U. S. SECURITIES AND EXCHANGE COMMISSION
                     Washington, DC   20549

                              FORM 10-KSB
(Mark One)

[x] ANNUAL REPORT UNDER SECTION 13 0R 15(d) OF THE SECURITIES
EXCHANGE ACT
    OF 1934 for the fiscal year ended September 30, 2007.

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE
    ACT 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 of                       (I.R.S. Employer
 Incorporation or Organization)                        Identification No.)

385 Cooper Road, West Berlin, New Jersey                        08091
(Address of Principal Executive Offices)                      (Zip Code)

                              (856) 767-4600
                        (Issuer's Telephone Number)


Securities registered under Section 12(b) of the Act: none

Securities registered under Section 12(g) of the Act: common
stock, $.0005 par value

Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities 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
[x]     No [ ]

Check if there is no disclosure of delinquent filers in response
to item 405 of Regulation S-B contained in this form, and that
no disclosure will be contained, to the best of the registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in part III of this Form 10-KSB or any
amendment to this Form 10-KSB [x]

State issuer's revenues for its most recent fiscal year:
$10,794,650.

The Company's common stock is quoted on the NASDAQ OTC Bulletin
Board under the symbol "DYSL.OB".   The estimated aggregate
market value of the voting and non-voting stock held by
non-affiliates of the registrant as of December 3, 2007 was
$5,464,444. The market value is based upon the last sale of the
Common Stock on the NASDAQ OTC Bulletin Board of $1.55 per share
as of December 3, 2007.

The Company had 6,118,497 shares of common stock, par value
$.0005 per share, outstanding as of December 3, 2007.

Documents incorporated by reference: none

Transitional Small Business Disclosure:     Yes       No  X
                                            ----       -----

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<PAGE>




                             PART I

ITEM 1.  DESCRIPTION OF BUSINESS

     Dynasil Corporation of America ("Dynasil", "we" or the
"Company") was
incorporated in the State of New Jersey on October 20, 1960.

     We were founded as a manufacturer and fabricator of
synthetic fused silica, a high purity, industrial optical
material. The manufacturing aspect of the business entails
producing synthetic fused silica through a chemical-vapor-
deposition process in furnaces. The fabricating aspect deals
with precision cutting, coring and shaping to customer
specifications, also done at our manufacturing facility. In
recent years, we have suspended operations of our glass furnaces
and concentrated on the fabrication of optical materials
supplied by other manufacturers. This has included fused quartz
from General Electric, fused silica from Corning Incorporated,
and various optical materials from Schott Glass Technologies
Inc., Ohara Corporation, and others.

      On March 8, 2005, we acquired the operating assets and
assumed certain liabilities of Optometrics LLC ("Optometrics"),
a worldwide supplier of optical components and instruments
including diffraction gratings, interference filters, laser
optics, monochromators and specialized optical systems.  This
acquisition approximately doubled our revenues and added
significant profitability.

     On October 2, 2006, we acquired 100% of the stock of
Evaporated Metal Films Corporation ("EMF") in Ithaca, NY.  EMF
provides optical thin-film coatings for a broad range of
application markets including display systems, optical
instruments, satellite communications and lighting.  This
acquisition increased our fiscal year 2007 revenues by
approximately 37%.

      Our products are used as components of optical
instruments, lasers, analytical instruments,
semiconductor/electronic devices, automotive components,
spacecraft/aircraft components, and in devices for the energy
industry. These applications include:

     Optical components - diffraction gratings, interference filters, lenses,
     prisms, reflectors, mirrors, filters, optical flats, beam splitters,
     windows

     Lasers - beam splitters, brewster windows, q-switches, medical/industrial
     lasers, exciter systems, diffraction gratings

     Analytical Instruments - Spectrometers, fire control devices, reticle
     substrates, and interferometer plates

     Semiconductor/Electronic - Microcircuit substrates, microwave devices,
     photomasks, sputter plates, microlithography optics

     Spacecraft/Aircraft - Docking light covers, windows, re-entry heat shields,
     ring laser gyros

     We also produce several analytical instruments including an
instrument designed to measure the "Sun Protection Factor"
("SPF") of sunscreens.

     Our products are distributed through direct sales and
delivered by commercial carriers. We have nine sales and
marketing people who handle all sales. We also use
manufacturer's representatives in various foreign countries for
international sales. Marketing efforts include direct customer
contact through sales visits, advertising in trade publications
and presentations at trade shows.

     We compete for business in the optics industry primarily
with fabricators of industrial optical materials, other optical
components manufacturers and other optical coaters. Market share
in the optics industry is largely a function of quality, price
and speed of delivery.  We believe that we compete effectively
in all three areas.

     Our largest supplier is Corning Incorporated.

     We presently have over 400 customers with approximately 32%
of our business concentrated in our top 10 customers. Our five
largest customers

                                      -2-
<PAGE>

accounted for approximately 6.1%, 4.2%, 3.8%, 3.6%
and 3.4%, respectively, of our revenues during fiscal year 2007.
The loss of any of these top five customers would likely have a
material adverse effect on our business, financial condition and
results of operations. Generally, our customers provide purchase
orders for a specific part, quantity and quality. Orders are
normally filled over a period ranging from one to six weeks. We
have blanket orders that call for monthly deliveries of a
predetermined amount.

     We have no patents or patent applications filed or pending.

     Other than federal, state and local environmental and
safety laws as well as ITAR and FDA requirements, our operations
are not subject to direct governmental regulation. We do not
have any pending notices of environmental violations and are
aware of no potential violations. There are no buried storage
tanks on our properties. Environmental costs for fiscal year
2007 did not exceed $50,000.

     Our research and development activities primarily involve
new product development, changes to our manufacturing process
and the introduction of improved methods and equipment.
Improvements to our processes are ongoing and related costs are
incorporated into our manufacturing expenses.

     Our total work force consists of 80 employees: 9
administrative; 9 sales; 10 engineering, and 52 manufacturing
personnel. The operations are non-union.

     The public may read and copy any materials we have filed
with the SEC at the SEC's Public Reference Room at 450 Fifth
Street, N.W., Washington, D.C. 20549.  Information on the
operation of the Public Reference Room may be obtained by
calling the SEC at 1-800-SEC-0330. The SEC also maintains an
internet site that contains reports, proxy and information
statements, and other information regarding issuers that file
electronically with the SEC. The address of the internet site is
http://www.sec.gov. The public can also contact Mr. Craig T.
Dunham at Dynasil Corporation of America, 385 Cooper Road, West
Berlin, NJ 08091 or through the internet web address
http://www.Dynasil.com.

ITEM 2.    DESCRIPTION OF PROPERTY

Facilities

     We own a manufacturing and office facility consisting of a
one-story, masonry and steel building containing approximately
15,760 square feet, located at 385 Cooper Road, West Berlin, New
Jersey 08091. The building includes optical materials
fabrication and administrative offices and is situated on a
3.686-acre site. We also lease a 10,000 square foot building in
Ayer, MA from a related party with a lease that expires in March
2013. As part of the EMF acquisition, we acquired a 44,000
square foot facility in Ithaca, New York.  We believe the
properties are in satisfactory condition and suitable for our
purposes.  The New Jersey and New York properties are mortgaged
as collateral against notes payable to banks.

ITEM 3.  LEGAL PROCEEDINGS

     NONE

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     During the Fourth Quarter of the Fiscal Year covered by
this report, no matter was submitted to a vote of security
holders through solicitation of proxies or otherwise.

                                  PART II

ITEM 5.    MARKET FOR THE COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

    The Registrant's Common Stock is quoted on the NASD-OTC
Bulletin Board under

                                    -3-
<PAGE>



the symbol "DYSL.OB". The Company's Common Stock has been traded
publicly since April 22, 1981. The "high" and "low" bid
quotations for the Company's Common Stock as reported by the OTC
Bulletin Board for each quarterly period for the fiscal years
ended September 30, 2006 and September 30, 2007 were as follows:

  Fiscal Quarter        High Bid Price        Low Bid Price
  --------------        --------------        -------------
       2006
       First              $0.89                 $0.70
       Second              0.91                  0.55
       Third               0.90                  0.52
       Fourth              0.85                  0.55

       2007
       First              $1.85                 $0.63
       Second              1.71                  1.20
       Third               1.93                  1.27
       Fourth              1.70                  0.92


     The above listed quotes reflect inter-dealer prices without
retail mark-up, mark-down, or commissions, and may not represent
actual transactions.

The "high" and "low" sale prices for trades of the Company's
Common stock on the OTC bulletin board were as follows for each
quarterly period:

  Fiscal Quarter        High Sale Price       Low Sale Price
  --------------        --------------        -------------
       2006
       First              $0.89                 $0.70
       Second              0.99                  0.55
       Third               1.01                  0.53
       Fourth              0.99                  0.60

       2007
       First              $1.99                 $0.65
       Second              1.75                  1.20
       Third               1.95                  1.28
       Fourth              1.74                  0.92

     As of September 30, 2007 there were 6,116,523 shares of
common stock outstanding held by approximately 500 holders of
record of the Common Stock of the Company (including
shareholders whose stock is held in street name and who have
declined disclosure of such information).

     The Company has paid no cash dividends on its common stock
since its inception. The Company intends to retain any future
earnings for use in its business and does not intend to pay cash
dividends on its common stock in the foreseeable future.

Holders of the Common stock are entitled to share ratably in
dividends when and as declared by the Board of Directors out of
funds legally available therefore.  Preferred Stock dividends of
$101,590 and $70,000 were paid during the years ended September
30, 2007 and 2006 respectively.

     The Company adopted Stock Incentive Plans in 1996 and 1999
that permit, among other incentives, grants and options to
officers, directors, employees and consultants to purchase up to
2,250,000 shares of the Company's common stock. At September 30,
2007, 1,105,614 shares of common stock are available for
issuance under the Plans. Options are generally exercisable at
the fair market value on the date of grant over a five-year
period.  To date, options have been granted at exercise prices
ranging from $.40 to $4.25 per share. On September 30, 2007,
281,459 options were outstanding.

     The securities authorized for issuance under equity
compensation plans are set forth in a tabular format in response
to Item 11.

                                      -4-
<PAGE>

     The Company adopted an Employee Stock Purchase Plan that
permits substantially all employees to purchase common stock.
Employees have an opportunity to acquire 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 had been reserved for
issuance. Of these, 147,400 shares have been purchased by
employees at purchase prices ranging from $.06 to $2.68 per
share. During any twelve-month period, employees are limited to
a total of $5,000 of stock purchases.

     On September 19, 2000 the Company filed a Form S-8 with the
United States Securities and Exchange Commission to register the
shares associated with the Stock Incentive Plans and the
Employee Stock Purchase Plan. Prior to that date the shares were
restricted and subject to the holding periods of Rule 144.

     On September 23, 2004, the Company entered into a
Subscription Agreement
with Mr. Craig T. Dunham pursuant to which Mr. Dunham agreed to
acquire 1,000,000 shares of Dynasil's common stock at $0.15 per
share for $150,000 including a Stock Purchase Warrant pursuant
to which Mr. Dunham may acquire, at any time prior to January
31, 2008, up to an additional 1,200,000 shares of the Company's
common stock at an exercise price of $0.225 per share dependent
upon certain conditions.


ITEM 6.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND
              RESULTS OF OPERATIONS

      The following management's discussion and analysis should
be read in conjunction with our financial statements and the
notes thereto appearing elsewhere in this Form 10-KSB.

