Misonix (MSON) 10-Q 6 Feb 19 2019 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Dec. 31, 2018	Jan. 24, 2019
Document And Entity Information
Entity Registrant Name	MISONIX INC
Entity Central Index Key	880,432
Document Type	10-Q
Trading Symbol	MSON
Document Period End Date	Dec. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--06-30
Entity's Reporting Status Current	Yes
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Ex Transition Period	false
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		9,587,303
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2,019

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Dec. 31, 2018	Jun. 30, 2018
Current assets:
Cash and cash equivalents	$ 10,173,286	$ 10,979,455
Accounts receivable, less allowance for doubtful accounts of $250,000 and $200,000, respectively	5,709,298	5,245,549
Inventories, net	5,711,528	5,019,886
Prepaid expenses and other current assets	601,752	611,647
Total current assets	22,195,864	21,856,537
Property, plant and equipment, net of accumulated amortization and depreciation of $9,720,862 and $9,023,235, respectively	4,473,859	4,188,378
Patents, net of accumulated amortization of $1,132,901 and $1,063,393, respectively	763,044	757,447
Goodwill	1,701,094	1,701,094
Contract assets	960,000
Intangible and other assets	451,315	517,295
Total assets	30,545,176	29,020,751
Current liabilities:
Accounts payable	3,592,287	1,794,098
Accrued expenses and other current liabilities	2,264,112	2,411,172
Deferred income	5,993	13,303
Total current liabilities	5,862,392	4,218,573
Non current liabilities	401,000	401,000
Total liabilities	6,263,392	4,619,573
Commitments and contingencies
Shareholders' equity:
Common stock, $.01 par value-shares authorized 40,000,000; 9,584,178 and 9,430,466 shares issued and outstanding in each period	95,842	94,305
Additional paid-in capital	42,143,359	39,772,973
Accumulated deficit	(17,957,417)	(15,466,100)
Total shareholders' equity	24,281,784	24,401,178
Total liabilities and shareholders' equity	$ 30,545,176	$ 29,020,751

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)	Dec. 31, 2018	Jun. 30, 2018
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 250,000	$ 200,000
Accumulated amortization and depreciation	9,720,862	9,023,235
Patents, net of accumulated amortization	$ 1,132,901	$ 1,063,393
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized	40,000,000	40,000,000
Common stock, issued	9,584,178	9,430,466
Common stock, outstanding	9,584,178	9,430,466

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Revenues
Total revenue	$ 10,176,453	$ 8,323,845	$ 19,537,617	$ 15,604,568
Cost of goods sold	3,048,079	2,465,826	5,798,622	4,643,181
Gross profit	7,128,374	5,858,019	13,738,995	10,961,387
Operating expenses:
Selling expenses	4,800,643	3,919,515	9,535,648	7,490,228
General and administrative expenses	2,347,184	2,380,860	5,530,568	4,953,991
Research and development expenses	839,219	957,204	2,143,984	1,858,478
Total operating expenses	7,987,046	7,257,579	17,210,200	14,302,697
Loss from operations	(858,672)	(1,399,560)	(3,471,205)	(3,341,310)
Other income (expense):
Interest income	17,242	45	37,056	58
Royalty income	1,105	71,550	1,105	524,521
Other	(8)	(4,387)	(18,273)	(8,845)
Total other income	18,339	67,208	19,888	515,734
Loss from operations before income taxes	(840,333)	(1,332,352)	(3,451,317)	(2,825,576)
Income tax expense		5,524,422		5,243,422
Net loss	$ (840,333)	$ (6,856,774)	$ (3,451,317)	$ (8,068,998)
Net loss per share:
Basic (in dollars per share)	$ (0.09)	$ (0.76)	$ (0.37)	$ (0.90)
Diluted (in dollars per share)	$ (0.09)	$ (0.76)	$ (0.37)	$ (0.90)
Weighted average shares - Basic (in shares)	9,322,237	8,977,984	9,210,031	8,968,195
Weighted average shares - Diluted (in shares)	9,322,237	8,977,984	9,210,031	8,968,195
Product [Member]
Revenues
Total revenue	$ 10,176,453	$ 8,323,845	$ 19,537,617	$ 15,604,568

Condensed Consolidated Statem_2

Condensed Consolidated Statement of Shareholders' Equity (Unaudited) - 6 months ended Dec. 31, 2018 - USD ($)	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]	Total
Balance at beginning at Jun. 30, 2018	$ 94,305	$ 39,772,973	$ (15,466,100)	$ 24,401,178
Balance at beginning (in shares) at Jun. 30, 2018	9,430,466
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect of the adoption of ASC 606 - revenue recognition			960,000	960,000
Net loss			(3,451,317)	(3,451,317)
Proceeds from exercise of stock options	$ 1,537	865,800		$ 867,337
Proceeds from exercise of stock options (in shares)	153,712			183,285
Stock-based compensation		1,504,586		$ 1,504,586
Balance at ending at Dec. 31, 2018	$ 95,842	$ 42,143,359	$ (17,957,417)	$ 24,281,784
Balance at ending (in shares) at Dec. 31, 2018	9,584,178

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Operating activities
Net loss	$ (3,451,317)	$ (8,068,998)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization	767,135	677,292
Disposals of property, plant and equipment		128,746
Bad debt expense	50,000
Deferred income tax		5,243,422
Stock-based compensation	1,504,586	1,469,894
Deferred lease liability	(7,310)	(4,677)
Changes in operating assets and liabilities:
Accounts receivable	(513,749)	807,010
Inventories	(1,189,559)	(839,361)
Prepaid expenses and other current assets	9,895	610,890
Deferred income		2,152,906
Intangible, contract and other assets	65,980
Accounts payable, accrued expenses and other current liabilities	1,651,129	(1,680,241)
Net cash provided by (used in) operating activities	(1,113,210)	496,883
Investing activities
Acquisition of property, plant and equipment	(485,191)	(117,897)
Additional patents	(75,105)	(58,179)
Net cash used in investing activities	(560,296)	(176,076)
Financing activities
Proceeds from exercise of stock options	867,337	224,552
Net cash provided by financing activities	867,337	224,552
Net increase (decrease) in cash and cash equivalents	(806,169)	545,359
Cash and cash equivalents at beginning of period	10,979,455	11,557,071
Cash and cash equivalents at end of period	10,173,286	12,102,430
Cash paid for:
Income taxes	13,273	895
Transfer of inventory to property, plant and equipmment for consignment of product	497,917	782,920
Adoption of new accounting standard on deferred taxes		$ 908,875

