-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UYPI3xGGsZCXuze7B4GzUSJrWFJNU0pzVBimIc8Ki31QHS5l3cyNxYPVxzsdHoug qz28l3u/CXTRffGoVjkfmw== 0001260415-05-000011.txt : 20050214 0001260415-05-000011.hdr.sgml : 20050214 20050214065436 ACCESSION NUMBER: 0001260415-05-000011 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20041231 FILED AS OF DATE: 20050214 DATE AS OF CHANGE: 20050214 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DYNASIL CORP OF AMERICA CENTRAL INDEX KEY: 0000030831 STANDARD INDUSTRIAL CLASSIFICATION: GLASS, GLASSWARE, PRESSED OR BLOWN [3220] IRS NUMBER: 221734088 STATE OF INCORPORATION: NJ FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-27503 FILM NUMBER: 05601955 BUSINESS ADDRESS: STREET 1: 385 COOPER RD CITY: WEST BERLIN STATE: NJ ZIP: 08091 BUSINESS PHONE: 8567674600 MAIL ADDRESS: STREET 1: 385 COOPER RD CITY: WEST BERLIN STATE: NJ ZIP: 08091 10QSB 1 dyn1204-10q.txt DYNASIL CORPORATION OF AMERICA FORM 10-QSB UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-QSB (Mark One) XX QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE - --- ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED December 31, 2004 TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE - --- ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______ TO ______. Commission file number 000-27503 ____________________ DYNASIL CORPORATION OF AMERICA ------------------------------------------------------------------- (Exact name of small business issuer as specified in its charter) New Jersey 22-1734088 -------------- ------------------------------- (State or other jurisdiction (IRS Employer Identification No.) of incorporation) 385 Cooper Road, West Berlin, New Jersey, 08091 ---------------------------------------------------------- (Address of principal executive offices) (856) 767-4600 -------------------------------------------------- (Registrant's telephone number, including area code) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 XX No ---- ---- The Company had 3,443,378 shares of common stock, par value $.0005 per share, outstanding as of February 8, 2004. DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES INDEX PAGE PART 1. FINANCIAL INFORMATION ---- ITEM 1. FINANCIAL STATEMENTS DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES ----------------------------------------------- CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2004 AND SEPTEMBER 30, 2004 3 CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED DECEMBER 31, 2004 AND 2003 4 CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED DECEMBER 31, 2004 AND 2003 5 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS 7 ITEM 3. CONTROLS AND PROCEDURES 11 PART II. OTHER INFORMATION 12 ITEM 1. LEGAL PROCEEDINGS 12 ITEM 2. CHANGES IN SECURITIES 12 ITEM 3. DEFAULTS ON SENIOR SECURITIES 12 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 12 ITEM 5. OTHER INFORMATION 13 ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K 13 SIGNATURES 13 2 DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS UNAUDITED) ASSETS December 31 September 30 2004 2004 ---------- ---------- Current assets Cash and cash equivalents $ 136,584 $ 254,908 Accounts receivable 444,507 309,276 Inventory 410,345 369,813 Other current assets 22,271 16,656 ---------- ---------- Total current assets 1,013,707 950,653 Property, Plant and Equipment, net 403,021 419,718 Other Assets 2,469 3,321 ---------- ---------- Total Assets $1,419,197 $1,373,692 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Current portion - long-term debt $120,000 $120,000 Accounts payable 218,685 184,214 Accrued expenses 120,070 114,959 ---------- ---------- Total current liabilities 458,755 419,173 Long-term Debt, net 458,889 488,889 Stockholders' Equity Common Stock, $.0005 par value, 25,000,000 shares authorized, 4,240,804 and 4,050,180 shares issued 3,430,644 and 3,240,020 shares outstanding 2,120 2,025 Additional paid in capital 1,269,488 1,239,736 Retained earnings 216,287 210,211 ---------- ---------- 1,487,895 1,451,972 Less 810,160 shares in treasury - at cost (986,342) (986,342) ---------- ---------- Total stockholders' equity 501,553 465,630 ---------- ---------- Total Liabilities and Stockholders' Equity $1,419,197 $1,373,692 ========== ==========
3 DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended December 31 2004 2003 ---------- --------- Sales $ 781,186 $ 622,494 Cost of Sales 580,689 462,548 ---------- -------- Gross profit 200,497 159,946 Selling, general and administrative 186,720 178,581 ---------- --------- Income (Loss) from Operations 13,777 ( 18,635) Other income (expense) Interest expense net ( 7,703) ( 7,401) ---------- --------- Income (Loss) before Income Taxes 6,074 (26,036) Income Tax 0 0 --------- -------- Net income (loss) $ 6,074 ($26,036) ========= ======== Net income (loss) per share Basic $0.00 ( $0.01) Diluted $0.00 ( $0.01) Weighted average shares outstanding 3,387,701 2,238,254