General Business Overview

     Fiscal  year 2007 was another year of significant  progress
for  Dynasil.  Compared to fiscal year 2006, revenues  increased
by  55.6%  to  $10.8 million, net income increased by  17.8%  to
$542,000,  and the EMF acquisition was completed  on  the  first
business  day of fiscal year 2007.   Management is pleased  with
the  results  compared to a starting point of  $2.3  million  in
revenues and a $176,000 loss for fiscal year 2004. Excluding the
impact  of  the  EMF  acquisition and $11,366  of  stock  option
expense, fiscal year 2007 revenues for our historical businesses
were  up  15%  and  net  income was up  100%, from  $460,000  to
$922,000,  compared to fiscal year 2006. Strong  revenue  growth
combined   with  continued  process  improvements  drove   those
substantial  gains. The EMF acquisition significantly  increased
our  optical  coating capabilities, it added 37% to fiscal  year
2007  revenues, and EMF also became profitable during the fourth
quarter. Transitional and process improvement costs resulted  in
a  loss  at EMF for its first three quarters with Dynasil  which
offset   the   outstanding  improvements   in   our   historical
businesses. We have significantly improved manufacturing  yields
and  reduced  production downtime as we develop the  disciplined
processes   required  for  EMF  to  consistently  execute   with
excellent  quality, service, and cost performance.  The  markets
for  our  optical materials, coatings and components  businesses
currently  appear to be sound and our businesses  appear  to  be
gaining  market  share.   We  remain focused  on  continuing  to
effectively  execute  our internal growth  as  well  as  growing
through further acquisitions and strategic alliances.

Results of Operations

          Revenues for the fiscal year ended September 30, 2007
were $10,794,650. This represents an increase of 55.6% over
revenues for the fiscal year ended September 30, 2006 of
$6,936,631. The revenue increases were driven by 15% organic
growth in both our optical components and materials businesses
as well as inclusion of the EMF acquisition.  For organic
growth, we continue to focus on retaining our existing customers
by consistently meeting their requirements while gaining market
share and penetrating adjacent markets.

     Cost of sales for the fiscal year ended September 30, 2007
was $7,498,691, or 69.4% of sales, versus $4,500,791 or 64.8% of
sales for fiscal year ended September 30, 2006. Gross profit
increased to $3,295,959, or 30.6% of sales, for



                            -5-
<PAGE>
fiscal year 2007 from $2,435,840 or 35.2% of sales for fiscal
year 2006. The higher cost of sales resulted primarily from the
addition of EMF's costs. The gross profit for our historical
businesses actually improved by 1.6 percentage points. The
Company continues to implement cost reductions such as
manufacturing yield improvements.  Operational improvements at
EMF are key to increasing gross profit in the future.

      Selling, general and administrative ("SG&A") expenses
increased to $2,708,886 or 25% of sales for fiscal year 2007
from $1,911,283 or 27.5% of sales for fiscal year 2006. The
changes in SG&A expenses and percentages resulted primarily from
the impact of the acquisition of EMF.

     Interest Expense-net, increased to $153,523 or 1.42% of
sales for fiscal year 2007 from $64,376 or 0.9% of sales for
fiscal year 2006. The increase in combined interest expense is
primarily related to the additional interest payments resulting
from the indebtedness incurred in connection with the EMF
acquisition.

     For fiscal year 2007, the Company had a net income tax
benefit of $108,460. After the utilization of current net
operating loss carry-forwards, the Company had a $20,240 net
current provision for fiscal year 2007 income taxes, largely
related to Optometrics' profits in Massachusetts. This was
offset by a $128,700 increase in the deferred tax asset to
recognize that the Company's return to profitability means that
the Company's net operating loss carry-forwards are likely to
have future value. Current federal and some New Jersey state
taxes for fiscal year 2007 were offset by utilization of net
operating loss carry-forwards.  As of September 30, 2007 we have
approximately $674,000 of net operating loss carry-forwards to
offset future taxable income for federal tax purposes expiring
in various years through 2021. In addition, the Company has
approximately $586,000 of net operating loss carry-forwards to
offset certain future New Jersey and New York state taxable
income, expiring in various years through 2013.

     The Company had net income of $542,010 for the year ended
September 30, 2007 compared to net income of $460,156 for the
fiscal year ended September 30, 2006.  Our historical optical
materials business showed significant profitability improvement
and the results included a full year of strong Optometrics
profitability. Strong gross margin results drove a 100% net
income increase for our historical businesses in fiscal year
2007.  Losses at EMF offset these improvements the first three
quarters and Management was pleased to deliver profitable
results for EMF in the fourth quarter.  The income tax benefit
of $108,460 was also a significant addition to net income.

Liquidity and Capital Resources

     The net cash increase for fiscal year 2007 was $144,809
compared to $43,929 for fiscal year 2006.

     Net cash provided by operating activities was $324,043 for
fiscal year 2007 versus $403,365 for fiscal year 2006. Net
income was $542,010, depreciation/ amortization added back
$368,771, accounts receivable decreased by $156,185, and prepaid
expenses decreased by $37,565. A $625,861 inventory increase was
the largest factor impacting net cash from operating activities.
The inventory increase was due in large part to the elimination
of consignment inventory by our largest supplier as well as the
addition of EMF.

     Cash flows used in investing activities were ($1,056,612)
for fiscal year 2007 compared to ($154,233) for fiscal year
2006.  Cash paid for the EMF acquisition and acquisition costs
was $674,890 during fiscal year 2007. Capital expenditures to
purchase property, plant and equipment of $374,491 for fiscal
year 2007 compared to $93,140 for 2006.

     Cash flows from (used in) financing activities were
$877,378 for fiscal year 2007 and ($205,203) for fiscal year
2006. Cash from financing activities for fiscal year 2007 came
largely from the net sale of $700,000 of Preferred stock and
$386,686 of proceeds from bank financing which were completed as
part of the EMF acquisition.  Cash used in financing activities
for 2007 was primarily used to reduce bank debt by $272,182 and
to pay $101,590 of preferred stock dividends.

                                      -6-
<PAGE>

Cash from 2007 issuance of common stock was $164,464 which came
primarily from the exercise of stock options and warrants.

     The Company believes that its current cash and cash
equivalent balances, along with the net cash generated by
operations and credit lines, are 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 major business
expansions or acquisitions likely will require the Company to
seek additional debt and/or equity financing.


STRATEGIC PLAN

Mission
The mission of Dynasil Corporation is to be recognized as a
premier manufacturer of photonic components, materials, and
coatings; to achieve financial results which are consistently
superior to those of its peers; and to be regarded by its
employees as an outstanding place to work.  Dynasil strives to
achieve the highest level of customer service and product
quality and to maximize shareholder value.

Financial Objectives
   - Perform in the top 25% of peer group companies with respect
     to:
   - 4 year compound annual growth rate in diluted earnings per
     share
   - Return on equity
   - Revenues exceeding $100 million by 2016

Ethics Policy
Dynasil has a policy of requiring adherence to the highest
ethical standards in all its dealings with customers, vendors,
employees and stockholders.  Ethical behavior includes the
principals of integrity, fairness, respect, openness, and
obeying all laws.

Operations Strategy
The Company is organized into highly competitive, semi-
autonomous business units which are focused on customers and
meeting key business goals.  Each business unit is led by a
General Manager with overall responsibility for their unit
results as well as managing the interfaces with other business
units and the corporate staff.  The company seeks to foster a
high level of employee involvement, motivation, and profit
sharing participation.

A small corporate staff will focus on adding value by
centralizing a few selected activities and by developing key
competencies within the business units including:
- Provide overall corporate leadership and coordination
- Provide cost effective financial reporting, tax compliance,
  investor relations, SEC compliance, legal support, and fund
  raising to support growth.
- Identify , structure, and coordinate acquisition activities to
  support growth objectives.
- Facilitate cooperation and coordination between business units
  such as working together to maximize overall effectiveness of
  sales and marketing.
- Identify transferable skills within the business units and use
  them to help other business units (such as sharing a Laser
  Safety Officer).  Some of the corporate functions may be
  performed by skilled people within one of the business units.
- Purchase shared items, such as insurance, where consolidated
  purchasing delivers savings.
- Coordinate Human Resource policies, high level recruiting, and
  provide business unit assistance with HR issues.
- Implement key corporate competencies in the business units to
  support organic growth by teaching and consulting to include:
- Clear focus by defining a few, key business objectives;
  prioritizing
  the projects to best meet those objectives; setting
  individual goals;
  consistently communicating updates;  and sharing in the
  profits.
- Disciplined manufacturing and business processes.
- Market understanding, strategy process, and identification
  of a few
  high growth projects.
- Continuous revenue growth and operations improvements.

                                      -7-
<PAGE>
Acquisitions
The Company will aggressively pursue additional acquisitions to
enhance growth.  A goal of one acquisition per year will be
targeted using two sets of criteria:

- Mature photonics companies with moderate growth prospects and
  strong cash flow potential.
- Photonics acquisitions or strategic alliances with a high
  upside for growth potential.

"Off Balance Sheet" Arrangements

     The Company has no "Off Balance Sheet" arrangements.

Critical Accounting Policies and Estimates
      There  have  been  no  material changes  in  our  critical
accounting  policies  or  critical  accounting  estimates  since
September 30, 2006.  Except for the adoption of SFAS 123(R),  we
have  not 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 the  Notes  to
Consolidated Financial Statements in our Annual Report  on  Form
10-KSB for the fiscal year ended September 30, 2007.

      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 a  portion
of our long-lived assets is impaired. Such a determination could
result  in non-cash charges to income that could materially  and
adversely affect the Company's financial position or results  of
operations for that period.

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.



                                     -8-
<PAGE>

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
believes that some of these carryforwards will be realized,  and
has adjusted the valuation allowance accordingly as outlined  in
the  Company's Annual Report on Form 10-KSB for the fiscal  year
ended September 30, 2007.

Stock-Based Compensation
       Effective  October  1,  2006,  we  adopted  SFAS  123(R),
"Accounting  for  Stock  Based  Compensation."  As   a   result,
compensation costs are now recognized for stock options  granted
to  employees  and directors.  Options and warrants  granted  to
employees  and non-employees are recorded as an expense  at  the
date  of  grant based on the then estimated fair  value  of  the
security in question, determined using the Black Scholes  option
pricing model.

Recent Accounting Pronouncements

     In February 2007, the FASB issued SFAS No. 159, "The Fair
Value Option for Financial Assets and Financial Liabilities -
Including an amendment of FASB Statement No. 115" (SFAS 159).
SFAS No. 159 permits entities to choose to measure eligible
items at fair value at specified election dates and report
unrealized gains and losses on items for which the fair value
option has been elected in earnings at each subsequent reporting
date.  SFAS No. 159 also establishes presentation and disclosure
requirements designed to facilitate comparisons between entities
that choose different measurement attributes for similar types
of assets and liabilities.  SFAS No. 159 is effective for fiscal
years beginning after November 15, 2007.  We are currently
evaluating the impact of provisions of SFAS 159 on our results
of operations and financial position.

Forward-Looking Statements

     The statements contained in this Annual Report on Form
10-KSB which are not historical facts, including, but not
limited to, certain statements found under the captions
"Business," "Results of Operations," "Strategic Plan," and
"Liquidity and Capital Resources" 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 Annual Report on Form 10-KSB,
including, without limitation, the portions of such reports
under the captions referenced above, and the uncertainties set
forth from time to time in the Company's 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 and the
effect of governmental regulation. The Company disclaims any
intention or obligation to update any forward-looking
statements, whether as a result of new information, future
events or otherwise.


                                      -9-
<PAGE>








ITEM 7.  FINANCIAL STATEMENTS


           REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM



To the Board of Directors and Stockholders
Dynasil Corporation of America and Subsidiaries
Berlin, New Jersey

      We  have  audited  the  accompanying consolidated  balance
sheets  of DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES  (the
"Company")  as of September 30, 2007 and 2006, and  the  related
consolidated  statements of operations, changes in stockholders'
equity,  and  cash  flows  for  the  years  then  ended.   These
consolidated financial statements are the responsibility of  the
Company's  management.   Our responsibility  is  to  express  an
opinion on these consolidated financial statements based on  our
audits.

