?

Yeah. So on the GT change, it was just to allow for greater flexibility for them and particularly for their customers and their order sizes. Previously they were ordering in specific multiples of the number of tiles, and this gave them a broader range to be able to work with—really just more flexibility for them. The pricing really stayed the same on that. So there was no real change in that other than just giving them that flexibility. And then with regards to the S-3 filing, we just felt like that was kind of a housekeeping item. We hadn't had one out there for I think about a year and a half, and felt like we needed to have that out there in order to just be able to have that flexibility should the need arise. And so we decided to go ahead and put that out there at this time but no specific plans for it at the moment.

Thank you very much.

(Operator instructions) And I see no further questions, so I'll turn it back over to management for any closing remarks.

Thank you everybody for joining us today. We really appreciate it. And we hope you have a great evening.

Thank you. That does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time and have a great day.