|   | þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|--------|-----------------------------------------------------------------------------------------|

|   |  ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|--------|------------------------------------------------------------------------------------------|

| Minnesota(State or other jurisdiction of incorporation ororganization)                       | 41-1458152(I.R.S. EmployerIdentification No.) |
|----------------------------------------------------------------------------------------------|-----------------------------------------------|
|                                                                                         |                                          |
|  350 Hills St., Suite 106, Richland, Washington(Address of principal executive offices) | 99354(Zip Code)                               |
|                                                                                         |                                          |
| Registrant's telephone number, including area code: (509) 375-1202                           |

| Class                          | Outstanding as of November 7, 2011 |
|--------------------------------|------------------------------------|
| Common stock, $0.001 par value | 28,985,469                         |

----

| PART I     | FINANCIAL INFORMATION                                                                            |   |
|------------|--------------------------------------------------------------------------------------------------|--------|
|       |                                                                                             |   |
| Item 1     | Consolidated Unaudited Financial Statements                                                      | 1      |
|       |                                                                                             |   |
|       | Consolidated Balance Sheets                                                                      | 1      |
|       |                                                                                             |   |
|       | Consolidated Statements of Operations (Unaudited)                                                | 2      |
|       |                                                                                             |   |
|       | Consolidated Statements of Cash Flows (Unaudited)                                                | 3      |
|       |                                                                                             |   |
|       | Notes to Unaudited Consolidated Financial Statements                                             | 4      |
|       |                                                                                             |   |
| Item 2     | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 8      |
|       |                                                                                             |   |
| Item 3     | Quantitative and Qualitative Disclosures About Market Risk                                       | 17     |
|       |                                                                                             |   |
| Item 4     | Controls and Procedures                                                                          | 17     |
|       |                                                                                             |   |
| PART II    | OTHER INFORMATION                                                                                |   |
|       |                                                                                             |   |
| Item 1A    | Risk Factors                                                                                     | 18     |
|       |                                                                                             |   |
| Item 2     | Unregistered Sales of Equity Securities and Use of Proceeds                                      | 18     |
|       |                                                                                             |   |
| Item 6     | Exhibits                                                                                         | 18     |
|       |                                                                                             |   |
| Signatures |                                                                                             | 19     |

