isr20180930_10q.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

	☑	QUARTERLY Report PURSUANT TO Section 13 or 15(d) of the Securities Exchange Act of 1934
		For the quarterly period ended September 30, 2021

	☐	Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
		For the transition period from __________ to ____________

Commission File No. 001-33407

ISORAY, INC.

(Exact name of registrant as specified in its charter)

Delaware	41-1458152
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

350 Hills St., Suite 106, Richland, Washington	99354
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: (509) 375-1202

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value	ISR	NYSE American

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 the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒

Number of shares outstanding of each of the issuer's classes of common equity as of the latest practicable date:

Class	Outstanding as of November 09, 2021
Common stock, $0.001 par value	141,915,266

PART I	FINANCIAL INFORMATION

Item 1	Consolidated Financial Statements (Unaudited)	1

	Consolidated Balance Sheets (Unaudited)	1

	Consolidated Statements of Operations (Unaudited)	2

	Consolidated Statements of Cash Flows (Unaudited)	3

	Consolidated Statements of Changes in Stockholders' Equity (Unaudited)	4

	Notes to the Consolidated Financial Statements (Unaudited)	5

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13

Item 3	Quantitative and Qualitative Disclosures About Market Risk	18

Item 4	Controls and Procedures	18

PART II	OTHER INFORMATION

Item 1	Legal Proceedings	19

Item 1A	Risk Factors	19

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	20

Item 3	Defaults Upon Senior Securities	20

Item 4	Mine Safety Disclosures	20

Item 5	Other Information	20

Item 6	Exhibits	21

Signatures		22

	September 30,			June 30,
	2021			2021
ASSETS
Current assets:
Cash and cash equivalents	$	61,690		$	63,828
Accounts receivable, net		1,902			2,013
Inventory		1,060			980
Prepaid expenses and other current assets		306			481

Total current assets		64,958			67,302

Property and equipment, net		1,953			1,958
Right of use asset, net (Note 8)		705			768
Restricted cash		182			182
Inventory, non-current		792			76
Other assets, net		120			130

Total assets	$	68,710		$	70,416

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable and accrued expenses	$	768		$	730
Lease liability (Note 8)		256			252
Accrued protocol expense		120			98
Accrued radioactive waste disposal		102			100
Accrued payroll and related taxes		300			362
Accrued vacation		253			259

Total current liabilities		1,799			1,801
Non-current liabilities:
Lease liability, non-current (Note 8)		459			524
Accrued payroll and related taxes, non-current		77			77
Asset retirement obligation		616			608

Total liabilities		2,951			3,010
Commitments and contingencies (Note 7)

Stockholders' equity:
Common stock, $.001 par value; 200,000,000 shares authorized; 141,915,266 and 141,915,266 shares issued and outstanding		142			142
Additional paid-in capital		159,185			158,589
Accumulated deficit		(93,568	)		(91,325	)

Total stockholders' equity		65,759			67,406

Total liabilities and stockholders' equity	$	68,710		$	70,416

	Quarter ended September 30,
	2021			2020

Sales, net	$	2,564		$	2,384
Cost of sales		1,535			1,138
Gross profit		1,029			1,246

Operating expenses:
Research and development		702			312
Sales and marketing		761			581
General and administrative		1,840			1,067
Total operating expenses		3,303			1,960

Operating loss		(2,274	)		(714	)

Non-operating income:
Interest income, net		31			1
Non-operating income, net		31			1

Net loss		(2,243	)		(713	)
Preferred stock dividends		-			(3	)

Net loss applicable to common stockholders		(2,243	)		(716	)

Basic and diluted loss per share	$	(0.02	)	$	(0.01	)

Weighted average shares used in computing net loss per share:
Basic and diluted		141,915			68,898

	Series B Preferred Stock				Common Stock
	Shares		Amount		Shares		Amount		Additional Paid-in Capital		Accumulated Deficit			Total

Balances at June 30, 2020		59,065	$	-		68,897,779	$	69	$	93,592	$	(87,938	)	$	5,723

Share-based compensation										85					85
Net loss												(713	)		(713	)

Balances at September 30, 2020		59,065	$	-		68,897,779	$	69	$	93,677	$	(88,651	)	$	5,095

	September 30,
	2021		2020
Series B preferred stock		-		59
Common stock warrants		2,646		6,080
Common stock options		7,326		5,533
Total potential dilutive securities		9,972		11,672

	September 30,		June 30,
	2021		2021
Raw materials	$	757	$	645
Work in process		268		286
Finished goods		35		49
Total inventory, current	$	1,060	$	980

	September 31,		June 30,
	2021		2021
Enriched barium, non-current	$	720	$	-
Raw materials, non-current		72		76
Total inventory, non-current	$	792	$	76

