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] 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 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 in. November of 2019 did have one less selling day than the prior year. The more impactful we believe was the fact that the Christmas and New Year's both fell on Wednesdays in 2019. We saw orders dropped 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…

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 [ph] to treat brain cancer, including nominal sales [ph] 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 dollars. 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…

Thank you. [Operator Instructions] 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. And 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, what I would - I'm sorry to 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 talking 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 sales person 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're they are really 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 they - you know 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 ’19?

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 a 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 this is Jonathan, 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 selves 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 increase from Blu Builds. You know none of that is obviously guaranteed, but those are all factors that we look at and are happy about and hopeful for the future.

Great. You say that Blu Build release in 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 - 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. Q – Swayampakula Ramakanth: 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 from, it gives physicians and patients another - what we believe is really great option to treat their tough cancer. So we're excited about what it looks like for GammaTile 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 you know 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. Q – Swayampakula Ramakanth: 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 a next step or what is it that investors like us need to be looking out for to get a feel for you know what growth could come from that 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 be - keep us from having physicians adopt 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 of 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 here available to them in a cost effective way we're trying to lower the barriers to entry. Now having said that you know, 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 - a lot more ability to really bring the kind of 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 of 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. Q – Swayampakula Ramakanth: Fair enough. Then on the operating lines you know you have been working with their 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 all 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 very with a lot of fiscal responsibility but 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 you know part of the ongoing business in the future. Q – Swayampakula Ramakanth: 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. Herschel, your line is open,

Can 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 was just to allow for greater flexibility for them and particularly for their customers and their order sizes though previously they were ordering and specific multiples of the number of titles. 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 S3 filings 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 now 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. Yeah but nothing that. Nothing at this time.

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.