     We conducted our audits in accordance with the standards of
the  Public Company Accounting Oversight Board (United  States).
Those  standards require that we plan and perform the  audit  to
obtain   reasonable  assurance  about  whether   the   financial
statements are free of material misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts  and
disclosures in the financial statements.  An audit also includes
assessing   the  accounting  principles  used  and   significant
estimates made by management, as well as evaluating the  overall
financial  statement presentation.  We believe that  our  audits
provide a reasonable basis for our opinion.

      In  our  opinion,  the  consolidated financial  statements
referred to above present fairly, in all material respects,  the
financial  position  of  DYNASIL  CORPORATION  OF  AMERICA   AND
SUBSIDIARIES as of September 30, 2007 and 2006 and  the  results
of  their  operations and their cash flows for  the  years  then
ended   in   conformity  with  accounting  principles  generally
accepted in the United States of America.


HAEFELE, FLANAGAN & CO., p.c.

Moorestown, New Jersey
December 14, 2007






                                      F-1
<PAGE>













                 DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           SEPTEMBER 30, 2007 AND 2006

                                     ASSETS

<TABLE>
<S>                                                   <C>               <C>
                                                            2007            2006
                                                        ----------      ----------
Current assets
   Cash and cash equivalents                            $  496,948      $  352,139
   Accounts receivable, net of allowance for doubtful
     accounts of $98,863 for 2007 and $12,840 for 2006   1,284,844       1,086,394
     and sales returns of $30,790 for 2007 and $36,215
     for 2006
   Inventories                                           1,832,720       1,131,648
   Deferred tax asset                                      216,100          61,500
   Prepaid expenses and other current assets               130,548         128,957
                                                        ----------      ----------
        Total current assets                             3,961,160       2,760,638

Property, Plant and Equipment, net                       2,436,517         626,790

Other Assets, net                                           88,698          78,812
                                                        ----------      ----------
        Total Assets                                    $6,486,375      $3,466,240

                                                        ==========      ==========

                 LIABILITIES AND STOCKHOLDERS' EQUITY



Current Liabilities
   Note payable to bank                                 $  311,870       $ 190,000
   Current portion of long-term debt                        99,237          72,482
   Accounts payable                                        684,208         390,110
   Accrued expenses and other current liabilities          587,872         368,977
                                                        ----------      ----------
   Total current liabilities                             1,683,187       1,021,569

Long-term Debt, net                                      1,626,980         593,889

Stockholders' Equity
   Common Stock, $.0005 par value, 25,000,000 shares
    authorized, 6,926,683 and 4,698,453 shares issued,
    6,116,523 and 3,888,293 shares outstanding
    for 2007 and 2006, respectively                         3,464            2,350
   Preferred Stock, $.001 par value, 10,000,000
     Shares authorized, 710,000 and 700,000 shares issued
     and outstanding for 2007 and 2006 respectively,
     10% Cumulative, Convertible                              710              700
   Additional paid in capital                           2,983,490        2,100,098
   Retained earnings                                    1,174,396          733,976
                                                        ----------      ----------
                                                        4,162,550        2,837,124
   Less 810,160 shares of treasury stock, at cost        (986,342)        (986,342)
                                                        ----------      ----------
        Total stockholders' equity                      3,176,208        1,850,782
                                                        ----------      ----------
        Total Liabilities and Stockholders' Equity     $6,486,375       $3,466,240
                                                        ==========      ==========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial
statements.

                                      F-2
<PAGE>





                 DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED SEPTEMBER 30, 2007 AND 2006

                                                    2007         2006
                                                 ----------   ----------

Net sales                                       $10,794,650   $6,936,631
Cost of sales                                     7,498,691    4,500,791
                                                 ----------   ----------
Gross profit                                      3,295,959    2,435,840

Selling, general and administrative expenses      2,708,886    1,911,283
                                                 ----------   ----------
Income from operations                              587,073      524,557

Interest expense, net                              (153,523)    ( 64,376)
                                                 ----------   ----------
Income before income taxes                          433,550      460,181

Income tax (expense) benefit                        108,460       (   25)
                                                 ----------   ----------
Net income                                       $  542,010    $ 460,156
                                                 ==========   ==========


Basic net income per common share                 $   0.08     $    0.10
Diluted net income per common share               $   0.07     $    0.07
                                                 ==========   ==========




The accompanying notes are an integral part of these
consolidated financial
statements.

























                                      F-3
<PAGE>

                 DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDED SEPTEMBER 30, 2007 AND 2006

                                                                   Additional
                    Common      Common     Preferred   Preferred    Paid-in
                    Shares      Amount     Shares       Amount      Capital
                    ---------   ------     ---------   ---------    ---------

Balance,
October 1, 2005     4,566,946   $2,283       700,000    $   700    $2,042,635


Issuance of shares
of common stock
under employee
stock purchase
plan                      739        1          -0-         -0-           530

Issuance of shares
of common stock in
lieu of compensation
to directors            2,817        1          -0-         -0-         1,999

Issuance of shares
of common stock
under stock
option plan            99,640       51          -0-         -0-        39,805

Stock based
compensation           28,311       14          -0-         -0-        15,129

Stock based
compensation           28,311       14          -0-         -0-        15,129

Preferred stock
dividends paid            -0-       -0-         -0-         -0-           -0-

Net income                -0-       -0-         -0-         -0-           -0-
                    ---------   ------     ---------   ---------    ---------
Balance,
September 30, 2006  4,698,453   $2,350      $700,000    $  700     $2,100,098

Issuance of shares
of common stock
under employee
stock purchase
plan                      497      -0-           -0-         -0-          529


Issuance of shares
of common stock in
lieu of compensation
to directors            3,289        2          -0-         -0-         4,998


Issuance of shares
of common stock
under stock
option plan            80,000       40          -0-         -0-        31,960

Issuance of shares
of common stock
under stock
warrant plan          586,373      293          -0-         -0-      131 ,642

Issuance of shares
of Series B
preferred stock
net of issuance
costs of $10,000         -0-       -0-       710,000        710       699,290

Issuance of shares
of common stock
for conversion of
Series A
preferred stock     1,555,540      778      (700,000)      (700)         (78)


Stock based
compensation
charged to
operations for
option based
arrangements              -0-      -0-           -0-         -0-       11,366

Stock based
compensation            2,531       1            -0-         -0-        4,175

Preferred stock
dividends paid            -0-      -0-           -0-         -0-          -0-

Net income                -0-      -0-           -0-         -0-          -0-
                    ---------   ------     ---------   ---------    ---------
Balance,
September 30, 2007  6,926,683    $3,464      710,000     $  710     $2,983,980
                    =========    ======      =======      =====     ==========




                                      F-4
<PAGE>







                 DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
           FOR THE YEARS ENDED SEPTEMBER 30, 2006 AND 2005 (continued)

                                    Treasury Stock             Total
                   Retained      -----------------------    Stockholders'
                   Earnings        Shares      Amount         Equity
                   --------      ---------   ----------    -------------
Balance,
October 1, 2005    $343,820        810,160   $(986,342)      $1,403,096

Issuance of shares
of common stock
under employee
stock purchase
plan                 -0-            -0-          -0-                531

Issuance of shares
of common stock in
lieu of compensation
to directors         -0-            -0-          -0-              2,000

Issuance of shares
of common stock
under stock
option plans         -0-            -0-          -0-             39,856

Stock based
compensation         -0-            -0-          -0-             15,143

Preferred stock
dividends paid     (70,000)         -0-          -0-            (70,000)

Net income         460,156          -0-          -0-            460,156
                   --------      ---------   ----------    -------------
Balance,
September 30,
2006               733,976        810,160    $(986,342)      $1,850,782



Issuance of shares
of common stock
under employee
stock purchase
plan                 -0-            -0-          -0-                529

Issuance of shares
of common stock in
lieu of compensation
to directors         -0-            -0-          -0-              5,000

Issuance of shares
of common stock
under stock
option plan          -0-            -0-          -0-             32,000

Issuance of shares
of common stock
under stock
warrant plan         -0-            -0-          -0-            131,935

Issuance of shares
of Series B
preferred stock
net of issuance
costs of $10,000     -0-            -0-          -0-            700,000

Issuance of shares
of common stock
for conversion
of Series A
preferred stock      -0-            -0-          -0-              -0-

Stock based
compensation
charged to
operations for
option based
arrangements         -0-            -0-          -0-             11,366


Stock based
compensation         -0-            -0-          -0-              4,176

Preferred stock
dividends paid    (101,590)         -0-          -0-           (101,590)

Net income         542,010          -0-          -0-            542,010
                   --------      ---------   ----------    -------------
Balance,
September 30,
2007              1,174,396       810,160    $(986,342)      $3,176,208
                  =========      =========   ==========    =============

The accompanying notes are an integral part of these
consolidated financial
statements.


                                      F-5
<PAGE>






                 DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED SEPTEMBER 30, 2007 AND 2006

Cash flows from operating activities:
    Net income                                   542,010          $460,156
    Adjustments to reconcile net
     income to net cash
     provided by operating activities
       Stock compensation expense                 20,542            15,143
       Provision for doubtful accounts
        and sales returns                        (72,060)           30,044
       Depreciation and amortization             368,771           222,185
       Deferred taxes                           (128,700)          (37,250)
      (Gain) Loss on Disposal of assets              (17)            2,098
      (Increase) decrease in:
         Accounts receivable                     156,185          (239,063)
         Inventories                            (625,861)         (289,499)
         Prepaid expenses and
          other current assets                    37,565            35,034
       Increase (decrease) in:
         Accounts payable and accrued expense     25,608           204,517
                                               ---------       -----------
Net cash provided by operating activities        324,043           403,365
                                               ---------       -----------
Cash flows from investing activities:
    Purchases of property, plant and equipment  (374,491)          (93,140)
    Proceeds from sale of fixed assets             1,825             2,000
    Cash paid for acquisition of EMF            (580,000)              -0-
     Cash paid for acquisition costs             (94,890)          (63,693)
     Other assets                                 (9,056)              600
                                               ---------       -----------
Net cash used in investing activities         (1,056,612)         (154,233)
                                               ---------       -----------
Cash flows from financing activities:
     Issuance of common stock                    164,464            42,387
     Issuance of preferred stock                 700,000               -0-
     Proceeds from short-term debt               211,870               -0-
     Proceeds from long-term debt                174,816               -0-
     Repayment of long-term debt                 (97,021)         (110,744)
     Repayment of note payable to bank          (175,161)          (60,000)
     Deferred financing costs incurred             -0-             ( 6,846)
     Preferred stock dividends paid             (101,590)          (70,000)
                                               ---------       -----------
Net cash provided by (used in)
 financing activities                            877,378          (205,203)
                                               ---------       -----------
Net increase in cash and cash equivalents        144,809            43,929
Cash and cash equivalents, beginning             352,139           308,210
                                               ---------       -----------
Cash and cash equivalents, ending              $496,948        $   352,139
                                              ==========       ===========

The accompanying notes are an integral part of these
consolidated financial
statements.
                                      F-6
<PAGE>
















         DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   SEPTEMBER 30, 2007 AND 2006

Note 1 - Summary of Significant Accounting Policies

Nature of Operations

      The  Company  is primarily engaged in the fabrication  and
marketing   of   customized  optical  components   and   optical
materials.   The  Company's products and services  are  used  in
optical  instrument and laser manufacturing industries, as  well
as in the medical industry.  Other applications include usage in
the  manufacturing  of  optical lenses and  spectrometers.   The
Company's  products and services are sold throughout the  United
States and internationally.

Principles of Consolidation

      The accompanying consolidated financial statements include
the  accounts of Dynasil Corporation of America and its  wholly-
owned    subsidiaries,    Optometrics    Corporation,    Dynasil
International Incorporated, Hibshman Corporation, and Evaporated
Metal   Films   Corp  ("EMF").   All  significant   intercompany
transactions have been eliminated.

Use of Estimates

      The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
America  requires management to make estimates  and  assumptions
that  affect  the  amounts  of assets and  liabilities  and  the
disclosures of contingent assets and liabilities at the date  of
the  financial statements and the reported amounts  of  revenues
and  expenses during the reporting period.  Actual results could
differ from those estimates.

