DYNASIL CORPORATION OF AMERICA

                    AUDIT COMMITTEE CHARTER

Introduction

The  Board  of  Directors of DYNASIL CORPORATION OF  AMERICA  has
formed  an  Audit Committee to promote the financial transparency
of   the   corporation  and  to  ensure  the  integrity  of   the
corporations  financial reporting.  The Dynasil  audit  committee
will  assist  the board of directors in fulfilling its  oversight
responsibilities.  The audit committee will review the  financial
reporting  process,  the system of internal  control,  the  audit
process, and the company=s process for monitoring compliance with
laws and regulations and with the code of conduct.  In performing
its   duties,  the  committee  will  maintain  effective  working
relationships  with the board of directors, management,  and  the
external auditors.  To effectively perform his or her role,  each
committee  member will obtain an understanding  of  the  detailed
responsibilities of committee membership as well as the company=s
business, operations, and risks.

Organization

Membership and Function:

Definitions
o Independence: A member of the audit committee and  an  auditor,
  respectively,  are independent if they have no relationship  to
  the  corporation that may interfere with the exercise of  their
  independence  from  management and  the  corporation,  such  as
  employment  with  the corporation or an affiliate  within  five
  years;  corporate  compensation  other  than  fees  for   Board
  service;  family  relationship  with  a  corporate  officer  or
  employee;  or relationship to a business affiliate  or  partner
  of the corporation.
o Financial Literacy: A member of the audit committee shall  have
  financial  literacy, as signified by the ability  to  read  and
  understand  fundamental  financial  statements,  including  the
  company's  balance  sheet,  income  statement,  and  cash  flow
  statement. Directors who have limited familiarity with  finance
  can  achieve such "literacy" through company-sponsored training
  programs.

Prerequisites of Audit Committee Membership
o The  corporation shall have an audit committee composed  solely
  of independent directors.
o The  audit  committee shall be comprised of a  minimum  of  two
  directors,  each  of  whom is financially literate  or  becomes
  financially literate within a reasonable period of  time  after
  his  or  her appointment to the audit committee, and  at  least
  one  member  of  the audit committee shall have  accounting  or
  related financial management experience.

Audit Committee Function
o The  Board  and the audit committee have the ultimate authority
  and  responsibility  to select, oversee, evaluate,  and,  where
  appropriate,  to  replace the outside auditor (or  to  nominate
  the outside auditor to be proposed for shareholder approval  in
  any   proxy  statement).  The  outside  auditor  is  ultimately
  accountable  to the board of directors and the audit  committee
  as the representatives of the shareholders.

Roles and responsibilities

Internal Control
o Confirm that management is setting the appropriate tone at  the
  top  by  communicating the importance of internal  control  and
  ensuring  that  all  individuals possess  an  understanding  of
  their roles and responsibilities;
o Ensure  that internal control recommendations made by  external
  auditors have been implemented by management; and

o Ensure  that  the  external auditors keep the  audit  committee
  informed  about fraud, illegal acts, deficiencies  in  internal
  control, and certain other matters.

Financial Reporting
General
o Review  significant accounting and reporting issues,  including
  recent   professional   and  regulatory   pronouncements,   and
  understand their impact on the financial statements; and
o Ask  management  and  the external auditors  about  significant
  risks and exposures and the plans to minimize such risks.

Annual Financial Statements
o Review  the  annual financial statements and determine  whether
  they are complete and consistent with the information known  to
  committee  members, and assess whether the financial statements
  reflect appropriate accounting principles;
o Pay    particular   attention   to   complex   and/or   unusual
  transactions.
o Focus on judgmental areas such as those involving valuation  of
  assets  and liabilities, including, for example, the accounting
  for  and  disclosure  of  obsolete or  slow  moving  inventory;
  warranty,  product, liability; litigation reserves;  and  other
  commitments and contingencies;
o Meet  with  management and the external auditors to review  the
  financial statements and the results of the audit;
o Consider  management=s handling of proposed  audit  adjustments
  identified by the external auditors;
o Review  the MD&A and other sections of the annual report before
  its  release  and consider whether the information is  adequate
  and  consistent with members= knowledge about the  company  and
  its operations; and
o Ensure  that the external auditors communicate certain required
  matters to the committee.

Interim Financial Statements
o Be  briefed on how management develops and summarizes quarterly
  financial   information,   the   extent   of   internal   audit
  involvement,  the extent to which the external auditors  review
  quarterly  financial information, and whether  that  review  is
  performed on a pre-or post-issuance basis;
o Meet  with  management  and,  if  a  pre-issuance  review   was
  completed,  with  the external auditors, either  telephonically
  or  in  person, to review the interim financial statements  and
  the results of the review;
o To  gain  insight  into the fairness of the interim  statements
  and  disclosures, obtain explanations from management and  from
  the external auditors on whether:
  o Actual  financial results for the quarter or  interim  period
     varied significantly from budgeted or projected results;
  o Changes  in financial ratios and relationships in the interim
     financial  statements are consistent  with  changes  in  the
     company>s operations and financing practices;
  o Generally   accepted   accounting   principles   have    been
     consistently applied;
  o There  are  any  actual or proposed changes in accounting  or
     financial reporting practices;
  o There are any significant or unusual events or transactions;
  o The   company=s   financial   and  operating   controls   are
     functioning effectively;
  o The   interim  financial  statements  contain  adequate   and
     appropriate disclosures.
  o Ensure   that  the  external  auditors  communicate   certain
     required matters to the committee.

Compliance with Laws and Regulations
o Review   the   effectiveness  of  the  system  for   monitoring
  compliance  with  laws  and  regulations  and  the  results  of
  management=s    investigation    and    follow-up    (including
  disciplinary  action)  on  any fraudulent  acts  or  accounting
  irregularities;
o Periodically  obtain updates from management, general  counsel,
  and tax director regarding compliance;
o Be  satisfied that all regulatory compliance matters have  been
  considered in the preparation of the financial statements; and
o Review   that  findings  of  any  examinations  by   regulatory
  agencies such as the Securities and Exchange commission.

Compliance with Code of Conduct
o Ensure  that  a  code of conduct is formalized in  writing  and
  that all employees are aware of it;
o Evaluate whether management is setting the appropriate tone  at
  the  top by communicating the importance of the code of conduct
  and the guidelines for acceptable business practices;
o Review  the program for monitoring compliance with the code  of
  conduct; and

External Audit
o Review   the  external  auditors=  proposed  audit  scope   and
  approach;
o Review  the performance of the external auditors and  recommend
  to  the board of directors the appointment or discharge of  the
  external auditors; and
o Review  and  confirm the independence of the external  auditors
  by  reviewing the nonaudit services provided and the  auditor=s
  assertion   of   their   independence   in   accordance    with
  professional standards.

Other Responsibilities
o Meet  with  the external auditors, and management  in  separate
  executive  sessions to discuss any matters that  the  committee
  or these groups believe should be discussed privately;
o Ensure  that significant findings and recommendations  made  by
  the  external auditors are received and discussed on  a  timely
  basis;
o Review,  with  the  company=s counsel, any legal  matters  that
  could  have  a  significant impact on the  company=s  financial
  statements;
o Review  the  policies and procedures in effect for  considering
  officers= expenses and perquisites;
o Perform  other  oversight functions as requested  by  the  full
  board; and
o Review  and  update  the charter; receive approval  of  changes
  from the board.

Reporting Responsibilities
o Regularly   update  the  board  of  directors  about  committee
  activities and make appropriate recommendations.