----

|                                                                                                                  |   | (Unaudited)        |        |   |          |   |
|-----------------------------------------------------------------------------------------------------------------------|--------|--------------------|-------------|--------|---------------|--------|
|                                                                                                                  |   | September 30, |        |   | June 30, |   |
|                                                                                                                  |   | 2011               |        |   | 2011          |   |
|                                                                                                                  |   |               |        |   |          |   |
| ASSETS                                                                                                                |   |               |        |   |          |   |
|                                                                                                                  |   |               |        |   |          |   |
| Current assets:                                                                                                       |   |               |        |   |          |   |
| Cash and cash equivalents                                                                                             |   | $                  | 1,594,545   |   |          | $      | 2,112,254 |   |
| Accounts receivable, net of allowance for doubtful accounts of $110,031 and $63,867, respectively                     |   |               | 972,429     |   |          |   | 792,835 |   |
| Inventory                                                                                                             |   |               | 761,906     |   |          |   | 749,849 |   |
| Other receivables                                                                                                     |   |               | 19,364      |   |          |   | 425,901 |   |
| Prepaid expenses and other current assets                                                                             |   |               | 211,857     |   |          |   | 141,154 |   |
|                                                                                                                  |   |               |        |   |          |   |   |   |
| Total current assets                                                                                                  |   |               | 3,560,101   |   |          |   | 4,221,993 |   |
|                                                                                                                  |   |               |        |   |          |   |   |   |
| Fixed assets, net of accumulated depreciation and amortization                                                        |   |               | 2,998,900   |   |          |   | 3,208,911 |   |
| Restricted cash                                                                                                       |   |               | 180,880     |   |          |   | 180,809 |   |
| Other assets, net of accumulated amortization                                                                         |   |               | 279,469     |   |          |   | 277,182 |   |
|                                                                                                                  |   |               |        |   |          |   |   |   |
| Total assets                                                                                                          |   | $                  | 7,019,350   |   |          | $      | 7,888,895 |   |
|                                                                                                                  |   |               |        |   |          |   |   |   |
| LIABILITIES AND SHAREHOLDERS' EQUITY                                                                                  |   |               |        |   |          |   |   |   |
|                                                                                                                  |   |               |        |   |          |   |   |   |
| Current liabilities:                                                                                                  |   |               |        |   |          |   |   |   |
| Accounts payable and accrued liabilities                                                                              |   | $                  | 548,804     |   |          | $      | 372,259 |   |
| Accrued protocol expense                                                                                              |   |               | 101,537     |   |          |   | 98,159 |   |
| Accrued radioactive waste disposal                                                                                    |   |               | 116,367     |   |          |   | 108,060 |   |
| Accrued payroll and related taxes                                                                                     |   |               | 72,668      |   |          |   | 125,014 |   |
| Accrued vacation                                                                                                      |   |               | 79,057      |   |          |   | 70,706 |   |
|                                                                                                                  |   |               |        |   |          |   |   |   |
| Total current liabilities                                                                                             |   |               | 918,433     |   |          |   | 774,198 |   |
|                                                                                                                  |   |               |        |   |          |   |   |   |
| Asset retirement obligation                                                                                           |   |               | 677,192     |   |          |   | 662,181 |   |
|                                                                                                                  |   |               |        |   |          |   |   |   |
| Total liabilities                                                                                                     |   |               | 1,595,625   |   |          |   | 1,436,379 |   |
|                                                                                                                  |   |               |        |   |          |   |   |   |
| Contingencies (Note 6)                                                                                                |   |               |        |   |          |   |   |   |
|                                                                                                                  |   |               |        |   |          |   |   |   |
| Shareholders' equity:                                                                                                 |   |               |        |   |          |   |   |   |
| Preferred stock, $.001 par value; 7,000,000 shares authorized:                                                        |   |               |        |   |          |   |   |   |
| Series A: 1,000,000 shares allocated; no shares issued and outstanding                                                |   |               | -           |   |          |   | - |   |
| Series B: 5,000,000 shares allocated; 59,065 shares issued and outstanding                                            |   |               | 59          |   |          |   | 59 |   |
| Series C: 1,000,000 shares allocated; no shares issued and outstanding                                                |   |               | -           |   |          |   | - |   |
| Common stock, $.001 par value; 193,000,000 shares authorized; 26,493,118 and 26,443,118 shares issued and outstanding |   |               | 26,493      |   |          |   | 26,443 |   |
| Treasury stock, at cost, 13,200 and 13,200 shares                                                                     |   |               | (8,390      | )      |          |   | (8,390 | ) |
| Additional paid-in capital                                                                                            |   |               | 51,253,620  |   |          |   | 51,180,237 |   |
| Accumulated deficit                                                                                                   |   |               | (45,848,057 | )      |          |   | (44,745,833 | ) |
|                                                                                                                  |   |               |        |   |          |   |   |   |
| Total shareholders' equity                                                                                            |   |               | 5,423,725   |   |          |   | 6,452,516 |   |
|                                                                                                                  |   |               |        |   |          |   |   |   |
| Total liabilities and shareholders' equity                                                                            |   | $                  | 7,019,350   |   |          | $      | 7,888,895 |   |