Business Acquisition

      On  October 2, 2006, the Company completed its acquisition
of  all of the outstanding capital stock of EMF in a transaction
accounted for as a purchase.  Total cost of the acquisition  was
$1,194,890  of  which $1.1 million was paid to the  seller,  and
$94,890  represented  acquisition  costs  incurred.   From   the
proceeds  of the issuance of 710,000 shares of Preferred  Stock,
Dynasil  paid  $580,000  in cash to the seller,  incurred  stock
issuance costs of $10,000 and incurred acquisition related costs
of  approximately  $94,890.  Also  on  October  2,  2006,  in  a
concurrent  bank transaction, EMF borrowed $1,050,000  of  which
$338,161 was used to retire assumed EMF debt, $520,000 was  paid
directly  to the seller at settlement, $17,023 was used  to  pay
transaction costs and the remaining funds of $174,816 were  used
for  working  capital  purposes.  The total  purchase  price  of
approximately $1,194,890 has been allocated to the tangible  and
identifiable intangible assets acquired and liabilities  assumed
on  the  basis of their estimated fair values.  The  results  of
operations  of  EMF  have  been  included  in  the  consolidated
financial statements from October 2, 2006, the effective date of
acquisition.   The  allocation of purchase price  is  summarized
below:


Purchase price:

     Total consideration to seller                $1,100,000
     Acquisition costs incurred                   $   94,890
                                                  ----------
                                                  $1,194,890

Purchase price allocation:


     Cash and cash equivalents                    $   45,457
     Accounts receivable                             282,575
     Inventories                                      75,211
     Prepaid expenses and other current assets        65,057
                                      F-7
<PAGE>


         DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   SEPTEMBER 30, 2007 AND 2006

Note 1 - Summary of Significant Accounting Policies

     Property and equipment                        1,789,621
     Current Liabilities assumed                   (443,158)
     Other liabilities assumed                     ( 74,227)
     Debt assumed                                  (545,646)
                                                  ----------
Net fair value of assets acquired                 $1,194,890

The following is the proforma financial information of the
Company for the year ended September 30, 2006, assuming the
transaction had been consummated at the beginning of the year
ended September 30, 2006:

                                             For the year ended
                                         September 30, 2006
                                             (Unaudited)

Statement of Operations:
Revenues                                     $9,781,588
Cost of Sales                                 6,724,079
Gross Profit                                 $3,057,509

Operating Expenses                            2,592,510
Income from Operations                          464,999
Interest and other expense                     (147,352)
Income before taxes                             317,647
Income tax benefit                               30,712
                                             ----------
Net Income                                    $ 348,359

Earnings per share:
     Basic                                       $ 0.09
     Diluted                                     $ 0.06

Revenue Recognition

     The   Company  records  sales  revenue  upon  shipment   to
customers as the terms are generally FOB shipping point at which
time  title  and  risk  of  loss have been  transferred  to  the
customer,  pricing  is fixed or determinable and  collection  of
the  resulting  receivable is reasonably  assured.   Returns  of
products  shipped are and have historically not  been  material.
Optometrics  and  EMF, however, provide an allowance  for  sales
returns  based  upon historical experience.   The  Company  also
provides  an allowance for doubtful accounts based on historical
experience and a review of its receivables.

Shipping and Handling Costs

     The Company includes some shipping and handling fees billed
to  customers in sales and shipping and handling costs  incurred
in cost of sales.

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.


                                      F-8
<PAGE>

         DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   SEPTEMBER 30, 2007 AND 2006

Note 1 - Summary of Significant Accounting Policies

Property, Plant and Equipment and Depreciation and Amortization

      Property,  plant  and  equipment  are  recorded  at  cost.
Depreciation  is  provided  using the straight-line  method  for
financial reporting purposes and accelerated methods for  income
tax  purposes over the estimated useful lives of the  respective
assets.

     The   estimated  useful  lives  of  assets  for   financial
reporting purposes are as follows:  building and improvements, 8
to  25  years;  machinery and equipment, 5 to 10  years;  office
furniture  and fixtures, 5 to 10 years; transportation equipment
5  years.  Maintenance  and repairs are charged  to  expense  as
incurred; major renewals and betterments are capitalized.   When
items of property, plant and equipment are sold or retired,  the
related costs and accumulated depreciation are removed from  the
accounts and any gain or loss is included in income.

Impairment of Long-Lived Assets

     The  Company  reviews its long-lived assets for  impairment
whenever  events or changes in circumstances indicate  that  the
carrying   amount   of   an  asset  may  not   be   recoverable.
Recoverability of assets to be held and used is  measured  by  a
comparison  of  the carrying amount of an asset to  undiscounted
future  net cash flows to be generated by the assets.  If  these
assets  are  considered to be impaired,  the  impairment  to  be
recognized  is  measured by the amount  by  which  the  carrying
amount of
the  assets  exceeds the fair value of the  assets.    Based  on
these  reviews,  no asset impairment charges were  made  to  the
carrying  value  of  long-lived assets during  the  years  ended
September 30, 2007 and 2006.

Other Assets

     Other assets include an intangible asset consisting of  the
acquired  customer base of Optometrics, LLC and are  carried  at
cost  less  accumulated amortization. Amortization  is  computed
using  the  straight-line method over the economic life  of  the
respective asset, or seven years. It is the Company's policy  to
assess,  periodically,  the carrying amount  of  its  intangible
assets  to  determine if there has been an impairment  to  their
carrying  value. There was no impairment at September 30,  2007.
Other  assets  also include deferred financing costs  which  are
amortized using the straight-line method over 5, 7 and 20 years.

Advertising

       The   Company  expenses  all  advertising  as   incurred.
Advertising expense for the years ended September 30,  2007  and
2006 was $118,713 and $94,960.

Income Taxes

     Dynasil   Corporation  of  America  and  its   wholly-owned
subsidiaries file a consolidated federal income tax return.

      The  Company  uses  the  asset and liability  approach  to
account for income taxes.  Under this approach, deferred  income
taxes  reflect  the  net  tax effects of  temporary  differences
between  the  carrying  amounts of assets  and  liabilities  for
financial reporting purposes and the amounts used for income tax
purposes  and  net operating loss and tax credit  carryforwards.
The  amount of deferred taxes on these temporary differences  is
determined using the tax rates that are expected to apply to the
period  when the asset is realized or the liability is  settled,
as  applicable,  based  on  tax rates,  and  tax  laws,  in  the
respective   tax   jurisdiction  then  in   effect.    Valuation
allowances are provided if it is more likely than not that  some
or all of
                                      F-9
<PAGE>



         DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   SEPTEMBER 30, 2007 AND 2006

Note 1 - Summary of Significant Accounting Policies

the deferred tax assets will not be realized.  The provision for
income taxes includes taxes currently payable, if any, plus  the
net   change  during  the  year  in  deferred  tax  assets   and
liabilities recorded by the Company.

Net Income Per Common Share

      Basic  net income per common share is computed by dividing
the  net  income  applicable to common  shares  after  preferred
dividend  requirements, if applicable, by the  weighted  average
number of common shares outstanding during each period.  Diluted
net  income  per common share adjusts basic net income  for  the
effects   of  common  stock  options,  common  stock   warrants,
convertible preferred stock and other potential dilutive  common
shares  outstanding during the periods. For periods with  a  net
loss, diluted net income per common share exclude the impact  of
potential  shares  since they would have resulted  in  an  anti-
dilutive effect.

     Common  stock  options of 281,459 and 261,459,common  stock
warrants  of  613,627  and 1,200,000 and  convertible  preferred
stock shares of 710,000 and 700,000 as of September 30, 2007 and
2006   represent  common  stock  equivalents  included  in   the
calculation  of  the diluted net income per common  share.   The
computation of basic and diluted net income per common share  is
as follows:

                                                      2007        2006
                                                    ---------  ----------

    Net income                                      $ 542,010    $460,156
    Less:  Preferred stock dividends                $(101,590)    (70,000)
                                                    ---------  ----------
    Income allocable to common shareholders         $ 440,420    $390,156

    Weighted average shares outstanding
     Basic                                          5,357,285   3,829,198
     Effect of dilutive securities
       Stock Options                                   67,292      43,297
       Stock Warrants                                 531,199     862,500
       Convertible Preferred Stock                    520,352     680,555
                                                    ---------  ----------
     Dilutive                                       6,479,128   5,415,550


Stock Based Compensation

     Prior to October 1, 2006, the Company accounted for stock
options issued under the Plan under the recognition and
measurements provisions of APB Opinion No. 25, Accounting for
Stock Issued to Employees, and related Interpretations, as
permitted by FASB Statement No. 123, Accounting FOR stock Based
Compensation ("SFAS No. 123").

     Effective October 1, 2006, the Company adopted the fair
value recognition provisions of FASB Statement No. 123 (revised
2004), "Share-Based Payment", ("SFAS 123(R)") which requires the
measurement and recognition of compensation expense for all
stock-based awards made to employees and directors, including
employee stock options, based on estimated fair values.  We had
previously applied

                                      F-10
<PAGE>




         DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   SEPTEMBER 30, 2007 AND 2006

Note 1 - Summary of Significant Accounting Policies
Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees," ("APB 25") and related
Interpretations and provided the required pro forma disclosures
of Statement of Financial Accounting Standards No. 123,
"Accounting for Stock Based Compensation" ("SFAS 123") which was
superceded by SFAS 123(R).  The Company has also applied the
provisions of Staff Accounting Bulletin No. 107 ("SAB 107") in
the adoption of SFAS 123(R).

     We elected to adopt the modified prospective application
transition method as provided by SFAS 123(R).  In accordance
with the modified prospective transition method, consolidated
financial statements for prior periods have not been restated to
reflect, and do not include, the impact of SFAS 123(R).  Under
that transition method, compensation cost recognized in the year
ended September  30, 2007 includes: (a) compensation cost for
all share-based payments granted prior to, but not yet vested as
of September 30, 2007, based on the grant date fair value
estimated in accordance with the original provisions of
Statement 123, and (b) compensation cost for all share-based
payments granted subsequent to October 1, 2005, based on the
grant-dated fair value estimated in accordance with the
provisions of Statement 123(R).

     The fair value of stock options granted was estimated at
the date of grant using the Black-Scholes options pricing model.
The proforma disclosures of net income and net income per share
for the year ended September 30, 2006, as permitted by SFA8
123(R) are presented below:

                                                       2006
                                                      --------
     Net income, as reported                         $460,156
     Add:  Stock-based employee compensation
           expense included in reported net income       -0-
     Less: Total stock-based employee
          compensation expense determined under
          fair value based method for all options     ( 4,636)
                                                    ----------
     Pro forma net income                           $ 455,520

     Net income per common share, as reported
       Basic                                           $ 0.10
       Diluted                                         $ 0.07
      Pro forma net income per common share
        Basic                                          $ 0.10
        Diluted                                        $ 0.07

Financial Instruments

     The carrying amount reported in the balance sheets for cash
and  cash equivalents, accounts receivable and accounts  payable
approximates  fair value because of the immediate or  short-term
maturity of these financial instruments. The carrying amount for
long-term  debt  approximates fair value because the  underlying
instruments are primarily at current market rates.

     Financial instruments that potentially subject the  Company
to concentrations of credit risk consist of accounts receivable.
In  the normal course of business, the Company extends credit to
certain  customers.  Management  performs  initial  and  ongoing
credit  evaluations  of their customers and generally  does  not
require collateral.



                                      F-11
<PAGE>



         DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   SEPTEMBER 30, 2007 AND 2006

Note 1 - Summary of Significant Accounting Policies
Concentration of Credit Risk

     The  Company  maintains  allowances  for  potential  credit
losses and has not experienced any significant losses related to
the  collection of its accounts receivable.  As of September 30,
2007  and 2006, approximately $261,032 and $300,581 or  20%  and
28%  of  the Company's accounts receivable are due from  foreign
sales.

