10-Q

FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

(Mark One)

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

For the quarterly period ended September 30, 2013

OR

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

For the transition period from                      to                   

Commission file number: 1-10986

MISONIX, INC.

(Exact name of registrant as specified in its charter)

New York	11-2148932
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
1938 New Highway, Farmingdale, NY	11735
(Address of principal executive offices)	(Zip Code)

(631) 694-9555

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes   x  No       ¨

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

Large accelerated filer      ¨	Accelerated filer       ¨	Non-accelerated filer       ¨	Smaller reporting company    x
		(Do not check if a smaller reporting company)

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

	Outstanding at
Class of Common Stock	November 7, 2013
Common Stock, $.01 par value	7,197,036

MISONIX, INC.

INDEX

	Page
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheets as of September 30, 2013 (Unaudited) and June 30, 2013	3
Consolidated Statements of Operations for the Three months ended September 30, 2013 and 2012 (Unaudited)	4
Consolidated Statement of Stockholders’ Equity for the Three months ended September 30, 2013 (Unaudited)	5
Consolidated Statements of Cash Flows for the Three months ended September 30, 2013 and 2012 (Unaudited)	6
Notes to Consolidated Financial Statements (Unaudited)	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3. Quantitative and Qualitative Disclosures About Market Risk	19
Item 4. Controls and Procedures	20
Part II - OTHER INFORMATION
Item 1A. Risk Factors	21
Item 6. Exhibits	21
Signatures	22
EX-31.1
EX-31.2
EX-32.1
EX-32.2

2

 

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

MISONIX, INC. and Subsidiaries

Consolidated Balance Sheets

	September 30,		June 30,
	2013		2013
	(unaudited)		(derived from audited financial statements)
Assets
Current assets:
Cash and cash equivalents	$	4,653,513	$	5,806,437
Accounts receivable, less allowance for doubtful accounts of $229,641 and $214,641,      respectively		2,799,336		2,974,641
Inventories, net		4,157,193		4,034,477
Prepaid expenses and other current assets		294,079		387,371
Total current assets		11,904,121		13,202,926
Property, plant and equipment, net		1,185,038		1,326,586
Goodwill		1,701,094		1,701,094
Intangible and other assets		1,073,996		1,129,321
Total assets	$	15,864,249	$	17,359,927
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	1,601,445	$	2,208,999
Accrued expenses and other current liabilities		1,024,844		1,276,963
Total current liabilities		2,626,289		3,485,962
Deferred lease liability		22,012		23,811
Deferred income		61,881		72,934
Total liabilities		2,710,182		3,582,707
Commitments and contingencies (Note 8)
Stockholders' equity:
Common stock, $.01 par value-shares authorized 20,000,000, 7,267,096 and 7,233,884 shares issued and 7,189,536 and 7,156,324 shares outstanding, respectively		72,671		72,339
Additional paid-in capital		27,250,076		26,989,559
Accumulated deficit		(13,757,687)		(12,873,685)
Treasury stock, at cost, 77,560 shares		(410,993)		(410,993)
Total stockholders' equity		13,154,067		13,777,220
Total liabilities and stockholders' equity	$	15,864,249	$	17,359,927

See Accompanying Notes to Consolidated Financial Statements.

3

 

MISONIX, INC. and Subsidiaries

Consolidated Statements of Operations

(Unaudited)

	For the three months ended
	September 30,
	2013		2012
Net sales	$	3,075,584	$	4,570,525
Cost of goods sold		1,345,330		1,843,899
Gross profit		1,730,254		2,726,626
Operating expenses:
Selling expenses		1,828,830		1,458,564
General and administrative expenses		1,221,315		1,042,332
Research and development expenses		472,888		397,131
Total operating expenses		3,523,033		2,898,027
Loss from operations		(1,792,779)		(171,401)
Other income (expense):
Interest income		19		13
Royalty income and license fees		912,794		222,679
Royalty expense		-		(3,698)
Other		(6,261)		(7,577)
Total other income		906,552		211,417
(Loss)/income from continuing operations before income taxes		(886,227)		40,016
Income tax expense		2,750		1,500
Net (loss)/income from continuing operations		(888,977)		38,516
Discontinued operations:
Income from discontinued operations net of tax expense of $0 and $0, respectively		4,975		6,318
Net income from discontinued operations		4,975		6,318
Net (loss)/income	$	(884,002)	$	44,834
Net (loss)/income per share from continuing operations - Basic	$	(0.12)	$	0.01
Net income per share from discontinued operations - Basic		0.00		0.00
Net (loss)/income per share - Basic	$	(0.12)	$	0.01
Net (loss)/income per share from continuing operations - Diluted	$	(0.12)	$	0.01
Net income per share from discontinued operations - Diluted		0.00		0.00
Net (loss)/income per share - Diluted	$	(0.12)	$	0.01
Weighted average shares - Basic		7,182,866		7,005,360
Weighted average shares - Diluted		7,182,866		7,297,690

See Accompanying Notes to Consolidated Financial Statements.

4

MISONIX, INC. and Subsidiaries

Consolidated Statement of Stockholders’ Equity

(Unaudited)

For the three months ended September 30, 2013

	Common Stock,
	$.01 Par Value			Treasury Stock			Additional				Total
	Number			Number			paid-in		Accumulated		stockholders'
	of shares	Amount		of shares	Amount		capital		deficit		equity
Balance, June 30, 2013	7,233,884	$	72,339	(77,560)	$	(410,993)	$	26,989,559	$	(12,873,685)	$	13,777,220
Net loss/comprehensive loss	-		-	-		-		-		(884,002)		(884,002)
Proceeds from exercise of stock     options	33,212		332	-		-		116,573		-		116,905
Stock-based compensation	-		-	-		-		143,944		-		143,944
Balance, September 30, 2013	7,267,096	$	72,671	(77,560)	$	(410,993)	$	27,250,076	$	(13,757,687)	$	13,154,067

See Accompanying Notes to Consolidated Financial Statements.

5

 

MISONIX, INC. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

	For the three months ended
	September 30,
	2013		2012
Operating activities
Net (loss)/income from continuing operations	$	(888,977)	$	38,516
Adjustments to reconcile net loss to net cash used in continuing operating activities:
Depreciation and amortization and other non-cash items		231,271		182,328
Bad debt expense		15,000		13,902
Stock-based compensation		143,944		98,945
Deferred income		(15,051)		(11,053)
Deferred lease liability		(1,799)		203
Changes in operating assets and liabilities:
Accounts receivable		160,305		532,011
Inventories		(146,590)		292,709
Prepaid expenses and other assets		117,120		102,749
Accounts payable, accrued expenses and other non-cash items		(855,675)		(807,842)
Net cash (used in)/provided by operating activities		(1,240,452)		442,468
Investing activities
Acquisition of property, plant and equipment		(5,925)		(41,629)
Additional patents		(28,427)		(17,505)
Net cash used in investing activities		(34,352)		(59,134)
Financing activities
Proceeds from exercise of stock options		116,905		-
Net cash provided by financing activities		116,905		-
Cash flows from discontinued operations
Net cash provided by operating activities		4,975		6,318
Net cash provided by discontinued operations		4,975		6,318
Net (decrease)/increase in cash and cash equivalents		(1,152,924)		389,652
Cash and cash equivalents at beginning of period		5,806,437		6,273,015
Cash and cash equivalents at end of period	$	4,653,513	$	6,662,667
Supplemental disclosure of cash flow information:
Cash paid for:
Income taxes	$	856	$	5,935

See Accompanying Notes to Consolidated Financial Statements.

6

 

MISONIX, INC. and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

1. Basis of Presentation

The accompanying unaudited financial information should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Annual Report on Form 10-K for the year ended June 30, 2013 (“2013 Annual Report”) of MISONIX, INC. (“Misonix” or the “Company”). A summary of the Company’s significant accounting policies is identified in Note 1 of the notes to the consolidated financial statements included in the Company’s 2013 Annual Report. There have been no changes in the Company’s significant accounting policies subsequent to June 30, 2013.

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X pursuant to the requirements of the U.S. Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. The results of operations for the interim periods are not necessarily indicative of the results of operations for the entire year.

The consolidated financial statements of the Company include the accounts of Misonix and its 100% owned subsidiaries, Fibra-Sonics (NY) Inc. and Hearing Innovations, Inc. All significant intercompany balances and transactions have been eliminated.

Organization and Business

Misonix is a surgical device company that designs, manufactures and markets innovative therapeutic ultrasonic products worldwide for spine surgery, skull-based surgery, neurosurgery, wound debridement, cosmetic surgery, laparoscopic surgery and other surgical applications.

The Company’s revenues are generated from various regions throughout the world. Sales by the Company outside the United States are made primarily through distributors. Sales made in the United States are made primarily through representative agents. The following is an analysis of net sales from continuing operations by geographic region:

	Three months ended September 30,
	2013		2012
United States	$	1,581,270	$	2,449,610
Australia		43,340		139,900
Europe		383,590		761,911
Asia		466,267		422,227
Canada and Mexico		84,705		226,060
South America		275,621		297,926
South Africa		93,576		206,683
Middle East		147,215		66,208
	$	3,075,584	$	4,570,525

Discontinued Operations

Laboratory and Forensic Safety Products Business

On October 19, 2011, Misonix sold its Laboratory and Forensic Safety Products business, which comprised substantially all of the Laboratory and Scientific Products segment, to Mystaire, Inc. for $1.5 million in cash plus a potential additional payment of up to an aggregate $500,000 based upon 30% of net sales in excess of $2.0 million for each of the three years following the closing (the “earn-out”).The earn-out will not be factored into the gain on sale until it is earned by Misonix. As of September 30, 2013, no earn-out has been recorded

7

MISONIX, INC. and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

High Intensity Focused Ultrasound Technology

In consideration for the May 2010 sale of its rights to the high intensity focused ultrasound technology to USHIFU LLC (“USHIFU”), Misonix will receive up to approximately $5.8 million, paid out of an earn-out of 7% of gross revenues received by USHIFU related to the business being sold up to the time the Company has received the first $3 million and thereafter 5% of the gross revenues up to the $5.8 million. Commencing 90 days after each December 31^st and beginning December 31, 2011 the payments will be the greater of (a) $250,000 or (b) 7% of gross revenues received up to the time the Company has received the first $3 million and thereafter 5% of gross revenues up to the $5.8 million. Total payments through September 30, 2013 were $504,788.