Basis of Presentation, Organiza

Basis of Presentation, Organization and Business and Summary of Significant Accounting Policies	6 Months Ended
	Dec. 31, 2018
Accounting Policies [Abstract]
Basis of Presentation, Organization and Business and Summary of Significant Accounting Policies	1. Basis of Presentation, Organization and Business and Summary of Significant Accounting Policies Basis of Presentation These condensed consolidated financial statements of Misonix, Inc. (“Misonix” or the “Company”) include the accounts of Misonix and its 100% owned subsidiaries. All significant intercompany balances and transactions have been eliminated. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these financial statements do not include all the information and footnotes required by U.S. GAAP for complete financial statements. As such, they should be read with reference to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2018, which provides a more complete explanation of the Company’s accounting policies, financial position, operating results, business properties and other matters. In the opinion of management, these financial statements reflect all adjustments considered necessary for a fair statement of interim results. Organization and Business Misonix designs, manufactures and markets minimally invasive therapeutic ultrasonic medical devices. These products are used for precise bone sculpting, removal of soft and hard tumors, and tissue debridement, primarily in the areas of neurosurgery, orthopedic surgery, plastic surgery, wound care and maxillo-facial surgery. In the United States, our products are marketed primarily through a hybrid sales approach. This includes direct sales representatives, managed by regional sales managers, along with independent distributors. Outside the United States, we sell BoneScalpel and SonaStar to specialty distributors who purchase products from us to resell to their clinical customer bases. We sell to all major markets in the Americas, Europe, Middle East, Asia Pacific and Africa. The Company operates as one business segment. High Intensity Focused Ultrasound Technology The Company sold its rights to the high intensity focused ultrasound technology to SonaCare Medical, LLC (“SonaCare”) in May 2010. The Company may receive up to approximately $5.8 million in payment for the sale. SonaCare is obligated to pay the Company 7% of the gross revenues received from its sales of the (i) prostate product in Europe and (ii) kidney and liver products worldwide, until the Company has received payments of $3 million, and thereafter 5% of the gross revenues, up to an aggregate payment of $5.8 million, all subject to a minimum annual royalty of $250,000. No payments were received for the six months ended December 31, 2018 and 2017. Cumulative royalties through December 31, 2018 were $2,542,579. Major Customers and Concentration of Credit Risk Included in revenues are sales to the Company distributor of Bone Scalpel in China of approximately $2,976,000 and $0, for the six months ended December 31, 2018 and 2017, respectively. Accounts receivable from this customer were $300,000 and $0 at December 31, 2018 and June 30, 2018, respectively. Total royalties from Medtronic Minimally Invasive Therapies (“MMIT”) related to their sales of the Company’s ultrasonic cutting and sculpting products, which use high frequency sound waves to coagulate and divide tissue for both open and laparoscopic surgery, were $0 and $524,000 for both the three and six months ended December 31, 2018 and 2017, respectively. Accounts receivable from MMIT royalties were $0 at December 31, 2018 and June 30, 2018. The license agreement with MMIT expired in August 2017. At December 31, 2018 and June 30, 2018, the Company’s accounts receivable with customers outside the United Sates were approximately $1,715,000 and $1,630,000, respectively, $72,000 of which is over 90 days at December 31, 2018. Earnings Per Share Earnings per share (“EPS”) is calculated using the two class method, which allocates earnings among common stock and participating securities to calculate EPS when an entity’s capital structure includes either two or more classes of common stock or common stock and participating securities. Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities. As such, unvested restricted stock of the Company are considered participating securities. The dilutive effect of options and their equivalents (including non-vested stock issued under stock based compensation plans), is computed using the “treasury” method. Basic income per common share is based on the weighted average number of common shares outstanding during the period. Diluted income per common share includes the dilutive effect of potential common shares outstanding. The following table sets forth the reconciliation of weighted average shares outstanding and diluted weighted average shares outstanding: For the three months ended For the six months ended December 31, December 31, 2018 2017 2018 2017 Basic weighted average shares outstanding 9,322,237 8,977,984 9,210,031 8,968,195 Dilutive effect of resticted stock awards — — — — Denominator for basic earnings per share 9,322,237 8,977,984 9,210,031 8,968,195 Dilutive effect of stock options — — — — Diluted weighted average shares outstanding 9,322,237 8,977,984 9,210,031 8,968,195 Diluted EPS for the three and six months ended December 31, 2018 and 2017 as presented is the same as basic EPS as the inclusion of the effect of common share equivalents then outstanding would be anti-dilutive. Accordingly, excluded from the calculation of diluted EPS are the dilutive effect of options to purchase 530,978 and 375,000 shares of common stock for the three months ended December 31, 2018 and 2017, respectively, and the dilutive effect of options to purchase 544,143 and 1,366,736 shares of common stock for the six months ended December 31, 2018 and 2017, respectively. Also excluded from the calculation of earnings per share for the three and six months ended December 31, 2018 and 2017 are the unvested restricted stock awards which were issued in December 2016. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (the “FASB”) issued ASC Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), which was subsequently updated. The purpose of the updated standard is to provide enhancements to the quality and consistency of revenue recognition between companies using U.S. GAAP and International Financial Reporting Standards. The new five-step recognition model introduces the core principle of recognizing revenue in an amount that reflects the consideration to which the entity expects to be entitled in exchange for the promised goods or services, which includes additional footnote disclosures to describe the nature, amount, timing and uncertainty of revenue, certain costs and cash flow arising from customers. As amended, ASU 2014-09 requires the Company to use either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients; or (ii) a modified retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption. This standard became effective for the Company on July 1, 2018 and the Company adopted the new pronouncement under the modified retrospective approach. In February 2016, the FASB issued guidance on lease accounting requiring lessees to recognize a right-of-use asset and a lease liability for long-term leases. The liability will be equal to the present value of lease payments. This guidance must be applied using a modified retrospective transition approach to all annual and interim periods presented and is effective for the Company beginning in fiscal 2020. The Company is currently in the early stages of evaluating this guidance to determine the impact it will have on its consolidated financial statements. In August 2016, the FASB issued guidance on the Statement of Cash Flows Classification of certain cash receipts and cash payments (a consensus of the Emerging Issues Task Force). This guidance addresses the following eight specific cash flow issues: Debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (including bank-owned life insurance policies); distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. This guidance became effective for the Company beginning in fiscal 2019. As this guidance only affects the classification within the statement of cash flows, ASU 2016-15 did not have a material impact on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations: Clarifying the Definition of a Business There are no other recently issued accounting pronouncements that are expected to have a material effect on the Company’s financial position, results of operations or cash flows. Critical Accounting Policies and Use of Estimates Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and judgments that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions are used for but not limited to establishing the allowance for doubtful accounts, valuation of inventory, depreciation, asset impairment evaluations and establishing deferred tax assets and related valuation allowances, and stock-based compensation. Actual results could differ from those estimates.

