|   |   |   | Contact:Patty KeheDynasil Corporation of AmericaPhone: (607) 272-3320, ext. 26Email:  pkehe@dynasilcorp.com |
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| Dynasil Corporation of America and Subsidiaries                                                                                                         |
|---------------------------------------------------------------------------------------------------------------------------------------------------------|
| Consolidated Balance Sheets                                                                                                                             |
|                                                                                                                                                    |   | 31-Mar |   |   | 30-Sep |   |
|                                                                                                                                                    |   | 2011 |   |   | 2010 |   |
| ASSETS                                                                                                                                                  |   | (Unaudited) |   |   |   |   |
| Current assets                                                                                                                                          |   |   |   |   |   |   |
|    Cash and cash equivalents                                                                                                             |   | $ | 4,329,661 |   |   | $ | 4,111,966 |   |
|    Accounts receivable, net                                                                                                              |   |   | 7,406,956 |   |   |   | 6,360,583 |   |
|    Inventories                                                                                                                           |   |   | 3,365,411 |   |   |   | 3,097,219 |   |
| Cost in excess of billings                                                                                                                              |   |   | -0- |   |   |   | 135,157 |   |
| Prepaid income taxes                                                                                                                                    |   |   | 223,752 |   |   |   | 410,045 |   |
| Prepaid expenses and other current assets                                                                                                               |   |   | 481,401 |   |   |   | 453,418 |   |
|                      Total current assets      |   |   | 15,807,181 |   |   |   | 14,568,388 |   |
|                                                                                                                                                    |   |   |   |   |   |   |   |   |
| Property, Plant and Equipment, net                                                                                                                      |   |   | 4,301,926 |   |   |   | 3,953,319 |   |
| Other Assets                                                                                                                                            |   |   |   |   |   |   |   |   |
|    Intangibles, net                                                                                                                      |   |   | 6,372,739 |   |   |   | 6,671,149 |   |
|    Goodwill                                                                                                                              |   |   | 13,146,382 |   |   |   | 13,591,287 |   |
|    Deferred financing costs, net                                                                                                         |   |   | 170,612 |   |   |   | 190,568 |   |
|                      Total other assets        |   |   | 19,689,733 |   |   |   | 20,453,004 |   |
|                                                                                                                                                    |   |   |   |   |   |   |   |   |
|                      Total Assets              |   | $ | 39,798,840 |   |   | $ | 38,974,711 |   |
|                                                                                                                                                    |   |   |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                    |   |   |   |   |   |   |   |   |
| Current Liabilities                                                                                                                                     |   |   |   |   |   |   |   |   |
|    Current portion of long-term debt                                                                                                     |   | $ | 1,870,029 |   |   | $ | 1,870,779 |   |
|    Accounts payable                                                                                                                      |   |   | 1,984,110 |   |   |   | 1,482,250 |   |
|    Accrued expenses and other liabilities                                                                                                |   |   | 1,686,168 |   |   |   | 1,823,222 |   |
|    Contingent consideration                                                                                                              |   |   | 279,600 |   |   |   | -0- |   |
|    Billings in excess of costs                                                                                                           |   |   | 558,110 |   |   |   | -0- |   |
|    Deferred tax liability                                                                                                                |   |   | 145,098 |   |   |   | 91,100 |   |
|    Dividends payable                                                                                                                     |   |   | -0- |   |   |   | 131,400 |   |
|                      Total current liabilities |   |   | 6,523,115 |   |   |   | 5,398,751 |   |
|                                                                                                                                                    |   |   |   |   |   |   |   |   |
| Long-term Liabilities                                                                                                                                   |   |   |   |   |   |   |   |   |
|    Long-term debt, net                                                                                                                   |   |   | 9,904,013 |   |   |   | 10,833,334 |   |
