UNITED STATES
                  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, 2002

[ ] 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: $2,670,469

The Company's common stock is quoted on the NASDAQ OTC Bulletin Board under
the symbol "DYSL".   The estimated aggregate market value of the voting and
non-voting stock held by non-affiliates of the registrant as of November 30,
2002 was $303,506. The market value is based upon the last sale of the Common
Stock on the NASDAQ OTC Bulletin Board of $.14 per share on November 29,
2002.

The Company had 2,404,123 shares of common stock, par value $.0005 per share,
outstanding as of November 30, 2002.

Documents incorporated by reference: none

Transitional Small Business Disclosure:     Yes       No  XX
                                                ----     -----
                                      -1-
<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.

On April 22, 1996, the Company's articles of incorporation were amended
to reflect an increase in the authorized shares of common stock from
1,500,000 to 25,000,000, and a reduction of the par value of the common stock
from $.10 to $.001. On June 1, 1996, the Board of Directors declared a
three-for-two stock split, effected in the form of a 50% stock dividend
payable to stockholders of record on April 30, 1996.

On October 16, 1996, the Board of Directors declared a two-for-one
stock split payable on November 1, 1996 to stockholders of record on October
1, 1996, which split further reduced the par value of our common stock from
$.001 to $.0005 per share.

     We are a manufacturer and value added reseller of customized synthetic
fused silica products. We also distribute fused quartz material that we
obtain from a variety of sources. Our products are used primarily as
components of optical instruments, lasers, analytical instruments,
semiconductor/electronic devices, spacecraft/aircraft components, and in
devices for the energy industry. These include:

          o    Optical components - lenses, prisms, reflectors, mirrors,
               filters, optical flats

          o    Lasers - Beam Splitters, brewster windows, q-switches,
               medical/industrial lasers, exciter systems

          o    Analytical Instruments - UV spectrophotometer cells, fire
               control devices, reticle substrates, and interferometer plates

          o    Energy - Laser/Tkamak fusion research isotope separation, solar
               cell covers

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

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

     We have a two person sales force located in our corporate headquarters,
West Berlin, New Jersey that handles all domestic sales. We also use
manufacture 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.
Our products are distributed through direct sales and delivered by commercial
carriers.

     We compete for business in the optics industry primarily with two other
manufacturers of synthetic fused silica and several distributors of their
products. The manufacturers are Corning Incorporated, Canton, NY and Heraeus
Quarzglas, Germany.  Our principal competitive distributors include United
Lens Company, Inc., Southbridge, MA, Advanced Glass Industries, Rochester, NY
and Glass Fab, Inc., Rochester NY. We also purchase material from Corning
Incorporated to supplement our in house inventory and enabling us to offer a
wider variety of products.

                                      -2-
<PAGE>
     Market share in the optics industry is largely a function of quality,
price and speed of delivery.  We believe that we have always been competitive
in all three areas. We have significantly improved our delivery times over
the past year as a result of improved product flow.

      The primary raw material used in our manufacturing process is silicon
tetrachloride, which we obtain from Wah Chang, an Allegheny Technologies
Company. In the event we are unable to obtain silicon tetrachloride from our
current supplier, it is available from Dow Chemical or Hemlock, Inc. at
comparable prices.


     We presently have over 150 customers, with approximately 90% of our
business being concentrated in our top 40 customers. Our five largest
customers each accounted for approximately 8.0%, 7.3%, 6.7%, 6.6% and 6.3%
respectively, of our revenues during fiscal year 2002. Generally, our
customers provide purchase orders for a specific quantity and quality of
fused silica. These purchase orders generally are filled with fused silica
from inventory or manufactured to order. Orders are generally filled over a
period ranging from one week to one year. The loss of any of these customers
would likely have a material adverse effect on our business, financial
condition and results of operations.

