Good afternoon and welcome to the IsoRay’s Second Quarter Fiscal 2018 Earnings Conference Call. All participants will be in a listen-only mode [Operator Instructions] Please also note today’s event is being recorded. I would now like to turn the conference over to Stephanie Prince of PCG. Please go ahead.

Thank you, Chad. Good afternoon everyone and welcome to the IsoRay’s second quarter fiscal 2018 earnings conference call. With me on the call today are Tom LaVoy, Chairman and CEO; Bill Cavanagh, COO and Chief Scientific Officer; and Mike Krachon, VP of Sales and Marketing. IsoRay issued its second quarter earnings press release at 4:05 p.m. toady after the market closed. For those of you who have not seen the release yet, it is available on the Investor Relation section of the Company’s website at isoray.com. Before starting the call, I’d like to remind you that today’s call will contain forward-looking statement as defined by the Private Securities Litigation Reform Act of 1995. These words include such as believe, expect, anticipate, plans, project, seeks, and other similar expressions and involves numerous risks and uncertainties the Company’s actual results could differ materially from those anticipated or implied as a result of certain factors set forth in the Company’s filings with the SEC. The Company undertakes no obligation to update any forward-looking statements. With that now I’d now like to turn the call over to Tom LaVoy. Tom.

Thank you, Stephanie. And good afternoon everyone. Welcome to the IsoRay’s second quarter earnings conference call. I’ll begin to call with an overview of our second quarter results and discuss some developments during the quarter. I’ll then turn the call over to Michael Krachon, our VP of Sales and Marketing. Mike will talk about the drivers of our sales gains and the increasing traction of our new sales and marketing initiatives. I’ll end the call with the discussion of our second quarter results, operating initiatives and guidance before opening it up for questions. IsoRay had a great second quarter. Revenues were up 50% over last year's second quarter and 27% over the first quarter. This is the fourth consecutive quarter of increasing year-over-year rep sales. And we believe this confirms our upward trend. Second quarter revenue of $1.54 million follows revenue of $1.2 million in the first quarter, and $1.28 million and $1.37 million in the third and fourth quarters of fiscal 2017, respectively. Twelve months trailing revenue is now $5.4 million, this is the first time we've crossed the $5 million mark since 2012. Sales were driven by expanding usage of Cesium-131 by existing and returning physicians. We've also been adding new doctors to our customer list as they go through the process of training and licensing of new facilities. Mike is going to go into more details in a few minutes, but we're pleased with the progress we've made over the last 18 months through focused execution of our two-pronged growth strategy. Our strategy is focused on revitalizing the prostate brachytherapy market through investment and support for the industry and promoting development of our new surgical applications. As a reminder IsoRay is the exclusive producer of Cesium-131, which we believe is the next generation brachytherapy isotope. In its…

Thank you, Tom. Excuse me. I'm excited to share the progress that we have made in the last quarter as we continue to build and strengthen the foundation that will allow us to realize sustainable sales and revenue growth. Over the past quarter we have continued to turn our trajectory gaining traction with increased volumes in existing accounts and making continued progress in our account targeting in the development of new accounts. This progress comes within the framework of our two-pronged growth strategy. The first prong is focused on the prostate cancer market, which is the largest current outlet for permanent brachytherapy seed and provides IsoRay Medical an opportunity to gain share and grow revenue. We estimate the potential of the prostate market at current domestic Cesium market prices to be over $100 million. The second prong is to focus on developing the market and strengthening our primary relationships with key opinion leaders for the other surgical applications of Cesium-131, primarily brain, gynecological, head and neck. We believe we are continuing to make progress in both of these areas. I will not discuss these strategies and our progress in more detail. In the prostate cancer market our revamped sales continue to gain traction with our existing and target customers. Over the recent quarter and we continue to see the impact of the multiple positive studies of prostate brachytherapy and Cesium-131. And over 80% of existing customers show year-over-year revenue growth. In addition, what we have also seen results of a back end of the sales cycle as we have gained a number of key customers. We are continuing to build our pipeline of new customers and explore ways to shorten the sales cycle. One of the key factors for the growth this past quarter was the volume growth in some…

Right thanks, Mike. I’d now like to provide a little more color on our financial results. As I mentioned earlier, we reported sales of 1.54 million for the second quarter, a 50% increase and the fourth consecutive quarter of year-over-year revenue increases, which we believe concern – confirms the upward trend. Prostate brachytherapy represented an 86% of the total revenue for both second quarter periods. In the context of the 50% revenue increase as Mike noted, this means that revenue from the other cancer treatment areas also increased 50% in the quarter. Gross profit continues to benefit from the automation and operating efficiencies we've introduced. For the quarter grocery profit reached $0.53 million, compared to a small loss a year ago and about double the first quarter gross profit. The gross profit percentage was 35% for the second quarter. These automation and efficiency programs are ongoing and we expect additional, sustainable improvements going forward on our gross profit margins. Since becoming the CEO approximately two years ago, we've invested an additional $2 million in sales and marketing and research and development, including the collaborative development agreement with GT Technologies. We see these investments as the key to our future success and we believe that we are just beginning to realize returns on these investments. Operating cost of the second quarter were $2 million and included increases of 127% in R&D; and 36% in sales and marketing, reflecting our ongoing investment in these areas. The large sales increase also triggered higher share based compensation and bonus expense, contributing to the 12% rise in G&A expenses. At December 31, IsoRay had cash on hand of approximately $6 million and stockholder equity of 7.9 million. We are reviewing our long-term sources of capital and we believe we have several options for raising capital…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] The first question will come from Jason Kolbert with Maxim Group. Please go ahead.