4 DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended December 31 2004 2003 ---------- ----------- Cash flows from operating activities: Net income (loss) $ 6,074 ($ 26,036) Adjustments to reconcile net income (loss) to net cash provided by (used in)operating activities: Depreciation 34,050 39,375 Amortization expense 852 852 Stock Based Compensation Directors 19,717 (Increase) decrease in: Accounts receivable (135,231) ( 62,892) Inventories (40,532) 35,076 Prepaid expenses and other current assets (5,615) 31,438 Increase (decrease) in: Accounts payable 34,471 30,678 Accrued expenses 5,113 ( 16,761) --------- ---------- Net cash provided by (used in) operating activities (81,101) 31,730 --------- ---------- Cash flows from investing activities: Acquisition of property, plant and equipment (17,353) 0 --------- ---------- Net cash used in investing activities (17,353) 0 --------- ----------- Cash flows from financing activities: Issuance of common stock 10,130 0 Repayments of long-term debt ( 30,000) ( 49,839) --------- ----------- Net cash used in financing activities ( 19,870) ( 49,839) --------- ----------- Net(decrease) in cash (118,324) ( 18,109) Cash - beginning of period 254,908 323,321 --------- ----------- Cash - end of period $ 136,584 $ 305,212 ========= ===========
5 DYNASIL CORPORATION OF AMERICA NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. Basis of Presentation The consolidated balance sheet as of September 30, 2004 was audited and appears in the Form 10-KSB previously filed by the Company. The consolidated balance sheet as of December 31, 2004 and the consolidated statements of operations and cash flows for the three months ended December 31, 2004 and 2003, and the related information contained in these notes have been prepared by management without audit. In the opinion of management, all adjustments (which include only normal recurring items) necessary to present fairly the financial position, results of operations and cash flows in conformity with generally accepted accounting principles as of December 31, 2004 and for all periods presented have been made. Interim operating results are not necessarily indicative of operating results for a full year. Certain information and note disclosures normally included in the Company's annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company's September 30, 2004 Annual Report on Form 10-KSB previously filed by the Company with the Securities and Exchange Commission. 2. Inventories Inventories are stated at the lower of average cost or market. Cost is determined using the first-in, first-out (FIFO) method. Inventories consist primarily of raw materials, work-in-process and finished goods. The Company evaluates inventory levels and expected usage on a periodic basis and records adjustments for impairments as required. Inventories consisted of the following: December 31, 2004 September 30, 2004 ----------------- ------------------ Raw Materials $137,945 $148,278 Work-in-Process 168,590 114,170 Finished Goods 103,810 107,365 ------- ------- $410,345 $369,813 ======= ======= 3. Net Income Per Share Basic net income per share is computed using the weighted average number of common shares outstanding. The dilutive effects of potential common shares outstanding are included in diluted net earnings per share. For periods with a net loss, diluted net earnings per share exclude the impact of potential common shares since they would have resulted in an antidilutive effect. 6 4. Stock Based Compensation The Company has adopted the disclosure provisions of SFAS No. 148 and continues to account for stock-based compensation using the intrinsic value method. Accordingly, no compensation cost has been recognized in the financial statements for stock options issued to employees since the options were granted at the quoted market price or higher on the date of grant. Stock options granted to consultants and other non-employees are reported at fair value in accordance with SFAS No. 123. The pro forma disclosures of net loss and net loss per common share required by SFAS No. 123 are shown below. Three months ended December 31, 2004 December 31, 2003 ----------- ------------- Net income (loss), as reported $ 6,074 ( $ 26,036) Add: Stock-based employee compensation expense included in reported net income -0- -0- Less: Total stock-based employee compensation expense determined under fair value based method for all options (153) -0- ----------- ----------- Pro forma net profit (loss) $ 5,921 ( $26,036) =========== =========== Actual net profit (loss) per common share $ 0.00 ($ 0.01) Pro forma net profit (loss) per common share $ 0.00 ($ 0.01) During the three-months ended December 31, 2004 and 2003, 241,966 stock options were granted at prices ranging from $0.40 to $0.60 per share and no options were exercised or cancelled. Compensation expense relating to non- employee stock options granted during the three-months ended December 31, 2004 and 2003 were $-0-. During the three months ended December 31, 2004, the Company issued 140,834 shares of common stock valued at $.14 per share to the Board of Directors in satisfaction of accrued directors' fees totaling $19,717. ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATION Overview Revenues for the 1st quarter ended December 31, 2004 were $781,186, an increase of 25% over revenues of $622,494 for the quarter ended December 31, 2003. The net profit for the quarter ended December 31, 2004 was $6,074, or less than $.01 per share, compared with a net loss of $26,036, or a negative $.01 per share, for the quarter ended December 31, 2003. The Company continues to focus on management's strategy of profitable growth from our optical materials business and by pursuing acquisitions. Order bookings for the quarter were up 48% over the first quarter of fiscal year 2004. Management believes that this revenue improvement comes from improved economic conditions in our markets combined with proactive sales and marketing efforts that include offering new optical materials and pursuit of new business. During the quarter, we also completed Dynasil's leadership transition. The expenses from that transition reduced quarterly 7 profits by $32,400. Without those expenses, earnings per share would have been $0.01 per share. If consummated, our previously announced acquisition of Optometrics LLC is expected to double Dynasil's revenues and significantly enhance profitability. The closing date for the Optometrics LLC acquisition is currently scheduled for March 8, 2005 to accommodate the schedules of all parties. Results of Operations Revenues for the three months ended December 31, 2004 were $781,186, an increase of 25.5% over revenues of $622,494 for the three months ended December 31, 2003. This is the second consecutive quarter with revenue growth exceeding 20% and the 48% order bookings increase has positioned the next quarter for strong revenues. Sales increased to a broad range of optical material customers and a large increase came from new business from a laser manufacturer. Cost of sales for the three months ended December 31, 2004 was $580,689, or 74.3% of sales and for the three months ended December 31, 2003 was $462,548, or 74.3% of sales. Start-up costs associated with the increased sales to the new laser manufacturer unfavorably impacted margins so that the cost of sales percentage remained the same as the previous year. Gross profit for the three months ended December 31, 2004 was $200,497, or 25.7% of sales, an increase of $40,551 over the three months ended December 31, 2003 of $159,946, or 25.7% of sales. Selling, general and administrative expenses for the three months ended December 31, 2004 were $186,720 or 23.9% of sales, an increase of $8,139 over the three months ended December 31, 2003 of $178,581, or 28.7% of sales. Mr. Craig T. Dunham joined the Company to replace Mr. John Kane as President and CEO effective October 1, 2004. Mr. Kane left the Company in early December and the management transition added costs estimated at $32,400 for the quarter. Interest expense- net for the three months ended December 31, 2004 was $7,703, an increase of $302 over the three months ended December 31, 2003 of $7,401. Net income for the three months ended December 31, 2004 was $6,074, or less than $0.00 per share, an increase of $32,110 over the net loss for the three months ended December 31, 2003 of ($26,036), or ($.01) in basic loss per share. Management is pleased to complete a profitable quarter after several challenging years. The Company has no provision for income taxes for either period in 2004 or 2003. As of September 30, 2004, we have approximately $1,400,000 of net operating loss carryforwards to offset future income for federal tax purposes expiring in various years through 2021. In addition, the Company has approximately $800,000 of net operating loss carryforwards to offset certain future states' taxable income, expiring in various years through 2013. Liquidity and Capital Resources Cash decreased by $118,324 for the three months ended December 31, 2004 to end at $136,584. The primary use of cash was $135,231 of higher accounts receivable which was largely a result of the higher sales. 8 The Company believes that its current cash and cash equivalent balances, along with the net cash generated by operations, will be sufficient to meet its anticipated cash needs for working capital for at least the next 12 months. There are currently no plans for any major capital expenditures in the next six to nine months. Any business expansion or acquisitions, including the pending acquisition of Optometrics LLC, will require the Company to seek additional debt or equity financing. The Company is currently seeking such additional financing and is confident that it will be able to obtain it. Optometrics Acquisition The planned Optometrics LLC acquisition is currently scheduled to close on March 8, 2005. Agreement has been reached on all substantial points and the Company expects to execute and deliver a definitive Asset Purchase Agreement relating to that transaction during the third week of February, 2005. As planned, the transaction will involve Dynasil's purchase of the assets of Optometrics LLC, entry into a long term facility lease and entry into two year employment agreements with the two principals of Optometrics LLC. A commitment for necessary bank financing has been received and the Company expects to complete other necessary financing