    We rely on trade secret and copyright laws to protect our proprietary
technologies, but there can be no assurance that those laws will provide us
with sufficient protection, that others will not develop technologies that
are similar or superior to ours, or that third parties will not copy or
otherwise obtain or use our technologies without our authorization. We have
no patents or patent applications filed or pending.

     Other than federal, state and local environmental laws, our
manufacturing process is not subject to direct governmental regulation. Our
manufacturing process, which includes storage of hazardous materials, is
subject to a variety of federal, state and local environmental rules and
regulations. We make extensive use of engineering consultants to provide the
technical expertise to help ensure that our equipment is in compliance. Waste
water and ground water testing is conducted quarterly by an engineering
consultant, and the results are submitted directly to the appropriate
regulating agencies. We are permitted to dispose of our wastewater through
the Camden County Municipal Utilities Authority. We have a permit to use an
air scrubber system, which is tested periodically. We successfully completed
our compliance emission evaluation test in March 2000. We do not have a
pending notice of violations and are aware of no potential violations. We
train our employees in the proper handling of hazardous materials. There are
no buried storage tanks on our property. A Phase I environmental audit,
completed approximately two years ago, did not disclose any conditions
requiring remediation. Our environmental compliance costs, when we are
operating at full capacity, are approximately $300,000 per year.

Our research and development activities primarily have involved changes to
our manufacturing process and the introduction of equipment with newer
technology. Improvements to our manufacturing process are ongoing and related
costs are incorporated into our manufacturing expenses. Investigations into
use of purer raw material, alternative fuels and improved distribution
systems have been the emphasis of our research and development program.

     Our total work force consist of 17 employees; 3 administrative
(including 1 part time employee), 2 sales, and 12 shop personnel. The shop
currently is non-union.

                                      -3-
<PAGE>
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 is
situated on a 3.686-acre site. It contains eight furnaces with attendant
pollution control systems, glass processing equipment, quality control
functions and administrative office space. We believe the property is in
satisfactory condition and suitable for our purposes.

The property is pledged as collateral against a note payable to a bank.



ITEM 3.  LEGAL PROCEEDINGS

     No material legal proceedings to which the Company or any of its
property is subject are pending, nor to the knowledge of the Company are any
such legal proceedings threatened.


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

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

                                      -4-
<PAGE>
                                  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 the symbol "DYSL". 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, 2001 and September 30, 2002 were as
follows:

  Fiscal Quarter        High Bid Price        Low Bid Price
  --------------        --------------        -------------
       2001
       First              $1.50                 $1.1875
       Second              1.50                  1.1875
       Third               1.40                  1.40
       Fourth              0.75                  0.55

       2002
       First              $0.95                 $0.30
       Second              0.90                  0.45
       Third               0.51                  0.40
       Fourth              0.40                  0.13

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

As of September 30, 2002, there were 2,402,939 shares of common stock
outstanding held by approximately 550 holders of record of the Common Stock
of the Company (plus a small number of additional shareholders whose stock is
held in street name and who have declined disclosure of such information).

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

The Company adopted a Stock Incentive Plan that provides for, among
other incentives, granting to officers, directors, employees and consultants
options to purchase shares of our common stock up to a total of 1,350,000
shares. The 1,350,000 shares consist of three separate plan approvals. The
first plan was approved in February 1996 for 450,000 shares, restated to
reflect the stock splits of 1996. The second and third plans were for 450,000
shares each and were approved on January 1999 and January 2001. At September
30, 2002, 675,023 shares of common stock were reserved for issuance under the
Plan. Options granted under the Plans are generally exercisable over a
five-year period. To date, options have been granted at exercise prices
ranging from $.56 to $4.25 per share. At September 30, 2002, 463,977 options
were outstanding.

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 150,000 shares had
been reserved for issuance. Of these, 88,770 shares have been purchased by
the employees at purchase prices ranging from $.11 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 Form S-8 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.