     The Company maintains cash and cash equivalents at various
financial institutions in New Jersey, Massachusetts and New
York.  Accounts at each institution are insured by the Federal
Deposit Insurance Corporation up to $100,000. At September 30,
2007, the Company's uninsured bank balances totaled $310,925.
The Company has not experienced any significant losses on its
cash and cash equivalents

Recent Accounting Pronouncements

The   following   is   a   summary   of   recent   authoritative
pronouncements that affect accounting, reporting, and disclosure
of financial information by the Company:

     In February 2007, the FASB issued SFAS No. 159, "The Fair
Value Option for Financial Assets and Financial Liabilities -
Including an amendment of FASB Statement No. 115" (SFAS 159).
SFAS No. 159 permits entities to choose to measure eligible
items at fair value at specified election dates and report
unrealized gains and losses on items for which the fair value
option has been elected in earnings at each subsequent reporting
date.  SFAS No. 159 also establishes presentation and disclosure
requirements designed to facilitate comparisons between entities
that choose different measurement attributes for similar types
of assets and liabilities.  SFAS No. 159 is effective for fiscal
years beginning after November 15, 2007.  Management is
currently evaluating the impact of the provisions of SFAS 159 on
the Company's results of operations and financial position.

Other  recent  accounting  pronouncements  issued  by  the  FASB
(including its Emerging Issues Task Force), the AICPA,  and  the
SEC did not or are not believed by management to have a material
impact on the Company's present or future consolidated financial
statements.

Statement of Cash Flows

     For purposes of the statement of cash flows, the Company
generally considers all highly liquid investments with original
maturities of three months or less to be cash equivalents.

Note 2 - Inventories

     Inventories at September 30, 2007 and 2006 consisted of the
following
                                  2007              2006
                              -----------        ------------
          Raw Materials       $1,145,249            $600,451
          Work-in-Process        336,203             259,425
          Finished Goods         351,268             271,772
                              -----------        ------------
                                1,832,720         $1,131,648
                              ===========        ============

                                      F-12
<PAGE>





         DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   SEPTEMBER 30, 2007 AND 2006

Note 3 - Property, Plant and Equipment

     Property, plant and equipment at September 30, 2007 and
2006 consist of the following:
                                            2007           2006
                                         -----------  ------------
          Land                          $    40,450    $       261
          Building and improvements       1,674,702      1,053,763
          Machinery and equipment         4,300,534      2,886,666
          Office furniture and fixtures     237,932        209,479
          Transportation equipment           53,419         53,419
                                         -----------  ------------
                                          6,307,037      4,203,588
          Less accumulated depreciation   3,870,520      3,576,798
                                         -----------  ------------
                                        $ 2,436,517    $   626,790
                                         ===========  ============
     Included  in  the  cost  of  machinery  and  equipment   at
September 30, 2007 and 2006 is $47,984 representing the cost  of
assets   under   capitalized  lease  obligations.    Accumulated
depreciation at September 30, 2007 and 2006 for the  capitalized
leases was $22,338 and $13,691.

     Depreciation expense for the years ended September 30, 2007
and 2006 was $352,578 and $207,016 of which $8,647 and $9,846
represents depreciation of assets under capitalized lease
obligations.

Note 4 - Other Assets
     Other assets at September 30, 2007 and 2006 consist of the
following:

                                                      2007        2006
                                                 -----------  ------------
      Deferred financing costs                    $   58,034   $  41,010
      Loan origination fees                            6,846       6,846
      Intangible asset - acquired customer base       78,414      78,414
      Other assets                                     9,055         -0-
                                                 -----------  ------------
                                                     152,349     126,270
      Less accumulated amortization                   63,651      47,458
                                                 -----------  ------------
                                                    $ 88,698   $  78,812
                                                 ===========  ============

     Amortization expense for the years ended September 30, 2007
and 2006 was $16,193 and $15,169.

Note 5 - Debt
     On  January 5, 2006, Dynasil Corporation of America entered
into  loan  agreements permitting borrowings up to  a  total  of
$649,345 with Susquehanna Bank ("Susquehanna Bank").  The  terms
of  the Loan Agreements provide the Company with a $449,345 term
loan  (the "Term Loan") and a $200,000 revolving credit facility
(the "Line of Credit").  The proceeds were used to refinance the
term note for the New Jersey real estate and for general working
capital purposes.
     On  March  8, 2005, Optometrics Corporation ("Optometrics")
entered into loan agreements permitting borrowings up to a total
of  $700,000  with  Citizens  Bank of  Massachusetts  ("Citizens
Bank") in connection with the acquisition of Optometrics, LLC of
which the initial borrowing was $550,000.  The terms of the Loan
Agreements  provide the Company with a $300,000 term  loan  (the
"Citizens  Term Loan") and a $400,000 revolving credit  facility
(the  "Citizens  Line of Credit").  The proceeds  were  used  to
payoff  the  debt of the former Optometrics, LLC,  to  fund  the
acquisition, and for general working capital purposes.
                                      F-13
<PAGE>

         DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   SEPTEMBER 30, 2007 AND 2006

Note 5 - Debt (continued)
Dynasil  Corporation  of  America has  guaranteed  the  debt  of
Optometrics to Citizens Bank and those loans are guaranteed  and
partially  collateralized  by  a second  lien  position  on  the
Company's  operating assets in New Jersey.   Citizens  Bank  has
agreed  subordinated  its second lien  position  to  permit  the
Susquehanna  Bank  loan facilities. Susquehanna  Bank  also  has
modified the standard terms and conditions of its business  loan
agreement  form  to  take account of and not conflict  with  the
terms and provisions of Citizen Bank's loans to Optometrics.
On October 2, 2006, in conjunction with the EMF acquisition, EMF
entered  into  Mortgage Note and Line of Credit Note  Agreements
with  Tompkins  Trust Company ("TTC") which were  guaranteed  by
Dynasil.    The  guaranteed  loans  include  (a)  a   $1,050,000
principal  amount commercial mortgage (the "EMF  Mortgage")  and
(b)  a  $215,000 principal amount line of credit  facility  (the
"EMF  Line of Credit").  Proceeds of the EMF Mortgage were  used
to  repay  certain EMF debts, to pay for part of the acquisition
of  EMF  and for working capital purposes.  Proceeds of the  EMF
Line  of  Credit were used for general corporate  purposes.  The
applicable  borrowing documents were entered into at arms-length
between EMF and Dynasil, on the one hand, and TTC, on the  other
hand,  on  commercial  lending terms and  conditions,  including
acceleration  rights,  events  of  default,  TTC'S  rights   and
remedies  and  silimar  provisions  that  Dynasil  believes  are
customary for commercial loans of this sort.  In connection with
the loan transactions, EMF and Dynasil executed and delivered to
TTC  customary  forms  of  notes mortgage,  security  agreement,
assignments of leases and rents, and similar documents.  The EMF
Mortgage  requires repayment over a 20 year period  at  a  fixed
annual  interest rate of 7.80% for the first 5 years,  resetting
to  a  fixed annual interest rate of 2.80 percentage points over
the  Federal Home Loan Bank of New York Advance Rate  for  five-
year  maturities  at five year intervals.  The EMF  Mortgage  is
secured by a first mortgage on EMF's real estate, equipment, and
fixtures,  as  well as Dynasil's guarantee.   The  EMF  Line  of
Credit has a term running until December 22, 2010 and carries an
annual  interest rate of one-half percent over the  Wall  Street
Journal's Prime Rate of interest, which is adjusted monthly.  It
is secured by EMF's real estate, equipment and fixtures, as well
as Dynasil's guarantee.

Notes Payable to Bank
     Dynasil  has  a  note  payable  to  Susquehanna  Bank  that
represents  borrowings  under the Line of  Credit,  which  bears
interest  at  a variable rate equal to Susquehanna Bank's  prime
rate plus 0.5% (8.25% and 8.75% at September 30, 2007 and 2006).
The  amount  available under this agreement is $200,000.  As  of
September 30, 2007 and 2006, there were no outstanding balances.
This  note is secured by a second mortgage on the Company's  New
Jersey  real estate and a third lien on the Company's  operating
assets  in  New  Jersey.  As part of the credit  agreement,  the
Company  is required to comply with certain financial covenants.
At  September  30, 2007, the Company is in compliance  with  its
financial  covenants  related  to  its  credit  agreement   with
Susquehanna Bank. (See Note 12)
     Optometrics  has  a  note payable  to  Citizens  Bank  that
represents  borrowings  under the Line of  Credit,  which  bears
interest at a variable rate equal to Citizens Bank's prime  rate
plus 0.5% (8.25% and 8.75% at September 30, 2007 and 2006).  The
amount   available  under  this  agreement  is   $400,000.   The
outstanding  balances  at  September  30,  2007  and  2006  were
$100,000  and $190,000, respectively.  The performance  of  this
obligation and the Citizens Term Loan are secured by the  assets
of  Optometrics with a corporate guarantee by the Company and  a
second  lien on the Company's New Jersey assets other than  real
estate.   As  part  of  the  credit agreement,  the  Company  is
required   to  comply  with  certain  financial  covenants   for
Optometrics.  At September 30, 2007 and 2006, the Company is  in
compliance  with its financial covenants related to  its  credit
agreement with Citizens Bank.
                                      F-14
<PAGE>
         DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   SEPTEMBER 30, 2007 AND 2006
Note 5 - Debt (continued)
     EMF  has  a note payable to Tompkins Trust Company  ("TTC")
that  represents borrowings under the EMF Line of  Credit  which
has a term running until December 22, 2010 and carries an annual
interest rate of one-half percent over the Wall Street Journal's
Prime  Rate of interest, which is adjusted monthly (8.25% as  of
September  30, 2007). The amount available under this  agreement
is  $215,000.  The outstanding balance at September 30, 2007 was
$211,870.    It  is secured by EMF's real estate, equipment  and
fixtures, as well as Dynasil's guarantee.
Long-term Debt
     Long-term debt at September 30, 2007 and 2006 consisted  of
the following:

                                                             2007         2006
                                                            ------       ------

  Note payable to bank in monthly installments of $3,580
  including interest at the rate of 7.25% through February
  2011 (after February 2011, the interest rate will adjust
  to the United States Treasury Average Weekly Yield
  rate plus 3.0%), final payment of $305,181 due January 5,
  2016, secured by first mortgage on Berlin, New Jersey
  property and substantially all of the New Jersey assets
  of the Company                                          $ 431,761   $ 442,529

  Capital lease obligations payable in total monthly
  installments of $1,409 including interest at rates
  ranging from 5.5% to 12.9% due and payable through
  June 2007, secured by related equipment                     -0-         3,848

  Note payable to bank in monthly installments of
  $8,727 including interest of 7.8% through October 2011
  (after October 2011, the interest rate will adjust every
  five years to the Federal Home Loan Bank of NY Advance
  Rate plus 2.8%), maturing on October 1, 2026, secured by
  a mortgage on the Ithaca, New York real estate          1,029,306        -0-

  Note payable to bank in monthly installments of
  $5,835 including interest at 6.25%, through March
  2010, secured by the assets of Optometrics Corporation
  with a Corporate guarantee by the Company and a second
  lien on New Jersey assets other than real estate          162,233     219,974

  Note payable to Ithaca Urban Renewal Agency for
  Lease of land in Ithaca, New York for 99 years
  with the option to purchase said land for $26,640
  after May 2008.                                            20,457        -0-

  Note payable to former owner of EMF/current officer
  in connection with EMF acquisition, bears
  interest at 7.8% with no scheduled date of
  repayment, unsecured                                        82,460*       -0-
                                                          -----------  ---------
                                                          $1,726,217     666,371
     Less current portion
                                                          -----------  ---------
                                                          $1,626,980     593,889
                                                          ===========  =========
     * Interest expense of $4,157 was accrued and included in
the outstanding balance as September 30, 2007.