Results of Discontinued Operations

	For the three months ended
	September 30,
	2013		2012
Revenues	$	4,975	$	4,975
Income from discontinued operations, before tax	$	4,975	$	6,318
Income tax expense		-		-
Net income from discontinued operations, net of tax	$	4,975	$	6,318

Accounts Receivable

Accounts receivable, principally trade, are generally due within 30 to 90 days and are stated at amounts due from customers, net of an allowance for doubtful accounts. The Company performs ongoing credit evaluations and adjusts credit limits based upon payment history and the customer’s current credit worthiness, as determined by a review of their current credit information. The Company continuously monitors aging reports, collections and payments from customers and maintains a provision for estimated credit losses based upon historical experience and any specific customer collection issues that have been identified. While such credit losses have historically been within expectations and the provisions established, the Company cannot guarantee that the same credit loss rates will be experienced in the future. The Company writes off accounts receivable when they become uncollectible.

Reclassifications

Certain prior period amounts in the accompanying financial statements and related notes have been reclassified to conform to the current period’s presentation.

2. Income (Loss) Per Share of Common Stock

Basic net income (loss) per common share (“basic EPS”) is computed by dividing income (loss) by the weighted average number of common shares outstanding for the period. Diluted income/(loss) per common share (“diluted EPS”) is computed by dividing income (loss) by the weighted average number of common shares and dilutive common share equivalents outstanding (consisting of outstanding common stock options) for the period.

8

MISONIX, INC. and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

The number of weighted average common shares used in the calculation of basic EPS and diluted EPS were as follows:

	For the three months ended
	September 30,
	2013	2012
Basic shares	7,182,866	7,005,360
Dilutive effect of stock options	-	292,330
Diluted shares	7,182,866	7,297,690

Excluded from the calculations of diluted EPS are options to purchase 690,780 shares of common stock for the three months ended September 30, 2012. The excluded shares are any share in which the average stock price for the quarter or year–to-date is less than the exercise price of the outstanding options in the period in which the Company has net income.

Diluted EPS for the three months ended September 30, 2013 presented is the same as basic EPS as the inclusion of the effect of common share equivalents then outstanding would be anti-dilutive. For this reason, excluded from the calculation of diluted EPS are outstanding options to purchase 1,898,079 shares of common stock for the three months ended September 30, 2013.

3. Comprehensive (Loss)/Income

Total comprehensive(loss)/income, which includes results of discontinued operations, was ($884,002) and $44,834 for three months ended September 30, 2013 and 2012, respectively. There are no components of comprehensive (loss)/income other than net (loss)/income for all periods presented.

4. Stock-Based Compensation

Stock options are granted with exercise prices not less than the fair market value of our common stock at the time of the grant, with an exercise term (as determined by the committee administering the applicable option plan (the “Committee”)) not to exceed 10 years. The Committee determines the vesting period for the Company’s stock options. Generally, such stock options have vesting periods of immediate to four years. Certain option awards provide for accelerated vesting upon meeting specific retirement, death or disability criteria and upon a change in control. During the three month periods ended September 30, 2013 and 2012, the Company granted options to purchase 249,000 and 261,200 shares of the Company’s common stock, respectively.

Stock-based compensation expense for the three month periods ended September 30, 2013 and 2012 was approximately $144,000 and $99,000, respectively. Compensation expense is recognized in the general and administrative expenses line item of the Company’s consolidated statements of operations on a straight-line basis over the vesting periods. As of September 30, 2013, there was approximately $1,975,000 of total unrecognized compensation cost related to non-vested stock-based compensation arrangements to be recognized over a weighted-average period of 3.2 years.

Cash in the amount of $116,905 was received from the exercise of stock options for the three month period ended September 30, 2013.

9

MISONIX, INC. and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

The fair values of the options granted during the periods ended September 30, 2013 and 2012 were estimated on the date of the grant using the Black-Scholes option-pricing model on the basis of the following weighted average assumptions during the respective periods:

	For the three months ended
	September 30,
	2013			2012
Risk-free interest rate		3.3	%		2.5	%
Expected option life in years		6.5			6.5
Expected stock price volatility		76.1	%		74.7	%
Expected dividend yield		0.0	%		0.0	%
Weighted-average fair value of options granted	$	3.76		$	2.33

The expected option term is based upon the number of years the Company estimates the option will be outstanding was based on historical exercises and terminations. The expected volatility for the expected life of the options is determined using historical price changes of the Company’s stock over a period equal to that of the expected life of the options. The risk free rate is based upon the U.S. Treasury yield in effect at the time of the grant. The expected dividend yield is 0% as the Company has historically not declared dividends and does not expect to declare any in the future.

Changes in outstanding stock options during the three months ended September 30, 2013 were as follows:

	Options
			Weighted
			Average
		Weighted	Remaining
		Average	Contractual	Aggregate
	Number of	Exercise	Life	Intrinsic
	Shares	Price ($)	(years)	Value (a)
Outstanding as of June 30, 2013	1,729,991	3.65
Granted	249,000	4.68
Exercised	(33,212)	3.52
Forfeited	(500)	2.96
Expired	(47,200)	4.70
Outstanding as of September 30, 2013	1,898,079	3.76	5.7	$	2,083,029
Exercisable and vested at September 30, 2013	1,203,730	3.72	4.3	$	1,429,851
Available for grant at September 30, 2013	606,225

(a) Intrinsic value for purposes of this table represents the amount by which the fair value of the underlying stock, based on the respective market prices at September 30, 2013 or if exercised, the exercise dates, exceeds the exercise prices of the respective options.

10

 

MISONIX, INC. and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

5. Income Taxes

For the three months ended September 30, 2013, the Company recorded an income tax expense in continuing operations of $2,750.

For the three months ended September 30, 2013 and 2012, the effective rate on continuing operations varied from the U.S. federal statutory rate primarily due to permanent book tax differences, state taxes and a change in the valuation allowance.

The Company established a valuation against the deferred tax asset in prior years when management concluded that it is more likely than not that the deferred tax asset may not be fully realized. Management’s deferred tax asset assessment is unchanged as of September 30, 2013.

As of September 30, 2013 and June 30, 2013, the Company has no material unrecognized tax benefits or accrued interest and penalties.

6. Inventories

Inventories are summarized as follows:

	September 30,		June 30,
	2013		2013
Raw material	$	2,400,768	$	2,641,982
Work-in-process		321,038		394,629
Finished goods		2,867,185		2,358,943
		5,588,991		5,395,554
Less valuation reserve		1,431,798		1,361,077
	$	4,157,193	$	4,034,477

7. Accrued Expenses and Other Current Liabilities

The following summarizes accrued expenses and other current liabilities:

	September 30,		June 30,
	2013		2013
Accrued payroll and vacation	$	415,053	$	456,095
Accrued bonuses		50,000		225,000
Accrued commissions		209,000		200,678
Accrued professional and legal fees		76,202		70,450
Deferred income		142,892		146,038
Other		131,697		178,702
	$	1,024,844	$	1,276,963

11

 

MISONIX, INC. and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

8. Commitments and Contingencies

The Company and its subsidiaries are from time to time involved in ordinary and routine litigation. Management presently believes that the ultimate outcome of these proceedings, individually or in the aggregate, will not have a material adverse effect on the Company’s financial position, cash flows or result of operations. Nevertheless, litigation is subject to inherent uncertainties and an unfavorable ruling could occur.  An unfavorable ruling could include money damages and in such event, could result in a material adverse impact on the Company’s results of operations in the year in which the ruling occurs.

On July 19, 2011, Misonix entered into a Distribution Agreement (the “Distribution Agreement”) with Puricore, Inc. (“Puricore”). Pursuant to the Distribution Agreement, the Company had been granted the right to distribute PuriCore’s Vashe ^® solution products in the United States, on a private label basis and known as the Misonix Soma product, as an antibacterial, antimicrobial irrigating solution for the treatment of human wound care in conjunction with therapeutic ultrasonic procedures (the “Field”). PuriCore had agreed, subject to modification, not to sell the products that were the subject of the Distribution Agreement (the “Licensed Products”) to any other therapeutic ultrasound company for distribution in the Field in the United States (“Exclusivity”). The Company had agreed not to sell or distribute in the United States in the Field any irrigating solution that has anti-microbial properties other than the Licensed Products so long as the Company had Exclusivity.

The Distribution Agreement was for a three (3) year term with automatic renewals for successive two (2) year periods; provided that the Company and PuriCore had agreed upon sales volume targets for each renewal period (such volume targets not to increase by more than ten (10%) percent year over year unless otherwise agreed) and provided that the cost terms would have been no less favorable than the twelve (12) months leading up to the start of such renewal period. In no event would the Distribution Agreement have survived beyond the expiration or invalidation of all of PuriCore’s patents.