                                      -5-
<PAGE>
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

     The steep downturn in demand in the semi-conductor and
telecommunications industries had a severe adverse effect on the Company for
the fiscal year 2002. We were faced with adjusting to an almost 50% reduction
in sales from fiscal year 2001 to fiscal year 2002. In order to adjust to the
reduction, significant cost savings measures had to be implemented. The most
essential of these measures included manpower reductions and an evaluation of
the carrying value of our production assets. Manpower was reduced by 25% and
an asset impairment was incurred for $677,676 (see discussion under results
of operations). We do not anticipate an increase in demand until the 2nd
quarter 2003.


Results of Operations

          Sales for the fiscal year ended September 30, 2002 were $2,670,469.
This represents a decrease of $2,223,625 or 45% from sales for the fiscal
year ended September 20, 2001 of $4,894,094. The reduction in sales is a
direct effect of the reduced demand for optical materials, as a result of the
downturn in the semiconductor, telecommunications, laser and optics markets.
The slow down in these industries has shown some signs of recovery, but the
best estimate for significant movement should be no sooner than 2nd quarter
2003.

International sales continues to be an improving segment for the
Company. For the fiscal year ended September 30, 2002 sales were $121,071
compared to fiscal year ended September 30, 2001 sales of $34,902. The
increase of $86,169 is in part attributed to the addition of sales
representatives in England and France, as well as increased demand from
existing customers in Germany. We are actively pursuing representation in
Asia and hope to have someone in place by mid 2003. We anticipate that the
experienced increases over the past years in international sales will
continue throughout 2003.

     Cost of sales increased, as a percentage of sales, to 82.5% for fiscal
year 2002 from 70.5% of sales for fiscal year 2001. There were two major
contributors to the significant percentage increase: low shipment volumes
combined with high fixed cost and reduced production volumes. In the first
quarter of the fiscal year we were forced to shut down our furnaces for
repair work and had to supplement existing inventories with outside
purchases. The added cost, in addition to our inability to spread our fixed
cost over inventory produced, had the effect of increasing our cost of sales.
When production resumed we were faced with a continued decline in demand
forcing reductions in production volumes and an inability to reduce fixed
cost.

     The high cost of our fixed overhead, in part related to the high
carrying value of the production assets, forced us to evaluate our existing
cost structure. We were also faced with considerable downward pressure on
pricing, as a result of the decline in demand combined with the over
abundance of product available. We reduced the number of running furnaces and
adjusted the carrying value on the remaining ones, which resulted in an asset
impairment charge of $677,676. Our inventory levels are sufficient to shut
all furnaces down on an interim basis, until demand increases. We also have
the ability to complement the inventory with outside purchases.

      Gross profit decreased to $468,409 or 17.5% of sales, for fiscal year
2002 from $1,444,985 or 29.5% of sales for fiscal year 2001. The decrease of
$976,576, or 67.6%, is a direct result of a combination of decreased revenue
and increased cost of sales, as a percentage of sales, as discussed above.

                                      -6-
<PAGE>
     Selling, general and administrative expenses decreased to $705,206 or
26.4% of sales, for fiscal year 2002 from $848,237 or 17.3% of sales, for
fiscal year 2001. The decrease of $143,031 was related primarily to the
decrease in  salaries and related benefit cost.

     Interest Expense-net, decreased to $68,365 or 2.6% of sales for fiscal
year 2002 from $144,490 or 2.9% of sales for fiscal year 2001. The decrease
of $76,125 was the result of debt decreasing overall by $419,493, improved
interest rates in the market and the positive effect of a greatly improved
cash position.

The Company lost $982,838 for the year ended September 30, 2002
compared to net income of $219,347 for the fiscal year ended September 30,
2001.

     The Company has no provisions for income taxes for either fiscal 2002 or
2001. As of September 30, 2002 we have approximately $880,000 of net
operating loss carryforwards to offset future taxable income for federal tax
purposes expiring in various years through 2020. In addition, the Company has
approximately $337,000 of net operating loss carryforwards to offset certain
future states' taxable income, expiring in various years through 2008.