     The aggregate maturities of long-term debt, as of September
30, 2007 are as follows:
          September 30, 2009                   123,836
          September 30, 2010                    77,086
          September 30, 2011                    45,195
          September 30, 2012                    48,800
          September 30, 2013                    52,693
          Thereafter                         1,279,370
                                            ----------
                   Total                    $1,626,980
                                     F-15
<PAGE>

         DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   SEPTEMBER 30, 2007 AND 2006

Note 6 - Income Taxes

      The  Company's income tax expense (benefit) for the  years
ended September 30, 2007 and 2006 are as follows:
                                          2007         2006
                                       ---------     ---------
      Current
       Federal                         $  98,700      $150,400
       State                              57,140        47,375
       Utilization of NOL carryforwards (135,600)     (160,500)
                                       ---------     ---------
                                        $ 20,240      $ 37,275
                                       ---------     ---------
     Deferred
       Federal                           (91,500)      (37,250)
       State                             (37,200)         -0-
                                       ---------     ---------
                                       $(128,700)     $(37,250)
                                       ---------     ---------
      Income tax expense (benefit)     $(108,460)     $     25
                                        ========       =======

     The  reasons  for the difference between total tax  expense
and the amount computed by applying the statutory federal income
tax  rates to income before income taxes at September  30,  2007
and 2006 are as follows:


                                                    2007       2006
                                                 ----------  ----------
Taxes at statutory rates applied to income
 before income taxes                              156,800     $156,700
Increase (reduction) in tax resulting from:
  Depreciation                                   ( 35,600)     (19,600)
  Accounts receivable                              29,300        1,800
  Inventories                                     (21,700)      10,700
  Vacation pay                                    (   300)       2,400
  Unfunded pension liability                      ( 6,200)         -0-
  Deferred compensation                           (19,200)         -0-
  Other                                            (4,400)      (1,600)
  State income taxes                               57,140       47,375
  Benefit of net operating loss carryforwards    (135,600)    (160,500)
  Adjustments to valuation allowance             (128,700)     (37,250)
                                                 ----------  ----------
                                               $ (108,460)   $      25
                                                 ==========  ==========

     Deferred income taxes (benefit) reflect the net tax effects
of  temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts
used  for  income  tax  purposes, and the  tax  effects  of  net
operating  losses  that are available to offset  future  taxable
income.   Significant components of the Company's  deferred  tax
assets  (liabilities)  at September 30, 2007  and  2006  are  as
follows:
                                      2007                 2006
                                   ----------          ----------
Inventories                        $ 122,700           $  22,700
Vacation pay                          10,900               2,800
Unfunded pension liability            23,100                -0-
Deferred compensation                  7,100                -0-
Accounts receivable                   53,900               2,000
Depreciation                          74,500             145,100
Net operating loss carryforwards     276,600             357,600
Less valuation allowance            (352,700)           (468,700)
                                   ----------          ----------
                                    $216,100          $   61,500
                                   ==========          ==========

                                      F-16
<PAGE>
         DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   SEPTEMBER 30, 2007 AND 2006

Note 6 - Income Taxes (continued)

     Based  on the Company's history of significant fluctuations
in  net  earnings,  the  Company established  a  full  valuation
allowance  as  of  September  30, 2004  and  prior  due  to  the
uncertainty as to the realization of certain net operating  loss
carryforwards. With the asset acquisition of Optometrics, LLC in
March  2005  and  operational  improvements,  the  Company   now
believes that some of these carryforwards will be realized,  and
has adjusted the valuation allowance accordingly.

     At  September  30,  2007,  the  Company  has  approximately
$674,280  of  net operating loss carryforwards to offset  future
taxable  income  for  federal tax purposes expiring  in  various
years  through 2021.  In addition, the Company has approximately
$585,766  of net operating loss carryforwards to offset  certain
future  state taxable income, expiring in various years  through
2013.

Note 7 - Stockholders' Equity

     On September 23, 2004, in a privately negotiated
transaction, the Company entered into a Subscription Agreement
(the "Agreement") with Mr. Craig T. Dunham, an individual,
pursuant to which Mr. Dunham agreed to acquire 1,000,000 shares
of the Company's common stock at a cash purchase price of $.15
per share.  The aggregate dollar amount of the transaction was
$150,000.  In connection with the Agreement, the Company also
granted to Mr. Dunham a Stock Purchase Warrant (the "Warrant")
pursuant to which he may acquire, at any time prior to January
31, 2008, up to an additional 1,200,000 shares of the Company's
common stock at an exercise price per share of $.225 dependent
upon certain conditions as further described in the Agreement.
Effective October 1, 2004, the Company also entered into an
Employment Agreement with Mr. Dunham pursuant to which Mr.
Dunham became the Company's President and Chief Executive
Officer.  During the year ended September 30, 2007, Mr. Dunham
exercised 586,373 warrants at $.225 per share for $131,935.  At
September 30, 2007, 613,627 warrants were outstanding.  No
warrants were exercised during fiscal year 2006. (See Note 12)

Convertible Preferred Stock

     On March 8, 2005, the Company completed a private placement
of  700,000  shares  of  Series  A  10%  Cumulative  Convertible
Preferred  Stock for cash proceeds of $700,000.  The  stock  was
sold  at  a  price of $1.00 per share.  Total expenses  for  the
stock  placement  were $10,000.  Each share of  preferred  stock
carried  a  10% per annum cumulative dividend payable  quarterly
and was convertible to 2.2222 shares of common stock at any time
by  holders,  and was callable starting March  9,  2007  by  the
Company  at a redemption price of $1.00 per share.  On March  9,
2007, the Company issued an aggregate of 1,555,540 shares of its
Common  Stock,  $.0005 par value per share, as a result  of  the
exercise  of the conversion rights by holders of 700,000  shares
of Dynasil's Series A 10% Cumulative Convertible Preferred Stock
(the  "Series  A  Preferred Shares").   Dynasil  had  previously
called  all  of the Series A Preferred Shares for redemption  on
March  9,  2007.   All of the shares of the Series  A  Preferred
Shares  that were called for redemption were converted to shares
of common stock.

     On  October  2, 2006 the Company sold 710,000 shares  of  a
Series B 10% Cumulative Convertible Preferred Stock in a private
placement.   The stock was sold at a price of $1.00  per  share.
Total  expenses  for  the  stock  placement  were  $10,000.   No
underwriting  discounts or commissions were paid  in  connection
with the sale.  Each share of preferred stock carries a 10%  per
annum dividend and is convertible to 1.33 shares of common stock
at  any  time by the holders and is callable after two years  by
Dynasil  at a redemption price of $1.00 per share.  Proceeds  of
the  preferred  stock sale were primarily used  to  acquire  the
capital stock of EMF and for related acquisition costs.

Stock Based Compensation

      The Company adopted Stock Incentive Plans in 1996 and 1999
which provide for,

                                      F-17
<PAGE>
         DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   SEPTEMBER 30, 2007 AND 2006

Note 7 - Stockholders Equity (continued)

among  other  incentives, the granting to  officers,  directors,
employees  and  consultants options to purchase  shares  of  the
Company's common stock.  The Company's 1999 Stock Incentive Plan
was  amended on July 25, 2000, with an effective date of January
1,  1999.  Options are generally exercisable at the fair  market
value  or  higher on the date of grant over a five  year  period
currently expiring through 2012.
     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 shares of common stock which  may  be
issued  under the Plans are 2,250,000 shares, of which 1,105,614
shares of common stock are available for future purchases  under
the Plan at September 30, 2007.

     A  summary  of  stock option activity for the  years  ended
September 30, 2007 and 2006 is presented below:

Options outstanding at September 30, 2005  526,459   $ .40-$1.50

Granted in 2006                            130,000   $ .85-$1.50
Exercised in 2006                         (120,000)       $ .40
Cancelled in 2006                         (275,000)  $ .65-$1.50
                                         ---------
Options outstanding at September 30, 2006  261,459   $ .40-$1.50

Options exercisable at September 30, 2006  261,459   $ .40-$1.50

Granted in 2007                            100,000   $1.66-$2.00
Exercised in 2007                         ( 80,000)        $ .40
Cancelled in 2007                             -0-
                                         ---------
Options outstanding at September 30, 2007  281,459   $ .40-$2.00

Options exercisable at September 30, 2007  281,459   $ .40- $2.00
                                         =========

     During  the  year ended September 30, 2007,  100,000  stock
options  were granted at prices ranging from $1.66 to $2.00  per
share  and 80,000 options were exercised. 20,000 of the  granted
stock  options  cannot be exercised until January  2,  2008  and
therefore   the   stock-based  compensation  expense   will   be
recognized at that time if they become exercisable.  The  80,000
options exercised had an exercise price of $0.40 per share  with
$32,000 paid in cash. No options were cancelled during the  year
ended September 30, 2007.

     For  the  year ended September 30, 2007, total  stock-based
compensation charged to operations for option-based arrangements
amounted   to  $11,366.   At  September  30,  2007,  there   was
approximately $9,620 of total unrecognized compensation  expense
related    to    non-exercisable    option-based    compensation
arrangements under the Plan.

     During  the  year ended September 30, 2006,  130,000  stock
options  were granted at prices ranging from $0.85 to $1.50  per
share  and 120,000 options were exercised at the price  of  $.40
per  share  totaling  $48,000 of which  20,358  shares  totaling
$8,143  were issued to the President in partial satisfaction  of
his accrued bonus at September 30, 2006.

     During  the  year  ended September 30,  2007,  the  Company
issued  3,289  shares of common stock valued at  an  average  of
$1.52  per  share  to  a  director in lieu  of  director's  fees
totaling $5,000. The Company also issued 2,531 shares of  common
stock  valued at $1.65 per share totaling $4,176 to an  employee
as compensation.

                                      F-18
<PAGE>

         DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   SEPTEMBER 30, 2007 AND 2006

Note 7 - Stockholders Equity (continued)

     During  the  year  ended September 30,  2006,  the  Company
issued 2,817 shares of common stock valued at $0.71 per share to
a  director in lieu of director's fees totaling $2,000 and 7,954
shares of common stock valued at $0.88 per share totaling $7,000
to an employee as compensation.


     The  fair  value of the stock options granted and  warrants
issued  were  estimated  on the date of grant  using  the  Black
Scholes   option-pricing  model.   Based  on   the   assumptions
presented below, the weighted average fair values of the options
granted  during the years ended September 30, 2007 and  2006  is
$.14 and $.08 per share, respectively.

                                   2007         2006

      Expected life in years            3         5
      Risk-free interest rate        4.82%        4.60%
      Expected volatility           20.42%       16.00%
      Dividend yield                 0.00%        0.00%

     The expected volatility was determined with reference to
the historical volatility of the Company's stock.  The Company
uses historical data to estimate option exercise and employee
termination within the valuation model. The expected term of
options granted represents the period of time that 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.

Employee Stock Purchase Plan

     The  Company  has  an  Employee Stock Purchase  Plan  which
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  147,400  shares  have  been  issued  as  of
September 30, 2007.

     During any twelve month period, employees may not purchase
more than the number of shares for which the total purchase
price exceeds $5,000.  During the years ended September 30, 2007
and 2006, 497 shares, and 739 shares of common stock were issued
under the Plan for aggregate purchase prices of $529, and $531,
respectively.

Note 8 - Retirement Plans

401(k) Plans

      The Company has three 401(k) Plans for the benefit of  its
employees.   The Company made contributions to the plans  during
the  years  ended  September 30, 2007 and 2006  of  $49,330  and
$36,183, respectively.


