Perspective Therapeutics, Inc. 10-Q

ITEM 1 - FINANCIAL STATEMENTS Isoray, Inc. and Subsidiaries Consolidated Balance Sheets (Unaudited) (In thousands, except shares) March 31, June 30, 2021 2020 ASSETS Current assets: Cash and cash equivalents $ 64,841 $ 2,392 Accounts receivable, net 2,019 2,044 Inventory 731 645 Prepaid expenses and other current assets 483 426 Total current assets 68,074 5,507 Property and equipment, net 1,885 1,735 Right of use asset, net (Note 8) 830 1,001 Restricted cash 182 181 Inventory, non-current 192 137 Other assets, net 117 138 Total assets $ 71,280 $ 8,699 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses $ 992 $ 654 Lease liability (Note 8) 249 236 Accrued protocol expense 115 35 Accrued radioactive waste disposal 99 94 Accrued payroll and related taxes 221 352 Accrued vacation 240 204 Total current liabilities 1,916 1,575 Non-current liabilities: Lease liability, non-current (Note 8) 589 769 Accrued payroll and related taxes, non-current 77 55 Asset retirement obligation 600 577 Total liabilities 3,182 2,976 Commitments and contingencies (Note 7) Stockholders' equity: Preferred stock, $.001 par value; 7,000,000 shares authorized: Series B: 5,000,000 shares allocated; no and 59,065 shares issued and outstanding - - Common stock, $.001 par value; 200,000,000 shares authorized; 141,465,266 and 68,897,779 shares issued and outstanding 141 69 Additional paid-in capital 158,221 93,592 Accumulated deficit (90,264 ) (87,938 ) Total stockholders' equity 68,098 5,723 Total liabilities and stockholders' equity $ 71,280 $ 8,699 The accompanying notes are an integral part of these consolidated financial statements. 1 Table of Contents Isoray, Inc. and Subsidiaries Consolidated Statements of Operations (Unaudited) (Dollars and shares in thousands, except for per-share amounts) Three months ended Nine months ended March 31, March 31, 2021 2020 2021 2020 Sales, net $ 2,600 $ 2,880 $ 7,343 $ 7,401 Cost of sales 1,238 1,174 3,568 3,348 Gross profit 1,362 1,706 3,775 4,053 Operating expenses: Research and development: 362 294 959 804 Sales and marketing 581 805 1,781 2,286 General and administrative 1,183 1,155 3,379 3,323 Loss on equipment disposal 2 - 9 - Gain on change in estimate of asset retirement obligation - - - (73 ) Total operating expenses 2,128 2,254 6,128 6,340 Operating loss (766 ) (548 ) (2,353 ) (2,287 ) Non-operating income: Interest income, net 21 3 27 29 Non-operating income 21 3 27 29 Net loss (745 ) (545 ) (2,326 ) (2,258 ) Preferred stock dividends - (3 ) (3 ) (8 ) Net loss applicable to common stockholders $ (745 ) $ (548 ) $ (2,329 ) $ (2,266 ) Basic and diluted loss per share $ (0.01 ) $ (0.01 ) $ (0.03 ) $ (0.03 ) Weighted average shares used in computing net loss per share: Basic and diluted 122,566 67,558 91,277 67,444 The accompanying notes are an integral part of these consolidated financial statements. 2 Table of Contents Isoray, Inc. and Subsidiaries Consolidated Statements of Cash Flows (Unaudited) (In thousands) Nine months ended March 31, 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (2,326 ) $ (2,258 ) Adjustments to reconcile net loss to net cash used by operating activities: Depreciation expense 107 113 Loss on equipment disposals 10 - Amortization of other assets 28 29 Accretion of asset retirement obligation 23 22 Gain on change in estimate of asset retirement obligation - (73 ) Share-based compensation 260 276 Changes in operating assets and liabilities: Accounts receivable, net 25 (993 ) Inventory (141 ) (21 ) Prepaid expenses and other current assets (57 ) (283 ) Accounts payable and accrued expenses 340 258 Accrued protocol expense 80 (88 ) Accrued radioactive waste disposal 5 13 Accrued payroll and related taxes (109 ) 171 Accrued vacation 36 41 Net cash used by operating activities (1,719 ) (2,793 ) CASH FLOWS FROM INVESTING ACTIVITIES: Additions to property and equipment (266 ) (248 ) Proceeds from sale of equipment 1 - Additions to other assets (7 ) - Net cash used by investing activities (272 ) (248 ) CASH FLOWS FROM FINANCING ACTIVITIES: Preferred dividends paid (9 ) (11 ) Proceeds from sales of common stock, pursuant to underwritten offering, net 56,375 - Proceeds from sales of common stock, pursuant to exercise of warrants 7,784 - Proceeds from sales of common stock, pursuant to exercise of options 291 131 Net cash provided by financing activities 64,441 120 Net increase (decrease) in cash, cash equivalents, and restricted cash 62,450 (2,921 ) Cash, cash equivalents, and restricted cash beginning of period 2,573 5,507 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH END OF PERIOD $ 65,023 $ 2,586 Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets: Cash and cash equivalents $ 64,841 $ 2,405 Restricted cash 182 181 Total cash, cash equivalents, and restricted cash $ 65,023 $ 2,586 Non-cash investing and financing activities: Recognition of operating lease liability and right of use asset $ 8 $ 1,228 The accompanying notes are an integral part of these consolidated financial statements. 