During the initial three year term of the Distribution Agreement, the Company was obligated to either purchase or pay a minimum of $2,000,000 in gross margin value to PuriCore for the Licensed Products (the “Minimum Payment”). The Minimum Payment was subject to downward adjustment and elimination in the event that (i) PuriCore chose to eliminate Exclusivity, (ii) the Company’s right to manufacture the Licensed Products under certain conditions had been triggered but the Company was unable to manufacture the Licensed Products or to have the Licensed Products manufactured for it by third parties or (iii) the U.S. Food and Drug Administration had made a final determination that prohibited the sale of the Licensed Products for use in the Field.

During our fiscal fourth quarter 2013, the Company sent a notice to terminate the Distribution Agreement due to management’s belief that the products subject to the Distribution Agreement were non-conforming. Puricore disputed the Company’s ability to terminate the Distribution Agreement.On October 11, 2013, the Company and Puricore mutually terminated the Distribution Agreement and signed a Settlement Agreement resolving all issues without the payment of any monies by either party.A reversal of the previously accrued and unpaid contractual minimum gross profit requirement in the amount of $439,508 will be made in the second quarter of fiscal 2014 as a result of the Settlement Agreement.

12

 

MISONIX, INC. and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

9. Fair Value of Financial Instruments

We follow 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.

The following is a summary of the carrying amounts and estimated fair values of our financial instruments at September 30, 2013 and June 30, 2013:

September 30, 2013	Carrying Amount		Fair Value
Cash and cash equivalents	$	4,653,513	$	4,653,513
Trade accounts receivable		2,799,336		2,799,336
Trade accounts payable		1,601,445		1,601,445

June 30, 2013	Carrying Amount		Fair Value
Cash and cash equivalents	$	5,806,437	$	5,806,437
Trade accounts receivable		2,974,641		2,974,641
Trade accounts payable		2,208,999		2,208,999

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

Cash and cash equivalents

The carrying amount approximates fair value because of the short maturity of those instruments.

Trade Accounts Receivable

The carrying amount of trade receivables reflects net recovery value and approximates fair value because of their short outstanding terms.

Trade Accounts Payable

The carrying amount of trade payables approximates fair value because of their short outstanding terms.

Non-financial assets and liabilities

Certain non-financial assets and liabilities, principally goodwill, are measured at fair value on a non-recurring basis; that is the assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances, such as when evidence of impairment exists. At September 30, 2013, no fair value adjustments or material fair value measurements were required for non-financial assets or liabilities.

13

 

MISONIX, INC. and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

10. Goodwill and Intangible Assets

Goodwill is not amortized. We review goodwill for impairment annually and whenever events or changes indicate that the carrying value of an asset may not be recoverable. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of significant assets or product lines. 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, estimation of the useful life over which cash flows will occur and determination of our weighted-average cost of capital. We primarily use a discounted cash flow model in determining fair value, which consists of level three inputs. Changes in the projected cash flows and discount rate estimates and assumptions underlying the valuation of goodwill could materially affect the determination of fair value at acquisition or during subsequent periods when tested for impairment. The Company determined that there were no indicators that the recorded goodwill was impaired as of September 30, 2013 which required further testing.

The cost of acquiring or processing patents is capitalized. This amount is being amortized using the straight-line method over the estimated useful lives of the underlying assets, which is approximately 17 years. Net patents reported in intangible and other assets totaled $577,326 and $568,823 at September 30, 2013 and June 30, 2013, respectively. Accumulated amortization totaled $574,847 and $554,923 at September 30, 2013 and June 30, 2013, respectively. Amortization expense for the three month periods ended September 30, 2013 and 2012 was approximately $19,000 and $18,000, respectively.

Net customer relationships reported in intangible and other assets totaled $320,000 and $360,000 at September 30, 2013 and June 30, 2013, respectively. Accumulated amortization amounted to $480,000 at September 30, 2013 and $440,000 at June 30, 2013, respectively. Amortization expense for the three month periods ended September 30, 2013 and 2012 was $40,000. Customer relationships are amortized on a straight-line basis over a five year period.

The following is a schedule of estimated future amortization expense as of September 30, 2013:

			Customer
	Patents		Relationships
2014	$	58,391	$	120,000
2015		72,883		160,000
2016		69,821		40,000
2017		67,637		-
2018		67,211		-
Thereafter		241,383		-
	$	577,326	$	320,000

11. Recent Accounting Pronouncements

There have been no recently issued pronouncements that have had or are expected to have a material impact on our financial statements.

14

MISONIX, INC. and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

12. Related Party Transactions

Stavros Vizirgianakis was appointed to the Board of Directors on May 7, 2013. Mr. Vizirgianakis owns a controlling interest in MD Solutions Australasia PTY Ltd and a family member owns one hundred percent of Applied BioSurgical;both independent distributors for the Company. The Company’s distribution agreements with these companies pre-date Mr. Vizirgianakis’ appointment to the Board of Directors.

Set forth below is a table showing the Company’s net sales and accounts receivable for the year ended September 30, 2013 and 2012 with these distributors:

For the three months ended September 30,
Applied Bio Surgical	2013		2012
Sales	$	93,576	$	206,683
Accounts Receivable	$	113,421	$	210,233

MD Solutions Australasia PTY Ltd.		2013		2012
Sales	$	43,340	$	139,900
Accounts Receivable	$	43,340	$	139,900

15

 

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

This Management’s Discussion and Analysis of Financial Condition and Results of Operations of Misonix and its subsidiaries, in which we refer to the Company as “Misonix”, “we”, “our” and “us” should be read in conjunction with the accompanying unaudited financial statements included in “Item 1. Financial Statements” of this Report and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the “SEC”) on September 24, 2013, for the fiscal year ended June 30, 2013 (“2013 Form 10-K”). Item 7 of the 2013 Form 10-K describes the application of our critical accounting policies, for which there have been no significant changes as of September 30, 2013.

Forward Looking Statements

This Report contains certain forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are intended to be covered by the safe harbors created thereby. Although the Company believes that the assumptions underlying the forward looking statements contained herein are reasonable, any of the assumptions could be inaccurate and, therefore, there can be no assurance that the forward looking statements contained in this Report will prove to be accurate. Factors that could cause actual results to differ from the results specifically discussed in the forward looking statements include, but are not limited to, the absence of anticipated contracts, higher than historical costs incurred in the performance of contracts or in conducting other activities, product mix in sales, future economic, competitive and market conditions, and the outcome of legal proceedings as well as management business decisions.

16

Three months ended September 30, 2013 and 2012.

Net sales: Net sales decreased $1,494,941 to $3,075,584 for the three months ended September 30, 2013 from $4,570,525 for the three months ended September 30, 2012. The decrease in sales is related to lower BoneScalpel revenue of $752,573, lower SonaStar revenue of $436,968, lower SonicOne revenue of $31,923, lower Lysonix revenue of $102,157, lower service revenue of $106,558 and other lower revenue of $64,761. However, there were twelve units consigned in the United States during the three months ended September 30, 2013 compared to four units for the same period in fiscal 2013. This resulted in an increase in domestic disposables excluding Aesculap, Inc. accounts.

Set forth below are tables showing the Company’s net sales by (i) product category and (ii) geographic region for the three months ended September 30, 2013 and 2012:

	Three months ended September 30,
	2013		2012		Variance
BoneScalpel	$	1,348,588	$	2,101,161	$	(752,573)
SonicOne		468,963		500,886		(31,923)
SonaStar		1,135,710		1,572,678		(436,968)
Other		122,323		395,800		(273,477)
	$	3,075,584	$	4,570,525	$	(1,494,941)

	Three months ended September 30,
	2013		2012
United States	$	1,581,270	$	2,449,610
Australia		43,340		139,900
Europe		383,590		761,911
Asia		466,267		422,227
Canada and Mexico		84,705		226,060
South America		275,621		297,926
South Africa		93,576		206,683
Middle East		147,215		66,208
	$	3,075,584	$	4,570,525

17

Gross profit: Gross profit decreased to 56.3% for the three months ended September 30, 2013 from 59.7% for the three months ended September 30, 2012. The decrease is related to unabsorbed factory costs due to lower sales volume, along with an unfavorable sales channel mix, as there was a shift to higher foreign sales.

Selling expenses: Selling expenses increased $370,266 to $1,828,830 for the three months ended September 30, 2013 from $1,458,564 for the three months ended September 30, 2012.  Selling expenses increased due to higher personnel costs of $111,945, primarily from an increase in headcount for customer service and support (including severance), higher travel expenses of $50,621, higher commission expense of $111,881 due to increases in commissionable sales, higher advertising expenses of $41,045, higher depreciation expenses of $42,486 and other unfavorable expenses of $12,288.

General and administrative expenses: General and administrative expenses increased $178,983 to $1,221,211 for the three months ended September 30, 2013 from $1,042,332 for the three months ended September 30, 2012. The increase is primarily related to higher non-cash stock-based compensation expense of $44,999, higher legal expense of $86,748 and higher accounting expense of $27,025 and other unfavorable expenses of $20,211.

Research and development expenses: Research and development expenses increased $75,757 to $472,888 for the three months ended September 30, 2013 from $397,131 for the three months ended September 30, 2012. The increase is primarily due to higher product development costs of $50,709, higher temporary help expense of $16,076 and other unfavorable expenses of $8,972.

Other income (expense): Other income for the three months ended September 30, 2013 was $906,552 as compared to $211,417 for the three months ended September 30, 2012. The increase in other income of $695,135 is mainly due to an increase in royalty income of $690,115 from Covidien plc.

Income taxes: For the three months ended September 30, 2013, the Company recorded an effective tax rate of (.3%), compared to 3.7%, for the three months ended September 30, 2012. The Company estimates its financial statement effective tax rate for the full year, inconclusive of discontinued operations to be approximately 1%. The actual effective rate for continuing operations may vary materially based on several factors including the realization of earn-outs recorded in discontinued operations and the related intraperiod tax allocation, the ratio of permanent differences to pretax income (loss), and a change in the valuation allowances as well as other factors.

