Good day, ladies and gentlemen, and welcome to the IsoRay Fourth Quarter Fiscal 2019 Conference 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] At this time, it is my pleasure to turn the floor over to your host, Mark Levin. Sir, the floor is yours.

Thank you, operator. Good afternoon and thank you for joining us today for the IsoRay fiscal fourth quarter and full year end 2019 earnings call for the quarter and year ended June 30, 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 assumptions made by and 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 September 24, 2019. 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 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 fourth quarter and fiscal 2019 full year 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 fourth quarter and full year 2019 earnings conference call for the quarter ended June 30, 2019. My comments today will include highlights from the fourth quarter and the full year financial results. Following my comments, you will hear from our Chief Financial Officer, Jonathan Hunt, who will provide a more detailed review of the fiscal fourth quarter and full year 2019 financial results. Our fiscal year 2019 and fiscal fourth quarter 2019 can be summed up in one word, progress. This growth is attributable to our strong core business and the products that support that business. Revenue for the fourth quarter increased 20% over the year ago quarter. Once again, the key driver of growth this quarter was IsoRay's core prostate brachytherapy revenue. Prostate brachytherapy revenue increased 24% versus the fiscal fourth quarter of 2018. We attribute this growth to the continued positive response to our sales and marketing strategies as well as the introduction of Blu Build delivery system that began its rollout in our fiscal second quarter. These efforts have contributed to increased sales penetration with our existing customers and the addition of new customers. Fiscal year 2019 was a year of great progress for IsoRay as we continue to take share of the total prostate brachytherapy market. Total revenue increased 23% for the full fiscal year. Gross profit increased 65%, with a gross margin expanding by over 10 percentage points to a record 41.7%. When combined with a 3% decrease in total operating expenses, our net loss declined 23%. Although we have moved each of these key metrics in their respective right directions, we know we have much more to do. One of the highlights of fiscal 2019 was the introduction of…

Thank you, Lori. I’m going to discuss some of the financial information that was contained in our press release for the fiscal fourth quarter and fiscal year ended June 30, 2019 that we released a short while ago. We anticipate that our Form 10-K will be filed with the SEC on or around September 27. Revenue for the fourth quarter ended June 30, 2019, grew 20% to $1.92 million versus $1.6 million for the same period last year. As Lori mentioned earlier, the primary driver of revenue growth for the quarter was the company’s core prostate brachytherapy business, which increased 24% versus the fourth quarter of 2018. Fourth quarter revenue was comprised of 89% for prostate brachytherapy, with the balance or 11% of revenue attributed to other brachytherapy. Gross profit as a percentage of revenues for the fourth quarter ended June 30, 2019, increased to 45.7% compared to 27.3% for the quarter ended June 30, 2018. The gross margin increase was primarily driven by higher sales as well as decreased isotope unit cost, primarily resulting from the adjustments to our isotope supply chain that we made at the end of calendar year 2018. Fourth quarter gross profit dollars of $879,000 increased 101% when compared to the same period last year. Total operating expenses, consisting of research and development, sales and marketing and general and administrative, decreased 28% or almost $800,000 to $2.02 million in the quarter versus $2.81 million in the fiscal fourth quarter 2018. Total R&D expense decreased 40% versus the comparable prior year quarter to $341,000. Collaborative research expenses related to GammaTile Therapy totaled $135,000 in the fiscal fourth quarter of 2018, which preceded the July 2018 FDA 510(K) approval of GammaTile Therapy, and those expenses declined to $0 this quarter. This along with the decline in proprietary…

Thank you. The floor is now open for questions. [Operator Instructions] And our first question comes from Jason Kolbert from Dawson James. Go ahead.

Lori, congratulations on seeing the growth in the prostate cancer market and on the expanding margins. But my real question is, other than the continuing [ph] growth there, which is good and it's positive, where did the breakout revenues come from? And can you give us a more detailed update on how you're going to benefit from GammaTile? And how is GammaTile doing in the GBM field? Thank you.

Hi, Jason. Thank you for your question. In regards to your questions regarding to GammaTile, GammaTile, in the period that we're reporting on was in a limited release and as such, the revenues we’ve seen from them are nominal. However, we are excited about the potential they have for the future. We can't give any guidance on it, because we don't have any idea at this point in time what it's going to look like. And outside of that, I don't have a lot in the way of an answer for you on that particular topic. Can you restate your first part of your question so I can answer it as well?

Yeah. I was just talking about the fact that there's been nice but incremental growth in prostate cancer, at this rate, how long does it take for you to get to breakeven?

I'm going to turn the call over to Jonathan.

So Jason, we have not provided guidance on when that breakeven points will be. We still continue to see growth in the markets we're in, particularly in the core prostate market, and we're excited by that and what we see there.

And our next question comes from Ed Woo from Ascendiant Capital. Go ahead.

Yeah. Thank you for taking my questions. You mentioned that Blu Build will be increasing revenues in the third and fourth quarter, is that the third and fourth fiscal quarter or third and fourth calendar quarter 2020?

Thank you for that question, Ed. It is the fiscal quarters, third and fourth fiscal quarters. It takes some time to get new centers, to get their radioactive materials license amended and get them set up to use Cesium. So it will take some time as it did when we originally got started with prostate, it took a while to get those new customers on board with all the different things you have to do to get them set up. So that gives you some color on why we're saying third and fourth quarter for fiscal 2020.