Revenue Recognition

Revenue Recognition	6 Months Ended
	Dec. 31, 2018
Revenue Recognition [Abstract]
Revenue Recognition	2. Revenue Recognition On July 1, 2018 the Company adopted Topic 606 using the modified retrospective method applied to those contracts which were not completed as of the adoption date. The reported results for the quarter ended December 31, 2018 reflect the application of Topic 606 guidance while the reported results for fiscal year 2018 were prepared under the guidance of Topic 605, “Revenue Recognition”. The adoption of Topic 606 resulted in a cumulative prior period adjustment in the amount of $960,000 related to the Company’s License and Exclusive Manufacturing Agreement described below, but the remainder of the adoption did not have a material impact on the timing or amount of revenue recognized. The impacts of adopting ASC Topic 606 on the Company’s consolidated balance sheets as of July 1, 2018 were as follows: As Adjusted As ASC 606 Under Reported Adjustments ASC 606 Contract assets $ — $ 960,000 $ 960,000 Total Shareholders’ equity $ 24,401,178 $ 960,000 $ 25,361,178 The Company has made the following accounting policy elections and elected to use certain practical expedients, as permitted by the FASB, in applying Topic 606: 1) the Company accounts for amounts collected from customers for sales and other taxes net of related amounts remitted to tax authorities; 2) the Company expenses costs to obtain a contract as they are incurred if the expected period of benefit, and therefore the amortization period, is one year or less; 3) the Company accounts for shipping and handling activities that occur after control transfers to the customer as a fulfillment cost rather than an additional promised service and these fulfillment costs fall within selling, general and administrative expenses; 4) the Company does not assess whether promised goods or services are performance obligations if they are immaterial in the context of the contract with the customer; 5) the Company will utilize the right-to-invoice practical expedient with regard to the recognition of revenue upon the purchase of consumable goods in connection with a product placement/consignment arrangement. The Company determines revenue recognition through the following steps: ● Identification of the contract, or contracts, with a customer ● Identification of the performance obligations in the contract ● Determination of the transaction price ● Allocation of the transaction price to the performance obligations in the contract ● Recognition of revenue when, or as, a performance obligation is satisfied Contracts and Performance Obligations The Company accounts for a contract with a customer when there is an approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of the consideration is probable. The Company’s performance obligations consist mainly of transferring control of products and related services identified in the contracts, purchase orders or invoices. For each contract, the Company considers the obligation to transfer products or bundled products and services to the customer, of which each is distinct in the context of the contract, to be performance obligations. The Company historically has not made provisions for returns and allowances as they have not been material to the operations of the Company. Transaction Price and Allocation to Performance Obligations Transaction prices of products are typically based upon contracted rates as specified on the purchase order for the purchase of consumables which represents the standalone selling price as determined through the sale of products and or bundled products or services separately in similar circumstances to similar customers. The Company determines the effects of variable consideration, inclusive of any constraints, in determining the transaction price with regard to their contracts with customers. Recognition of Revenue The Company satisfies performance obligations over time, or at a point in time, upon which control transfers to the customer. Revenue derived from the shipping and billing of product is recorded upon shipment, when transfer of control occurs for products shipped F.O.B. shipping point. Products shipped F.O.B. destination point are recorded as revenue when received at the point of destination when the transfer of control is completed. Shipments under agreements with distributors are not subject to return, and payment for these shipments is not contingent on sales by the distributor. Accordingly, the Company recognizes revenue on shipments to distributors in the same manner as with other customers under the ship and bill process. Revenue derived from the rental of equipment is recorded on a monthly basis over the term of the lease. Shipments of consumable products to these rental customers is recorded as orders are received and shipments are made F.O.B. destination or F.O.B. shipping point. Revenue derived from consignment agreements is earned as consumables product orders are fulfilled. Therefore, revenue is recognized as shipments are made F.O B shipping point or F.O.B destination. Revenue derived from service and maintenance contracts is recognized evenly over the life of the service agreement as the services are performed. Contract Specific Performance Obligations and Significant Judgements Product Placement/Consignment Agreements The Company’s product placement/consignment agreements include the placement of a generator at the customer’s place of business and pricing related to the purchase of consumables for use in conjunction with the generator. These agreements have no stated minimum consumable purchase quantities nor a stated term. The Company considers the transaction price in these arrangements to be fully constrained variable consideration because it is dependent on future sales of consumables to the customer. The Company has determined that the pattern of purchase of consumables by a customer is consistent with the benefit received by the customer for the use of the generator and therefore the Company has a right to consideration based upon the pattern of consumable purchases placed through purchase orders by the customer. The Company’s invoices to these customers have short-term payment terms and are aligned with the transfer of goods and services to the customer and the Company recognizes revenue based upon their right to invoice customers. License and Manufacturing Agreement On October 19, 2017, the Company entered into a License and Exclusive Manufacturing Agreement (the “Agreement”) with Hunan Xing Hang Rui Kang Bio-technologies Co., Ltd, a Chinese corporation (the “Licensee”) under which Misonix has licensed certain manufacturing and distribution rights to its SonaStar product line in China, Hong Kong and Macau in exchange for payments consisting of initial payments totaling $5,000,000 for the transfer of functional intellectual property and initial stocking orders of product, and minimum royalty payments of $2,000,000 per calendar year for three years beginning in 2019, based upon the manufacture of products by the Licensee. $5,000,000 of initial revenue was collected and recorded for the quarter ended March 31, 2018 under ASC 605. Upon the adoption of Topic 606, the Company evaluated this contract under the provisions of the new revenue standard. The Company determined that the satisfied performance obligations and allocation of the transaction price related to the $5,000,000 received prior to adoption was consistent with the provisions of ASC 606 and also recorded a transitional adjustment to accumulated deficit in the amount of $960,000 as follows: Minimum royalty revenue provided by the contract $ 6,000,000 Implicit price concession (5,040,000 ) Adoption adjustment to accumulated deficit under ASC 606 $ 960,000 Although the contract includes minimum royalties, the Company concluded that a significant portion of those guaranteed minimums are actually variable consideration subject to the constraint because the Company has provided an implicit price concession. Specifically, the fact that production of the product in China is not assured and the Licensee must develop a manufacturing process, coupled with the fact that new technology related to this product is expected to be available for sale domestically, may result in the Licensee not earning sufficient revenue in order to pay the minimum royalties. Therefore, the Company has determined variable consideration through utilization of the most likely method based upon forecasts and projections of shipment of products. The Company will monitor facts and circumstances over time and adjust management’s most likely estimate of variable consideration on a quarterly basis. Disaggregation of Revenue The Company generates revenue from the sale and leasing of medical equipment and from the sale of consumable products used with such equipment in surgical procedures as well as through product licensing arrangements. In the United States, the Company’s products are marketed primarily through a hybrid sales approach which includes direct sales representatives, managed by regional sales managers, along with independent distributors. Outside the United States, the Company sells BoneScalpel and SonaStar to specialty distributors who purchase products to resell to their clinical customer bases. The Company sells to all major markets in the Americas, Europe, Middle East, Asia Pacific, and Africa. Revenue is disaggregated from contracts between products under ship and bill arrangements and licensing agreements, and by geography, which the Company believes best depicts how the nature, amount, timing and uncertainty of revenues and cash flows are affected by economic factors. The Company also provides an immaterial amount of service revenue which is recognized over time, but not stated separately because the amounts are immaterial. The following table disaggregates the Company’s product revenue by classification and geographic location: For the three months ended December 31, For the six months ended December 31, 2018 2017 2018 2017 Total Consumables $ 7,570,395 $ 6,162,064 $ 13,915,047 $ 11,505,826 Equipment 2,606,058 2,161,781 5,622,570 4,098,742 Total $ 10,176,453 $ 8,323,845 $ 19,537,617 $ 15,604,568 Domestic: Consumables $ 5,477,995 $ 4,623,545 $ 10,308,167 $ 8,722,636 Equipment 600,559 776,878 1,179,711 1,329,930 Total $ 6,078,554 $ 5,400,423 $ 11,487,878 $ 10,052,566 International: Consumables $ 2,092,400 $ 1,538,519 $ 3,606,880 $ 2,783,190 Equipment 2,005,499 1,384,903 4,442,859 2,768,812 Total $ 4,097,899 $ 2,923,422 $ 8,049,739 $ 5,552, 002 There was no license revenue for the periods presented. Contract Assets The timing of revenue recognition, customer invoicing, and collections produces accounts receivable and contract assets on the Company’s consolidated balance sheet. Contract liabilities are not material to the operations of the Company as of December 31, 2018. The Company invoices in accordance with contract payment terms. Customer invoices represent an unconditional right of consideration. When revenue is recognized in advance of customer invoicing a contract asset is recorded. Unpaid customer invoices are reflected as accounts receivable. The contract asset represents an asset in conjunction with the Company’s License and Manufacturing Agreement related to the most likely variable consideration associated with the royalty provisions in the contract. The asset is recorded as a long-term asset as the Company believes that payment will be made on this asset in a duration to exceed one year. Contract assets as of December 31, 2018 and June 30, 2018 were $960,000 and $0, respectively. Selling Costs Incremental direct costs of obtaining a contract primarily include sales commissions paid to sales personnel and outside sales representatives in connection with sales of products under ship and bill scenarios or through product placement scenarios. The expected period of benefit of these costs is one year or less and therefore the Company has elected the practical expedient to expense such costs in the period in which they are incurred. Typically, these costs represent shipping and handling costs and the Company accounts for these costs as fulfillment costs and are expensed as incurred. Costs in fulfilling a contract are only capitalized as an asset if they relate directly to an existing contract or specific anticipated contract, they generate or enhance resources of the entity that will be used to satisfy performance obligations in the future, and they are expected to be recovered. The Company has not identified any such costs.

Fair Value of Financial Instrum

Fair Value of Financial Instruments	6 Months Ended
	Dec. 31, 2018
Fair Value Disclosures [Abstract]
Fair Value of Financial Instruments	3. Fair Value of Financial Instruments The Company follows a three-level fair value hierarchy that prioritizes the inputs to measure fair value. This hierarchy requires entities to maximize the use of “observable inputs” and minimize the use of “unobservable inputs.” The three levels of inputs used to measure fair value are as follows: Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets as of the measurement date. Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3: Significant unobservable inputs that reflect assumptions that market participants would use in pricing an asset or liability. At December 31, 2018 and June 30, 2018, all of the Company’s cash and cash equivalents, trade accounts receivable and trade accounts payable were short term in nature, and their carrying amounts approximate fair value.

Inventories

Inventories	6 Months Ended
	Dec. 31, 2018
Inventory Disclosure [Abstract]
Inventories	4. Inventories Inventories are summarized as follows: December 31, June 30, 2018 2018 Raw material $ 3,416,547 $ 3,540,205 Work-in-process 324,932 180,442 Finished goods 2,414,307 1,743,497 6,155,786 5,464,144 Less valuation reserve (444,258 ) (444,258 ) $ 5,711,528 $ 5,019,886

Property, Plant and Equipment

Property, Plant and Equipment	6 Months Ended
	Dec. 31, 2018
Property, Plant and Equipment [Abstract]
Property, Plant and Equipment	5. Property, Plant and Equipment Depreciation and amortization of property, plant and equipment was $698,000 and $615,000 for the six months ended December 31, 2018 and 2017, respectively. Inventory items included in property, plant and equipment are depreciated using the straight line method over estimated useful lives of 3 to 5 years. Depreciation of generators which are consigned to customers is expensed over a 5-year period, and depreciation is charged to selling expenses.

Goodwill

Goodwill	6 Months Ended
	Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	6. Goodwill The excess of the cost over the fair value of net assets of acquired businesses is recorded as goodwill. Goodwill is not subject to amortization, but is reviewed for impairment at the reporting unit level annually, or more frequently if impairment indicators arise. The Company’s assessment of the recoverability of goodwill is based upon a comparison of the carrying value of goodwill with its estimated fair value and the value of the Company at the measurement date. Application of these impairment tests requires significant judgments, including estimation of cash flows, which is dependent on internal forecasts, estimation of the long term rate of growth for our business, the useful lives over which cash flows will occur and determination of our weighted average cost of capital. The Company’s market capitalization exceeds the value of the goodwill. The Company concluded that there was no impairment to goodwill at June 30, 2018 and June 30, 2017. There were no triggering events identified during the quarter ended December 31, 2018.