PuriCore Settlement:

As previously disclosed, the Company had entered into a Product License and Distribution Agreement, dated as of July 19, 2011 (the “Distribution Agreement”), with PuriCore, Inc. (“PuriCore”). Pursuant to the Distribution Agreement, the Company had the right to distribute PuriCore’s Vashe ^® solutions product in the United States on a private label basis under the name “Soma.” Disputes between the Company and Puricore were finally resolved on October 11, 2013 when the parties executed a Settlement Agreement pursuant to which the Distribution Agreement was terminated with no additional payments required to be made by either Misonix or PuriCore (the “Settlement Agreement”). As a result of entering into the Settlement Agreement, the Company is no longer obligated to pay PuriCore the remaining minimum gross profit requirement in the amount of $439,508 in the second quarter of fiscal 2014. Previously, all appropriate amounts had been recorded by the Company for the fiscal year ending June 30, 2013.

Discontinued Operations

See Note 1 of the notes to consolidated financial statements included in Part I, Item 1 of this Report for a description of the discontinued operations. The following summarizes the results of the discontinued operations:

	For the three months ended
	September 30,
	2013		2012
Revenues	$	4,975	$	4,975
Income from discontinued operations, before tax	$	4,975	$	6,318
Income tax expense		-		-
Net income from discontinued operations, net of tax	$	4,975	$	6,318

18

 

Liquidity and Capital Resources

We regularly review our cash funding requirements and attempt to meet those requirements through a combination of cash on hand, cash provided by operations and possible future public or private debt and/or equity offerings. At times, we evaluate possible acquisitions of, or investments in, businesses that are complementary to ours, which may require the use of cash. We believe that our cash, other liquid assets and access to equity capital markets, taken together, provide adequate resources to fund ongoing operating expenditures. In the event that they do not, we may require additional funds in the future to support our working capital requirements or for other purposes and may seek to raise such additional funds through the sale of public or private equity and/or debt financings, and divestiture of current business lines as well as from other sources. No assurance can be given that additional financing will be available in the future or that if available, such financing will be obtainable on favorable terms when required.

Working capital at September 30, 2013 and June 30, 2013 was $9,278,000 and $9,717,000, respectively. For the three months ended September 30, 2013, cash used in operations totaled $1,240,452, primarily related to operating losses of $888,977, lower accounts payable and other accrued expenses of $855,675, partially offset by depreciation and amortization of $231,271, stock-based compensation of $143,944 and lower prepaid expenses and other assets of $117,120. For the three months ended September 30, 2013, cash used in investing activities was $34,352, primarily due to applications for additional patents. For the three months ended September 30, 2013, cash provided by financing activities was $116,905 from the exercise of stock options. For the three months ended September 30, 2013, cash provided by discontinued operations was $4,975.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to the Company.

Other

In the opinion of management, inflation has not had a material effect on the operations of the Company.

New Accounting Pronouncements

There have been no recently issued pronouncements that have or are expected to have a material impact on our financial statements. See note 11 to our consolidated financial statements included herein.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Market Risk:

The principal market risks (i.e., the risk of loss arising from adverse changes in market rates and prices) to which the Company is exposed are interest rates on short-term investments.

Interest Rate Risk:

The Company earns interest on cash balances and pays interest on debt incurred. In light of the Company’s existing cash, results of operations and projected borrowing requirements, the Company does not believe that a 10% change in interest rates would have a significant impact on its consolidated financial position.

19

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decision regarding required disclosures. The Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of September 30, 2013 and, based on their evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective.

Changes in Internal Control Over Financial Reporting

There has been no change in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the three months ended September 30, 2013 that has materially affected, or is reasonable likely to materially affect, the Company’s internal control over financial reporting.

20

 

Part II - OTHER INFORMATION

Item 1A. Risk Factors.

Risks and uncertainties that, if they were to occur, could materially adversely affect our business or that could cause our actual results to differ materially from the results contemplated by the forward-looking statements contained in this Report and other public statements were set forth in the “Item 1A. Risk Factors” section of our 2013 Form 10-K.There have been no material changes from the risk factors disclosed in that Form 10-K.

Item 6. Exhibits.

Exhibit 31.1	Rule 13a-14(a)/15d-14(a) Certification
Exhibit 31.2	Rule 13a-14(a)/15d-14(a) Certification
Exhibit 32.1	Section 1350 Certification of Chief Executive Officer
Exhibit 32.2	Section 1350 Certification of Chief Financial Officer

21

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: November 7, 2013

MISONIX, INC.
(Registrant)
By:	/s/ Michael A. McManus, Jr.
	Michael A. McManus, Jr.
		President and Chief Executive Officer
By:	/s/ Richard A. Zaremba
	Richard A. Zaremba
		Senior Vice President, Chief Financial Officer,
		Treasurer and Secretary

22

 

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Michael A. McManus, Jr., certify that:

1.	I have reviewed this quarterly report on Form 10-Q of MISONIX, INC.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 7, 2013

/s/ Michael A. McManus, Jr.

Michael A. McManus, Jr.

President and Chief Executive Officer

 

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Richard Zaremba, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of MISONIX, INC.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 7, 2013

/s/ Richard A. Zaremba

Richard A. Zaremba

Senior Vice President, Chief Financial Officer,

Treasurer and Secretary

 

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of MISONIX, INC. (the "Company") on Form 10-Q for the period ended September 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Michael A. McManus, Jr., President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: November 7, 2013

/s/ Michael A. McManus, Jr.

Michael A. McManus, Jr.

President and Chief Executive Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to MISONIX, INC. and will be retained by MISONIX, INC. and furnished to the Securities and Exchange Commission or its staff upon request.

 

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of MISONIX, INC. (the "Company") on Form 10-Q for the period ended September 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Richard A. Zaremba, Senior Vice President, Chief Financial Officer, Treasurer and Secretary of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: November 7, 2013

/s/ Richard A. Zaremba

Richard A. Zaremba

Senior Vice President, Chief Financial Officer,

Treasurer and Secretary

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to MISONIX, INC. and will be retained by MISONIX, INC. and furnished to the Securities and Exchange Commission or its staff upon request.

 

XML

Fair Value of Financial Instruments

3 Months Ended

Sep. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

9. Fair Value of Financial Instruments

We follow 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.

The following is a summary of the carrying amounts and estimated fair values of our financial instruments at September 30, 2013 and June 30, 2013:

September 30, 2013	Carrying Amount		Fair Value
Cash and cash equivalents	$	4,653,513	$	4,653,513
Trade accounts receivable		2,799,336		2,799,336
Trade accounts payable		1,601,445		1,601,445

June 30, 2013	Carrying Amount		Fair Value
Cash and cash equivalents	$	5,806,437	$	5,806,437
Trade accounts receivable		2,974,641		2,974,641
Trade accounts payable		2,208,999		2,208,999

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

Cash and cash equivalents

The carrying amount approximates fair value because of the short maturity of those instruments.

Trade Accounts Receivable

The carrying amount of trade receivables reflects net recovery value and approximates fair value because of their short outstanding terms.

Trade Accounts Payable

The carrying amount of trade payables approximates fair value because of their short outstanding terms.

Non-financial assets and liabilities

Certain non-financial assets and liabilities, principally goodwill, are measured at fair value on a non-recurring basis; that is the assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances, such as when evidence of impairment exists. At September 30, 2013, no fair value adjustments or material fair value measurements were required for non-financial assets or liabilities.

XML

Consolidated Statements of Operations (USD $)	3 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Net sales	$ 3,075,584	$ 4,570,525
Cost of goods sold	1,345,330	1,843,899
Gross profit	1,730,254	2,726,626
Operating expenses:
Selling expenses	1,828,830	1,458,564
General and administrative expenses	1,221,315	1,042,332
Research and development expenses	472,888	397,131
Total operating expenses	3,523,033	2,898,027
Loss from operations	(1,792,779)	(171,401)
Other income (expense):
Interest income	19	13
Royalty income and license fees	912,794	222,679
Royalty expense	0	(3,698)
Other	(6,261)	(7,577)
Total other income	906,552	211,417
(Loss)/income from continuing operations before income taxes	(886,227)	40,016
Income tax expense	2,750	1,500
Net (loss)/income from continuing operations	(888,977)	38,516
Discontinued operations:
Income from discontinued operations net of tax expense of $0 and $0, respectively	4,975	6,318
Net income from discontinued operations	4,975	6,318
Net (loss)/income	$ (884,002)	$ 44,834
Net (loss)/income per share from continuing operations - Basic (in dollars per share)	$ (0.12)	$ 0.01
Net income per share from discontinued operations - Basic (in dollars per share)	$ 0.00	$ 0.00
Net (loss)/income per share - Basic (in dollars per share)	$ (0.12)	$ 0.01
Net (loss)/income per share from continuing operations - Diluted (in dollars per share)	$ (0.12)	$ 0.01
Net income per share from discontinued operations - Diluted (in dollars per share)	$ 0.00	$ 0.00
Net (loss)/income per share - Diluted (in dollars per share)	$ (0.12)	$ 0.01
Weighted average shares - Basic (in shares)	7,182,866	7,005,360
Weighted average shares - Diluted (in shares)	7,182,866	7,297,690

XML

Income (Loss) Per Share of Common Stock

3 Months Ended

Sep. 30, 2013

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

2. Income (Loss) Per Share of Common Stock

Basic net income (loss) per common share (“basic EPS”) is computed by dividing income (loss) by the weighted average number of common shares outstanding for the period. Diluted income/(loss) per common share (“diluted EPS”) is computed by dividing income (loss) by the weighted average number of common shares and dilutive common share equivalents outstanding (consisting of outstanding common stock options) for the period.