3 Table of Contents Isoray, Inc. and Subsidiaries Consolidated Statement of Changes in Stockholders' Equity (Unaudited) (In thousands, except shares) Series B Preferred Stock Common Stock Shares Amount Shares Amount Additional Paid-in Capital Accumulated Deficit Total Balances at June 30, 2019 59,065 $ - 67,388,047 $ 67 $ 92,105 $ (84,492 ) $ 7,680 Share-based compensation - - - - 91 - 91 Net loss - - - - - (816 ) (816 ) Balances at September 30, 2019 59,065 $ - 67,388,047 $ 67 $ 92,196 $ (85,308 ) $ 6,955 Payment of dividend to preferred stockholders - - - - (11 ) - (11 ) Share-based compensation - - - - 94 - 94 Net loss - - - - - (897 ) (897 ) Balances at December 31, 2019 59,065 $ - 67,388,047 $ 67 $ 92,279 $ (86,205 ) $ 6,141 Issuance of common stock pursuant to exercise of options - - 262,500 1 130 - 131 Share-based compensation - - - - 91 - 91 Net loss - - - - - (545 ) (545 ) Balances at March 31, 2020 59,065 $ - 67,650,447 $ 68 $ 92,500 $ (86,750 ) $ 5,818 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 Conversion of preferred stock to common stock (59,065 ) - 59,065 - Issuance of common stock pursuant to underwritten offering, net - - 18,269,230 18 8,453 - 8,471 Issuance of common stock pursuant to exercise of options - - 6,250 - 3 - 3 Payment of dividend to preferred stockholders - - - - (9 ) - (9 ) Share-based compensation - - - - 81 - 81 Net loss - - - - - (868 ) (868 ) Balances at December 31, 2020 - $ - 87,232,324 $ 87 $ 102,205 $ (89,519 ) $ 12,773 - Issuance of common stock pursuant to underwritten offering, net - - 41, 400,000 41 47,863 - 47,904 Issuance of common stock pursuant to exercise of warrants - - 12,318,877 12 7,772 - 7,784 Issuance of common stock pursuant to exercise of options - - 514,065 1 287 - 288 Share-based compensation - - - - 94 - 94 Net loss - - - - - (745 ) (745 ) Balances at March 31, 2021 - $ - 141,465,266 $ 141 $ 158,221 $ (90,264 ) $ 68,098 The accompanying notes are an integral part of these consolidated financial statements. 4 Table of Contents Isoray, Inc. Notes to the Unaudited Consolidated Financial Statements 1. Basis of Presentation The accompanying unaudited interim consolidated financial statements are those of Isoray, Inc., and its wholly-owned subsidiaries, referred to herein as “Isoray” or the “Company”. All significant intercompany accounts and transactions have been eliminated in the consolidation. In the opinion of management, all adjustments necessary for the fair presentation of the consolidated financial statements have been included. These unaudited interim consolidated financial statements should be read in conjunction with our audited consolidated financial statements and related notes as set forth in the Company’s annual report filed on Form 10-K for the year ended June 30, 2020. The unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (GAAP) have been condensed or omitted pursuant to those rules and regulations, although we believe that the disclosures are adequate for the information not to be misleading. Certain prior period amounts have been reclassified to conform to the current period’s presentation. The results of operations for the periods presented may not be indicative of those which may be expected for a full year. The Company anticipates that as the result of continuing operating losses and the significant net operating losses available from prior fiscal years, its effective income tax rate for fiscal year 2021 will be 0%. 2. New Accounting Standards Accounting Standards Updates Adopted In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and Topic 606, which, among other things, provides guidance on how to assess whether certain collaborative arrangement transactions should be accounted for under Topic 606. The amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The standard was adopted on July 1, 2020 and had no effect on the consolidated financial statements. Accounting Standards Updates to Become Effective in Future Periods Other accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. 