Goodwill

12 Months Ended

Sep. 30, 2011

Note 6 – Goodwill

During the year ended September 30, 2011 the following changes were made to goodwill:

On April 4, 2011, the Company acquired the rights to six biomedical technologies invented or co-invented by Dr. Daniel Ericson for a purchase price of $300,000, together with certain rights to royalty and milestone payments if these technologies are successfully developed. Dynasil currently believes that these technologies represent exciting technologies, but there can be no assurances that any of these technologies will be successfully commercialized. The purchase price of $300,000, paid in cash, was recorded as Goodwill while the opportunities were fully assessed.

At September 30, 2011, the Company completed assessments of the various purchased biomedical technologies and determined that three were most commercially viable for future products or technology licensing. Provisional patents have been filed. Therefore, we have re-classed the $300,000 from Goodwill to Intangible Assets which will be amortized using five year estimated useful lives.

Prior Activity

On July 19, 2010, Dynasil completed the acquisition of 100% of the issued and outstanding common stock of Hilger Crystals Limited from Newport Corporation. The purchase price was composed of $4 million in cash and a possible additional payment of up to $750,000 (contingent consideration) after eighteen months based on Hilger’s business revenues for the eighteen months following the acquisition. The Company reassessed the expectations regarding the revenue during the eighteen month period based on twelve months of actual revenues and the forthcoming six months of the period. As a result, the Company lowered the estimate for the contingent consideration payment to $279,600 from the original $750,000. Goodwill was reduced by $470,400 as was the recorded liability, which is now carried as a current liability. The Company further assessed the contingent consideration as of September 30, 2011. As a result, the contingent consideration was reduced by $95,887, but without any change in goodwill.

The Company also reassessed the initial carrying valuations of the property and equipment acquired in the Hilger acquisition. As a result, Property, Plant and Equipment was reduced by $25,495 and Goodwill was increased by the same amount.

Goodwill balance at September 30, 2010	$	13,775,087
Contingent consideration adjustment		(470,400	)
Property, plant & equipment adjustment		25,495
Biomedical Technologies		300,000
Biomedical Technologies reclassed to Intangibles		(300,000	)
Goodwill balance at September 30, 2011	$	13,330,182