Patents

Patents	6 Months Ended
	Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Patents	7. Patents The costs of acquiring or processing patents are capitalized at cost. These amounts are being amortized using the straight-line method over the estimated useful lives of the underlying assets, which is approximately 17 years. Patents, net of accumulated amortization, totaled $763,044 and $757,447 at December 31, 2018 and June 30, 2018, respectively. Amortization expense for the six months ended December 31, 2018 and 2017 was $70,000 and $61,000, respectively. The following is a schedule of estimated future patent amortization expenses by fiscal year as of December 31, 2018: 2019 $ 67,325 2020 109,566 2021 102,374 2022 68,695 2023 67,625 Thereafter 347,459 $ 763,044

Accrued Expenses and Other Curr

Accrued Expenses and Other Current Liabilities	6 Months Ended
	Dec. 31, 2018
Payables and Accruals [Abstract]
Accrued Expenses and Other Current Liabilities	8. Accrued Expenses and Other Current Liabilities The following summarizes accrued expenses and other current liabilities: December 31, June 30, 2018 2018 Accrued payroll, payroll taxes and vacation $ 576,674 $ 351,435 Accrued bonus 309,995 552,988 Accrued commissions 678,002 742,807 Professional fees 166,385 102,065 Vendor, tax and other accruals 533,056 661,877 $ 2,264,112 $ 2,411,172

Stock-Based Compensation Plans

Stock-Based Compensation Plans	6 Months Ended
	Dec. 31, 2018
Equity [Abstract]
Stock-Based Compensation Plans	9. Stock-Based Compensation Plans Stock Option Awards For the three and six months ended December 31, 2018 and 2017, the compensation cost relating to stock option awards that has been charged against income for the Company’s stock option plans was $500,087 and $844,601, and $1,504,586 and $1,016,026, respectively. As of December 31, 2018, there was $2,928,738 of total unrecognized compensation cost related to non-vested share-based compensation arrangements to be recognized over a weighted-average period of 2.7 years. Stock options typically expire 10 years from the date of grant and vest over service periods, which typically are 4 years. All options are granted at fair market value, as defined in the applicable plans. The fair value of each option award was estimated on the date of grant using the Black-Scholes option valuation model that uses the assumptions noted in the following table. The expected volatility represents the historical price changes of the Company’s stock over a period equal to that of the expected term of the option. The Company uses the simplified method for determining the option term. The risk-free rate was based on the U.S. Treasury yield curve in effect at the time of grant. The expected dividend yield is based upon historical and projected dividends. The Company has historically not paid dividends, and is not expected to do so in the near term. The weighted average fair value per share at date of grant for options granted during the six months ended December 31, 2018 was $8.51. There were options to purchase 182,000 and 305,500 shares granted during the six months ended December 31, 2018 and 2017, respectively. The fair value was estimated based on the weighted average assumptions of: For six months ended December 31, 2018 2018 2017 Risk-free interest rates 2.90 % 1.98 % Expected option life in years 6.25 5.95 Expected stock price volatility 55.87 % 57.42 % Expected dividend yield 0 % 0 % A summary of option activity under the Company’s equity plans as of December 31, 2018, and changes during the six months ended December 31, 2018 is presented below: Outstanding Average Aggregate Outstanding at June 30, 2018 1,330,193 $ 8.47 $ 5,369,557 Granted 182,000 15.40 Exercised (183,285 ) 7.81 Forfeited (73,752 ) 9.01 Expired (15,000 ) 2.66 Outstanding as of December 31, 2018 1,240,156 $ 9.69 $ 7,835,881 Vested and exercisable at December 31, 2018 676,780 $ 8.24 $ 5,258,285 The total fair value of stock options vested during the six months ended December 31, 2018 was $999,195. The number and weighted-average grant-date fair value of non-vested stock options at the beginning of fiscal 2018 was 648,877 and $5.08, respectively. The number and weighted-average grant-date fair value of stock options which vested during the six months ended December 31, 2018 was 194,374 and $5.14, respectively. Restricted Stock Awards On December 15, 2016, the Company issued 400,000 shares of restricted stock to its Chief Executive Officer. These awards vest over a period of up to five years, subject to meeting certain service, performance and market conditions. These awards were valued at approximately $3.6 million. Compensation expense recorded in the six months ended December 31, 2018 and 2017 related to these awards was $871,329 and $453,868 respectively. As of December 31, 2018, there was approximately $1,377,319 of total unrecognized compensation cost related to non-vested restricted stock awards to be recognized over a weighted-average period of 2.81 years. The awards contain a combination of vesting terms which include time vesting, performance vesting relating to revenue achievement, and market vesting related to obtaining certain levels of Company stock prices. At December 31, 2018, the Company has estimated that it is probable that the performance conditions will be met. The awards were valued using a Monte Carlo valuation model using a stock price at the date of grant of $9.60, a term of 3 to 5 years, a risk free interest rate of 1.6% to 2.1% and a volatility factor of 66.5%. As of December 31, 2018, 186,600 shares from this set of awards have vested. During the six months ended December 31, 2018, the performance conditions of one of these restricted stock awards were met, resulting in the full amortization of this award during the period, totaling $475,286 of additional amortization during the first quarter of the current fiscal year. The number of restricted stock awards which vested was 133,333.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Dec. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	10. Commitments and Contingencies Leases The Company has entered into several non-cancellable operating leases for the rental of certain manufacturing and office space, equipment and automobiles expiring in various years through 2021. The principal building lease provides for a monthly rental of approximately $28,000. Class Action Securities Litigation On September 19, 2016, Richard Scalfani, an individual shareholder of Misonix, filed a lawsuit against the Company and its former CEO and CFO in the U.S. District Court for the Eastern District of New York, alleging violations of the federal securities laws. The complaint alleges that the Company’s stock price was artificially inflated between November 5, 2015 and September 14, 2016 as a result of alleged false and misleading statements in the Company’s securities filings concerning the Company’s business, operations, and prospects and the Company’s internal control over financial reporting. Scalfani filed the action seeking to represent a putative class of all persons (other than defendants, officers and directors of the Company, and their affiliates) who purchased publicly traded Misonix securities between November 5, 2015 and September 14, 2016. Scalfani was seeking an unspecified amount of damages for himself and for the putative class under the federal securities laws. On March 24, 2017, the Court appointed Scalfani and another individual Misonix shareholder, Tracey Angiuoli, as lead plaintiffs for purposes of pursuing the action on behalf of the putative class. The lead plaintiffs, on behalf of the putative class, and the Company reached a settlement in principle under which the Company would pay $500,000 to resolve the matter. The district court approved the settlement and dismissed the lawsuit with prejudice in an order dated December 16, 2017. The Company has paid its $250,000, representing its insurance retention. The balance was paid by the Company’s insurance carrier. Former Chinese Distributor - FCPA With the assistance of outside counsel, the Company conducted a voluntary investigation into the business practices of the independent Chinese entity that previously distributed its products in China and the Company’s knowledge of those business practices, which may have implications under the FCPA, as well as into various internal controls issues identified during the investigation (the “Investigation”). On September 27, 2016 and September 28, 2016, the Company voluntarily contacted the SEC and the DOJ, respectively, to advise both agencies of these potential issues. The Company has provided and will continue to provide documents and other information to the SEC and the DOJ, and is cooperating fully with these agencies in their ongoing investigations of these matters. Although the Company’s Investigation is complete, additional issues or facts could arise which may expand the scope or severity of the potential violations. The Company has no current information derived from the Investigation or otherwise to suggest that its previously reported financial statements and results are incorrect. At this stage, the Company is unable to predict what, if any, action the DOJ or the SEC may take or what, if any, penalties or remedial measures these agencies may seek. Nor can the Company predict the impact on the Company as a result of these matters, which may include the imposition of fines, civil and criminal penalties, which are not currently estimable, as well as equitable remedies, including disgorgement of any profits earned from improper conduct and injunctive relief, limitations on the Company’s conduct, and the imposition of a compliance monitor. The DOJ and the SEC periodically have based the amount of a penalty or disgorgement in connection with an FCPA action, at least in part, on the amount of profits that a company obtained from the business in which the violations of the FCPA occurred. During its distributorship relationship with the prior Chinese distributor from 2010 through 2016, the Company generated revenues of approximately $8 million. Further, the Company may suffer other civil penalties or adverse impacts, including lawsuits by private litigants in addition to the lawsuits that already have been filed, or investigations and fines imposed by local authorities. The investigative costs to date are approximately $3.4 million, of which approximately $0.3 million and $0.4 million was charged to general and administrative expenses during the three and six months ended December 31, 2018, respectively, compared with $0.1 million and $0.3 million for the three and six months ended December 31, 2017. Former Chinese Distributor – Litigation On April 5, 2017, the Company’s former distributor in China, Cicel (Beijing) Science & Technology Co., Ltd., filed a lawsuit against the Company and certain officers and directors of the Company in the United States District Court for the Eastern District of New York, alleging that the Company improperly terminated its contract with the former distributor. The complaint sought various remedies, including compensatory and punitive damages, specific performance and preliminary and post judgment injunctive relief, and asserted various causes of action, including breach of contract, unfair competition, tortious interference with contract, fraudulent inducement, and conversion. On October 7, 2017, the court granted the Company’s motion to dismiss all of the tort claims asserted against it, and also granted the individual defendants’ motion to dismiss all claims asserted against them. The only claim currently remaining in the case is for breach of contract against the Company; the plaintiff has moved to amend its complaint to add tort claims, which the Company has opposed. The Company believes it has various legal and factual defenses to the allegations in the complaint, and intends to vigorously defend the action. The case is at its earliest stages; discovery is just beginning and there is no trial date. Stockholder Derivative Litigation On June 6, 2017, Irving Feldbaum, an individual shareholder of Misonix, filed a lawsuit in the U.S. District Court for the Eastern District of New York. The complaint alleges claims against the Company’s board of directors, its former CEO and CFO, certain of its former directors, and the Company as a nominal defendant for alleged violations of Section 14(a) of the Securities Exchange Act of 1934 and state law claims for breach of fiduciary duty, waste of corporate assets, and unjust enrichment. The complaint alleges that the Company incurred damages as a result of alleged false and misleading statements in the Company’s securities filings concerning the Company’s business, operations, and prospects and the Company’s internal control over financial reporting. The complaint also alleges that the Company’s February 4, 2016 Proxy Statement contained false and misleading statements regarding executive compensation. The complaint seeks the recovery of damages on behalf of the Company and the implementation of changes to corporate governance procedures. On June 16, 2017, Michael Rubin, another individual shareholder of Misonix, filed a case alleging similar claims in the same district court. On July 21, 2017, the district court consolidated the two actions for all purposes. On July 16, 2018, the Company and counsel for Mr. Feldbaum and Mr. Rubin informed the District Court that the parties had reached a settlement in principle. There are aspects of the settlement that remain to be negotiated and documented, and the settlement is subject to approval by the District Court after notice to the Company’s shareholders.