	For the Three Months Ended September 30,
	2021			2020
Weighted average fair value		$0.58			$0.46
Options issued		2,951,600			40,000
Exercise price	$0.69	to	$0.79	$0.64	to	$0.74
Expected term (in years)		5			5
Risk-free rate	0.73%	to	0.89%	0.22%	to	0.29%
Volatility		99%			83%

	Three Months ended September 30,
	2021		2020
Cost of sales	$	44	$	2
Research and development expenses		130		12
Sales and marketing expenses		49		18
General and administrative expenses		373		53
Total share-based compensation	$	596	$	85

					Weighted
			Weighted		Average
	Number of		Exercise		Contractual		Intrinsic
As of September 30, 2021	Options		Price		Term (Years)		Value
Outstanding		7,326	$	.72		8.08	$	343
Vested and expected to vest		7,326	$	.72		8.08	$	343
Vested and exercisable		4,205	$	.68		7.07	$	289

	September 30,			June 30,
	2021			2021
Land	$	366		$	366
Equipment		4,305			4,202
Leasehold improvements		4,143			4,143
Other¹		445			495
Property and equipment		9,259			9,206
Less accumulated depreciation		(7,306	)		(7,248	)
Property and equipment, net	$	1,953		$	1,958

Year Ending June 30,
2022 (remaining nine months)		219
2023		292
2024		264
Total		775
Less: imputed interest		(60	)
Total lease liability		715
Less current portion		(256	)
Non-current lease liability	$	459

	Three Months Ended September 30,
Facility	2021 % of total revenue			2020 % of total revenue
El Camino, Los Gatos, & other facilities		28.5	%		25.7	%
GT Medical Technologies		15.0	%		<10.0	%

	Three months ended September 30,
	2021						2020						2021 - 2020
	Amount			% (a)			Amount			% (a)			% Change
Sales, net	$	2,564			100		$	2,384			100			8
Cost of sales		1,535			60			1,138			48			35
Gross profit		1,029			40			1,246			52			(17	)

Operating expenses:
Research and development expenses		702			27			312			13			125
Sales and marketing expenses		761			30			581			24			31
General and administrative expenses		1,840			72			1,067			45			72

Total operating expenses		3,303			129			1,960			82			69
Operating loss	$	(2,274	)		(89	)	$	(714	)		(30	)		218

	Three months
	ended September 30,
	2021			2020
Net cash (used) by operating activities	$	(2,084	)	$	(338	)
Net cash (used) by investing activities		(54	)		(113	)
Net (decrease) in cash and cash equivalents	$	(2,138	)	$	(451	)

		As of
		September 30, 2021		June 30, 2021
Working capital	$	63,159	$	65,501
Current ratio		36.11		37.37

Exhibits:
3(i)		Certificate of Incorporation, incorporated by reference to Exhibit A of the Form Def 14A filed on November 9, 2018.

3(ii)		Bylaws, incorporated by reference to Exhibit C of the Form Def 14A filed on November 9, 2018.

10.1		Addendum No. 1, dated July 29, 2021, to Supply Contract dated March 18, 2021, between Isoray Medical, Inc. and Joint Stock Company «Isotope», incorporated by reference to Exhibit 10.1 of the Form 8-K filed on August 3, 2021.


10.2		A ddendum No. 2, dated August 19, 2021, to Supply Contract dated March 18, 2021, between Isoray Medical, Inc. and Joint Stock Company «Isotope», incorporated by reference to Exhibit 10.1 of the Form 8-K filed on August 25, 2021.

10.3		Consignment Agreement, dated September 9, 2021, between Isoray Medical, Inc. and MedikorPharma-Ural LLC, incorporated by reference to Exhibit 10.1 of the Form 8-K filed on September 15, 2021.

31.1*		Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer

31.2*		Rule 13a-14(a)/15d-14(a) Certification of Co-Principal Financial Officer

31.3*		Rule 13a-14(a)/15d-14(a) Certification of Co-Principal Financial Officer

32.1**		Section 1350 Certifications

101.INS*		Inline XBRL Instance Document

101.SCH*		Inline XBRL Taxonomy Extension Schema Document

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

Dated: November 10, 2021
		ISORAY, INC., a Delaware corporation
		/s/ Lori A. Woods
		Lori A. Woods
		Chief Executive Officer (Principal Executive Officer)

		/s/ Jonathan Hunt
		Jonathan Hunt
		Chief Financial Officer (Co-Principal Financial Officer)

		/s/ Mark J. Austin
		Mark J. Austin
		Vice President of Finance and Corporate Controller (Co-Principal Financial, Principal Accounting Officer, Corporate Secretary)

SEC Form 10-Q filed by IsoRay, Inc.