----

|                                                          |   | Three months ended September 30, |       |
|---------------------------------------------------------------|--------|------------------------------------------------------|------------|
|                                                          |   | 2011                                                 |       |   | 2010 |   |
|                                                          |   |                                                 |       |   |   |   |
| Product sales                                                 |   | $                                                    | 1,213,417  |   |   | $ | 1,327,127 |   |
| Cost of product sales                                         |   |                                                 | 1,147,075  |   |   |   | 1,111,527 |   |
|                                                          |   |                                                 |       |   |   |   |   |   |
| Gross income                                                  |   |                                                 | 66,342     |   |   |   | 215,600 |   |
|                                                          |   |                                                 |       |   |   |   |   |   |
| Operating expenses:                                           |   |                                                 |       |   |   |   |   |   |
| Research and development expenses                             |   |                                                 | 251,314    |   |   |   | 114,522 |   |
| Research and development reimbursement                        |   |                                                 | (50,000    | ) |   |   | - |   |
| Sales and marketing expenses                                  |   |                                                 | 314,418    |   |   |   | 373,425 |   |
| General and administrative expenses                           |   |                                                 | 652,927    |   |   |   | 596,133 |   |
|                                                          |   |                                                 |       |   |   |   |   |   |
| Total operating expenses                                      |   |                                                 | 1,168,659  |   |   |   | 1,084,080 |   |
|                                                          |   |                                                 |       |   |   |   |   |   |
| Operating loss                                                |   |                                                 | (1,102,317 | ) |   |   | (868,480 | ) |
|                                                          |   |                                                 |       |   |   |   |   |   |
| Non-operating income (expense):                               |   |                                                 |       |   |   |   |   |   |
| Interest income                                               |   |                                                 | 187        |   |   |   | 1,061 |   |
| Financing and interest expense                                |   |                                                 | (94        | ) |   |   | (4,463 | ) |
|                                                          |   |                                                 |       |   |   |   |   |   |
| Non-operating (expense) income, net                           |   |                                                 | 93         |   |   |   | (3,402 | ) |
|                                                          |   |                                                 |       |   |   |   |   |   |
| Net loss                                                      |   |                                                 | (1,102,224 | ) |   |   | (871,882 | ) |
| Preferred stock dividends                                     |   |                                                 | (2,658     | ) |   |   | (2,658 | ) |
|                                                          |   |                                                 |       |   |   |   |   |   |
| Net loss applicable to common shareholders                    |   | $                                                    | (1,104,882 | ) |   | $ | (874,540 | ) |
|                                                          |   |                                                 |       |   |   |   |   |   |
| Basic and diluted loss per share                              |   | $                                                    | (0.04      | ) |   | $ | (0.04 | ) |
|                                                          |   |                                                 |       |   |   |   |   |   |
| Weighted average shares used in computing net loss per share: |   |                                                 |       |   |   |   |   |   |
| Basic and diluted                                             |   |                                                 | 26,487,140 |   |   |   | 23,048,754 |   |