Liquidity and Capital Resources

     Net cash provided by operating activities decreased to $272,294 for
fiscal year 2002, from $871,859 for fiscal year 2001. The decrease of
$599,565 was due primarily to the change from operating loss of $982,838 in
fiscal year 2002 compared to operating income of $219,347 in fiscal year
2001.

     Cash flows used in investing activities decreased to $160,739 for fiscal
year 2002, from $313,048 for fiscal year 2001. Cash used in investing
activities for fiscal year 2002 were for the purchase of property, plant and
equipment.

Cash flows used in financing activities increased to $412,822 for
fiscal year 2002, from $335,121 for fiscal year 2001. Cash used in financing
activity for fiscal year 2002 was primarily used to reduce long-term debt.

The Company believes that its current cash and cash equivalent
balances, and net cash generated by operations, will be sufficient to meet
its anticipated cash needs for working capital for at least the next 12
months. Any business expansion may require the Company to seek additional
debt or equity financing.


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," 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.

                                      -7-
<PAGE>
ITEM 7.  FINANCIAL STATEMENTS



                        INDEPENDENT AUDITORS' REPORT


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 as of September 30, 2002 and 2001,
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 auditing standards generally
accepted in the United States of America.  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, 2002 and 2001 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
November 12, 2002

                                      F-1
<PAGE>

                 DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           SEPTEMBER 30, 2002 AND 2001

                                     ASSETS
<TABLE>
<S>                                                     <C>                <C>

                                                               2002            2001
                                                           ----------      ----------
Current assets
   Cash and cash equivalents                                $ 172,118      $  473,385
   Accounts receivable, net of allowance for doubtful
    accounts of $5,000 and $-0- for 2002 and 2001             343,227         469,030
   Inventories                                                581,104         768,707
   Prepaid expenses and other current assets                   40,567          26,577
                                                           ----------      ----------
        Total current assets                                1,137,016       1,737,699

Property, Plant and Equipment, net                            891,261       1,701,730

Other Assets
   Restricted cash                                            200,000         200,000
   Other assets                                                15,465          18,873
                                                           ----------       ----------
Total other assets                                            215,465         218,873
  ----------       ----------
        Total Assets                                       $2,243,742      $3,658,302
                                                           ==========      ==========

                 LIABILITIES AND STOCKHOLDERS' EQUITY

                                                               2002            2001
                                                           ----------      ----------
Current Liabilities
   Current portion of long-term debt                        $ 202,477      $  419,493
   Accounts payable                                           163,903         139,736
   Accrued expenses and other current liabilities              77,460         120,527

                                                           ----------      ----------


        Total current liabilities                             443,840         679,756

Long-term Debt, net                                           913,710      1,116,187

Stockholders' Equity
   Common Stock, $.0005 par value, 25,000,000 shares
    authorized, 3,043,563 and 3,018,383 shares issued,
    2,402,939 and 2,377,759 shares outstanding
    for 2002 and 2001, respectively                             1,522           1,509
   Additional paid in capital                               1,089,200       1,082,542
   Retained earnings                                          754,773       1,737,611
                                                           ----------      ----------
                                                            1,845,495       2,821,662

   Less 640,624 shares of treasury stock, at cost            (959,303)       (959,303)
                                                           ----------      ----------
        Total stockholders' equity                            886,192       1,862,359
                                                           ----------      ----------
        Total Liabilities and Stockholders' Equity         $2,243,742      $3,658,302
                                                           ==========      ==========
</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, 2002 AND 2001

<TABLE>
<S>                                             <C>             <C>
                                                    2002            2001
                                                 ----------     ----------

Net sales                                       $2,670,469       $4,894,094
Cost of sales                                    2,202,060        3,449,109
                                                 ----------      ----------
Gross profit                                       468,409        1,444,985