|    Contingent consideration                                                                                                              |   |   | -0- |   |   |   | 750,000 |   |
|                     Total long-term liabilities     |   |   | 9,904,013 |   |   |   | 11,583,334 |   |
|                                                                                                                                                    |   |   |   |   |   |   |   |   |
| Temporary Equity                                                                                                                                        |   |   | 2,000,000 |   |   |   | 2,000,000 |   |
|                                                                                                                                                    |   |   |   |   |   |   |   |   |
| Stockholders' Equity                                                                                                                                    |   |   | 21,371,712 |   |   |   | 19,992,626 |   |
|                                                                                                                                                    |   |   |   |   |   |   |   |   |
| Total Liabilities and Stockholders' Equity                                                                                                              |   | $ | 39,798,840 |   |   | $ | 38,974,711 |   |

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|                                                |   | Three Months Ended |       |   | Six Months Ended |   |
|-----------------------------------------------------|--------|--------------------|------------|--------|------------------|--------|
|                                                |   | March 31,          |       |   | March 31,        |   |
|                                                |   | 2011               |       |   | 2010             |   |   | 2011 |   |   | 2010 |   |
| Net revenue                                         |   | $                  | 12,116,349 |   |             | $      | 10,263,326 |   |   | $ | 23,742,856 |   |   | $ | 20,200,092 |   |
| Cost of revenue                                     |   |               | 7,400,518  |   |             |   | 6,054,847 |   |   |   | 14,120,300 |   |   |   | 12,106,800 |   |
| Gross profit                                        |   |               | 4,715,831  |   |             |   | 4,208,479 |   |   |   | 9,622,556 |   |   |   | 8,093,292 |   |
| Selling, general and administrative expenses        |   |               | 3,898,973  |   |             |   | 3,099,355 |   |   |   | 8,069,983 |   |   |   | 5,912,334 |   |
| Income from operations                              |   |               | 816,858    |   |             |   | 1,109,124 |   |   |   | 1,552,573 |   |   |   | 2,180,958 |   |
| Interest expense, net                               |   |               | 155,157    |   |             |   | 151,988 |   |   |   | 313,352 |   |   |   | 314,429 |   |
| Income before income taxes                          |   |               | 661,701    |   |             |   | 957,136 |   |   |   | 1,239,221 |   |   |   | 1,866,529 |   |
| Income taxes                                        |   |               | 265,485    |   |             |   | 323,836 |   |   |   | 467,823 |   |   |   | 619,462 |   |
| Net income                                          |   | $                  | 396,216    |   |             | $      | 633,300 |   |   | $ | 771,398 |   |   | $ | 1,247,067 |   |
|                                                |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
|                                                |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Net Income                                          |   | $                  | 396,216    |   |             | $      | 633,300 |   |   | $ | 771,398 |   |   | $ | 1,247,067 |   |
| Foreign currency translation, net of $53,898        |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
|  and $ -0- income taxes in 2011 and 2010       |   |               | 96,913     |   |             |   | -0- |   |   |   | 138,594 |   |   |   | -0- |   |
| Total comprehensive income                          |   | $                  | 493,129    |   |             | $      | 633,300 |   |   | $ | 909,992 |   |   | $ | 1,247,067 |   |
|                                                |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
|                                                |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                          |   | $                  | 396,216    |   |             | $      | 633,300 |   |   | $ | 771,398 |   |   | $ | 1,247,067 |   |
| Dividends on preferred stock                        |   |               | -0-        |   |             |   | 131,400 |   |   |   | 116,646 |   |   |   | 274,633 |   |
| Net income applicable to common stockholders        |   |               | 396,216    |   |             |   | 501,900 |   |   |   | 654,752 |   |   |   | 972,434 |   |
| Dividend add back due to preferred stock conversion |   |               | -0-        |   |             |   | 131,400 |   |   |   | 116,646 |   |   |   | 274,633 |   |
| Net income for diluted income per common share      |   | $                  | 396,216    |   |             | $      | 633,300 |   |   | $ | 771,398 |   |   | $ | 1,247,067 |   |
|                                                |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Basic net income per common share                   |   | $                  | 0.03       |   |             | $      | 0.04 |   |   | $ | 0.06 |   |   | $ | 0.08 |   |
| Diluted net income per common share                 |   | $                  | 0.03       |   |             | $      | 0.04 |   |   | $ | 0.05 |   |   | $ | 0.09 |   |
|                                                |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average shares outstanding                 |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                               |   |               | 14,971,874 |   |             |   | 12,502,365 |   |   |   | 13,975,906 |   |   |   | 12,146,499 |   |
| Diluted                                             |   |               | 15,507,493 |   |             |   | 14,839,745 |   |   |   | 14,511,525 |   |   |   | 14,483,879 |   |

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