Hi guys, its Jason McCarthy for Jason Kolbert. Congratulations on a great quarter and all the growth. A couple questions, first in the prostate market you had mentioned that some returning or maybe the majority of returning physicians are using brachytherapy confined with external beam radiation therapy. Can you discuss how much Cesium-131 is going towards that type of indication versus your standard brachytherapy implantable seed? And which arm if you would, would you expect to grow more as we head through 2018?

The combination therapy is, in the ASCENDE trial is primarily targeting the intermediate to high risk patient pool. And we estimate that that target is about 15% to 20% of prostate cancer treatment in the market. So right now there has not been a real, definitive review of exactly where the treatments are going. So in general brachytherapy has been about 25% of the United States’ market. So there's about 25,000 patients. And it's really pretty much been distributed across most of the risk groups. So when looking forward at the ASCENDE trail gains more traction and as the industry accepts its data, we expect that the high risk patient pool could be somewhere between 15,000 and 20,000 patients a year. And that could be a significant number using brachytherapy. So in looking forward, we expect a good amount to growth to come from this intermediate to high-risk patient just because of that new clinical activity.

Okay, great. And just on GammaTile, can you give us a little bit more color on what if any steps remain for the 510(k) clearance an expected timing of commercial launch heard some time in 2018, maybe you can just give a little bit more clarity on what we could expect from that product?

Yes we've stated that we have to go through with our 510(k) clearance. The FDA has required bio compatibility testing and the testing of animals. So we started those tests in November, December and January. The expectation is those tests will take three to four months and the test results will start coming out in April and May and then the reports will be issued to the FDA in that timeframe so we will at that point we’ll have to go through the FDA process but the expectation is in the first half of 2018 if the FDA clearance is achieved in that period, we're also working at the same time with clearance, our reimbursement with CMS. There's an activity through an NCAP application that is ongoing. So the timing of both reimbursement and FDA are expected in sometime mid-2018. If that – both of those of objectives are achieved, commercial launch will happen pretty quickly thereafter. So we're expecting in the last half of 2018 that a commercial launch will start to occur.

Okay. And just a follow-up for GammaTile in brain cancer setting, have sales – have some of the salesforce been contacting physicians or using something like the [indiscernible] that would be key go to KOLs to adopt GammaTile once it’s approved.

We actually have had through the Cornell method for the last eight or ten years, actually Cornell has used the sutured seed to apply Cesium in the brain cavity. So over the last really five or six years we have been working with our sales team and contacting a number of KOLs on the treatment of brain cancer. So we already have a pretty good size customer base that does utilize Cesium-131 in the brain. Now GammaTile, what that product does is actually improves the process. The old, the Cornell method takes somewhere between 30 minutes and 45 minutes to apply at the end of surgery. And the GammaTile method comment using the collagen product actually is done in approximately ten minutes. It provides in that collagen tile, actually structure, spacing and shielding. So the uniqueness of our GammaTile is it takes the other process, improves it and makes it faster. And again the GammaTile guys have up to three years or four years of clinical activity now and they've presented multiple times. So we've done a nice job already, I believe in getting to a number of top KOLs in the neurological space. So we believe that this launch should be well accepted.

Great thank you for taking the question guys.

Yes.

[Operator Instructions] The next question comes from Tony Karam, a Private Investor. Please go ahead.

Hi gentleman, great results on the quarter. It’s good to see the growth. Basically my question is a financial question with roughly $6 million left for operations when do you anticipate making a decision on what we are going to do to gain capital for future operations?

Our anticipation and we've stated this in our releases. In the next three months to six months we will be looking at potentially all our capital raising options. So we will make a decision at some point in the next three to six months on that.

Okay, great. One follow-up question as well any opportunity to partner up with GammaTile almost like a type of merger or anything like that is something that's a possibility.

You know that's probably that’s something that we can make a comment on right now. I mean our current relationship is we have a collaborative agreement with them sharing in the development side of FDA 510(k) clearance and reimbursement. We just signed a ten-year exclusive manufacturing agreement. And also the GammaTile or GT Technologies Group actually – has actually just gone through a capital raise and they are hiring staff. So they've raised $2 million in the private market and are looking at increasing their staffing in their clinical activity.

Excellent, thanks guys.

[Operator Instructions] Ladies and gentlemen, this concludes our question-and-answer session. I would like to turn the conference back over to Tom LaVoy for any closing remarks.

Well thank you for joining us on our second quarter conference call. We are very excited about the changes that we have brought to IsoRay over the last 18 months. And we believe we are on a path that will result in continued growth and success. We look forward to speaking with you again for our third quarterly conference call in May. Have a good night and thank you very much.

Thank you, sir. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.