Operating Expenses
  Selling, general and administrative              705,206          848,237
  Asset impairment                                 677,676              -0-
                                                 ----------       ----------
     Total operating expenses                    1,382,882          848,237
                                                 ----------       ----------

Income (loss) from operations                     (914,473)         596,748

Other income (expense)
     Interest expense, net                        ( 68,365)        (144,490)
     Other expense                                    -0-          (232,911)
                                                 ----------       ----------
     Total other expense                          ( 68,365)        (377,401)
                                                 ----------       ----------
Income (loss) before income taxes                 (982,838)         219,347

Income taxes                                         -0-              -0-
                                                 ----------       ----------
Net income (loss)                                $(982,838)        $219,347
                                                 ==========       ==========


Basic net income (loss) per common share          $   (0.41)      $     0.09
                                                 ===========      ===========
Diluted net income (loss) per common share        $   (0.41)      $     0.09
                                                 ===========      ===========

</TABLE>
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, 2002 AND 2001

<TABLE>
<S>                                         <C>          <C>          <C>              <C>
                                                                        Additional
                                                                         Paid-in        Retained
                                              Shares       Amount        Capital        Earnings
                                              --------      ------      ----------      ----------

Balance, October 1, 2000                      2,997,292      $1,499      $1,062,309      $1,518,264

Issuance of shares of common stock under
 employee stock purchase plan                     5,591           2          3,551               0

Issuance of shares of common stock under
 stock option plan                               15,500           8          16,682              0

Net Income                                            0           0               0         219,347
                                              ---------       -----         -------       ---------
Balance, September 30, 2001                   3,018,383      $1,509      $1,082,542      $1,737,611

Issuance of shares of common stock under
 employee stock purchase plan                    25,180          13           6,658               0

Net loss                                              0           0               0       (982,838)
                                               ---------       -----       ---------       ---------
Balance, September 30, 2002                   3,043,563      $1,522      $1,089,200      $  754,773
                                               =========      ======      ==========      ==========
</TABLE>
<TABLE>
<S>                                            <C>            <C>            <C>

                                                     Treasury Stock             Total
                                                 -----------------------     Stockholders'
                                                  Shares        Amount          Equity
                                                  -------      ----------     -------------

Balance, October 1, 2000                          640,624      $(959,303)      $1,622,769

Issuance of shares of common stock under
 employee stock purchase plan                           0              0            3,553

Issuance of shares of common stock under
 stock option plan                                      0              0           16,690

Net Income                                              0              0          219,347
                                                  -------      ----------     -------------
Balance, September 30, 2001                       640,624      $(959,303)      $1,862,359


Issuance of shares of common stock under
 employee stock purchase plan                           0              0            6,671

Net loss                                                0              0         (982,838)
                                                  -------      ----------     ------------
Balance, September 30, 2002                       640,624      $(959,303)      $  886,192
                                                  =======      =========       ==========

</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.

                                      F-4
<PAGE>
                 DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED SEPTEMBER 30, 2002 AND 2001

<TABLE>
<S>                                                         <C>               <C>
                                                                  2002              2001
                                                               ---------        -----------

Cash flows from operating activities:
    Net income (loss)                                          $(982,838)      $    219,347
    Adjustments to reconcile net income (loss) to net
     cash provided by operating activities
       Depreciation and amortization                             296,940            315,967
       Recyclable inventory write-off                                  0            175,000
Loss on project abandonment                                            0             57,911
Allowance for doubtful accounts                                    5,000                  0
Asset impairment                                                 677,676                  0
(Increase) decrease in:
         Accounts receivable                                     120,803            139,458
         Inventories                                             187,603           (34,484)
         Prepaid expenses and other current assets               (13,990)             6,019
       Increase (decrease) in:
         Accounts payable                                         24,167             37,865
         Accrued expenses and other current liabilities          (43,067)          (45,224)
                                                               ---------        -----------
Net cash provided by operating activities                        272,294            871,859
                                                               ---------        -----------