The number of weighted average common shares used in the calculation of basic EPS and diluted EPS were as follows:

	For the three months ended
	September 30,
	2013	2012
Basic shares	7,182,866	7,005,360
Dilutive effect of stock options	-	292,330
Diluted shares	7,182,866	7,297,690

Excluded from the calculations of diluted EPS are options to purchase 690,780 shares of common stock for the three months ended September 30, 2012. The excluded shares are any share in which the average stock price for the quarter or year–to-date is less than the exercise price of the outstanding options in the period in which the Company has net income.

Diluted EPS for the three months ended September 30, 2013 presented is the same as basic EPS as the inclusion of the effect of common share equivalents then outstanding would be anti-dilutive. For this reason, excluded from the calculation of diluted EPS are outstanding options to purchase 1,898,079 shares of common stock for the three months ended September 30, 2013.

XML

Stock-Based Compensation (Tables)

3 Months Ended

Sep. 30, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

The fair values of the options granted during the periods ended September 30, 2013 and 2012 were estimated on the date of the grant using the Black-Scholes option-pricing model on the basis of the following weighted average assumptions during the respective periods:

	For the three months ended
	September 30,
	2013			2012
Risk-free interest rate		3.3	%		2.5	%
Expected option life in years		6.5			6.5
Expected stock price volatility		76.1	%		74.7	%
Expected dividend yield		0.0	%		0.0	%
Weighted-average fair value of options granted	$	3.76		$	2.33

Schedule of Share-based Compensation, Activity [Table Text Block]

Changes in outstanding stock options during the three months ended September 30, 2013 were as follows:

	Options
			Weighted
			Average
		Weighted	Remaining
		Average	Contractual	Aggregate
	Number of	Exercise	Life	Intrinsic
	Shares	Price ($)	(years)	Value (a)
Outstanding as of June 30, 2013	1,729,991	3.65
Granted	249,000	4.68
Exercised	(33,212)	3.52
Forfeited	(500)	2.96
Expired	(47,200)	4.70
Outstanding as of September 30, 2013	1,898,079	3.76	5.7	$	2,083,029
Exercisable and vested at September 30, 2013	1,203,730	3.72	4.3	$	1,429,851
Available for grant at September 30, 2013	606,225

(a) Intrinsic value for purposes of this table represents the amount by which the fair value of the underlying stock, based on the respective market prices at September 30, 2013 or if exercised, the exercise dates, exceeds the exercise prices of the respective options.

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Goodwill and Intangible Assets

3 Months Ended

Sep. 30, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

10. Goodwill and Intangible Assets

Goodwill is not amortized. We review goodwill for impairment annually and whenever events or changes indicate that the carrying value of an asset may not be recoverable. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of significant assets or product lines. 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, estimation of the useful life over which cash flows will occur and determination of our weighted-average cost of capital. We primarily use a discounted cash flow model in determining fair value, which consists of level three inputs. Changes in the projected cash flows and discount rate estimates and assumptions underlying the valuation of goodwill could materially affect the determination of fair value at acquisition or during subsequent periods when tested for impairment. The Company determined that there were no indicators that the recorded goodwill was impaired as of September 30, 2013 which required further testing.

The cost of acquiring or processing patents is capitalized. This amount is being amortized using the straight-line method over the estimated useful lives of the underlying assets, which is approximately 17 years. Net patents reported in intangible and other assets totaled $577,326 and $568,823 at September 30, 2013 and June 30, 2013, respectively. Accumulated amortization totaled $574,847 and $554,923 at September 30, 2013 and June 30, 2013, respectively. Amortization expense for the three month periods ended September 30, 2013 and 2012 was approximately $19,000 and $18,000, respectively.

Net customer relationships reported in intangible and other assets totaled $320,000 and $360,000 at September 30, 2013 and June 30, 2013, respectively. Accumulated amortization amounted to $480,000 at September 30, 2013 and $440,000 at June 30, 2013, respectively. Amortization expense for the three month periods ended September 30, 2013 and 2012 was $40,000. Customer relationships are amortized on a straight-line basis over a five year period.

The following is a schedule of estimated future amortization expense as of September 30, 2013:

			Customer
	Patents		Relationships
2014	$	58,391	$	120,000
2015		72,883		160,000
2016		69,821		40,000
2017		67,637		-
2018		67,211		-
Thereafter		241,383		-
	$	577,326	$	320,000

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Stock-Based Compensation (Details Textual) (USD $)	3 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award, Terms of Award	not to exceed 10 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period	249,000	261,200
Allocated Share-based Compensation Expense	$ 144,000	$ 99,000
Employee Service Share Based Compensation Nonvested Awards Total Compensation Cost Not Yet Recognized Stock Options	1,975,000
Employee Service Share Based Compensation Nonvested Awards Total Compensation Cost Not Yet Recognized Period For Recognition 1	3 years 2 months 12 days
Employee Service Share-based Compensation, Cash Received from Exercise of Stock Options	$ 116,905

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Fair Value of Financial Instruments (Tables)

3 Months Ended

Sep. 30, 2013

Fair Value Disclosures [Abstract]

Schedule of Carrying Values and Estimated Fair Values of Financial Instruments [Table Text Block]

The following is a summary of the carrying amounts and estimated fair values of our financial instruments at September 30, 2013 and June 30, 2013:

September 30, 2013	Carrying Amount		Fair Value
Cash and cash equivalents	$	4,653,513	$	4,653,513
Trade accounts receivable		2,799,336		2,799,336
Trade accounts payable		1,601,445		1,601,445

June 30, 2013	Carrying Amount		Fair Value
Cash and cash equivalents	$	5,806,437	$	5,806,437
Trade accounts receivable		2,974,641		2,974,641
Trade accounts payable		2,208,999		2,208,999

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Accrued Expenses and Other Current Liabilities (Tables)

3 Months Ended

Sep. 30, 2013

Payables and Accruals [Abstract]

Schedule of Accrued Expenses and Other Current Liabilities [Table Text Block]

The following summarizes accrued expenses and other current liabilities:

	September 30,		June 30,
	2013		2013
Accrued payroll and vacation	$	415,053	$	456,095
Accrued bonuses		50,000		225,000
Accrued commissions		209,000		200,678
Accrued professional and legal fees		76,202		70,450
Deferred income		142,892		146,038
Other		131,697		178,702
	$	1,024,844	$	1,276,963

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Related Party Transactions (Details) (USD $)	3 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Applied Bio Surgical [Member]
Sales	$ 93,576	$ 206,683
Accounts receivable	113,421	210,233
MD Solutions Australasia PTY Ltd [Member]
Sales	43,340	139,900
Accounts receivable	$ 43,340	$ 139,900

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Income (Loss) Per Share of Common Stock (Details Textual)	3 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	1,898,079	690,780

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Inventories (Details) (USD $)	Sep. 30, 2013	Jun. 30, 2013
Raw material	$ 2,400,768	$ 2,641,982
Work-in-process	321,038	394,629
Finished goods	2,867,185	2,358,943
Inventory, Gross	5,588,991	5,395,554
Less valuation reserve	1,431,798	1,361,077
Inventory, Net, Total	$ 4,157,193	$ 4,034,477

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Basis of Presentation (Details 1) (USD $)	3 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Revenues	$ 4,975	$ 4,975
Income from discontinued operations, before tax	4,975	6,318
Income tax expense	0	0
Net income from discontinued operations, net of tax	$ 4,975	$ 6,318

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Fair Value of Financial Instruments (Details) (USD $)	Sep. 30, 2013	Jun. 30, 2013	Sep. 30, 2012	Jun. 30, 2012
Cash and cash equivalents, Carrying Amount	$ 4,653,513	$ 5,806,437	$ 6,662,667	$ 6,273,015
Trade accounts receivable, Carrying Amount	2,799,336	2,974,641
Trade accounts payable, Carrying Amount	1,601,445	2,208,999
Cash and cash equivalents, Fair Value	4,653,513	5,806,437
Trade accounts receivable, Fair Value	2,799,336	2,974,641
Trade accounts payable, Fair Value	$ 1,601,445	$ 2,208,999

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Inventories (Tables)

3 Months Ended

Sep. 30, 2013

Inventory Disclosure [Abstract]

Schedule of Inventory, Current [Table Text Block]

Inventories are summarized as follows:

	September 30,		June 30,
	2013		2013
Raw material	$	2,400,768	$	2,641,982
Work-in-process		321,038		394,629
Finished goods		2,867,185		2,358,943
		5,588,991		5,395,554
Less valuation reserve		1,431,798		1,361,077
	$	4,157,193	$	4,034,477

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Consolidated Statement of Stockholders' Equity (USD $)	Total	Common Stock [Member]	Treasury Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]
Balance at Jun. 30, 2013	$ 13,777,220	$ 72,339	$ (410,993)	$ 26,989,559	$ (12,873,685)
Balance (in shares) at Jun. 30, 2013		7,233,884	(77,560)
Net loss/comprehensive loss	(884,002)	0	0	0	(884,002)
Proceeds from exercise of stock options	116,905	332	0	116,573	0
Proceeds from exercise of stock options (in shares)		33,212	0
Stock-based compensation	143,944	0	0	143,944	0
Balance at Sep. 30, 2013	$ 13,154,067	$ 72,671	$ (410,993)	$ 27,250,076	$ (13,757,687)
Balance (in shares) at Sep. 30, 2013		7,267,096	(77,560)