----

|                                                                        |   | Three months ended September 30, |       |
|-----------------------------------------------------------------------------|--------|------------------------------------------------------|------------|
|                                                                        |   | 2011                                                 |       |   | 2010 |   |
|                                                                        |   |                                                 |       |   |   |   |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                       |   |                                                 |       |   |   |   |
| Net loss                                                                    |   | $                                                    | (1,102,224 | ) |   | $ | (871,882 | ) |
| Adjustments to reconcile net loss to net cash used by operating activities: |   |                                                 |       |   |   |   |   |   |
| Depreciation and amortization of fixed assets                               |   |                                                 | 216,806    |   |   |   | 224,528 |   |
| Amortization of deferred financing costs and other assets                   |   |                                                 | 6,714      |   |   |   | 7,262 |   |
| Accretion of asset retirement obligation                                    |   |                                                 | 15,011     |   |   |   | 13,724 |   |
| Share-based compensation                                                    |   |                                                 | 33,189     |   |   |   | 24,592 |   |
| Changes in operating assets and liabilities:                                |   |                                                 |       |   |   |   |   |   |
| Accounts receivable, net                                                    |   |                                                 | (179,594   | ) |   |   | 62,923 |   |
| Inventory                                                                   |   |                                                 | (12,057    | ) |   |   | 3,089 |   |
| Other receivables                                                           |   |                                                 | 406,537    |   |   |   | (4,227 | ) |
| Prepaid expenses, other current assets and other assets                     |   |                                                 | (70,703    | ) |   |   | (45,405 | ) |
| Accounts payable and accrued expenses                                       |   |                                                 | 176,545    |   |   |   | 22,560 |   |
| Accrued protocol expense                                                    |   |                                                 | 3,378      |   |   |   | (29,698 | ) |
| Accrued radioactive waste disposal                                          |   |                                                 | 8,307      |   |   |   | 12,000 |   |
| Accrued payroll and related taxes                                           |   |                                                 | (52,346    | ) |   |   | (61,497 | ) |
| Accrued vacation                                                            |   |                                                 | 8,351      |   |   |   | 1,756 |   |
|                                                                        |   |                                                 |       |   |   |   |   |   |
| Net cash used by operating activities                                       |   |                                                 | (542,086   | ) |   |   | (640,275 | ) |
|                                                                        |   |                                                 |       |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                       |   |                                                 |       |   |   |   |   |   |
| Purchases of fixed assets                                                   |   |                                                 | (6,795     | ) |   |   | (1,892 | ) |
| Additions to other assets                                                   |   |                                                 | (9,001     | ) |   |   | - |   |
| Change in restricted cash                                                   |   |                                                 | (71        | ) |   |   | (214 | ) |
|                                                                        |   |                                                 |       |   |   |   |   |   |
| Net cash used by investing activities                                       |   |                                                 | (15,867    | ) |   |   | (2,106 | ) |
|                                                                        |   |                                                 |       |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                       |   |                                                 |       |   |   |   |   |   |
| Principal payments on notes payable                                         |   |                                                 | -          |   |   |   | (11,919 | ) |
| Proceeds from sales of common stock, pursuant to exercise of warrants, net  |   |                                                 | 40,244     |   |   |   | - |   |
|                                                                        |   |                                                 |       |   |   |   |   |   |
| Net cash provided / (used) by financing activities                          |   |                                                 | 40,244     |   |   |   | (11,919 | ) |
|                                                                        |   |                                                 |       |   |   |   |   |   |
| Net decrease in cash and cash equivalents                                   |   |                                                 | (517,709   | ) |   |   | (654,300 | ) |
| Cash and cash equivalents, beginning of period                              |   |                                                 | 2,112,254  |   |   |   | 1,678,869 |   |
|                                                                        |   |                                                 |       |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS, END OF PERIOD                                    |   | $                                                    | 1,594,545  |   |   | $ | 1,024,569 |   |

----

| 1. | Basis of Presentation |
|----|-----------------------|

| 2. | New Accounting Pronouncements |
|----|-------------------------------|

| 3. | Loss per Share |
|----|----------------|

|                                |   | September 30, |      |
|-------------------------------------|--------|--------------------|-----------|
|                                |   | 2011               |      |   | 2010 |   |
| Preferred stock                     |   |               | 59,065    |   |   |   | 59,065 |   |
| Common stock warrants               |   |               | 3,784,185 |   |   |   | 3,165,768 |   |
| Common stock options                |   |               | 2,318,706 |   |   |   | 2,151,372 |   |
|                                |   |               |      |   |   |   |   |   |
| Total potential dilutive securities |   |               | 6.161.956 |   |   |   | 5,376,205 |   |

----

| 4. | Inventory |
|----|-----------|

|            |   | September 30, |    |   | June 30, |   |
|-----------------|--------|--------------------|---------|--------|---------------|--------|
|            |   | 2011               |    |   | 2011          |   |
| Raw materials   |   | $                  | 655,077 |   |          | $      | 625,394 |   |
| Work in process |   |               | 94,186  |   |          |   | 120,180 |   |
| Finished goods  |   |               | 12,643  |   |          |   | 4,275 |   |
|            |   |               |    |   |          |   |   |   |
|            |   | $                  | 761,906 |   |          | $      | 749,849 |   |

| 5. | Share-Based Compensation |
|----|--------------------------|

|                                |   | Three months             |   |
|-------------------------------------|--------|-------------------------------|--------|
|                                |   | ended September 30, |   |
|                                |   | 2011                          |   |   | 2010 |   |
| Cost of product sales               |   | $                             | 12,090 |   |   | $ | 8,470 |   |
| Research and development expenses   |   |                          | 7,630  |   |   |   | 5,410 |   |
| Sales and marketing expenses        |   |                          | 2,605  |   |   |   | 3,847 |   |
| General and administrative expenses |   |                          | 10,864 |   |   |   | 6,865 |   |
| Total share-based compensation      |   | $                             | 33,189 |   |   | $ | 24,592 |   |