Cash flows from investing activities:
     Purchases of property, plant and equipment                 (160,739)         (111,301)
     Increase in restricted cash                                       0           (200,000)
     Other assets                                                      0            (1,747)
                                                               ---------        -----------
Net cash used in investing activities                           (160,739)         (313,048)
                                                               ---------        -----------
Cash flows from financing activities:
     Repayment of long-term debt                                (419,493)         (555,364)
     Proceeds from long-term debt                                      0            200,000
     Issuance of common stock                                      6,671             20,243
                                                               ---------        -----------
Net cash used in financing activities                           (412,822)         (335,121)
                                                               ---------        -----------
Net increase (decrease) in cash and cash equivalents            (301,267)           223,690
Cash and equivalents, beginning                                  473,385            249,695
                                                               ---------        -----------
Cash and equivalents, ending                                   $ 172,118        $   473,385
                                                               =========        ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.

                                      F-5
<PAGE>
DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2002 AND 2001

Note 1- Summary of Significant Accounting Policies

Nature of Operations

The Company is primarily engaged in the manufacturing and marketing of
customized synthetic fused silica products.  The Company's products and
services are used in the optical lens and laser manufacturing industries, as
well as in the medical industry.  Other applications include usage in the
manufacturing of analytical instruments and semi-conductors.

The Company's products and services are provided primarily in the
United States with some international activity.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts
of Dynasil Corporation of America and its wholly owned subsidiaries, Dynasil
International Incorporated and Hibshman Corporation. All significant
intercompany transactions have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes.  Actual results could differ from those estimates.

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 and collection of the resulting
receivable is reasonable assured. Returns of products shipped are and have
historically not been material.

Shipping and Handling Costs

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

                                      F-6
<PAGE>
DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2002 AND 2001

Note 1   Summary of Significant Accounting Policies (continued)

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.

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, 10 to 25 years; machinery and
equipment, 5 to 10 years; office furniture and fixtures, 5 to 7 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. Based on these reviews,
asset impairment charges of $677,676 and $0 were made to the carrying value
of long-lived assets during the years ended September 30, 2002 and 2001.
Additional disclosures are included in Note 4.

Other Assets

Other assets include deferred financing costs which are amortized using
the straight-line method over 7 years.  Amortization expense for the years
ended September 30, 2002 and 2001 was $3,408 and $3,408.  Accumulated
amortization as of September 30, 2002 and 2001 was $14,200 and $10,792.

                                      F-7
<PAGE>
DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2002 AND 2001

Note 1   Summary of Significant Accounting Policies (continued)

Advertising

The Company expenses all advertising as incurred.  Advertising expense
for the years ended September 30, 2002 and 2001 was $6,280 and $10,973.

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 the deferred tax
assets will not be realized.

Earnings Per Share

Basic net income per share is computed using the weighted average
number of common shares outstanding. Dilutive earnings per share gives effect
to all dilutive potential common shares outstanding during the years ended
September 30, 2002 and 2001. The computations of basic and diluted net income
(loss) per share are as follows:


                                     2002              2001

Net income (loss)                 $(982,838)          $219,347
                                  ==========          ========

Basic weighted average shares     2,394,302          2,368,579
Effect of dilutive securities:
  Common stock options                   0                   0
                                 ---------           ---------
                                 2,394,302           2,368,579
                                 =========           =========
Net income per share
  Basic                           ( $ 0.41 )             $ 0.09
  Diluted                         ( $ 0.41 )             $ 0.09

  Diluted net income (loss) per share excludes the impact of common stock
options of 463,977 and 548,977 for 2002 and 2001, respectively, and common
stock warrants of  0- and 6,450 for 2002 and 2001, since the exercise prices
were greater than the average market price of the common shares and
therefore, would have resulted in an antidilutive effect.