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Consolidated Statements of Cash Flows (USD $)	3 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Operating activities
Net (loss)/income from continuing operations	$ (888,977)	$ 38,516
Adjustments to reconcile net loss to net cash used in continuing operating activities:
Depreciation and amortization and other non-cash items	231,271	182,328
Bad debt expense	15,000	13,902
Stock-based compensation	143,944	98,945
Deferred income	(15,051)	(11,053)
Deferred lease liability	(1,799)	203
Changes in operating assets and liabilities:
Accounts receivable	160,305	532,011
Inventories	(146,590)	292,709
Prepaid expenses and other assets	117,120	102,749
Accounts payable, accrued expenses and other non-cash items	(855,675)	(807,842)
Net cash (used in)/provided by operating activities	(1,240,452)	442,468
Investing activities
Acquisition of property, plant and equipment	(5,925)	(41,629)
Additional patents	(28,427)	(17,505)
Net cash used in investing activities	(34,352)	(59,134)
Financing activities
Proceeds from exercise of stock options	116,905	0
Net cash provided by financing activities	116,905	0
Cash flows from discontinued operations
Net cash provided by operating activities	4,975	6,318
Net cash provided by discontinued operations	4,975	6,318
Net (decrease)/increase in cash and cash equivalents	(1,152,924)	389,652
Cash and cash equivalents at beginning of period	5,806,437	6,273,015
Cash and cash equivalents at end of period	4,653,513	6,662,667
Supplemental disclosure of cash flow information:
Income taxes	$ 856	$ 5,935

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Comprehensive (Loss)/Income

3 Months Ended

Sep. 30, 2013

Stockholders' Equity Note [Abstract]

Comprehensive Income (Loss) Note [Text Block]

3. Comprehensive (Loss)/Income

Total comprehensive(loss)/income, which includes results of discontinued operations, was ($884,002) and $44,834 for three months ended September 30, 2013 and 2012, respectively. There are no components of comprehensive (loss)/income other than net (loss)/income for all periods presented.

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Basis of Presentation

3 Months Ended

Sep. 30, 2013

Accounting Policies [Abstract]

Basis of Presentation and Significant Accounting Policies [Text Block]

1. Basis of Presentation

The accompanying unaudited financial information should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Annual Report on Form 10-K for the year ended June 30, 2013 (“2013 Annual Report”) of MISONIX, INC. (“Misonix” or the “Company”). A summary of the Company’s significant accounting policies is identified in Note 1 of the notes to the consolidated financial statements included in the Company’s 2013 Annual Report. There have been no changes in the Company’s significant accounting policies subsequent to June 30, 2013.

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X pursuant to the requirements of the U.S. Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. The results of operations for the interim periods are not necessarily indicative of the results of operations for the entire year.

The consolidated financial statements of the Company include the accounts of Misonix and its 100% owned subsidiaries, Fibra-Sonics (NY) Inc. and Hearing Innovations, Inc. All significant intercompany balances and transactions have been eliminated.

Organization and Business

Misonix is a surgical device company that designs, manufactures and markets innovative therapeutic ultrasonic products worldwide for spine surgery, skull-based surgery, neurosurgery, wound debridement, cosmetic surgery, laparoscopic surgery and other surgical applications.

The Company’s revenues are generated from various regions throughout the world. Sales by the Company outside the United States are made primarily through distributors. Sales made in the United States are made primarily through representative agents. The following is an analysis of net sales from continuing operations by geographic region:

	Three months ended September 30,
	2013		2012
United States	$	1,581,270	$	2,449,610
Australia		43,340		139,900
Europe		383,590		761,911
Asia		466,267		422,227
Canada and Mexico		84,705		226,060
South America		275,621		297,926
South Africa		93,576		206,683
Middle East		147,215		66,208
	$	3,075,584	$	4,570,525

Discontinued Operations

Laboratory and Forensic Safety Products Business

On October 19, 2011, Misonix sold its Laboratory and Forensic Safety Products business, which comprised substantially all of the Laboratory and Scientific Products segment, to Mystaire, Inc. for $1.5 million in cash plus a potential additional payment of up to an aggregate $500,000 based upon 30% of net sales in excess of $2.0 million for each of the three years following the closing (the “earn-out”).The earn-out will not be factored into the gain on sale until it is earned by Misonix. As of September 30, 2013, no earn-out has been recorded

High Intensity Focused Ultrasound Technology

In consideration for the May 2010 sale of its rights to the high intensity focused ultrasound technology to USHIFU LLC (“USHIFU”), Misonix will receive up to approximately $5.8 million, paid out of an earn-out of 7% of gross revenues received by USHIFU related to the business being sold up to the time the Company has received the first $3 million and thereafter 5% of the gross revenues up to the $5.8 million. Commencing 90 days after each December 31^st and beginning December 31, 2011 the payments will be the greater of (a) $250,000 or (b) 7% of gross revenues received up to the time the Company has received the first $3 million and thereafter 5% of gross revenues up to the $5.8 million. Total payments through September 30, 2013 were $504,788.

Results of Discontinued Operations

	For the three months ended
	September 30,
	2013		2012
Revenues	$	4,975	$	4,975
Income from discontinued operations, before tax	$	4,975	$	6,318
Income tax expense		-		-
Net income from discontinued operations, net of tax	$	4,975	$	6,318

Accounts Receivable

Accounts receivable, principally trade, are generally due within 30 to 90 days and are stated at amounts due from customers, net of an allowance for doubtful accounts. The Company performs ongoing credit evaluations and adjusts credit limits based upon payment history and the customer’s current credit worthiness, as determined by a review of their current credit information. The Company continuously monitors aging reports, collections and payments from customers and maintains a provision for estimated credit losses based upon historical experience and any specific customer collection issues that have been identified. While such credit losses have historically been within expectations and the provisions established, the Company cannot guarantee that the same credit loss rates will be experienced in the future. The Company writes off accounts receivable when they become uncollectible.

Reclassifications

Certain prior period amounts in the accompanying financial statements and related notes have been reclassified to conform to the current period’s presentation.

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Accrued Expenses and Other Current Liabilities (Details) (USD $)	Sep. 30, 2013	Jun. 30, 2013
Accrued payroll and vacation	$ 415,053	$ 456,095
Accrued bonuses	50,000	225,000
Accrued commissions	209,000	200,678
Accrued professional and legal fees	76,202	70,450
Deferred income	142,892	146,038
Other	131,697	178,702
Accrued Expenses and Other Current Liabilities	$ 1,024,844	$ 1,276,963

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Goodwill and Intangible Assets (Tables)

3 Months Ended

Sep. 30, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

The following is a schedule of estimated future amortization expense as of September 30, 2013:

			Customer
	Patents		Relationships
2014	$	58,391	$	120,000
2015		72,883		160,000
2016		69,821		40,000
2017		67,637		-
2018		67,211		-
Thereafter		241,383		-
	$	577,326	$	320,000

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Basis of Presentation (Details Textual) (USD $)	1 Months Ended		3 Months Ended
	Oct. 19, 2011 Laboratory and Forensic Safety Products Business [Member]	May 31, 2010 High Intensity Focused Ultrasound Technology [Member]	Sep. 30, 2013 High Intensity Focused Ultrasound Technology [Member]	Sep. 30, 2013 Fibra Sonics Ny Inc [Member]
Equity Method Investment, Ownership Percentage				100.00%
Proceeds from Sales of Business, Affiliate and Productive Assets	$ 1,500,000
Sale of Business Potential Additional Payment	500,000
Sale of Business Potential Additional Payment Determination Basis	based upon 30% of net sales in excess of $2.0 million for each of the three years following the closing (the “earn-out”).
Proceeds from Sales of Intangible Assets		5,800,000
Sale of Intangible Assets Percentage of Gross Revenue Received as Earn Out Up to First Benchmark		7.00%
Proceeds from Sale of Intangible Assets First Benchmark		3,000,000
Sale of Intangible Assets Percentage of Gross Revenue Received as Earn Out Up to Second Benchmark		5.00%
Proceeds from Sale of Intangible Assets Second Benchmark		5,800,000
Payment Sale Of Intangible Assets Description		Commencing 90 days after each December 31st and beginning December 31, 2011 the payments will be the greater of (a) $250,000 or (b) 7% of gross revenues received up to the time the Company has received the first $3 million and thereafter 5% of gross revenues up to the $5.8 million.
Payment Sale Of Intangible Assets			$ 504,788

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Stock-Based Compensation (Details 1) (Employee Stock Option [Member], USD $)	3 Months Ended
	Sep. 30, 2013
Employee Stock Option [Member]
Number of Shares, Outstanding at beginning of period	1,729,991
Number of Shares, Granted	249,000
Number of Shares, Exercised	(33,212)
Number of Shares, Forfeited	(500)
Number of Shares, Expired	(47,200)
Number of Shares, Outstanding at end of period	1,898,079
Number of Shares, exercisable and vested	1,203,730
Number of shares, Available for grant	606,225
Weighted Average Exercise Price, Outstanding at beginning of period	$ 3.65
Weighted Average Exercise Price, Granted	$ 4.68
Weighted Average Exercise Price, Exercised	$ 3.52
Weighted Average Exercise Price, Forfeited	$ 2.96
Weighted Average Exercise Price, Expired	$ 4.70
Weighted Average Exercise Price, Outstanding at end of period	$ 3.76
Weighted Average Exercise Price, exercisable and vested	$ 3.72
Weighte Average Remaining Contractual Life, Outstanding (in years)	5 years 8 months 12 days
Weighte Average Remaining Contractual Life, vested and exercisable (in years)	4 years 3 months 18 days
Aggregate Intrinsic Value, Outstanding (in dollars)	$ 2,083,029	[1]
Aggregate Intrinsic Value, vested and exercisable (in dollars)	$ 1,429,851	[1]

[1] Intrinsic value for purposes of this table represents the amount by which the fair value of the underlying stock, based on the respective market prices at September 30, 2013 or if exercised, the exercise dates, exceeds the exercise prices of the respective options.