|                                                   |   |           |      |   |     |   |   | Weighted    |   |   |      |   |
|--------------------------------------------------------|--------|----------------|-----------|--------|----------|--------|--------|-------------|--------|--------|-----------|--------|
|                                                   |   |           |      |   | Weighted |   |   | Average     |   |   |      |   |
|                                                   |   |           |      |   | Average  |   |   | Remaining   |   |   | Aggregate |   |
|                                                   |   | Number of |      |   | Exercise |   |   | Contractual |   |   | Intrinsic |   |
|                                                   |   | Options        |      |   | Price    |   |   | Term        |   |   | Value     |   |
|                                                   |   |           |      |   |     |   |   |        |   |   |      |   |
| Outstanding at September 30, 2011                      |   |           | 2,318,706 |   |     | $      | 1.83   |        |   |   | 6.25      |   |   | $ | 465,690 |   |
| Vested and expected to vest at September 30, 2011 |   |           | 2,222,772 |   |     | $      | 1.88   |        |   |   | 6.20      |   |   | $ | 424,031 |   |
| Vested and exercisable at September 30, 2011      |   |           | 1,882,682 |   |     | $      | 2.06   |        |   |   | 5.96      |   |   | $ | 364,721 |   |

----

| 6. | Contingencies |
|----|---------------|

----

| 7. | Preferred Dividends |
|----|---------------------|

| 8. | Shareholders’ Equity |
|----|----------------------------|

| 9. | Related Party Transaction |
|----|---------------------------|

| 10. | Subsequent Events |
|-----|-------------------|

----

----

|                     |   | Three months  |      |   | Three months  |   |      |              |   |   |              |   |
|--------------------------|--------|--------------------|-----------|--------|--------------------|--------|-----------|-------------------|--------|--------|-------------------|--------|
|                     |   | ended              |      |   | ended              |   |      |              |   |   |              |   |
|                     |   | September 30, |      |   | September 30, |   |      |              |   |   |              |   |
| Description              |   | 2011               |      |   | 2010               |   |      | Variance ($) |   |   | Variance (%) |   |
| Product Sales (Prostate) |   | $                  | 1,096,478 |   |               | $      | 1,229,552 |              |   | $      | (133,074          | )      |   |   | (11 | )% |
| Product Sales (Other)    |   | $                  | 116,939   |   |               | $      | 97,575    |              |   | $      | 19,364            |   |   |   | 20 | % |
| Total product sales      |   | $                  | 1,213,417 |   |               | $      | 1,327,127 |              |   | $      | (113,710          | )      |   |   | (9 | )% |

----

|                                                |   | Three months  |      |   | Three months  |   |      |         |   |   |         |   |
|-----------------------------------------------------|--------|---------------|-----------|--------|---------------|--------|-----------|--------------|--------|--------|--------------|--------|
|                                                |   | ended,        |      |   | ended         |   |      |         |   |   |         |   |
|                                                |   | September 30, |      |   | September 30, |   |      |         |   |   |         |   |
| Description                                         |   | 2011          |      |   | 2010          |   |      | Variance ($) |   |   | Variance (%) |   |
| Material                                            |   | $             | 499,017   |   |          | $      | 428,575   |         |   | $      | 70,442       |   |   |   | 16 | % |
| Pre-loading                                         |   | $             | 100,653   |   |          | $      | 95,770    |         |   | $      | 4,883        |   |   |   | 5 | % |
| Payroll, benefits and share-based compensation |   | $             | 176,600   |   |          | $      | 215,407   |         |   | $      | (38,807      | )      |   |   | (18 | )% |
| Cost of product sales (Other)                       |   | $             | 370,805   |   |          | $      | 371,775   |         |   | $      | (970         | )      |   |   | 0 | % |
| Total cost of product sales                         |   | $             | 1,147,075 |   |          | $      | 1,111,527 |         |   | $      | 35,548       |   |   |   | 3 | % |