Related Party Transactions

Related Party Transactions	6 Months Ended
	Dec. 31, 2018
Related Party Transactions [Abstract]
Related Party Transactions	11. Related Party Transactions OrthoXact Proprietary Limited (“OrthoXact”) (formerly Applied BioSurgical) is an independent distributor for the Company in South Africa. The chief executive officer of OrthoXact is also the brother of Stavros G. Vizirgianakis, the CEO of Misonix, Inc. Set forth below is a table showing the Company’s net revenues for the six months ended December 31 and accounts receivable at December 31 for the indicated time period below with OrthoXact: For the six months ended December 31, 2018 2017 Sales $ 573,953 $ 436,551 Accounts receivable $ 260,222 $ 172,292

Income Taxes

Income Taxes	6 Months Ended
	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Income Taxes	12. Income Taxes For the three and six months ended December 31, 2018 and 2017, the Company recorded income tax expense (benefit), as follows: For the three months ended December 31, For the six months ended December 31, 2018 2017 2018 2017 Income tax benefit $ (228,000 ) $ (228,149 ) $ (655,000 ) $ (509,149 ) Reduction of deferred tax assets relating to Tax Legislation — 1,764,039 — 1,764,039 Valuation allowance on deferred tax assets 228,000 3,988,532 655,000 3,988,532 Net income tax expense $ — $ 5,524,422 $ — $ 5,243,422 For the six months ended December 31, 2018 and 2017, the effective rate of 0% and 185.6%, respectively, varied from the U.S. federal statutory rate primarily due to the recording of a full valuation allowance on the remaining deferred tax assets, permanent book tax differences relating principally to stock compensation expense and tax credits, and the impact of the Tax Cuts and Jobs Act of 2017. Tax Cuts and Jobs Act of 2017 The Tax Cuts and Jobs Act of 2017, enacted on December 22, 2017, contains significant changes to U.S. tax law, including lowering the U.S. corporate income tax rate to 21%, implementing a territorial tax system, and imposing a one-time tax on deemed repatriated earnings of foreign subsidiaries. Valuation Allowance on Deferred Tax Assets Deferred tax assets refer to assets that are attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets in essence represent future savings of taxes that would otherwise be paid in cash. The realization of the deferred tax assets is dependent upon the generation of sufficient future taxable income, including capital gains. If it is determined that the deferred tax assets cannot be realized, a valuation allowance must be established, with a corresponding charge to net income. In accordance with ASC Topic 740, the Company establishes valuation allowances for deferred tax assets that, in its judgment are not more likely-than-not realizable. The guidance requires entities to evaluate all available positive and negative evidence, including cumulative results in recent periods, weighted based on its objectivity, in determining whether its deferred tax assets are more likely than not realizable. The Company regularly assesses its ability to realize its deferred tax assets. While the Company had positive cumulative pretax income as of June 30, 2017, based on actual results for fiscal 2018 and the Company’s current forecast for fiscal 2019 the Company is in a three-year cumulative loss position at December 31, 2018, and it expects to be in a cumulative pretax loss position as of June 30, 2019. Management evaluated available positive evidence, including the continued growth of the Company’s revenues and gross profit margins, its recent SonaStar technology license to its Chinese partner and the reduction in investigative and professional fees recognized in fiscal 2017, along with available negative evidence, including the Company’s continuing investment in building its next generation Nexus platform and its continuing investment in building a direct sales force, while at the same time paying commissions to its domestic sales distributors. After weighing both the positive and negative evidence, management concluded that the Company’s deferred tax assets are not more likely-than-not realizable. Accordingly, the Company recorded a full valuation allowance against its deferred tax assets. The Company will continue to assess its ability to utilize its net operating loss carryforwards, and will reverse this valuation allowance when sufficient evidence is achieved to allow the realizability of such deferred tax assets. As of December 31, 2018 and June 30, 2018, the Company had no material unrecognized tax benefits or accrued interest and penalties.

Segment Reporting

Segment Reporting	6 Months Ended
	Dec. 31, 2018
Segment Reporting [Abstract]
Segment Reporting	13. Segment Reporting Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated on a regular basis by the chief operating decision-maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance of the segment. The Company has concluded that its Chief Executive Officer is the CODM as he is the ultimate decision maker for key operating decisions, determining the allocation of resources and assessing the financial performance of the Company. These decisions, allocations and assessments are performed by the CODM using consolidated financial information. Consolidated financial information is utilized by the CODM as the Company’s current product offering primarily consists of minimally invasive therapeutic ultrasonic medical devices. The Company’s products are relatively consistent and manufacturing is centralized and consistent across product offerings. Based on these factors, key operating decisions and resource allocations are made by the CODM using consolidated financial data and as such the Company has concluded that it operates as one segment. Worldwide revenue for the Company’s products and license revenue is categorized as follows: For the three months ended December 31, For the six months ended December 31, 2018 2017 2018 2017 Domestic $ 6,078,554 $ 5,400,423 $ 11,487,878 $ 10,052,566 International 4,097,899 2,923,422 8,049,739 5,552,002 Total $ 10,176,453 $ 8,323,845 $ 19,537,617 $ 15,604,568 Substantially all of the Company’s long-lived assets are located in the United States.