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Goodwill and Intangible Assets (Details Textual) (USD $)	3 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Jun. 30, 2013
Patents [Member]
Finite-Lived Intangible Asset, Useful Life	17 years
Finite-Lived Intangible Assets, Net, Total	$ 577,326		$ 568,823
Finite-Lived Intangible Assets, Accumulated Amortization	574,847		554,923
Amortization of Intangible Assets	19,000	18,000
Customer Relationships [Member]
Finite-Lived Intangible Assets, Net, Total	320,000		360,000
Finite-Lived Intangible Assets, Accumulated Amortization	480,000		440,000
Amortization of Intangible Assets	$ 40,000	$ 40,000

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Consolidated Balance Sheets (Parenthetical) (USD $)	Sep. 30, 2013	Jun. 30, 2013
Allowance for doubtful accounts (in dollars)	$ 229,641	$ 214,641
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	20,000,000	20,000,000
Common stock, shares issued	7,267,096	7,189,536
Common stock, shares outstanding	7,233,884	7,156,324
Treasury stock, shares	77,560	77,560

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Inventories

3 Months Ended

Sep. 30, 2013

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

6. Inventories

Inventories are summarized as follows:

	September 30,		June 30,
	2013		2013
Raw material	$	2,400,768	$	2,641,982
Work-in-process		321,038		394,629
Finished goods		2,867,185		2,358,943
		5,588,991		5,395,554
Less valuation reserve		1,431,798		1,361,077
	$	4,157,193	$	4,034,477

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Consolidated Statements of Operations (Parenthetical) (USD $)	3 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Income from discontinued operations net of tax expense	$ 0	$ 0

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Consolidated Balance Sheets (USD $)	Sep. 30, 2013	Jun. 30, 2013
Assets
Cash and cash equivalents	$ 4,653,513	$ 5,806,437
Accounts receivable, less allowance for doubtful accounts of $229,641 and $214,641, respectively	2,799,336	2,974,641
Inventories, net	4,157,193	4,034,477
Prepaid expenses and other current assets	294,079	387,371
Total current assets	11,904,121	13,202,926
Property, plant and equipment, net	1,185,038	1,326,586
Goodwill	1,701,094	1,701,094
Intangible and other assets	1,073,996	1,129,321
Total assets	15,864,249	17,359,927
Liabilities and stockholders' equity
Accounts payable	1,601,445	2,208,999
Accrued expenses and other current liabilities	1,024,844	1,276,963
Total current liabilities	2,626,289	3,485,962
Deferred lease liability	22,012	23,811
Deferred income	61,881	72,934
Total liabilities	2,710,182	3,582,707
Commitments and contingencies (Note 8)
Stockholders' equity:
Common stock, $.01 par value-shares authorized 20,000,000, 7,267,096 and 7,233,884 shares issued and 7,189,536 and 7,156,324 shares outstanding, respectively	72,671	72,339
Additional paid-in capital	27,250,076	26,989,559
Accumulated deficit	(13,757,687)	(12,873,685)
Treasury stock, at cost, 77,560 shares	(410,993)	(410,993)
Total stockholders' equity	13,154,067	13,777,220
Total liabilities and stockholders' equity	$ 15,864,249	$ 17,359,927

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Related Party Transactions (Tables)

3 Months Ended

Sep. 30, 2013

Related Party Transactions [Abstract]

Schedule of Related Party Transactions [Table Text Block]

Set forth below is a table showing the Company’s net sales and accounts receivable for the year ended September 30, 2013 and 2012 with these distributors:

For the three months ended September 30,
Applied Bio Surgical	2013		2012
Sales	$	93,576	$	206,683
Accounts Receivable	$	113,421	$	210,233

MD Solutions Australasia PTY Ltd.		2013		2012
Sales	$	43,340	$	139,900
Accounts Receivable	$	43,340	$	139,900

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Income (Loss) Per Share of Common Stock (Tables)

3 Months Ended

Sep. 30, 2013

Earnings Per Share [Abstract]

Schedule of Weighted Average Number of Shares [Table Text Block]

The number of weighted average common shares used in the calculation of basic EPS and diluted EPS were as follows:

	For the three months ended
	September 30,
	2013	2012
Basic shares	7,182,866	7,005,360
Dilutive effect of stock options	-	292,330
Diluted shares	7,182,866	7,297,690

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Goodwill and Intangible Assets (Details) (USD $)	Sep. 30, 2013	Jun. 30, 2013
Patents [Member]
2014	$ 58,391
2015	72,883
2016	69,821
2017	67,637
2018	67,211
Thereafter	241,383
Finite-Lived Intangible Assets, Future Amortization Expense	577,326	568,823
Customer Relationships [Member]
2014	120,000
2015	160,000
2016	40,000
2017	0
2018	0
Thereafter	0
Finite-Lived Intangible Assets, Future Amortization Expense	$ 320,000	$ 360,000

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Income Taxes (Details Textual) (USD $)	3 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Income Tax Expense (Benefit)	$ 2,750	$ 1,500

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Comprehensive (Loss)/Income (Details Textual) (USD $)	3 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Net Income (Loss) Attributable to Parent, Total	$ (884,002)	$ 44,834

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Stock-Based Compensation (Details) (USD $)	3 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Risk-free interest rate	3.30%	2.50%
Expected option life in years	6 years 6 months	6 years 6 months
Expected stock price volatility	76.10%	74.70%
Expected dividend yield	0.00%	0.00%
Weighted-average fair value of options granted	$ 3.76	$ 2.33

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Income Taxes

3 Months Ended

Sep. 30, 2013

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

5. Income Taxes

For the three months ended September 30, 2013, the Company recorded an income tax expense in continuing operations of $2,750.

For the three months ended September 30, 2013 and 2012, the effective rate on continuing operations varied from the U.S. federal statutory rate primarily due to permanent book tax differences, state taxes and a change in the valuation allowance.

The Company established a valuation against the deferred tax asset in prior years when management concluded that it is more likely than not that the deferred tax asset may not be fully realized. Management’s deferred tax asset assessment is unchanged as of September 30, 2013.

As of September 30, 2013 and June 30, 2013, the Company has no material unrecognized tax benefits or accrued interest and penalties.

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Basis of Presentation (Details) (USD $)	3 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Net sales	$ 3,075,584	$ 4,570,525
United States [Member]
Net sales	1,581,270	2,449,610
Australia [Member]
Net sales	43,340	139,900
Europe [Member]
Net sales	383,590	761,911
Asia [Member]
Net sales	466,267	422,227
Canada and Mexico [Member]
Net sales	84,705	226,060
South America [Member]
Net sales	275,621	297,926
South Africa [Member]
Net sales	93,576	206,683
Middle East [Member]
Net sales	$ 147,215	$ 66,208

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Commitment and Contingencies (Details Textual) (USD $)	3 Months Ended
	Sep. 30, 2013
Purchase Commitment, Remaining Minimum Amount Committed	$ 2,000,000
Second quarter of fiscal 2014 [Member]
Minimum Gross Profit	$ 439,508

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Commitments and Contingencies

3 Months Ended

Sep. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

8. Commitments and Contingencies

The Company and its subsidiaries are from time to time involved in ordinary and routine litigation. Management presently believes that the ultimate outcome of these proceedings, individually or in the aggregate, will not have a material adverse effect on the Company’s financial position, cash flows or result of operations. Nevertheless, litigation is subject to inherent uncertainties and an unfavorable ruling could occur.  An unfavorable ruling could include money damages and in such event, could result in a material adverse impact on the Company’s results of operations in the year in which the ruling occurs.

On July 19, 2011, Misonix entered into a Distribution Agreement (the “Distribution Agreement”) with Puricore, Inc. (“Puricore”). Pursuant to the Distribution Agreement, the Company had been granted the right to distribute PuriCore’s Vashe ^® solution products in the United States, on a private label basis and known as the Misonix Soma product, as an antibacterial, antimicrobial irrigating solution for the treatment of human wound care in conjunction with therapeutic ultrasonic procedures (the “Field”). PuriCore had agreed, subject to modification, not to sell the products that were the subject of the Distribution Agreement (the “Licensed Products”) to any other therapeutic ultrasound company for distribution in the Field in the United States (“Exclusivity”). The Company had agreed not to sell or distribute in the United States in the Field any irrigating solution that has anti-microbial properties other than the Licensed Products so long as the Company had Exclusivity.

The Distribution Agreement was for a three (3) year term with automatic renewals for successive two (2) year periods; provided that the Company and PuriCore had agreed upon sales volume targets for each renewal period (such volume targets not to increase by more than ten (10%) percent year over year unless otherwise agreed) and provided that the cost terms would have been no less favorable than the twelve (12) months leading up to the start of such renewal period. In no event would the Distribution Agreement have survived beyond the expiration or invalidation of all of PuriCore’s patents.

During the initial three year term of the Distribution Agreement, the Company was obligated to either purchase or pay a minimum of $2,000,000 in gross margin value to PuriCore for the Licensed Products (the “Minimum Payment”). The Minimum Payment was subject to downward adjustment and elimination in the event that (i) PuriCore chose to eliminate Exclusivity, (ii) the Company’s right to manufacture the Licensed Products under certain conditions had been triggered but the Company was unable to manufacture the Licensed Products or to have the Licensed Products manufactured for it by third parties or (iii) the U.S. Food and Drug Administration had made a final determination that prohibited the sale of the Licensed Products for use in the Field.