|                    |   | Three months  |   |   | Three months  |   |    |         |   |   |         |   |
|-------------------------|--------|---------------|--------|--------|---------------|--------|---------|--------------|--------|--------|--------------|--------|
|                    |   | ended         |   |   | ended         |   |    |         |   |   |         |   |
|                    |   | September 30, |   |   | September 30, |   |    |         |   |   |         |   |
| Description             |   | 2011          |   |   | 2010          |   |    | Variance ($) |   |   | Variance (%) |   |
| Gross profit            |   | $             | 66,342 |   |          | $      | 215,600 |         |   | $      | (149,258     | )      |   |   | (69 | )% |
|                    |   |          |   |   |          |   |    |         |   |   |         |   |   |   |   |   |
| Gross profit percentage |   |          | 5      | %      |          |   | 16      | %            |   |   |         |   |   |   |   |   |

----

|                                           |   | Three months  |    |   | Three months  |   |    |              |   |   |              |   |
|------------------------------------------------|--------|--------------------|---------|--------|--------------------|--------|---------|-------------------|--------|--------|-------------------|--------|
|                                           |   | Ended              |    |   | ended              |   |    |              |   |   |              |   |
|                                           |   | September 30, |    |   | September 30, |   |    |              |   |   |              |   |
| Description                                    |   | 2011               |    |   | 2010               |   |    | Variance ($) |   |   | Variance (%) |   |
| Other organ research                 |   | $                  | 25,143  |   |               | $      | 2,325   |              |   | $      | 22,818            |   |   |   | 1,150 | % |
| Payroll, benefits and share-based compensation |   | $                  | 142,820 |   |               | $      | 65,352  |              |   | $      | 77,468            |   |   |   | 119 | % |
| Protocol expense                               |   | $                  | 37,789  |   |               | $      | 10,969  |              |   | $      | 26,820            |   |   |   | 245 | % |
| Research and development (Other)               |   | $                  | 45,562  |   |               | $      | 35,876  |              |   | $      | 9,686             |   |   |   | 27 | % |
| Gross research and development                 |   | $                  | 251,314 |   |               | $      | 114,522 |              |   | $      | 136,792           |   |   |   | 119 | % |
|                                           |   |               |    |   |               |   |    |              |   |   |              |   |   |   |   |   |
| Research and development cost recovery         |   | $                  | (50,000 | )      |               | $      | -       |              |   | $      | (50.000           | )      |   |   | (100 | )% |
|                                           |   |               |    |   |               |   |    |              |   |   |              |   |   |   |   |   |
| Net research and development cost              |   | $                  | 201,314 |   |               | $      | 114,522 |              |   | $      | 86,792            |   |   |   | 76 | % |

----

|                                           |   | Three months  |    |   | Three months  |   |    |              |   |   |              |   |
|------------------------------------------------|--------|--------------------|---------|--------|--------------------|--------|---------|-------------------|--------|--------|-------------------|--------|
|                                           |   | ended              |    |   | ended              |   |    |              |   |   |              |   |
|                                           |   | September 30, |    |   | September 30, |   |    |              |   |   |              |   |
| Description                                    |   | 2011               |    |   | 2010               |   |    | Variance ($) |   |   | Variance (%) |   |
| Consulting                                     |   | $                  | (900    | )      |               | $      | 16,500  |              |   | $      | (17,400           | )      |   |   | (105 | )% |
| Payroll, benefits and share-based compensation |   | $                  | 213,031 |   |               | $      | 260,665 |              |   | $      | (47,634           | )      |   |   | (18 | )% |
| Sales and marketing (Other)                    |   | $                  | 102,287 |   |               | $      | 96,260  |              |   | $      | 6,027             |   |   |   | 6 | % |
| Total sales and marketing                      |   | $                  | 314,418 |   |               | $      | 373,425 |              |   | $      | (59,007           | )      |   |   | (16 | )% |