arrangements shortly. Due diligence activities are nearly complete. The planned acquisition of the Optometrics LLC assets is expected to double Dynasil's revenues and add significant net income. Management is pleased with the progress on the pending acquisition and expects that the transaction will provide benefits for both companies. Critical Accounting Policies and Estimates There have been no material changes in our critical accounting policies or critical accounting estimates since September 30, 2004, nor have we adopted an accounting policy that has or will have a material impact on our consolidated financial statements. For further discussion of our accounting policies see Footnote 1 " Summary of Significant Accounting Policies" in this Quarterly Report on Form 10-QSB and the Notes to Consolidated Financial Statements in our Annual Report on Form 10-KSB for the fiscal year ended September 30, 2004. The accounting policies that reflect our more significant estimates, judgments and assumptions and which we believe are the most critical to aid in fully understanding and evaluating our reported financial results include the following: Revenue Recognition Revenue from sales of products is recognized at the time title and the risks and rewards of ownership pass. This is when the products are shipped per customers' instructions, the sales price is fixed and determinable, and collections are reasonably assured. Valuation of Long-Lived Assets We assess the recoverability of long-lived assets whenever we determine that events or changes in circumstances indicate that their carrying amount may not be recoverable. Our assessment is primarily based upon our estimate of future cash flows associated with these assets. These valuations contain certain assumptions concerning estimated future revenues and future expenses. We have determined that there is no indication of impairment of any of our assets. However, should our operating results deteriorate, we may determine that some portion of our long-lived assets are impaired. Such determination could result in non-cash charges to income that could materially affect our financial position or results of operations for that period. 9 Estimating Allowances for Doubtful Accounts Receivable We perform ongoing credit evaluations of our customers and adjust credit limits based upon payment history and the customer's current credit worthiness, as determined by our review of their current credit information. We continuously monitor collections and payments from our customers and maintain a provision for estimated credit losses based upon our historical experience and any specific customer collection issues that we have identified. While such credit losses have historically been minimal, within our expectations and the provisions established, we cannot guarantee that we will continue to experience the same credit loss rates that we have in the past. A significant change in the liquidity or financial position of any of our significant customers could have a material adverse effect on the collectibility of our accounts receivable and our future operating results. Valuation of Deferred Tax Assets We regularly evaluate our ability to recover the reported amount of our deferred income taxes considering several factors, including our estimate of the likelihood of the Company generating sufficient taxable income in future years during the period over which temporary differences reverse. The Company's deferred tax assets are currently fully reserved. Recent Accounting Pronouncements In November 2004, the Financial Accounting Standards Board (FASB) issued SFAS No. 151,"Inventory Costs". SFAS No. 151 amends the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage) under the guidance in ARB No. 43, Chapter 4, "Inventory Pricing". Paragraph 5 of ARB No. 43, Chapter 4, previously stated that ". . . under some circumstances, items such as idle facility expense, excessive spoilage, double freight, and rehandling costs may be so abnormal as to require treatment as current period charges. . . ." This Statement requires that those items be recognized as current-period charges regardless of whether they meet the criterion of "so abnormal." In addition, this Statement requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. This statement is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. Management does not expect adoption of SFAS No. 151 to have a material impact on the Company's financial statements. In December 2004, the FASB issued SFAS No. 153,"Exchanges of Nonmonetary Assets," an amendment to Opinion No. 29,"Accounting for Nonmonetary Transactions". Statement No. 153 eliminates certain differences in the guidance in Opinion No. 29 as compared to the guidance contained in standards issued by the International Accounting Standards Board. The amendment to Opinion No. 29 eliminates the fair value exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. Such an exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS No. 153 is effective for nonmonetary asset exchanges occurring in periods beginning after June 15, 2005. Earlier application is permitted for nonmonetary asset exchanges occurring in periods beginning after December 16, 2004. Management does not expect adoption of SFAS No. 153 to have a material impact on the Company's financial statements. 