Basis of Presentation, Organi_2

Basis of Presentation, Organization and Business and Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Dec. 31, 2018
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation These condensed consolidated financial statements of Misonix, Inc. (“Misonix” or the “Company”) include the accounts of Misonix and its 100% owned subsidiaries. All significant intercompany balances and transactions have been eliminated. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these financial statements do not include all the information and footnotes required by U.S. GAAP for complete financial statements. As such, they should be read with reference to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2018, which provides a more complete explanation of the Company’s accounting policies, financial position, operating results, business properties and other matters. In the opinion of management, these financial statements reflect all adjustments considered necessary for a fair statement of interim results.
Organization and Business	Organization and Business Misonix designs, manufactures and markets minimally invasive therapeutic ultrasonic medical devices. These products are used for precise bone sculpting, removal of soft and hard tumors, and tissue debridement, primarily in the areas of neurosurgery, orthopedic surgery, plastic surgery, wound care and maxillo-facial surgery. In the United States, our products are marketed primarily through a hybrid sales approach. This includes direct sales representatives, managed by regional sales managers, along with independent distributors. Outside the United States, we sell BoneScalpel and SonaStar to specialty distributors who purchase products from us to resell to their clinical customer bases. We sell to all major markets in the Americas, Europe, Middle East, Asia Pacific and Africa. The Company operates as one business segment.
High Intensity Focused Ultrasound Technology	High Intensity Focused Ultrasound Technology The Company sold its rights to the high intensity focused ultrasound technology to SonaCare Medical, LLC (“SonaCare”) in May 2010. The Company may receive up to approximately $5.8 million in payment for the sale. SonaCare is obligated to pay the Company 7% of the gross revenues received from its sales of the (i) prostate product in Europe and (ii) kidney and liver products worldwide, until the Company has received payments of $3 million, and thereafter 5% of the gross revenues, up to an aggregate payment of $5.8 million, all subject to a minimum annual royalty of $250,000. No payments were received for the six months ended December 31, 2018 and 2017. Cumulative royalties through December 31, 2018 were $2,542,579.
Major Customers and Concentration of Credit Risk	Major Customers and Concentration of Credit Risk Included in revenues are sales to the Company distributor of Bone Scalpel in China of approximately $2,976,000 and $0, for the six months ended December 31, 2018 and 2017, respectively. Accounts receivable from this customer were $300,000 and $0 at December 31, 2018 and June 30, 2018, respectively. Total royalties from Medtronic Minimally Invasive Therapies (“MMIT”) related to their sales of the Company’s ultrasonic cutting and sculpting products, which use high frequency sound waves to coagulate and divide tissue for both open and laparoscopic surgery, were $0 and $524,000 for both the three and six months ended December 31, 2018 and 2017, respectively. Accounts receivable from MMIT royalties were $0 at December 31, 2018 and June 30, 2018. The license agreement with MMIT expired in August 2017. At December 31, 2018 and June 30, 2018, the Company’s accounts receivable with customers outside the United Sates were approximately $1,715,000 and $1,630,000, respectively, $72,000 of which is over 90 days at December 31, 2018.
Earnings Per Share	Earnings Per Share Earnings per share (“EPS”) is calculated using the two class method, which allocates earnings among common stock and participating securities to calculate EPS when an entity’s capital structure includes either two or more classes of common stock or common stock and participating securities. Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities. As such, unvested restricted stock of the Company are considered participating securities. The dilutive effect of options and their equivalents (including non-vested stock issued under stock based compensation plans), is computed using the “treasury” method. Basic income per common share is based on the weighted average number of common shares outstanding during the period. Diluted income per common share includes the dilutive effect of potential common shares outstanding. The following table sets forth the reconciliation of weighted average shares outstanding and diluted weighted average shares outstanding: For the three months ended For the six months ended December 31, December 31, 2018 2017 2018 2017 Basic weighted average shares outstanding 9,322,237 8,977,984 9,210,031 8,968,195 Dilutive effect of resticted stock awards — — — — Denominator for basic earnings per share 9,322,237 8,977,984 9,210,031 8,968,195 Dilutive effect of stock options — — — — Diluted weighted average shares outstanding 9,322,237 8,977,984 9,210,031 8,968,195 Diluted EPS for the three and six months ended December 31, 2018 and 2017 as presented is the same as basic EPS as the inclusion of the effect of common share equivalents then outstanding would be anti-dilutive. Accordingly, excluded from the calculation of diluted EPS are the dilutive effect of options to purchase 530,978 and 375,000 shares of common stock for the three months ended December 31, 2018 and 2017, respectively, and the dilutive effect of options to purchase 544,143 and 1,366,736 shares of common stock for the six months ended December 31, 2018 and 2017, respectively. Also excluded from the calculation of earnings per share for the three and six months ended December 31, 2018 and 2017 are the unvested restricted stock awards which were issued in December 2016.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (the “FASB”) issued ASC Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), which was subsequently updated. The purpose of the updated standard is to provide enhancements to the quality and consistency of revenue recognition between companies using U.S. GAAP and International Financial Reporting Standards. The new five-step recognition model introduces the core principle of recognizing revenue in an amount that reflects the consideration to which the entity expects to be entitled in exchange for the promised goods or services, which includes additional footnote disclosures to describe the nature, amount, timing and uncertainty of revenue, certain costs and cash flow arising from customers. As amended, ASU 2014-09 requires the Company to use either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients; or (ii) a modified retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption. This standard became effective for the Company on July 1, 2018 and the Company adopted the new pronouncement under the modified retrospective approach. In February 2016, the FASB issued guidance on lease accounting requiring lessees to recognize a right-of-use asset and a lease liability for long-term leases. The liability will be equal to the present value of lease payments. This guidance must be applied using a modified retrospective transition approach to all annual and interim periods presented and is effective for the Company beginning in fiscal 2020. The Company is currently in the early stages of evaluating this guidance to determine the impact it will have on its consolidated financial statements. In August 2016, the FASB issued guidance on the Statement of Cash Flows Classification of certain cash receipts and cash payments (a consensus of the Emerging Issues Task Force). This guidance addresses the following eight specific cash flow issues: Debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (including bank-owned life insurance policies); distributions received from equity method investees; beneficial interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. This guidance became effective for the Company beginning in fiscal 2019. As this guidance only affects the classification within the statement of cash flows, ASU 2016-15 did not have a material impact on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations: Clarifying the Definition of a Business There are no other recently issued accounting pronouncements that are expected to have a material effect on the Company’s financial position, results of operations or cash flows.
Critical Accounting Policies and Use of Estimates	Critical Accounting Policies and Use of Estimates Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and judgments that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions are used for but not limited to establishing the allowance for doubtful accounts, valuation of inventory, depreciation, asset impairment evaluations and establishing deferred tax assets and related valuation allowances, and stock-based compensation. Actual results could differ from those estimates.

Basis of Presentation, Organi_3

Basis of Presentation, Organization and Business and Summary of Significant Accounting Policies (Tables)	6 Months Ended
	Dec. 31, 2018
Accounting Policies [Abstract]
Schedule of reconciliation of weighted average shares outstanding and diluted weighted average shares outstanding	The following table sets forth the reconciliation of weighted average shares outstanding and diluted weighted average shares outstanding: For the three months ended For the six months ended December 31, December 31, 2018 2017 2018 2017 Basic weighted average shares outstanding 9,322,237 8,977,984 9,210,031 8,968,195 Dilutive effect of resticted stock awards — — — — Denominator for basic earnings per share 9,322,237 8,977,984 9,210,031 8,968,195 Dilutive effect of stock options — — — — Diluted weighted average shares outstanding 9,322,237 8,977,984 9,210,031 8,968,195

Revenue Recognition (Tables)

Revenue Recognition (Tables)	6 Months Ended
	Dec. 31, 2018
Revenue Recognition [Abstract]
Schedule of impacts of adopting ASC Topic 606	The impacts of adopting ASC Topic 606 on the Company’s consolidated balance sheets as of July 1, 2018 were as follows: As Adjusted As ASC 606 Under Reported Adjustments ASC 606 Contract assets $ — $ 960,000 $ 960,000 Total Shareholders’ equity $ 24,401,178 $ 960,000 $ 25,361,178
Schedule of provisions of ASC 606	The Company determined that the satisfied performance obligations and allocation of the transaction price related to the $5,000,000 received prior to adoption was consistent with the provisions of ASC 606 and also recorded a transitional adjustment to accumulated deficit in the amount of $960,000 as follows: Minimum royalty revenue provided by the contract $ 6,000,000 Implicit price concession (5,040,000 ) Adoption adjustment to accumulated deficit under ASC 606 $ 960,000
Schedule of product revenue by classification and location	The following table disaggregates the Company’s product revenue by classification and geographic location: For the three months ended For the six months ended 2018 2017 2018 2017 Total Consumables $ 7,570,395 $ 6,162,064 $ 13,915,047 $ 11,505,826 Equipment 2,606,058 2,161,781 5,622,570 4,098,742 Total $ 10,176,453 $ 8,323,845 $ 19,537,617 $ 15,604,568 Domestic: Consumables $ 5,477,995 $ 4,623,545 $ 10,308,167 $ 8,722,636 Equipment 600,559 776,878 1,179,711 1,329,930 Total $ 6,078,554 $ 5,400,423 $ 11,487,878 $ 10,052,566 International: Consumables $ 2,092,400 $ 1,538,519 $ 3,606,880 $ 2,783,190 Equipment 2,005,499 1,384,903 4,442,859 2,768,812 Total $ 4,097,899 $ 2,923,422 $ 8,049,739 $ 5,552,002