During our fiscal fourth quarter 2013, the Company sent a notice to terminate the Distribution Agreement due to management’s belief that the products subject to the Distribution Agreement were non-conforming. Puricore disputed the Company’s ability to terminate the Distribution Agreement.On October 11, 2013, the Company and Puricore mutually terminated the Distribution Agreement and signed a Settlement Agreement resolving all issues without the payment of any monies by either party.A reversal of the previously accrued and unpaid contractual minimum gross profit requirement in the amount of $439,508 will be made in the second quarter of fiscal 2014 as a result of the Settlement Agreement.

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Stock-Based Compensation

3 Months Ended

Sep. 30, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

4. Stock-Based Compensation

Stock options are granted with exercise prices not less than the fair market value of our common stock at the time of the grant, with an exercise term (as determined by the committee administering the applicable option plan (the “Committee”)) not to exceed 10 years. The Committee determines the vesting period for the Company’s stock options. Generally, such stock options have vesting periods of immediate to four years. Certain option awards provide for accelerated vesting upon meeting specific retirement, death or disability criteria and upon a change in control. During the three month periods ended September 30, 2013 and 2012, the Company granted options to purchase 249,000 and 261,200 shares of the Company’s common stock, respectively.

Stock-based compensation expense for the three month periods ended September 30, 2013 and 2012 was approximately $144,000 and $99,000, respectively. Compensation expense is recognized in the general and administrative expenses line item of the Company’s consolidated statements of operations on a straight-line basis over the vesting periods. As of September 30, 2013, there was approximately $1,975,000 of total unrecognized compensation cost related to non-vested stock-based compensation arrangements to be recognized over a weighted-average period of 3.2 years.

Cash in the amount of $116,905 was received from the exercise of stock options for the three month period ended September 30, 2013.

The fair values of the options granted during the periods ended September 30, 2013 and 2012 were estimated on the date of the grant using the Black-Scholes option-pricing model on the basis of the following weighted average assumptions during the respective periods:

	For the three months ended
	September 30,
	2013			2012
Risk-free interest rate		3.3	%		2.5	%
Expected option life in years		6.5			6.5
Expected stock price volatility		76.1	%		74.7	%
Expected dividend yield		0.0	%		0.0	%
Weighted-average fair value of options granted	$	3.76		$	2.33

The expected option term is based upon the number of years the Company estimates the option will be outstanding was based on historical exercises and terminations. The expected volatility for the expected life of the options is determined using historical price changes of the Company’s stock over a period equal to that of the expected life of the options. The risk free rate is based upon the U.S. Treasury yield in effect at the time of the grant. The expected dividend yield is 0% as the Company has historically not declared dividends and does not expect to declare any in the future.

Changes in outstanding stock options during the three months ended September 30, 2013 were as follows:

	Options
			Weighted
			Average
		Weighted	Remaining
		Average	Contractual	Aggregate
	Number of	Exercise	Life	Intrinsic
	Shares	Price ($)	(years)	Value (a)
Outstanding as of June 30, 2013	1,729,991	3.65
Granted	249,000	4.68
Exercised	(33,212)	3.52
Forfeited	(500)	2.96
Expired	(47,200)	4.70
Outstanding as of September 30, 2013	1,898,079	3.76	5.7	$	2,083,029
Exercisable and vested at September 30, 2013	1,203,730	3.72	4.3	$	1,429,851
Available for grant at September 30, 2013	606,225

(a) Intrinsic value for purposes of this table represents the amount by which the fair value of the underlying stock, based on the respective market prices at September 30, 2013 or if exercised, the exercise dates, exceeds the exercise prices of the respective options.

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Consolidated Statement of Stockholders' Equity (Parenthetical) (USD $)	Sep. 30, 2013	Jun. 30, 2013
Common Stock, Par Value (in dollars per share)	$ 0.01	$ 0.01

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Income (Loss) Per Share of Common Stock (Details)	3 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Basic shares	7,182,866	7,005,360
Dilutive effect of stock options	0	292,330
Diluted shares	7,182,866	7,297,690

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Recent Accounting Pronouncements

3 Months Ended

Sep. 30, 2013

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Description of New Accounting Pronouncements Not yet Adopted [Text Block]

11. Recent Accounting Pronouncements

There have been no recently issued pronouncements that have had or are expected to have a material impact on our financial statements.

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Accrued Expenses and Other Current Liabilities

3 Months Ended

Sep. 30, 2013

Payables and Accruals [Abstract]

Accounts Payable, Accrued Liabilities, and Other Liabilities Disclosure, Current [Text Block]

7. Accrued Expenses and Other Current Liabilities

The following summarizes accrued expenses and other current liabilities:

	September 30,		June 30,
	2013		2013
Accrued payroll and vacation	$	415,053	$	456,095
Accrued bonuses		50,000		225,000
Accrued commissions		209,000		200,678
Accrued professional and legal fees		76,202		70,450
Deferred income		142,892		146,038
Other		131,697		178,702
	$	1,024,844	$	1,276,963

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Basis of Presentation (Tables)

3 Months Ended

Sep. 30, 2013

Accounting Policies [Abstract]

Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area [Table Text Block]

The following is an analysis of net sales from continuing operations by geographic region:

	Three months ended September 30,
	2013		2012
United States	$	1,581,270	$	2,449,610
Australia		43,340		139,900
Europe		383,590		761,911
Asia		466,267		422,227
Canada and Mexico		84,705		226,060
South America		275,621		297,926
South Africa		93,576		206,683
Middle East		147,215		66,208
	$	3,075,584	$	4,570,525

Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block]

	For the three months ended
	September 30,
	2013		2012
Revenues	$	4,975	$	4,975
Income from discontinued operations, before tax	$	4,975	$	6,318
Income tax expense		-		-
Net income from discontinued operations, net of tax	$	4,975	$	6,318

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Related Party Transactions

3 Months Ended

Sep. 30, 2013

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

12. Related Party Transactions

Stavros Vizirgianakis was appointed to the Board of Directors on May 7, 2013. Mr. Vizirgianakis owns a controlling interest in MD Solutions Australasia PTY Ltd and a family member owns one hundred percent of Applied BioSurgical;both independent distributors for the Company. The Company’s distribution agreements with these companies pre-date Mr. Vizirgianakis’ appointment to the Board of Directors.

Set forth below is a table showing the Company’s net sales and accounts receivable for the year ended September 30, 2013 and 2012 with these distributors:

For the three months ended September 30,
Applied Bio Surgical	2013		2012
Sales	$	93,576	$	206,683
Accounts Receivable	$	113,421	$	210,233

MD Solutions Australasia PTY Ltd.		2013		2012
Sales	$	43,340	$	139,900
Accounts Receivable	$	43,340	$	139,900

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Document And Entity Information	3 Months Ended
	Sep. 30, 2013	Nov. 07, 2013
Document Information [Line Items]
Entity Registrant Name	MISONIX INC
Entity Central Index Key	0000880432
Current Fiscal Year End Date	--06-30
Entity Filer Category	Smaller Reporting Company
Trading Symbol	MSON
Entity Common Stock, Shares Outstanding		7,197,036
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2013
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2014

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Basis of Presentation (Policies)

3 Months Ended

Sep. 30, 2013

Accounting Policies [Abstract]

Discontinued Operations, Policy [Policy Text Block]

Discontinued Operations

Laboratory and Forensic Safety Products Business

On October 19, 2011, Misonix sold its Laboratory and Forensic Safety Products business, which comprised substantially all of the Laboratory and Scientific Products segment, to Mystaire, Inc. for $1.5 million in cash plus a potential additional payment of up to an aggregate $500,000 based upon 30% of net sales in excess of $2.0 million for each of the three years following the closing (the “earn-out”).The earn-out will not be factored into the gain on sale until it is earned by Misonix. As of September 30, 2013, no earn-out has been recorded

High Intensity Focused Ultrasound Technology

In consideration for the May 2010 sale of its rights to the high intensity focused ultrasound technology to USHIFU LLC (“USHIFU”), Misonix will receive up to approximately $5.8 million, paid out of an earn-out of 7% of gross revenues received by USHIFU related to the business being sold up to the time the Company has received the first $3 million and thereafter 5% of the gross revenues up to the $5.8 million. Commencing 90 days after each December 31^st and beginning December 31, 2011 the payments will be the greater of (a) $250,000 or (b) 7% of gross revenues received up to the time the Company has received the first $3 million and thereafter 5% of gross revenues up to the $5.8 million. Total payments through September 30, 2013 were $504,788.

Results of Discontinued Operations

	For the three months ended
	September 30,
	2013		2012
Revenues	$	4,975	$	4,975
Income from discontinued operations, before tax	$	4,975	$	6,318
Income tax expense		-		-
Net income from discontinued operations, net of tax	$	4,975	$	6,318

Receivables, Policy [Policy Text Block]

Accounts Receivable

Accounts receivable, principally trade, are generally due within 30 to 90 days and are stated at amounts due from customers, net of an allowance for doubtful accounts. The Company performs ongoing credit evaluations and adjusts credit limits based upon payment history and the customer’s current credit worthiness, as determined by a review of their current credit information. The Company continuously monitors aging reports, collections and payments from customers and maintains a provision for estimated credit losses based upon historical experience and any specific customer collection issues that have been identified. While such credit losses have historically been within expectations and the provisions established, the Company cannot guarantee that the same credit loss rates will be experienced in the future. The Company writes off accounts receivable when they become uncollectible.

Reclassification, Policy [Policy Text Block]

Reclassifications

Certain prior period amounts in the accompanying financial statements and related notes have been reclassified to conform to the current period’s presentation.