5 Table of Contents 3. Loss per Share Basic and diluted earnings (loss) per share are calculated by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding and does not include the impact of any potentially dilutive common stock equivalents. At March 31, 2021 and 2020, the calculation of diluted weighted average shares did not include convertible preferred stock, common stock warrants, or options that are potentially convertible into common stock as those would be antidilutive due to the Company’s net loss position. Securities not considered in the calculation of diluted weighted average shares, but that could be dilutive in the future as of March 31, 2021 and 2020, were as follows (in thousands): March 31, 2021 2020 Series B preferred stock - 59 Common stock warrants 2,646 6,080 Common stock options 4,907 4,367 Total potential dilutive securities 7,553 10,506 6 Table of Contents 4. Inventory Inventory consisted of the following at March 31, 2021 and June 30, 2020 (in thousands): March 31, June 30, 2021 2020 Raw materials $ 508 $ 401 Work in process 201 221 Finished goods 22 23 Total inventory, current $ 731 $ 645 March 31, June 30, 2021 2020 Enriched barium, non-current $ 117 $ 117 Raw materials, non-current 75 20 Total inventory, non-current $ 192 $ 137 Inventory, non-current represents raw materials that were ordered in quantities to obtain volume cost discounts which based on current and anticipated sales volumes will not be consumed within an operating cycle. On August 25, 2017, the Company entered into a Consignment Agreement and related Services Agreement with MedikorPharma-Ural LLC to begin utilizing our enriched barium-130 carbonate inventory. The Company anticipates obtaining enough Cesium-131 under this arrangement to obtain approximately 4,000 curies of Cesium-131. During the three and nine months ended March 31, 2021, the Company did not obtain any curies under this agreement. At March 31, 2021, the Company estimates that the remaining enriched barium will result in 894 curies; approximately 62 of which will be obtained in the next twelve months and 832 will be obtained after March 31, 2022. There is no assurance as to whether the agreement will be terminated before this full amount is obtained and other supply sources are used, nor is there assurance that the third-party reactor which relies on this Consignment Agreement will be used by the Cesium-131 supplier under contract with the Company. 5. Property and Equipment Property and equipment consisted of the following at March 31, 2021 and June 30, 2020 (in thousands): March 31, June 30, 2021 2020 Land $ 366 $ 366 Equipment 3,651 3,872 Leasehold improvements 4,143 4,143 Other 1 1,026 871 Property and equipment 9,186 9,252 Less accumulated depreciation (7,301 ) (7,517 ) Property and equipment, net $ 1,885 $ 1,735 1 Plant and equipment, not placed in service are items that meet the capitalization threshold or which management believes will meet the threshold at the time of completion and which have yet to be placed into service as of the date of the balance sheet, and therefore, no depreciation expense has been recognized. Also included at March 31, 2021 and June 30, 2020 are costs associated with advance planning and design work on the Company’s new production facility of approximately $207,000. The advance planning and design work was primarily incurred in fiscal year 2017. The new production facility is currently on hold as the Company has sufficient production capacity to meet future demands and while the Company focuses its resources on revenue growth. It is anticipated that the Company will continue work on the new production facility in the next four to five years . 7 Table of Contents 6. Share-Based Compensation The following table presents the share-based compensation expense recognized (recaptured) for stock-based options during the three months ended March 31, 2021 and 2020 (in thousands): Three Months ended March 31, 2021 2020 Cost of sales $ 2 $ 8 Research and development expenses 55 18 Sales and marketing expenses (14 ) 24 General and administrative expenses 51 41 Total share-based compensation $ 94 $ 91 8 Table of Contents The following table presents the share-based compensation expense recognized for stock-based options during the nine months ended March 31, 2021 and 2020 (in thousands): Nine Months ended March 31, 2021 2020 Cost of sales $ 7 $ 24 Research and development expenses 79 56 Sales and marketing expenses 20 73 General and administrative expenses 154 123 Total share-based compensation $ 260 $ 276 As of March 31, 2021, total unrecognized compensation expense related to stock-based options was approximately $480,000 and the related weighted-average period over which it is expected to be recognized is approximately 1 .10 years. A summary of stock options within the Company’s share-based compensation plans as of March 31, 2021 was as follows (in thousands except for exercise prices and terms): Weighted Weighted Average Number of Exercise Contractual Intrinsic As of March 31, 2021 Options Price Term (Years) Value Outstanding 4,907 $ .65 7.12 $ 2,385 Vested and expected to vest 4,907 $ .65 7.12 $ 2,385 Vested and exercisable 3,393 $ .67 6.40 $ 1,608 There were 514,065 and 262,500 stock options exercised, with approximately $652,000 and $83,000 of intrinsic value associated with these exercises, during the three months ended March 31, 2021 and 2020, respectively. The Company’s current policy is to