Inventories (Tables)

Inventories (Tables)	6 Months Ended
	Dec. 31, 2018
Inventory Disclosure [Abstract]
Schedule of inventories	Inventories are summarized as follows: December 31, June 30, 2018 2018 Raw material $ 3,416,547 $ 3,540,205 Work-in-process 324,932 180,442 Finished goods 2,414,307 1,743,497 6,155,786 5,464,144 Less valuation reserve (444,258 ) (444,258 ) $ 5,711,528 $ 5,019,886

Patents (Tables)

Patents (Tables)	6 Months Ended
	Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of patents	The following is a schedule of estimated future patent amortization expenses by fiscal year as of December 31, 2018: 2019 $ 67,325 2020 109,566 2021 102,374 2022 68,695 2023 67,625 Thereafter 347,459 $ 763,044

Accrued Expenses and Other Cu_2

Accrued Expenses and Other Current Liabilities (Tables)	6 Months Ended
	Dec. 31, 2018
Payables and Accruals [Abstract]
Schedule of accrued expenses and other current liabilities	The following summarizes accrued expenses and other current liabilities: December 31, June 30, 2018 2018 Accrued payroll, payroll taxes and vacation $ 576,674 $ 351,435 Accrued bonus 309,995 552,988 Accrued commissions 678,002 742,807 Professional fees 166,385 102,065 Vendor, tax and other accruals 533,056 661,877 $ 2,264,112 $ 2,411,172

Stock-Based Compensation Plans

Stock-Based Compensation Plans (Tables)	6 Months Ended
	Dec. 31, 2018
Equity [Abstract]
Schedule of weighted average fair value at date of grant for options	The fair value was estimated based on the weighted average assumptions of: For six months ended December 31, 2018 2018 2017 Risk-free interest rates 2.90 % 1.98 % Expected option life in years 6.25 5.95 Expected stock price volatility 55.87 % 57.42 % Expected dividend yield 0 % 0 %
Schedule of summary of option activity	A summary of option activity under the Company’s equity plans as of December 31, 2018, and changes during the six months ended December 31, 2018 is presented below: Outstanding Average Aggregate Outstanding at June 30, 2018 1,330,193 $ 8.47 $ 5,369,557 Granted 182,000 15.40 Exercised (183,285 ) 7.81 Forfeited (73,752 ) 9.01 Expired (15,000 ) 2.66 Outstanding as of December 31, 2018 1,240,156 $ 9.69 $ 7,835,881 Vested and exercisable at December 31, 2018 676,780 $ 8.24 $ 5,258,285

Related Party Transactions (Tab

Related Party Transactions (Tables)	6 Months Ended
	Dec. 31, 2018
Related Party Transactions [Abstract]
Schedule of net sales and accounts receivables	Set forth below is a table showing the Company’s net revenues for the six months ended December 31 and accounts receivable at December 31 for the indicated time period below with OrthoXact: For the six months ended December 31, 2018 2017 Sales $ 573,953 $ 436,551 Accounts receivable $ 260,222 $ 172,292

Income Taxes (Tables)

Income Taxes (Tables)	6 Months Ended
	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Schedule of income tax expense (benefit)	For the three and six months ended December 31, 2018 and 2017, the Company recorded income tax expense (benefit), as follows: For the three months ended December 31, For the six months ended December 31, 2018 2017 2018 2017 Income tax benefit $ (228,000 ) $ (228,149 ) $ (655,000 ) $ (509,149 ) Reduction of deferred tax assets relating to Tax Legislation — 1,764,039 — 1,764,039 Valuation allowance on deferred tax assets 228,000 3,988,532 655,000 3,988,532 Net income tax expense $ — $ 5,524,422 $ — $ 5,243,422

Segment Reporting (Tables)

Segment Reporting (Tables)	6 Months Ended
	Dec. 31, 2018
Segment Reporting [Abstract]
Schedule of revenue	Worldwide revenue for the Company’s products and license revenue is categorized as follows: For the three months ended December 31, For the six months ended December 31, 2018 2017 2018 2017 Domestic $ 6,078,554 $ 5,400,423 $ 11,487,878 $ 10,052,566 International 4,097,899 2,923,422 8,049,739 5,552,002 Total $ 10,176,453 $ 8,323,845 $ 19,537,617 $ 15,604,568

Basis of Presentation, Organi_4

Basis of Presentation, Organization and Business and Summary of Significant Accounting Policies (Details) - shares	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Accounting Policies [Abstract]
Basic weighted average shares outstanding	9,322,237	8,977,984	9,210,031	8,968,195
Dilutive effect of resticted stock awards (participating securities)
Denominator for basic earnings per share	9,322,237	8,977,984	9,210,031	8,968,195
Dilutive effect of stock options
Diluted weighted average shares outstanding	9,322,237	8,977,984	9,210,031	8,968,195

Basis of Presentation, Organi_5

Basis of Presentation, Organization and Business and Summary of Significant Accounting Policies (Details Narrative)	May 10, 2010USD ($)	Dec. 31, 2018USD ($)shares	Dec. 31, 2017USD ($)shares	Dec. 31, 2018USD ($)Numbershares	Dec. 31, 2017USD ($)shares	Jun. 30, 2018USD ($)
Number of operating segment | Number				1
Revenues		$ 10,176,453	$ 8,323,845	$ 19,537,617	$ 15,604,568
Bone Scapel Generators [Member[ | Distribution Rights [Member]
Revenues				2,976,000	$ 0
Accounts receivable		$ 300,000		$ 300,000		$ 0
Stock Options [Member]
Excluded from the calculation of Diluted EPS (in shares) | shares		530,978	375,000	544,143	1,366,736
International [Member]
Revenues		$ 4,097,899	$ 2,923,422	$ 8,049,739	$ 5,552,002
Accounts receivable		1,715,000		1,715,000		1,630,000
International [Member] | Over 90 Days [Member]
Accounts receivable		72,000		72,000
SonaCare Medical, LLC ("SonaCare") [Member]
Proceeds from sale of intangible assets	$ 5,800,000			2,542,579
Earn-out percentage	7.00%
Proceeds from sale of intangible assets	$ 3,000,000
Earn-out percentage	5.00%
Proceeds from sale of intangible assets	$ 5,800,000
Annual Royalty	$ 250,000
Medtronic Minimally Invasive Therapies ("MMIT") [Member] | License Agreement [Member] | Royalty [Member]
Revenues		0	$ 524,000	0	$ 524,000
Accounts receivable		$ 0		$ 0		$ 0

Revenue Recognition (Details)

Revenue Recognition (Details) - USD ($)	Dec. 31, 2018	Jul. 02, 2018	Jun. 30, 2018
Contract assets	$ 960,000		$ 0
Total Shareholders' equity	$ 24,281,784		$ 24,401,178
As Reported [Member]
Contract assets
Total Shareholders' equity		24,401,178
ASC 606 Adjustments [Member]
Contract assets		960,000
Total Shareholders' equity		960,000
As Adjusted Under ASC 606 [Member]
Contract assets		960,000
Total Shareholders' equity		$ 25,361,178

Revenue Recognition (Details 1)

Revenue Recognition (Details 1)	6 Months Ended
	Dec. 31, 2018USD ($)
Revenue Recognition [Abstract]
Minimum royalty revenue provided by the contract	$ 6,000,000
Implicit price concession	(5,040,000)
Adoption adjustment to accumulated deficit under ASC 606	$ 960,000

Revenue Recognition (Details 2)