Well, you do have to spend some - and money to invest to ramp this up? Or has that pretty much been all done and spent during your development?

There may be some additional cost, but we feel like we’ve to date spent most of the money that's going to be required to get this up and running in the development process.

Great. And then my other question is going back to the gross margin improvement. You mentioned that it was due to the supplier change. Are you guys pretty much at a relatively stable gross margin rate or will you see continued improvement going forward?

So yes, we feel like the gross margin that we’re not quite at our potential yet, that as sales continue to rise that we’ll be able to continue to increase that margin as well. It's just becoming more efficient in some of our operations.

Great. Well, thanks for answering my questions. And I wish we had good luck. Thank you.

Thank you, Ed.

And our next question comes from Mr. Ramakanth from H.C. Wainwright. Go ahead.

Thank you. Good afternoon, Lori. You stated that at ASTRO, the last week's ASTRO conference, Blu Build was well received. Could you elaborate what you mean by that? And also, how do you see that impacting sales and growth of your franchise in 2020 and beyond 2020 as well?

Absolutely. So at ASTRO last week, we had quite a few people come by who had actually heard about Blu Build, but they came by specifically to play with it, touch it, feel it, see how it works, work it themselves with some of the demonstration models we have there and to talk to their sales representative about opportunities for their centers and Blu Build. So that continues to build on our sales force talking about this, the couple of centers we have during the limited market release for us. And we’re really happy to see all that continued interest. We have, I think, reported in the past that we feel that about 25% of the prostate brachytherapy market, we don't have access to because we didn't have a loader like this. So we feel like, and I think it's been backed up by the interest that we're seeing, that we will have access to that 25% of the market that we previously haven’t had access to. So that gives us quite some good places to go in the coming years.

Thank you for that. And I know you got couple of questions on GammaTile already. But in general, in the short commercial life of GammaTile so far, what are you hearing from your partners on - from your partners in GT Medical about this and in terms of acceptance? And also you were talking about that you are seeing more centers trying to get the license for radioactive - for the use of radioactive material. How good of a correlation is that, the growth that you have seen in the past that you would expect in the future?

So to address the first part of your question, I think - and if you go to some of the publicly released statements from hospitals who have used GammaTile, there has been a lot of excitement from the centers that have used it. We continue to hear real positive things from GT Medical Technologies about the future and how they view the acceptance of this product going forward. Can you please restate the second part of your question?

I’m just trying to understand how - what is the correlation that you are seeing because you said there was increased number of licenses for facilities to use radioactive material. How does that correlate with your sales that you had seen in the past that you would expect something like that to happen again that -- in the future with GammaTile?

Absolutely. So it’s a key step in getting a center to be able to use Cesium-131. And in the past, in our prostate business, in our surgical applications, it's been one of the most crucial steps in moving forward. So seeing the increased requests from centers is exciting to us. There is not real good time lines that you can tie to it. And looking back over our prostate business, I can't tell you that somebody got a materials license amended within a month ordered. That's just not the process. There is so many other steps involved in hospital administration and multiple specialties to get through. But seeing that, that volume is increasing is definitely supportive of the interest in GammaTile, and we’re excited to see it.

And my last question is, you also stated that in the last year, there were quite a few changes within your sales strategy. So what are the learning’s from that? And what additional changes do you think you need to be doing so that you can optimize the Cesium product that you have currently in the market?

So some of the things we looked at really closely this last year was doing some more training for prostate brachytherapy. They are still real low in the market as there have been other competing modalities out there that we're - that had significant reimbursement. And one of the things that we've identified and are continuing to work through this year is how do we get more physicians interested in doing brachytherapy, and how do they get trained to do it in the best manner possible. So I think if you go back to one of our press releases, we talked about some training we're doing. We're really excited about that, and we're seeing that we're getting some interest from physicians to get trained and learning how to do brachytherapy and how to do it with Cesium-131 specifically. And that's going to be really important to have more doctors trained as doctors retire, and a lot of the doctors who've been doing prostate brachytherapy for a long time will retire in the next few years and it will be nice to have a group of people coming up who know how to do the procedure and who can support the procedure. I think the other thing that we’ve been really looking at this year is reengaging with urology community. They are really many times the referral for prostate brachytherapy case, and they are also a competitor in some ways because they do radical prostatectomy. So really engaging them and making sure they understand the appropriateness of brachytherapy for some of these prostate cancer patients has been important and keeping them involved in prostate brachytherapy, I think, is going to be helpful for us in the long run as well.

Thank you. Thanks, Lori and congratulations and good luck for 2020.

Thank you, Ramakanth.

Thank you. [Operator Instructions] And our next question - they just bounced out of the queue. [Operator Instructions] At this time, we have no further questions. I’d like to turn the call back to management. Thank you. Actually, two questions – two people just popped in. One second. No, sorry. Again, ladies and gentlemen, thank you. I will now turn the call back to management.

Thank you very much, everyone, for joining us today. We appreciate it. Have a great rest of your day. Bye-bye.

Thank you. This does conclude today's conference. We thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.