issue new shares to satisfy stock option exercises. There were 125,000 and no option awards granted with a fair value of approximately $152,000 and $0, during the three months ended March 31, 2021 and 2020, respectively. There were 2,000 and 21,250 stock option awards which expired during the three months ended March 31, 2021 and 2020, respectively. There were 234,375 and no stock option awards forfeited during the three months ended March 31, 2021 and 2020, respectively. There were 520,315 and 262,500 stock options exercised, with approximately $653,000 and $83,000 of intrinsic value associated with these exercises, during the nine months ended March 31, 2021 and 2020, respectively. The Company’s current policy is to issue new shares to satisfy stock option exercises. There were 165 ,000 and 40,0 00 option awards granted with a fair value of approximately $170,000 and $14,000, during the nine months ended March 31, 2021 and 2020, respectively. There were 4 ,000 and 29,500 stock option awards which expired during the nine months ended March 31, 2021 and 2020, respectively. There were 237,500 and 26,250 stock option awards forfeited during the nine months ended March 31, 2021 and 2020, respectively. 9 Table of Contents 7. Commitments and Contingencies Isotope Purchase Agreement On August 26, 2020, a new supply contract was signed with The Open Joint Stock Company «Isotope» for a term of August 2020 to December 2021 (the “August 2020 Agreement”), as the Company had purchased the maximum amount of Cesium-131 permitted under its previous agreement. On February 10, 2021, the Company entered into Addendum No. 1 to the August 2020 Agreement. The Addendum updated delivery locations. On March 18, 2021, the Company entered into a new supply contract (the “New Agreement”) with JSC Isotope pursuant to which the Company will purchase Cesium-131 for a term from March 18, 2021 through March 31, 2023. Although the August 2020 Agreement remains in effect until December 31, 2021, the Company has or will shortly purchase the maximum amount of Cesium-131 permitted under the August 2020 Agreement. Therefore, the Company will make all future purchases of Cesium-131 under the New Agreement. 10 Table of Contents 8. Leases The Company maintains a production facility located at Applied Process Engineering Laboratory (APEL) in Richland, Washington. The APEL facility became operational in September 2007. The production facility has over 15,000 square feet and includes space for isotope separation, seed production, order dispensing, a clean room for assembly of our product offerings, and a dedicated shipping area. In 2015, the Company entered into a modification to the production facility lease that modified the requirement to return the facility to ground at the time of exit at Company discretion and exercised an extension in 2017 to increase the lease term to April 30, 2021, and reduced the required notice to terminate the lease early from twelve months to six months. In July 2019, the Company entered into another modification of the production facility lease that extends the term to April 20, 2026 and provides for an eighteen month termination notice with an early termination penalty of up to $40,000 which decreases in the future beginning May 1, 2022. Effective August 2020, the Company entered into a new lease with APEL for 540 square feet of storage space. Upon the adoption of Topic 842 on July 1, 2019, the Company recognized a right-of-use asset and lease liability of approximately $1.2 million. In determining the amount of the right-of-use asset and lease liability, we assumed the termination of the lease in April 2024 and incurring a termination penalty of $20,000. As of the date of adoption, a right of use asset and a corresponding lease liability of approximately $1.2 million were recognized on the balance sheet based upon the present value of the future base payments discounted at a 6% discount rate using the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term and amount equal to the lease payments in a similar economic environment as the lease does not provide an implicit discount rate. Due to the August 2020 lease, the Company increased the right-of-use asset and the lease liability by approximately $8,000 during the nine months ended March 31, 2021. The weighted average remaining term and discount rate as of March 31, 2021 was 3.1 years and 6%, respectively. For the three months ended March 31, 2021 and 2020 our operating lease expense was approximately $ 75,000 and $73,000 respectively, and is recognized in the statement of operations in cost of sales and general and administrative expenses. For the three months ended March 31, 2021 and 2020 our operating lease expense recognized in cost of sales was approximately $48,000 and $46,000 respectively and our lease expense recognized in general