Revenue Recognition (Details 2) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Total	$ 10,176,453	$ 8,323,845	$ 19,537,617	$ 15,604,568
Consumables [Member]
Total	7,570,395	6,162,064	13,915,047	11,505,826
Equipment [Member]
Total	2,606,058	2,161,781	5,622,570	4,098,742
US [Member]
Total	6,078,554	5,400,423	11,487,878	10,052,566
US [Member] | Consumables [Member]
Total	5,477,995	4,623,545	10,308,167	8,722,636
US [Member] | Equipment [Member]
Total	600,559	776,878	1,179,711	1,329,930
International [Member]
Total	4,097,899	2,923,422	8,049,739	5,552,002
International [Member] | Consumables [Member]
Total	2,092,400	1,538,519	3,606,880	2,783,190
International [Member] | Equipment [Member]
Total	$ 2,005,499	$ 1,384,903	$ 4,442,859	$ 2,768,812

Revenue Recognition (Details Na

Revenue Recognition (Details Narrative) - USD ($)	Jul. 02, 2018	Oct. 19, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Jun. 30, 2018
Revenues			$ 10,176,453	$ 8,323,845	$ 19,537,617	$ 15,604,568
Adoption adjustment to accumulated deficit under ASC 606					960,000
Contract assets			$ 960,000		960,000		$ 0
Accounting Standards Codification 605 [Member]
Adoption adjustment to accumulated deficit under ASC 606					$ 960,000
License And Exclusive Manufacturing Agreement [Member]
Cumulative prior period adjustment	$ 960,000
License And Exclusive Manufacturing Agreement [Member] | Hunan Xing Hang Rui Kang Bio-technologies Co Ltd [Member]
Transfer initial payments of functional intellectual property		$ 5,000,000
Minimum royalty payments		$ 2,000,000
Beginning year of minimum royalty payments		2,019

Inventories (Details)

Inventories (Details) - USD ($)	Dec. 31, 2018	Jun. 30, 2018
Inventory Disclosure [Abstract]
Raw material	$ 3,416,547	$ 3,540,205
Work-in-process	324,932	180,442
Finished goods	2,414,307	1,743,497
Inventory, gross	6,155,786	5,464,144
Less valuation reserve	(444,258)	(444,258)
Inventory, net	$ 5,711,528	$ 5,019,886

Property, Plant and Equipment (

Property, Plant and Equipment (Details Narrative) - USD ($)	6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Depreciation and amortization	$ 698,000	$ 615,000
Inventory [Member]
Estimated useful lives	3 to 5 years
Generators [Member]
Depreciation term of property	5 years

Patents (Details)

Patents (Details) - USD ($)	Dec. 31, 2018	Jun. 30, 2018
Finite-Lived Intangible Assets [Line Items]
Total	$ 763,044	$ 757,447
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
2,019	67,325
2,020	109,566
2,021	102,374
2,022	68,695
2,023	67,625
Thereafter	347,459
Total	$ 763,044	$ 757,447

Patents (Details Narrative)

Patents (Details Narrative) - USD ($)	6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Jun. 30, 2018
Patents totaled	$ 763,044		$ 757,447
Patents [Member]
Intangible assets estimated useful lives	17 years
Patents totaled	$ 763,044		$ 757,447
Amortization expense	$ 70,000	$ 61,000

Accrued Expenses and Other Cu_3

Accrued Expenses and Other Current Liabilities (Details) - USD ($)	Dec. 31, 2018	Jun. 30, 2018
Payables and Accruals [Abstract]
Accrued payroll, payroll taxes and vacation	$ 576,674	$ 351,435
Accrued bonus	309,995	552,988
Accrued commissions	678,002	742,807
Professional fees	166,385	102,065
Vendor, tax and other accruals	533,056	661,877
Accrued expenses and other current liabilities	$ 2,264,112	$ 2,411,172

Stock-Based Compensation Plan_2

Stock-Based Compensation Plans (Details)	6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Equity [Abstract]
Risk-free interest rates	2.90%	1.98%
Expected option life in years	6 years 3 months	5 years 11 months 12 days
Expected stock price volatility	55.87%	57.42%
Expected dividend yield	0.00%	0.00%

Stock-Based Compensation Plan_3

Stock-Based Compensation Plans (Details 1) - USD ($)	6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Outstanding Shares [Roll Forward]
Outstanding at beginning	1,330,193
Granted	182,000	305,500
Excercised	(183,285)
Forfeited	(73,752)
Expired	(15,000)
Outstanding at ending	1,240,156
Vested and exercisable at ending	676,780
Weighted Average Exercise Price [Roll Forward]
Outstanding at beginning	$ 8.47
Granted	15.40
Excercised	7.81
Forfeited	9.01
Expired	2.66
Outstanding at ending	9.69
Vested and exercisable at ending	$ 8.24
Aggregate Intrinsic Value [Roll Forward]
Outstanding at beginning	$ 5,369,557
Outstanding at ending	7,835,881
Vested and exercisable at ending	$ 5,258,285

Stock-Based Compensation Plan_4

Stock-Based Compensation Plans (Details Narrative) - USD ($)	Dec. 15, 2016	Dec. 31, 2018	Sep. 30, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Jun. 30, 2018
Compensation cost					$ 1,504,586	$ 1,469,894
Unrecognized compensation cost		$ 2,928,738			2,928,738
Unrecognized compensation cost related to non-vested restricted stock awards		$ 1,377,319			$ 1,377,319
Period of recognition					2 years 8 months 12 days
Unrecognized compensation weighted-average period					2 years 9 months 22 days
Weighted average fair value at date of grant (in dollars per share)					$ 8.51
Number of shares granted					182,000	305,500
Fair value of shares vested					$ 999,195
Number of non-vested stock options					194,374		648,877
Weighted-average grant-date fair value of non-vested stock options (in dollars per share)					$ 5.14		$ 5.08
Number of shares vested		186,600			186,600
Expected term					6 years 3 months	5 years 11 months 12 days
Expected volatility rate					55.87%	57.42%
Additional amortization of award			$ 475,286
Restricted Stock [Member]
Fair value of shares vested					$ 133,333
Stock price		$ 9.60			$ 9.60
Risk free interest rate, minimum					1.60%
Risk free interest rate, maximum					2.10%
Expected volatility rate					66.50%
Restricted Stock [Member] | Chief Executive Officer [Member]
Compensation cost					$ 871,329	$ 453,868
Option vesting period	5 years
Fair value of shares vested	$ 3,600,000
Number of stock issued	400,000
Restricted Stock [Member] | Minimum [Member]
Expected term					3 years
Restricted Stock [Member] | Maximum [Member]
Expected term					5 years
Stock Options [Member]
Compensation cost		$ 500,087		$ 844,601	$ 1,504,586	$ 1,016,026
Option Expiration period					10 years
Option vesting period					4 years

Commitments and Contingencies (

Commitments and Contingencies (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended		72 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Jun. 30, 2016
Amount of settlement			$ 500,000
Revenues	$ 10,176,453	$ 8,323,845	19,537,617	$ 15,604,568
Insurance retention paid	250,000		250,000
Former Chinese Distributor - FCPA [Member]
Investigative costs			3,400,000
Revenues					$ 8,000,000
Former Chinese Distributor - FCPA [Member] | General and Administrative Expense [Member]
Investigative costs	$ 300,000	$ 100,000	400,000	$ 300,000
Building [Member]
Rent expense			$ 28,000
Frequency of rent expense			Monthly

Related Party Transactions (Det

Related Party Transactions (Details) - Mr. Stavros G. Vizirgianakis [Member] - Applied BioSurgical [Member] - USD ($)	6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Sales	$ 573,953	$ 436,551
Accounts receivable	$ 260,222	$ 172,292

Income Taxes (Details)

Income Taxes (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Income tax benefit	$ (228,000)	$ (228,149)	$ (655,000)	$ (509,149)
Reduction of deferred tax assets relating to Tax Legislation		1,764,039		1,764,039
Valuation allowance on deferred tax assets	228,000	3,988,532	655,000	3,988,532
Net income tax expense		$ 5,524,422		$ 5,243,422

Income Taxes (Details Narrative

Income Taxes (Details Narrative)	Dec. 22, 2017	Dec. 31, 2018	Dec. 31, 2017
Income Taxes Details Narrative Abstract
U.S. federal statutory effective rate	21.00%	0.00%	185.60%

Segment Reporting (Details)

Segment Reporting (Details) - Product [Member] - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017
Total	$ 10,176,453	$ 8,323,845	$ 19,537,617	$ 15,604,568
US [Member]
Total	6,078,554	5,400,423	11,487,878	10,052,566
International [Member]
Total	$ 4,097,899	$ 2,923,422	$ 8,049,739	$ 5,552,002

Segment Reporting (Details Narr

Segment Reporting (Details Narrative)	6 Months Ended
	Dec. 31, 2018Number
Segment Reporting [Abstract]
Number of operating segment	1