10 On December 16, 2004, the FASB issued SFAS No. 123 (revised 2004 - SFAS No. 123R), "Share-Based Payment", which is a revision of FASB Statement No. 123, Accounting for Stock-Based Compensation ("SFAS No. 123). Generally, the approach in SFAS No. 123R is similar to the approach described in SFAS No. 123. However, SFAS No. 123 permitted, but does not require, share-based payments to employees to be recognized based on their fair values while SFAS 123R requires all share-based payments to employees to be recognized based on their fair values. SFAS No. 123R also revises, clarifies and expands guidance in several areas, including measuring fair value, classifying an award as equity or as a liability and attributing compensation cost to reporting periods. The new standard will be effective for the Company in the first interim period beginning after December 15, 2005. Management is currently assessing the effect of SFAS No. 123R on the Company's financial statements. Forward-Looking Statements The statements contained in this Quarterly Report on Form 10-QSB which are not historical facts, including, but not limited to, certain statements found under the captions "Results of Operations", "Liquidity and Capital Resources" and "Optometrics Acquisition" above, are forward-looking statements that involve a number of risks and uncertainties. The actual results of the future events described in such forward-looking statements could differ materially from those stated in such forward-looking statements. Among the factors that could cause actual results to differ materially are the risks and uncertainties discussed in this Quarterly Report on Form 10-QSB, including, without limitation, the portions of such reports under the captions referenced above, and the uncertainties set forth from time to time described in this and the Company's other filings with the Securities and Exchange Commission, and other public statements. Such risks and uncertainties include, without limitation, seasonality, interest in the Company's products, consumer acceptance of new products, general economic conditions, consumer trends, costs and availability of raw materials and management information systems, competition, litigation, need for additional financing, the effect of governmental regulation and other matters. The Company disclaims any intention or obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. ITEM 3 CONTROLS AND PROCEDURES Based on his most recent informal evaluation, which was completed during the period covered within this Form 10-QSB, the Company's President/chief executive officer believes the Company's disclosure controls and procedures (as defined in Exchange Act Rule 13a-14 and 15d-14) are effective. There were not any significant changes in the Company's internal controls or no other facts that could significantly affect these controls subsequent to the date of this evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. The Company is presently unable to provide segregation of duties within the Company as a means of internal control. As a result, the Company is presently relying on overriding management reviews, and assistance from its board of directors and Audit Committee in providing short-term review procedures until such time as additional funding is provided to hire additional executives to segregate duties within the Company. 11 PART II OTHER INFORMATION - ------------------ ITEM 1 LEGAL PROCEEDINGS NONE ITEM 2 CHANGES IN SECURITIES NONE ITEM 3 DEFAULTS ON SENIOR SECURITIES NONE ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS (a) The Company's Annual Meeting of Shareholders was held on January 18, 2005. (b) On November 30, 2004, the Shareholder's record date for the annual meeting, there were 3,430,644 shares of Common Stock outstanding and entitled to one vote per share. At the annual meeting there were 3,040,017 shares present in person or by proxy, a total of 88.61% of the shares outstanding. A quorum was present. The results of the election of Directors are stated below: Total votes cast: 3,040,017 James Saltzman 3,030,391 shares voted for and 9,626 shares withheld Craig Dunham 3,031,011 shares voted for and 9,006 shares withheld David Manzi 3,031,011 shares voted for and 9,006 shares withheld The necessary votes were cast in favor of each of the nominees, each of whom was a continuing director, and they were elected. (c)The following were the results of the vote on other items: Item 2 of the proxy, to approve an amendment to the Employee Stock Purchase Plan to increase by 300,000 the number of shares of common stock that may be issued under that Plan. Total votes cast 1,959,605 1,938,414 shares in favor 18,541 shares against 2,650 shares abstained The necessary majority of votes were cast in favor of Item Number 2 and it was approved. Item 3 of the proxy, to approve an amendment to the 1999 Stock Incentive Plan to increase by 900,000 the number of shares of common