and administrative expense was approximately $27,000 and $27,000 respectively. For the nine months ended March 31, 2021 and 2020 our operating lease expense was approximately $227,000 and $220,000 respectively, and is recognized in the statement of operations in cost of sales and general and administrative expenses. For the nine months ended March 31, 2021 and 2020 our operating lease expense recognized in cost of sales was approximately $146,000 and $140,000 respectively and our lease expense recognized in general and administrative expense was approximately $81,000 and $80,000 respectively. The following table presents the future operating lease payments and lease liability included on the condensed balance sheet related to the Company’s operating lease as of March 31, 2021 (in thousands): Year Ending June 30, 2021 (remaining three months) $ 73 2022 292 2023 292 2024 264 Total 921 Less: imputed interest (83 ) Total lease liability 838 Less current portion (249 ) Non-current lease liability $ 589 11 Table of Contents Asset Retirement Obligation The Company has an asset retirement obligation (ARO) associated with the facility it currently leases. The following table presents the change in the ARO during the nine months ended March 31, 2021 and 2020 (in thousands): Nine months ended March 31, 2021 2020 Beginning balance $ 577 $ 621 Accretion of discount 23 22 Gain on change in ARO estimate due to lease modification - (73 ) Ending Balance $ 600 $ 570 In July 2019, the Company extended the lease term an additional five years thus extending the time before asset retirement costs would be incurred. The Company estimated retirement costs to be $704,000, which was discounted utilizing an interest rate of 5.1% for a new ARO liability of $555,000, a reduction of $73,000. At the time of extension, the asset retirement asset had been fully amortized, thus the Company recognized a gain on change in the estimate of $73,000. 9. Stockholders’ Equity On January 23, 2020, the Company filed a Form S-3 registration statement which became effective on February 4, 2020, with the potential to register up to $80 million of equity securities. On March 31, 2020, the Company entered into an Equity Distribution Agreement (the “Agreement”) with Oppenheimer & Co., Inc. (“Oppenheimer”). The common stock sold pursuant to the Agreement was distributed at the market prices prevailing at the time of sale. The Agreement provided that Oppenheimer will be entitled to compensation for its services at a commission rate of 3.0% of the gross sales price per share of common stock sold plus reimbursement of certain expenses. As of June 30, 2020, the Company had sold an aggregate of 1,247,232 shares under the Agreement at an average price of approximately $0.738 per common share for gross proceeds of approximately $920,000 and net proceeds of approximately $850,000. No shares were sold under this Agreement during fiscal year 2021. On October 19, 2020, the Company terminated the Agreement, effective on the same date. On October 22, 2020, the Company sold 18,269,230 shares of its common stock at a price of $0.52 per share, for aggregate gross proceeds of $9,500,000, pursuant to the registration statement on Form S-3 that became effective on February 4, 2020. The net proceeds from the offering were approximately $8,595,000. Additionally, the Company issued to the purchasers warrants to purchase up to 9,134,615 shares of common stock. The warrants have an exercise price of $0.57 per share of common stock, are exercisable immediately, and expire five years from the date of issuance. If exercised for cash, future exercises of these warrants will provide additional capital to the Company. On February 8, 2021, the Company sold shares of its common stock at a price of $1.25 per share for aggregate gross proceeds of approximately $45,000,000, pursuant to the registration statement on Form S-3 that became effective on February 4, 2020. Additionally, the Company granted the underwriters an option to purchase an additional 5,400,000 shares of common stock at a purchase price of $1.25 per share for the purpose of covering overallotments, which was exercised on February 8, 2021 and generated gross proceeds of approximately $6,750,000. Between January 1, 2021 and March 31, 2021, the Company received approximately $7.8 million as a result of the exercise of 12,318,877 warrants to purchase common stock and $0.3 million as a result of the exercise of 514,065 options to purchase common stock. The following table summarizes the activity of all stock warrants and weighted average exercise prices. Warrants Price (a) Balance at June 30, 2019 6,080,000 $ 0.75 Warrants issued - - Warrants exercised - - Warrants expired - - Balance at March 31, 2020 6,080,000 $ 0.75 Balance at June 30, 2020 6,080,000 $ 0.75 Warrants issued 9,134,615 0.57 Warrants exercised (12,318,877 ) 0.63 Warrants expired (250,000 ) 0.54 Balance at March 31, 2021 2,645,738 $ 0.70 (a) Weighted average exercise price per share. 