Formation of Xcede Technologies, Inc. Joint Venture

9 Months Ended

Jun. 30, 2014

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments and Joint Ventures Disclosure [Text Block]

Note 2 – Formation of Xcede Technologies, Inc. Joint Venture

On or about October 1, 2013, the Company formed Xcede Technologies, Inc. (“Xcede”), a joint venture with Mayo Clinic, in order to spin out and separately fund the development of its tissue sealant technology which formerly comprised the majority of its Biomedical segment. Xcede had received a total of approximately $800,000 in funding as of June 30, 2014 in the form of Convertible Notes from individual investors including certain directors of the Company. The notes accrue interest at 5%. Upon the closing of a capital stock financing by Xcede, the outstanding principal amount of the notes plus all accrued but unpaid interest on the notes will be converted into shares of the same capital stock sold in the capital stock financing at a 20% discount to the price per share of that capital stock financing. Alternatively, at any time prior to a capital stock financing the note holders can convert at their option into common stock of Xcede based on a $5.0 million valuation.

Xcede is continuing its fund raising efforts as it will require additional funding in connection with human trials expected to commence in the Fall of 2014.

Xcede’s common stock is 90% owned by Dynasil Biomedical. Xcede is a subsidiary of Dynasil Biomedical and Dynasil, and is, therefore, included in the Company’s consolidated balance sheet, results of operations and cash flows. Dynasil holds a majority of the seats on Xcede’s board of directors.