Defined Benefit Pension Plan

      EMF  has  a  defined benefit pension plan covering  hourly
employees.  The plan provides defined benefits based on years of
service and final average salary.  As of September 30, 2006, the
plan was frozen.  The following relates to the Company's defined
pension plan as of September 30, 2007:


                                      F-19
<PAGE>

         DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   SEPTEMBER 30, 2007 AND 2006

Note 8 - Retirement Plans (continued)

                                                     2007

Pension  benefit obligation as of September 30      $349,493*
Fair  value of plan assets as of September  30      (291,644)
Excess  of benefit obligation over plan  assets     $ 57,849


Amounts recognized on the balance sheet as:
   Accrued  benefit costs (in accrued expenses)     $ 57,849

* The current liability was used since the plan is frozen.


Discount rate on the benefit obligation           5.79%
Rate of expected return on the plan assets        5.50%

Pension expense                                   $ 8,806
Company contributions                             $26,946

Note 9 - Related Party Transactions

      During  the years ended September 30, 2007 and  2006,  the
Company  made  sales of $9,968 and $21,572, respectively,  to  a
company  in  which a former member of the board of directors  is
also  an  officer.   As of September 30, 2007 and 2006,  amounts
due  from  this  customer included in accounts  receivable  were
$1,199  and  $1,612,  respectively.   During  the  years   ended
September  30,  2007  and  2006,  building  lease  payments   of
$114,000,  were paid to Optometrics Holdings, LLC in  which  the
Company's Chief Financial Officer has an interest.


Note 10 - Vendor Concentration

      The Company purchased $1,557,846 and $1,228,021 of its raw
materials from one supplier during the years ended September 30,
2007 and 2006. As of September 30, 2007 and 2006, amounts due to
that  supplier  included in accounts payable were  $379,940  and
$192,071.


Note 11 - Supplemental Disclosure of Cash Flow Information:

                                        2007          2006

     Cash paid during the year for:
        Interest                      $150,253       70,592
                                       ========     =======
        Income taxes                   $72,951      $23,667
                                       ========     =======

     Non-cash investing and financing activities:

      In  January 2006, the Company refinanced its mortgage note
payable in the amount of $449,346 with another bank.

                                      F-20
<PAGE>







         DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   SEPTEMBER 30, 2007 AND 2006

Note 11 - Supplemental Disclosure of Cash Flow Information:
(continued)


Acquisition of Assets of EMF Corporation on October 2, 2006:

  Fair market value of current assets acquired     $  468,300
  Property, plant and equipment                     1,789,621
  Fair market value of liabilities assumed         (1,063,031)
                                                    ---------
  Total cost of acquisition                         1,194,890
  Debt incurred to pay seller                        (520,000)
                                                    ---------
  Net  cash paid for EMF Corporation               $  674,890



      To  partially fund the acquisition of EMF Corporation, the
Company  issued  710,000  shares of Series  B  preferred  stock,
valued  at  $1.00  per share, incurred stock issuance  costs  of
$10,000 and received net proceeds of $700,000.

      On  October 2, 2006, concurrently with the acquisition  of
EMF  Corporation,  EMF borrowed $1,050,000.  The  proceeds  were
used  as  follows:  (1)  repayment  of  assumed  liabilities  of
$338,161  at closing, (2) payment of the balance due  seller  of
$520,000  directly  by  the  bank at  closing,  (3)  payment  of
transaction  costs  of  $17,023 at closing,  and  (4)  remaining
balance of $174,816 was used for working capital purposes.

Note 12 - Subsequent Events

     On  December 13, 2007, Dynasil's available line  of  credit
with  Susquehanna Patriot Bank was increased to  $475,000.   The
interest charged on advances was reduced to the prime rate.  All
other terms, remained unchanged.  (See Note 5)

        On  December  14,  2007,  Mr.  Dunham  communicated  his
intention  to  exercise his remaining warrants  prior  to  their
expiration on January 31, 2008.  (See Note 7)




                              F-21
<PAGE>



ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

     There  were  no  disputes or disagreements  of  any  nature
between  the  Company or its management and its public  auditors
with   respect   to  any  aspect  of  accounting  or   financial
disclosure.

ITEM 8A CONTROLS AND PROCEDURES

      As  required by Rule 13a-15(e) under the Exchange Act, our
Chief  Executive  Officer  and  Chief  Financial  Officer   have
evaluated our disclosure controls and procedures as of  the  end
of  the  period  covered by the report and have determined  that
such disclosure controls and procedures are effective.

      There  has  been  no change in our internal  control  over
financial  reporting  in connection with  this  evaluation  that
occurred   during  our  last  fiscal  quarter  that   materially
affected,  or it is reasonably likely to materially affect,  our
internal control over financial reporting.

                                PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS;
         COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

      All  of our directors were elected to serve for a one-year
term  at our Annual meeting of the shareholders held on February
1,  2007.  All directors will hold office until their successors
are elected at the next annual meeting of the shareholders.

     Our executive officers and directors, and their ages at
November 30, 2007, are as follows:

Name                  Age       Position
---------------       ---       --------
James Saltzman         64       Chairman of the Board
Craig T. Dunham        51       President, CEO, Director
Cecil Ursprung         63        Director
Laura Lunardo          55       CFO, COO Optometrics
Bruce Leonetti         53       Vice President
Megan Shay             42       Vice President
Paul Schulz            47       President EMF

      None  of the above persons is related to any other of  the
above-named persons by blood or marriage.

      The  Company's Board of Directors does not have  an  audit
committee financial expert. Although it would like to attract  a
qualified person to serve in that capacity, the Company's  small
size and limited resources have precluded it from attracting  an
appropriate individual.

      Based  upon  a  review of filings with the Securities  and
Exchange  Commission and written representations that  no  other
reports  were  required, the Company believes that  all  of  the
Company's  directors  and  executive  officers  complied  during
fiscal 2007 with the reporting requirements of Section 16(a)  of
the Securities Exchange Act of 1934.

    Craig T. Dunham, 51, President and CEO, has been with the
Company since October 1, 2004 when he replaced John Kane as a
Director. Prior to joining the Company, he spent about one year
partnering with a private equity group to pursue acquisitions of
mid-market manufacturing companies.  From 2000 to 2003, he was
Vice President/ General Manager of the Tubular Division at
Kimble Glass Incorporated.  From 1979 to 2000, he held
progressively increasing leadership responsibilities at Corning
Incorporated in manufacturing, engineering, commercial,
and  general  management positions.  At  Corning,  he  delivered
results  in  various  glass  and ceramics  businesses  including
optics  and photonics businesses.  Mr. Dunham earned a  B.S.  in
mechanical engineering and an M.B.A. from Cornell University.


                               -10-
<PAGE>

     James  Saltzman,  Chairman, 64, has been a  member  of  the
Board  since  February 1998.  Mr. Saltzman has been involved  in
the investment community since October 1969. He has invested  in
both  public and private corporations.  He was on the  Board  of
Directors of IMCS Partmaker which was recently sold to Delcam, a
public corporation specializing in software for the machine tool
industry.   From January 1997 to June 2000, Mr. Saltzman  served
as  Vice Chairman of the Board and a director of Madison Monroe,
Inc., a private company engaged in investments.

      Cecil  Ursprung, 63, has been a member of the Board  since
February 1, 2007.  Mr. Ursprung is the former Chairman  and  CEO
of Reflexite Corporation in Avon, Connecticut, a manufacturer of
reflective products to enhance safety and optical films used  to
manage light in LCD displays.  He has been with Reflexite  since
1983  and  led  the  revenue growth of that  company  from  $2.5
million  to  approximately $100 million.   His  past  experience
includes  marketing  and  management  positions  with  Marketing
Displays,  Inc., Container Corporation of America  and  Anheuser
Busch.  He is currently on the Board of Directors of Lewis  Tree
Service  in  Rochester, New York.  He is a frequent  speaker  on
topics   such   as   business  strategy  development,   employee
motivation,  business  ethics, executive compensation,  employee
ownership  and  the  effective  use  of  outside  boards.    His
education includes a degree in Economics and Finance from Baylor
University, an MBA from Washington University in St.  Louis  and
post-graduate work at the University of Michigan.

       Laura  Lunardo,  55, CFO and Chief Operating  Officer  of
Optometrics  Corporation, has been with the  Company  since  the
March  2005 Optometrics acquisition. Previously, she had been  a
partner  in  Optometrics LLC with primary  responsibilities  for
Sales  &  Marketing, Accounting, Finance and Administration  and
she  was  the  CFO  of  Optometrics USA, Inc.,  the  predecessor
corporation to Optometrics LLC, since 1984.  Ms. Lunardo  earned
her   B.S.  degree  in  Business  and  Accounting  from   Boston
University in 1976.

      Bruce  Leonetti, 53, Vice President of Sales and Marketing
has  been  with  the Company since January  23,  2006.   He  was
previously  with  the Company for 14 years prior  to  1993,  and
again from 1999 to 2002.  In the interim periods, he worked as a
development officer with the University of Pennsylvania and  was
owner/operator  of  a restaurant on the New  Jersey  shore.   He
graduated from the University of Pennsylvania.

     Megan Shay, 42, Corporate Vice President joined the Company
as of the October 2, 2006 acquisition of EMF.  She joined EMF in
1995  to lead a business turn-around and has been owner and  CEO
since 1998.  She was Administrator for the Andy Warhol museum in
Pittsburgh from 1991-1995.  She has a BA in Ceramics from  Wells
College and an MFA in Sculpture from Carnegie Mellon University.

      Paul  Schulz, 47, President of EMF, joined the Company  on
November  19, 2007 succeeding Marcela Backer in that  role.   He
had  previous General Management experience at Midland Materials
and Electro-Tech Machining.  He delivered results for a total of
15 years at Morgan AM&T in Pennsylvania as Global Vice President
of  Operations, Vice President/ General Manager of  Pure  Carbon
Company, Plant Manager, and Engineering Manager.  Mr. Schulz has
a B.S. in Chemical Engineering from Bucknell University.


Code of Ethics

        The  Company has adopted a Code of Ethics for  Principal
Executives  and  Senior Financial Officers that applies  to  its
Chief Executive Officer and Chief Financial Officer. The Company
will provide a copy to any person without charge upon request in
the manner set forth under item 1 on page 3.

                                   -11-
<PAGE>



 ITEM 10. EXECUTIVE COMPENSATION
<TABLE>
<CAPTION>
                            Summary Compensation Table

<S>          <C>     <C>          <C>        <C>          <C>          <C>             <C>

Name and				     Stock         Option      All Other
Position     Year    Salary ($)    Bonus ($) Awards ($)    Awards ($)  Compensation($)  Total ($)
------------ ------  -----------  ---------- -----------  ----------- ----------------  ----------


Craig Dunham  2007     110,000     86,711                                                196,711
President     2006     110,000     82,881                                                192,881
And CEO


Laura Lunardo 2007      97,693     31,266                                 14,393         143,352
CFO, COO-     2006      92,689     16,514                                 14,209         123,412
Optometrics

Megan Shay    2007      95,400                                            25,000         120,400

</TABLE>
Executive Compensation

The employment agreement with Craig T. Dunham, President and
CEO, commenced on October 1, 2004 for a three-year period, after
which the agreement automatically renews for one-year terms,
unless terminated by either party upon ninety days written
notice prior to the end of any term, or for cause. Under the
employment agreement, Mr. Dunham agreed to work for us full
time, and received an annual base salary of $110,000. Mr.
Dunham's agreement also provides for a performance bonus of 20%
of the Company net income above $100,000 and an additional
bonuses or stock options at the discretion of our Board of
Directors. The annual performance bonus is paid one third in
cash and the other two thirds is paid in stock where Mr. Dunham
has the option to utilize his existing warrants or options to
set the share price. The agreement also provides for standard
Dynasil N.J. benefits and a company car (or car allowance).
Effective October 1, 2007, the Board of Directors increased Mr.
Dunham's base salary to $150,000, eliminated the company car
benefit, and reduced Mr. Dunham's bonus percentage for fiscal
2008 to 47% of a "Core Bonus" pool comprised of 15% of Dynasil's
net profits before taxes after subtracting an amount equal to an
8% annual return on Dynasil's shareholders' equity.

