IsoRay Announces Second Quarter 2007 Results and Call of Warrants

RICHLAND, Wash.-- February 21, 2007-- IsoRay, Inc. ("IsoRay") (OTCBB:ISRY), a medical isotope company focusing on brachytherapy solutions for prostate and other malignant tissue cancers through use of its proprietary Cesium-131 radioisotope, announced its financial results for the second quarter of fiscal year 2007, ended December 31, 2006.

IsoRay’s consolidated sales revenues for the second quarter of fiscal year 2007, ended December 31, 2006, were $1,414,155, a 191% increase over the $486,247 recorded for the second quarter of fiscal year 2006, ended December 31, 2006 and a 38% increase over the $1,025,444 recorded for first quarter 2007 ended September 30, 2006. IsoRay’s consolidated net loss for the second quarter of fiscal year 2007, ended December 31, 2006, was $1,918,449, compared to a net loss for the second quarter of fiscal year 2006, ended December 31, 2005, of $1,979,224 and a reduction from the $2,927,435 net loss recorded for the first quarter 2007, ended September 30, 2006. Included in the net loss for the quarter ended December 31, 2006 is share-based compensation expense of $116,444 due to implementation of new accounting rules for option and warrant grants. Without including this expense item, our net loss would have shown an even greater decrease.

Other highlights include IsoRay’s first quarter of positive gross margins totaling $26,761 and having four clinical abstracts on Cesium 131 accepted at the 28th annual American Brachytherapy Society meeting held in Chicago starting April 28th,2007.

IsoRay also announced today that effective February 16, 2007, its share price exceeded $4.50 per share for 30 out of a requisite 60 trading days for the first time since its registration statement went effective, registering shares issued to MicroCap and other investors in August, 2006. Reaching this share price will now permit the company to call approximately 1.6 million remaining unexercised warrants or raise up to approximately $4.8 million through the exercise of these warrants. The company is sending out notices today of its call of these warrants and the warrant holders will have 30 days in which to either exercise their warrants or permit the company to repurchase the warrants at $.01 per share.

“We are excited that the company has the opportunity to obtain additional capital at this time to achieve its business plans,” said IsoRay CEO Roger Girard. “It is nice to also clear up the overhang in the market for warrants exercisable at $3.00 per share and assure investors these warrants will no longer remain outstanding.”

About IsoRay

IsoRay, Inc., through its subsidiary, IsoRay Medical™, Inc., is the sole producer of the Cesium-131 brachytherapy seed, used to treat prostate and other cancers. The Cesium-131 seed offers a significantly shorter half-life than the two other isotopes commonly used for brachytherapy, which results in a substantially faster delivery of therapeutic radiation, lower probability of cancer cell survival and reduction of the longevity of common brachytherapy side effects. IsoRay is based in Richland, Washington. More information is available about IsoRay at www.isoray.com.

Safe Harbor Statement

Statements in this news release about IsoRay's future expectations, including: the advantages of our Cesium-131 seed, the amount of cash received upon exercise of warrants, and all other statements in this release, other than historical facts, are forward-looking statements. It is important to note that actual results and ultimate corporate actions could differ materially from those in such forward-looking statements based on such factors as physician acceptance, training and use of our products, investors’ willingness to exercise warrants, our ability to successfully manufacture, market and sell our products, our ability to manufacture our products in sufficient quantities to meet demand within required delivery time periods while meeting our quality control standards, our ability to obtain sufficient supplies of isotopes and other materials from suppliers, our ability to maintain adequate quality control, including with the third parties we rely on, to minimize reduction in orders from customers, and our ability to enforce our intellectual property rights, and other risks detailed from time to time in IsoRay's reports filed with the SEC.

Media Contacts:

IsoRay Inc.
Ralph Scahtzmair
IsoRay Medical™ Inc.
rschatzmair@isoray.com 

or

The Bartlett Group Public Relations
Barry Bartlett
206-285-0673
Cell: 206-335-4694
barry@bartlettgrouppr.com 

IsoRay Medical™, Inc.                                                            877.4.ISORAY
350 Hills Street, Suite 106                                                 509.375.1202 TEL    
Richland, WA 99352                                                           509.375.3473 FAX

www.isoray.com
www.cesium131.com