                                      F-8
<PAGE>
DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2002 AND 2001

Note 1   Summary of Significant Accounting Policies (continued)

Stock Based Compensation

The Company follows the disclosure-only provisions of Statement of
Financial Accounting Standards No. 123, "Accounting for Stock Based
Compensation" regarding disclosure of proforma information for stock based
compensation. As permitted by Statement No. 123, the Company measures
compensation cost using the intrinsic value based method currently prescribed
under Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees". Under APB No. 25, compensation cost for stock options,
if any, is measured as the excess of the quoted market price of the Company's
stock at the date of grant over the cost to acquire the stock.  Accordingly,
no compensation cost has been recognized in the financial statements for
stock options issued to employees since the options were granted at the
quoted market price on the date of grant.  Stock options granted to
consultants and other non-employees are reported at fair value in accordance
with SFAS No. 123.

Fair Value

The Company's financial instruments consist primarily of cash and cash
equivalents, accounts receivable, accounts payable, and debt.  The carrying
amounts of cash and cash equivalents, accounts receivable, and accounts
payable approximate fair value due to the short maturity of these
instruments.  Based on borrowing rates currently available to the Company for
loans with similar terms and maturities, the Company's debt approximates its
fair value.

Concentrations of Credit Risk

Financial instruments which potentially subject the Company to
concentrations of credit risk, consist primarily of cash and cash equivalents
and accounts receivable.  The Company maintains cash and cash equivalents at
various financial institutions in Pennsylvania.  Accounts at each institution
are insured by the Federal Deposit Insurance Corporation up to $100,000.  At
September 30, 2002, the Company's uninsured bank balances totaled $226,200.
The Company has not experienced any significant losses on its cash and cash
equivalents.  The Company performs ongoing credit evaluations of it customers
and generally requires no collateral from its customers.  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, 2002 and 2001, approximately $121,071 and $34,902 or 35% and
7% of the Company's accounts receivable are due from foreign sales.

New Accounting Pronouncements

         In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations". SFAS No. 143 addresses the financial accounting and
reporting for obligations associated with the retirement of tangible long-
lived assets and associated asset retirement costs. The statement requires
that the fair value of a liability for an asset retirement obligation be
recognized in the period which it is incurred and capitalized as

                                      F-9
<PAGE>
DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2002 AND 2001

Note 1   Summary of Significant Accounting Policies (continued)

part of the carrying amount of the long-lived asset. The statement applies to
legal obligations associated with the retirement of long-lived assets that
result from the acquisition, construction, development, and normal operation
of long-lived assets. SFAS No. 143 is effective for fiscal years beginning
after June 15, 2002. Management believes the adoption of SFAS No. 143 will
not have a material impact on the Company's financial position or results of
operations.

         In August 2001, the FASB issued SFAS No. 144 "Accounting for the
Impairment or Disposal of Long-Lived Assets". SFAS No. 144, effective for
financial statements for fiscal years beginning after December 15, 2001,
supercedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets
to be Disposed Of". The statement also supercedes APB No. 30, "Reporting the
Results of Operations-Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual, and Infrequently Occurring Events and
Transactions". This statement established a single accounting model, based on
the framework established in SFAS No. 121, for long-lived assets to be
disposed of by sale. The statement retains most of the requirements in SFAS
No. 121 related to the recognition of impairment of long-lived assets to be
held and used. The Company has elected early adoption of SFAS No. 144. The
adoption of SFAS No. 144 did not have a material impact on the Company's
financial position or results of operations.

         In June 2002, the FASB issued SFAS No. 146, "Accounting for Cost
Associated with Exit or Disposal Activities." This standard nullifies
Emerging Issues Task Force No. 94-3, "Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity (including
Certain Costs Incurred in a Restructuring)." This standard requires that a
liability for a cost associated with an exit or disposal activity be
recognized when the liability is incurred rather than the date of an entity's
commitment to an exit plan. SFAS No. 146 is effective after December 31,
2002. Management believes the adoption of SFAS No. 146 will not have a
material impact on the Company's financial position or results of operations.