----

|                               |   | Three months  |    |   | Three months  |   |    |              |   |   |              |   |
|------------------------------------|--------|--------------------|---------|--------|--------------------|--------|---------|-------------------|--------|--------|-------------------|--------|
|                               |   | ended              |    |   | ended              |   |    |              |   |   |              |   |
|                               |   | September 30, |    |   | September 30, |   |    |              |   |   |              |   |
| Description                        |   | 2011               |    |   | 2010               |   |    | Variance ($) |   |   | Variance (%) |   |
| Bad debt expense                   |   | $                  | 46,165  |   |               | $      | (4,322  | )                 |   | $      | 50,487            |   |   |   | 1,168 | % |
| Legal                              |   | $                  | 69,143  |   |               | $      | 34,929  |              |   | $      | 34,214            |   |   |   | 98 | % |
| Other expense                      |   | $                  | 18,789  |   |               | $      | 60,742  |              |   | $      | (41,953           | )      |   |   | (69 | )% |
| General and administrative (Other) |   | $                  | 518,830 |   |               | $      | 504,784 |              |   | $      | 14,046            |   |   |   | 3 | % |
| Total general and administrative   |   | $                  | 652,927 |   |               | $      | 596,133 |              |   | $      | 56,794            |   |   |   | 10 | % |

|           |   | Three months  |       |   | Three months  |   |     |              |   |   |              |   |
|----------------|--------|--------------------|------------|--------|--------------------|--------|----------|-------------------|--------|--------|-------------------|--------|
|           |   | ended              |       |   | ended              |   |     |              |   |   |              |   |
|           |   | September 30, |       |   | September 30, |   |     |              |   |   |              |   |
| Description    |   | 2011               |       |   | 2010               |   |     | Variance ($) |   |   | Variance (%) |   |
| Operating loss |   | $                  | (1,102,317 | )      |               | $      | (868,480 | )                 |   | $      | (233,837          | )      |   |   | (27 | )% |

|            |   | Three months  |   |   | Three months  |   |   |              |   |   |              |   |
|-----------------|--------|--------------------|--------|--------|--------------------|--------|--------|-------------------|--------|--------|-------------------|--------|
|            |   | ended              |   |   | ended              |   |   |              |   |   |              |   |
|            |   | September 30, |   |   | September 30, |   |   |              |   |   |              |   |
| Description     |   | 2011               |   |   | 2010               |   |   | Variance ($) |   |   | Variance (%) |   |
| Interest income |   | $                  | 187    |   |               | $      | 1,061  |              |   | $      | (874              | )      |   |   | (82 | )% |

|                                 |   | Three months         |   |   | Three months         |   |   |              |   |   |              |   |
|--------------------------------------|--------|---------------------------|--------|--------|---------------------------|--------|--------|-------------------|--------|--------|-------------------|--------|
|                                 |   | ended March 31, |   |   | ended March 31, |   |   |              |   |   |              |   |
| Description                          |   | 2011                      |   |   | 2010                      |   |   | Variance ($) |   |   | Variance (%) |   |
| Interest expense                     |   | $                         | 94     |   |                      | $      | 3,910  |              |   | $      | (3,816            | )      |   |   | (98 | )% |
| Deferred financing expense           |   | $                         | -      |   |                      | $      | 553    |              |   | $      | (553              | )      |   |   | (100 | )% |
| Total financing and interest expense |   | $                         | 94     |   |                      | $      | 4,463  |              |   | $      | 4,369             |   |   |   | (98 | )% |

----

|                                                      |   | Three months  |       |   | Three months  |   |     |         |   |   |         |   |
|-----------------------------------------------------------|--------|--------------------|------------|--------|--------------------|--------|----------|--------------|--------|--------|--------------|--------|
|                                                      |   | ended              |       |   | ended              |   |     |         |   |   |         |   |
|                                                      |   | September 30, |       |   | September 30, |   |     |         |   |   |         |   |
| Description                                               |   | 2011               |       |   | 2010               |   |     | Variance ($) |   |   | Variance (%) |   |
| Net loss                                                  |   | $                  | (1,102,224 | )      |               | $      | (871,882 | )            |   | $      | (230,342     | )      |   |   | 26 | % |
| Non-cash items                                            |   | $                  | 271,720    |   |               | $      | 270,106  |         |   | $      | 1,614        |   |   |   | 1 | % |
| Non-cash changes in operating assets and liabilities |   | $                  | 288,418    |   |               | $      | (38,499  | )            |   | $      | 326,917      |   |   |   | 849 | % |
| Net cash used by operating activities                     |   | $                  | (542,086   | )      |               | $      | (640,275 | )            |   | $      | 98,189       |   |   |   | (15 | )% |