stock that may be issued under that Plan. Total votes cast 1,959,605 1,898,072 shares in favor 58,633 shares against 2,900 shares abstained The necessary majority of votes were cast in favor of Item Number 3 and it was approved. Item 4 of the proxy, to approve an amendment to the Certificate of Incorporation to authorize the issuance of up to 10 million shares of "blank check" preferred stock. Total votes case 1,959,605 1,898,422 shares in favor 58,283 shares against Item 4 2,900 shares abstained 12 The necessary two thirds of votes were cast in favor of Item Number 4 and it was approved. Item 5 of the proxy, to approve an amendment to the Certificate of Incorporation to reduce the shareholder vote required for certain corporate actions from two-thirds to a simple majority. Total votes cast 1,959,605 1,896,172 shares in favor 60,533 shares against 2,900 shares abstained The necessary two thirds of votes were cast in favor of Item Number 5 and it was approved. Item 6 of the proxy, to ratify the appointment of Haefele, Flanagan & Company p.c. as the Company's independent public accountants for the 2005 fiscal year. Total votes cast 3,042,057 3,031,765 shares in favor 3,000 shares against 7,292 shares abstained The necessary majority of votes were cast in favor of Item Number 6 and it was approved. ITEM 5 OTHER INFORMATION NONE ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits and index of Exhibits 31.1(a) and (b) Rule 13a-14(a)/15d-14(a) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Section 1350 Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished but not filed for purposes of the Securities Exchange Act of 1934) (b) Reports on Form 8-K - On 11/4/04, a current report for Items 12 and 7 including September 30, 2004 financial results. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. DYNASIL CORPORATION OF AMERICA BY: /s/ Craig T. Dunham DATED: February 10, 2005 --------------------------------- ----------------- Craig T. Dunham, President, CEO, Acting Chief Financial Officer 13 EX-31 2 dynex31a.txt CERTIFICATION EXHIBIT 31.1 (a) CERTIFICATION PURSUANT TO RULE 13a 14(a)/15D-14(a) and SECTION 302 OF THE SARBANES-OXLEY ACT I, Craig Dunham, the President and Chief Executive Officer of Dynasil Corporation of America, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Dynasil Corporation of America; 2. Based on my knowledge, this quarterly 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 small business issuer as of, and for, the periods presented in this report; 4. The small business issuer'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 small business issuer 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 small business issuer, 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 small business issuer'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 small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and -1- 5. The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer'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 small business issuer'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 small business issuer's internal control over financial reporting. Date: February 10, 2005 /s/ Craig T Dunham ------------------ ------------------------------------ Craig T Dunham President and Chief Executive Officer -15- EX-31 3 dynex31b.txt CERTIFICATION EXHIBIT 31.1 (b) CERTIFICATION PURSUANT TO RULE 13a 14(a)/15D-14(a) and SECTION 302 OF THE SARBANES-OXLEY ACT I, Craig T Dunham, the President and Acting Chief Financial Officer of Dynasil Corporation of America, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Dynasil Corporation of America; 2. Based on my knowledge, this quarterly 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 small business issuer as of, and for, the periods presented in this report; 4. The small business issuer'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 small business issuer 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 small business issuer, 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 small business issuer'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 small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and -1- 5. The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer'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 small business issuer'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 small business issuer's internal control over financial reporting. Date: February 10, 2005 /s/ Craig T Dunham --------------------- Craig T Dunham Acting Chief Financial Officer -2- EX-32 4 dynex32-1.txt CERTIFICATION 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 DYNASIL CORPORATION OF AMERICA (the "Company") on Form 10QSB for the period ended December 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Craig T Dunham, President, Acting Chief Executive Officer and Acting Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 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. /s/ Craig T Dunham ------------------- Craig T Dunham President, Chief Executive Officer and Acting Chief Financial Officer February 10, 2005 -----END PRIVACY-ENHANCED MESSAGE-----