12 Table of Contents 10. Contracts with Customers We routinely enter into agreements with customers that include general commercial terms and conditions, notification requirements for price increases, shipping terms, and in most cases, prices for the products that we offer. However, these agreements do not obligate us to provide goods to the customer and there is no consideration promised to us at the onset of these arrangements. For customers without separate agreements, we have a standard list price established for all products and our invoices contain standard terms and conditions that are applicable to those customers where a separate agreement is not controlling. Our performance obligations are established when a customer submits a purchase order or e-mail notification (in writing or electronically) for goods, and we accept the order. We identify performance obligations as the sale of our products and professional services as requested from our customers. We generally recognize revenue upon the satisfaction of these criteria when control of the product has been transferred to the customer at which time we have an unconditional right to receive payment or as we provide professional services which are based on our actual time provided. Our prices are fixed and are not affected by contingent events that could impact the transaction price. We do not offer price concessions and do not accept payment that is less than the price stated when we accept the purchase order, except in rare credit related circumstances. We do not have any material performance obligations where we are acting as an agent for another entity. Revenues for all products are typically recognized at the time the product is shipped, at which time the title passes to the customer, and there are no further performance obligations. Sources of Revenue We have identified the following revenues disaggregated by revenue source: 1. Domestic – direct sales of products and services. 2. International – direct sales of products and services. During the three months ended March 31, 2021 and 2020 the Company had no international revenue. For the three months ended March 31, 2021, prostate brachytherapy comprised 78% of our revenue while other revenue comprised 22% compared to 84% and 16%, respectively, in the three months ended March 31, 2020. During the nine months ended March 31, 2021 and 2020 the Company had nominal, and no international revenue respectively. For the nine months ended March 31, 2021, prostate brachytherapy comprised 79% of our revenue while other revenue comprised 21% compared to 87% and 13%, respectively, in the nine months ended March 31, 2020. Warranty Our general product warranties do not extend beyond an assurance that the product delivered will be consistent with stated specifications and do not include separate performance obligations. Returns Generally, we allow returns if not implanted and we are notified within a few weeks after satisfying our performance obligations of a return. Returns after shipment may result in a 50% restocking fee. 13 Table of Contents Commissions and Contract Costs We expense commissions on orders to our sales team upon satisfaction of our performance obligations. We generally do not incur incremental charges associated with securing agreements with customers which would require capitalization and recovery over the life of the agreement. Practical Expedients Our payment terms for sales direct to customers and distributors are substantially less than the one year collection period that falls within the practical expedient in determination of whether a significant financing component exists. Shipping and Handling Charges Fees charged to customers for shipping and handling of products are included as revenue and the costs for shipping and handling of products are included as a component of cost of sales. Taxes Collected from Customers As our products are used in another service and are exempt, to this point we have not collected taxes. If we were to collect taxes they would be on the value of transaction revenue and would be excluded from revenues and cost of sales and would be accrued in current liabilities until remitted to governmental authorities. Concentration of Customers One group of customers, facilities or physician practices has revenues that aggregate to greater than 10% of total Company sales. This group of facilities individually do not aggregate to more than 10% of total Company sales. They are serviced by the same physician group, one of whom is our Medical Director: Nine Months Ended March 31, Facility 2021 % of total revenue 2020 % of total revenue El Camino, Los Gatos, & other facilities 25.55 % 25.00 % 14