|                                       |   | Three months  |    |   | Three months  |   |   |         |   |   |         |   |
|--------------------------------------------|--------|--------------------|---------|--------|--------------------|--------|--------|--------------|--------|--------|--------------|--------|
|                                       |   | ended              |    |   | ended              |   |   |         |   |   |         |   |
|                                       |   | September 30, |    |   | September 30, |   |   |         |   |   |         |   |
| Description                                |   | 2011               |    |   | 2010               |   |   | Variance ($) |   |   | Variance (%) |   |
| Purchases of fixed assets                  |   | $                  | (6,795  | )      |               | $      | (1,892 | )            |   | $      | (4,903       | )      |   |   | 259 | % |
| Additions to other assets                  |   | $                  | (9,001  | )      |               | $      | -      |         |   | $      | (9,001       | )      |   |   | (100 | )% |
| Change in restricted cash                  |   | $                  | (71     | )      |               | $      | (214   | )            |   | $      | 143          |   |   |   | (67 | )% |
| Net cash used by investing activities |   | $                  | (15,867 | )      |               | $      | (2,106 | )            |   | $      | (13,761      | )      |   |   | (653 | )% |

----

|                                                  |   | Three months  |   |   | Three months  |   |    |         |   |   |         |   |
|-------------------------------------------------------|--------|--------------------|--------|--------|--------------------|--------|---------|--------------|--------|--------|--------------|--------|
|                                                  |   | ended              |   |   | ended              |   |    |         |   |   |         |   |
|                                                  |   | September 30, |   |   | September 30, |   |    |         |   |   |         |   |
| Description                                           |   | 2011               |   |   | 2010               |   |    | Variance ($) |   |   | Variance (%) |   |
| Principal payments on notes payable HAEIFC            |   | $                  | -      |   |               | $      | (11,919 | )            |   | $      | (11,919      | )      |   |   | (100 | )% |
| Proceeds from sale of common stock                    |   | $                  | 40,244 |   |               | $      | -       |         |   | $      | 40,244       |   |   |   | 100 | % |
| Net cash provided (used) by financing activities |   | $                  | 40,244 |   |               | $      | (11,919 | )            |   | $      | 52,163       |   |   |   | 438 | % |

----

----

|   | · | In June 2011, the Company filled the open accounting position to address the segregation of duties.. |
|--------|--------|------------------------------------------------------------------------------------------------------|

|   | · | The Company plans to continue to enhance staff knowledge through continued training and periodic reviews. |
|--------|--------|-----------------------------------------------------------------------------------------------------------|

----

| Proceeds used in the three months ended September 30, 2011:          |   |   |    |
|----------------------------------------------------------------------|--------|--------|---------|
| Purchase and installation of machinery and equipment                 |   | $      | 1,595   |   |
| Indirect payments to directors and officers for database development |   |   | 5,200   |   |
| Direct payments of salaries to directors and officers                |   |   | 221,987 |   |
| Working capital                                                      |   |   | 288,927 |   |
| Total proceeds used in the three months ended September 30, 2011     |   | $      | 517,709 |   |

| 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 Principal Financial Officer |
|   |                                                                  |
| 32     | Section 1350 Certifications                                           |

----

| ISORAY, INC., a Minnesota corporation |
|---------------------------------------|
|                                  |   |
| By                                    | /s/ Dwight Babcock |
|                                  | Dwight Babcock, Chief Executive Officer(Principal Executive Officer) |

| By  |  /s/ Brien Ragle                                          |
|----------|---------------------------------------------------------------------|
|     | Brien Ragle, Controller(Principal Financial and Accounting Officer) |

----