The  employment  agreement  with  Laura  Lunardo,  CFO  and  COO
Optometrics, commenced on March 9, 2007 and continues for a  one
year  period, after which the agreement is subject  to  renewal.
Under  the employment agreement, Ms. Lunardo has agreed to  work
for  us  full  time,  and  receives an  annual  base  salary  of
$100,000.   Ms. Lunardo's agreement also provides for an  annual
performance  bonus equal to 5% of Optometrics net profit  before
tax,  and  additional bonuses or stock options at the discretion
of  our Board of Directors. The agreement also provides for a 9%
contribution  to her 401(k) pension plan and a company  car  (or
car allowance) in addition to standard Optometrics benefits.

The employment agreement with Megan Shay, former CEO of EMF,
commenced on October 2, 2006 for a one year period, and amended
on June 15, 2007.  Under the amended agreement, Ms. Shay has
agreed to work full time and receives an annual base salary of
$95,400, an annual incentive bonus based on 10% of EMF Net
Income, and standard EMF benefits, as well as additional $25,000
for the Full Time Extension Period of April 1, 2007 to September
30, 2007.  Ms. Shay's became an employee at will effective
October 1, 2007 in her new role as Corporate Vice President at
the same base salary and a bonus equal to 16.8% of a "Core
Bonus" pool comprised of 15% of Dynasil's net profits before
taxes after subtracting an amount equal to an 8% annual return
on Dynasil's shareholders' equity.

                    Director Compensation

           Fees earned or
               Paid in   Stock       Option         All other
Name           cash($)   awards($)   awards($)      compensation($)  Total ($)
------------- ---------  ---------   ----------     ---------------  ---------
James Saltzman 15,000                                                 15,000

Cecil
Ursprung(1)                8,000       11,366                         19,366

David Manzi     4,000                                                  4,000

                               -12-
<PAGE>

(1) Mr. Ursprung elected to receive 100% of his Directors fees
in stock which was issued at each quarter ending market price
which ranged from $1.27 to $1.75 per share.   A total of 5164
shares were issued with a value of $8,000 and an average price
per share of $1.55 per share. Mr. Ursprung was issued 80,000
stock options on December 19, 2006 which were contingent upon
him being elected as a Director.  The most recent market price
was $1.53, the option price is $2.00 per share, the options have
a three year period, and were valued at $11,366.

Members of the Board have the option to split their compensation
between the Company's common stock and cash.  Stock payments are
made at the end of each quarter based on the ending market price
for that quarter.  Fiscal year 2007 for serving on the Board is:
Chairman of the Board, $1,250 per month and all other non-
employee directors, $1,000 per month. In addition, all
reasonable expenses incurred in attending meetings are
reimbursed by the Company and Directors are eligible for stock
options and grants.  Effective quarter 1 fiscal year 2008,
Director compensation has been increased to: Chairman of the
Board, $1,500 per month and all other non-employee directors,
$1,250 per month.


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

      The following table sets forth the beneficial ownership of
the Common Stock of the Company as of September 30, 2007 by each
person  who  was known by the Company to beneficially  own  more
than  5%  of  the common stock, by each director  and  executive
officer who owns shares of common stock and by all directors and
executive officers as a group:

Title      Name and Address             No. of Shares and nature of   Percent of
of Class   of Beneficial Owner          Beneficial Ownership(1)       Class
--------   -------------------          ---------------------------   ----------

Common     Craig Dunham (1)(4)               3,095,194                  44.5%
           385 Cooper Road
           West Berlin, NJ 08091

Common     Saltzman Partners (1)(2)            243,206                   4.0%
           4 Tower Bridge
           Suite 100
           West Conshohocken, PA  19428

Common     James Saltzman  (1)(2)(3)           331,962                   5.3%
           777 Germantown Pike
           Plymouth Meeting, PA  19437

Common     Laura Lunardo                       152,531                   2.5%
           8 Nemco Way
           Ayer, MA 01432

Common     Cecil Ursprung (1)(5)                80,000                   1.3%
           120 Darling Drive
           Avon, CT 06001

Common     Megan Shay (1)(6)                    79,800                   1.3%
           239 Cherry Street
           Ithaca, NY 14850

Common     Bruce Leonetti (1)                    8,254                   0.2%
           385 Cooper Road
           West Berlin, NJ 08091


All Officers and Directors
as a Group (1)                               3,747,741                  53.4%

------------
                              -13-
<PAGE>
(1)The  numbers and percentages shown include shares  of  common
stock  issuable  to  the  identified person  pursuant  to  stock
options  that  may be exercised within 60 days.  In  calculating
the  percentage  of  ownership, such shares  are  deemed  to  be
outstanding  for  the  purpose of computing  the  percentage  of
shares  of common stock owned by such person, but are not deemed
to be outstanding for the purpose of computing the percentage of
share  of  common  stock owned by any other  stockholders.   The
number   of  shares  outstanding  on  September  30,  2007   was
6,116,523.

(2)James Saltzman disclaims beneficial ownership of the  243,206
shares owned by Saltzman Partners.

(3)Includes  options to purchase 90,000 shares of the  Company's
common  stock at $1.50 per share and options to purchase  40,000
shares of the Company's common stock at $0.40 per share.

(4)Includes warrants to purchase 613,627 shares of the Company's
common stock at an exercise price of $0.225 per share and Series
B  preferred  stock  which is convertible to 230,755  shares  of
common stock.

(5)Includes options to purchase 80,000 shares of the Company's
stock at $2.00 per share.

(6)Includes Series B preferred stock which is convertible to
79,800 shares of common stock.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

  NONE.

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

(a)   The following exhibits are filed pursuant to Item  601  of
Regulation S-B:

Exhibit No.  Description of Document

2.01*        Asset  purchase agreement, dated as of  February  17,
             2005 between
             Dynasil Corporation of America, Optometrics LLC, Frank
             Denton, and
             Laura Lunardo filed on Form 8-K/A dated May 24, 2005.

2.02*        Lease agreement, dated March 8, 2005 between Dynasil
             Corporation of
             America, Optometrics Corporation, and Optometrics
             Holdings LLC
             filed on Form 8-K/A dated May 24, 2005.

2.03*        Stock purchase agreement dated August 21, 2006,
             between Dynasil, Megan Shay, and Evaporated Metal Films
             Corporation, filed on Form 8-K on
             August 22, 2006.

3.01*        By-laws of Registrant, filed as an exhibit to
             Registrant's
             Registration Statement on Form 10-SB, filed October 1,
             1999

3.02*        Restated Certificate of Incorporation of Dynasil
             Corporation of
             America dated May 6, 2005, filed as an exhibit to Form
             10-QSB dated May 16, 2005.

3.03*        Restated Certificate of Incorporation of Dynasil
             Corporation of America dated October 13, 2006, filed
             on Form 8-K dated October 19, 2006.

10.01*       1996 Stock Incentive Plan, filed as an exhibit to
             Registrant's
             Registration Statement on Form 10-SB, filed October 1,
             1999

10.02*       1999 Stock Incentive Plan, filed as an exhibit to
             Registrant's
             Registration Statement on Form 10-SB, filed October 1,
             1999

10.03*       Employee Stock Purchase Plan, filed as an exhibit to
             Registrant's
             Registration Statement on Form 10-SB, filed October 1,
             1999

                              -14-
<PAGE>

10.04*    Audit Committee Charter filed as an exhibit on Form 10-
          KSB dated
          September 30, 2001.

10.05*    Loan Agreement and associated documents dated April
          15, 2004 with
          Premier Bank, for a $708,889 term loan, filed as an
          exhibit
          to Registrant's Registration Statement on Form 10-SB,
          filed May 14, 2004.

10.06*    Employment Agreement of Craig T. Dunham dated October
          1, 2004,
          filed on form 10-KSB on December 21, 2004.

10.07*    Employment Agreement of Laura Lunardo effective March
          8, 2005,
          filed on Form 10-QSB dated May 16, 2005.

10.08*    Loan agreement dated March 8, 2005 with Citizen's Bank
          for a
          $400,000 revolving line of credit, filed on Form 10-
          QSB dated May
          16, 2005.

10.09*    Loan agreement dated March 8, 2005 with Citizen's Bank
          for a
          $300,000 term loan, filed on Form 10-QSB dated May 16,
          2005.

10.10*    Loan agreements dated January 5, 2006 with
          Susquehanna Patriot Bank
          for a $449,346 term loan and $200,000 line of credit,
          filed on Form 8-K dated January 10, 2006.

10.11*    Employment agreement of Bruce Leonetti, dated January
          16, 2006, filed
          on Form 8-K on January 19, 2006.

10.12*    Employment agreement of Megan Shay, filed on Form 8-K
          on August 22, 2006.

10.13*    Loan documents for loan entered into with Tompkins
          Trust Company on October 2, 2006 by Evaporated Metals
          Film Corporation and guaranteed by
          Dynasil, filed on Form 8-K on October 6, 2006.

10.14     Indemnification agreement with new Dynasil
          Director, Cecil Ursprung,
          dated 2/1/07.

10.15     Offer letter to Marcella Backer as EMF President
          effective July 10, 2007.

10.16     Amendment to Margaret Shay employment agreement dated
          June 15, 2007.


21.01*    List of Subsidiaries of Registrant, filed as an
          exhibit to
          Registrant's Registration Statement on Form 10-SB,
          filed October
          1, 1999.

99.1      Press release, dated December 19, 2007, issued by
          Dynasil
          Corporation  of America announcing its financial
          results for the
          fourth quarter ending September 30, 2007.


* Incorporated herein by reference

(b)  Reports on Form 8-K:  There were not any reports on Form
     8-K filed
     during the last quarter of the period covered by this
     report.

ITEM 14. Principal Accountant Fees and Services

 (a)   Audit Fees

The   aggregate  fees  billed  or  to  be  billed   for
professional   services  rendered  by   the   Company's
principal accountant for the audit of the

                                      -15
<PAGE>
Company's  annual financial statements for  the  fiscal
years ended September 30, 2007 and 2006 and the reviews
of  the  financial statements included in the Company's
Forms 10-QSB during those fiscal years are $67,750  and
$54,000, respectively.

(b)  Audit Related Fees

The   aggregate  fees  billed  or  to  be  billed   for
professional   services  rendered  by   the   Company's
principal  accountant for audit related  fees  for  the
fiscal years ended September 30, 2007 and 2006 were $-0-
and  $33,000, respectively.  The fiscal year 2006  fees
related  to due diligence fees of $13,500 for  the  EMF
acquisition and EMF audit fees of $19,500.

(c)   Tax Fees

The  Company incurred fees of $6,500 and $4,700  during
the  last  two  fiscal years for professional  services
rendered by the Company's principal accountant for  tax
compliance, tax advice and tax planning.

(d)  All Other Fees

The  Company incurred no other fees during the last two
fiscal years for products and services by the Company's
principal accountant.

(e) Pre-approval Policies and Procedures

The Board of Directors has adopted a pre-approval policy
requiring that the Audit Committee pre-approve the audit and non-
audit services performed by the independent auditor in order to
assure that the provision of such services do not impair the
auditor's independence.

                                      -16-
<PAGE>

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities
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 Dunham
        ---------------------------------
        Craig Dunham, President, CEO

DATED:  December 19, 2007
        ---------------------------------
In accordance with the Exchange Act, this report has been signed
below by the following persons on behalf of the registrant and
in the capacities and on the date indicated.


 Signature                   Title                           Date
 ---------                   -----                           ----
BY:  /s/ James Saltzman      Chairman of the Board of   December 19, 2007
    ---------------------    Directors
   James Saltzman

BY: /s/ Cecil Ursprung         Director                 December 19, 2007
    ---------------------
   Cecil Ursprung


BY: /s/ Craig T. Dunham        President and CEO        December 19, 2007
    ---------------------
   Craig T. Dunham

BY: /s/ Laura Lunardo         CFO and Principal         December 19, 2007
    ---------------------     Accounting Officer
   Laura Lunardo







                                      -17-