Stockholders' Equity

12 Months Ended

Sep. 30, 2013

Stockholders Equity Note [Abstract]

Stockholders Equity Note Disclosure [Text Block]

Note 11 – Stockholders’ Equity

Temporary Equity

As part of the July 1, 2008 RMD Instruments, LLC acquisition, the Company issued one million shares of Dynasil common stock to the members of the seller. Commencing July 1, 2010, the seller's members were able to tender these shares of Dynasil common stock to the Company for repurchase by it at a repurchase price of $2.00 per share during a two year period ending July 1, 2012, upon no less than ninety (90) days prior notice to the Company.  As of September 30, 2011, the 1,000,000 shares of redeemable common stock valued at its redemption value of $2.00 per share, or $2,000,000, were included in temporary equity to properly reflect the repurchase requirement that was not within the Company’s control.

See Note 9 for discussion of the redemption of 928,773 shares during the year ended September 30, 2012. There were an additional 71,227 shares of common stock outstanding that were subject to the Put Right, as discussed in Note 9. The notice period for these shares expired on April 2, 2012 and the amount of $142,454 previously recorded as temporary equity associated with these shares was reclassified to equity.

Stock Based Compensation

The Company adopted Stock Incentive Plans in 1996, 1999 and 2010 which provide for, among other incentives, the granting to officers, directors, employees and consultants options to purchase shares of the Company’s common stock. The Plans also allow eligible persons to be issued shares of the Company’s common stock either through the purchase of such shares or as a bonus for services rendered to the Company. Shares are generally issued at the fair market value on the date of issuance. The maximum number of shares of common stock which may be issued under the 2010 Stock Incentive Plan is 6,000,000, of which 3,868,124 and 4,289,436 shares of common stock are available for future purchases under the plan at September 30, 2013 and 2012, respectively. Options are generally exercisable at the fair market value or higher on the date of grant over a three to five year period currently expiring through 2017.

The fair value of the stock options granted is estimated at the date of grant using the Black-Scholes option pricing model. There were no option grants in the year ended September 30, 2013. The weighted average assumptions for grants during the year ended September 30, 2012 used in the Black-Scholes option pricing model were as follows:

	2012
Expected term in years	5 years
Risk-free interest rate	2.64	%
Expected volatility	93.62	%
Expected dividend yield	0.00	%

A summary of stock option activity for the years ended September 30, 2013 and 2012 is presented below:

		Weighted Average	Weighted Average
	Options	Exercise Price per	Remain Contractual
	Outstanding	Share ($)	Term (in Years)
Balance at September 30, 2012	794,483	3.34	1.75
Outstanding and exercisable at September 30, 2012	794,483	3.34	1.75
Granted	-	-
Exercised	-	-
Cancelled	(163,951)	3.39
Balance at September 30, 2013	630,532	3.33	1.06
Outstanding and exercisable at September 30, 2013	630,532	3.33	1.06

			Weighted	Weighted			Weighted
			Average	Average			Average
Range of		Options	Contractual	Exercise		Options	Exercise
Exercise Prices		Outstanding	Life (years)	Price		Exercisable	Price
$	2.00 - 2.99	200,000	0.84	$	2.00	200,000	$	2.00
	3.00 - 3.99	115,730	1.49		3.16	115,730		3.16
	4.00 - 4.99	275,000	1.03		4.00	275,000		4.00
	5.00 - 5.99	29,528	1.03		5.53	29,528		5.53
	6.00 - 6.65	10,274	1.17		6.65	10,274		6.65
$	2.00 - 6.65	630,532	1.06	$	3.33	630,532	$	3.33

The expected volatility was determined with reference to the historical volatility of the Company's stock. The Company uses historical data to estimate option exercises and employee terminations within the valuation model. The expected term of options granted represents the period of time that the options granted are expected to be outstanding. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury rate in effect at the time of grant. The dividend yield is expected to be 0.00% because historically the Company has not paid dividends on common stock.

During the year ended September 30, 2013, no stock options were granted nor exercised. During the year ended September 30, 2013, no stock options vested. During the year ended September 30, 2012, 43,960 stock options were granted with a weighted average grant date fair value of $1.34 per share. During the year ended September 30, 2012, 138,373 options were exercised in a cashless exercise with an intrinsic value of $92,710, for which the Company recognized no tax benefit. During the year ended September 30, 2012, 192,085 options vested with a fair value of $135,684. The intrinsic value of the options outstanding and the exercisable options at September 30, 2013 and 2012 was $0 and $0, respectively, as the market price was below the exercise prices.

Stock compensation expense for the years ended September 30, 2013 and 2012 is presented below:

Stock Compensation Expense	2013		2012
Stock Grants	$	231,272	$	312,503
Restricted Stock Grants		173,688		503,815
Option Grants		9,813		81,502
Employee Stock Purchase Plan		3,588		37,778
Total	$	418,361	$	935,598

At September 30, 2013 there was approximately $240,000 in unrecognized stock compensation cost, which is expected to be recognized over a weighted average period of six months.

A summary of restricted stock activity for the year ended September 30, 2013 and 2012 is presented below:

Restricted Stock Activity for the Year		Weighted-Average
ended September 30, 2013	Shares	Grant-Date Fair Value
Nonvested at September 30, 2012	127,834	$	1.92
Granted	404,000	$	0.67
Vested	(84,666)	$	1.38
Cancelled	(24,000)	$	3.59
Nonvested at September 30, 2013	423,168	$	0.77

Restricted Stock Activity for the Year		Weighted-Average
ended September 30, 2012	Shares	Grant-Date Fair Value
Nonvested at September 30, 2011	403,000	$	4.02
Granted	104,000	$	1.10
Vested	(127,166)	$	3.72
Cancelled	(252,000)	$	4.03
Nonvested at September 30, 2012	127,834	$	1.92

Employee Stock Purchase Plan

On September 28, 2010, the Company adopted an Amended and Restated Employee Stock Purchase Plan.  The existing plan was amended to extend the termination date to September 28, 2020.  The Employee Stock Purchase Plan permits substantially all employees to purchase common stock at a purchase price of 85% of the fair market value of the shares.    Under the Plan, a total of 450,000 shares have been reserved for issuance of which 284,858 and 256,236 shares have been issued as of September 30, 2013 and 2012, respectively.

On December 16, 2011, the Company amended the Amended and Restated Employee Stock Purchase Plan to change the maximum dollar amount of stock able to be purchased through the Plan by any  employee per calendar year from $5,000 to $20,000 per calendar year. During the years ended September 30, 2013 and 2012, 28,622 shares and 47,440 shares of common stock were issued under the Plan for aggregate purchase prices of $21,009 and $63,122, respectively.