Statement of Cash Flows

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

Note 2 - Restricted Cash

         Restricted cash consists of certificates of deposit pledged as
collateral for the $105,555 note payable to the bank (See Note 6).

                                      F-10
<PAGE> DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2002 AND 2001

Note 3 - Inventories

Inventories at September 30, 2002 and 2001 consisted of the following:

                                  2002           2001
          Raw Materials       $255,901       $379,899
          Work-in-Process      176,303        224,739
          Finished Goods       148,900        164,069
                              --------       ---------
                              $581,104       $768,707
                              =========      =========

In June 2001 management prepared an evaluation of the feasibility of
continuing to pursue the market for recycled synthetic fused silica.  This
market encompassed the use of "drop-offs", converted to another form by
melting or crushing, for various applications.  The lack of a strong demand
in this market led management to abandon this segment.  This decision
resulted in management writing down the carrying value of inventory
identified for this market.  The result was a $175,000 charge to income and
is included in other expense. (See Note 7)

Note 4 - Property, Plant and Equipment

Property, plant and equipment at September 30, 2002 and 2001 consist of
the following:

                                       2002               2001


Land                               $      261          $      261
Building and improvements           1,212,968           2,536,071
Machinery and equipment             2,458,496           3,012,006
Office furniture and fixtures         231,248             225,535
Transportation equipment               53,419              53,419
                                   ----------          ----------
                                    3,956,392           5,827,292
Less accumulated depreciation       3,065,131           4,125,562
                                   ----------          ----------
                                   $  891,261          $1,701,730
                                   ==========          ==========

Included in the cost of machinery and equipment at September 30, 2002
and 2001 is $165,831 representing the cost of assets under capitalized lease
obligations.  Accumulated depreciation at September 30, 2002 and 2001 for the
capitalized leases was $41,497 and $20,661.

Depreciation expense for the years ended September 30, 2002 and 2001
was $293,532 and $312,599, of which $20,836 and $15,669 represents
depreciation of assets under capitalized lease obligations.

                                      F-11
<PAGE>
DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2002 AND 2001

Note 4   Property, Plant and Equipment (continued)

     In June 2002 the Company recorded asset impairment charges of $677,676.
The impairment charges were required to bring the carrying value of the
production furnaces in line with their fair value. The combination of reduced
demand and substantially reduced market pricing for synthetic fused silica
required management to recognize the impairment.

Note 5 - Line of Credit

The Company has a $150,000 line of credit agreement with a bank.
Advances under the line are due on demand with interest at the Bank's prime
rate plus 1% (5.75% and 7.0% at September 30, 2002 and 2001).  The note is
secured by a mortgage on the Berlin, New Jersey property, accounts
receivable, inventories, machinery and equipment and leasehold improvements.
At September 30, 2002 and 2001, the entire amount was available.

Note 6 - Long-Term Debt

Long-term debt at September 30, 2002 and 2001 consisted of the
following:
<TABLE>
<S>                                                <C>                    <C>
                                                        2002               2001

Subordinated debentures bearing interest at
10% per annum payable semiannually, repaid
June 2002, unsecured                                  $     0             212,100

Note payable to bank in monthly installments of
$7,222 plus interest at the Bank's prime rate plus
0.5%(5.25% and 6.5% at September 30, 2002 and
2001), final payment of $700,556 due August 1,
2005, secured by first Mortgage on Berlin, New
Jersey property and all accounts receivable,
Inventory, equipment and general intangibles
of the Company                                        946,114           1,032,778

Note payable to bank in monthly installments of
$5,556 plus interest at 7.25%, due April 2004,
Secured by certificate of deposits, first mortgage
On Berlin, New Jersey property, and all accounts
Receivable, inventory, equipment and general
Intangibles of the Company (See Note 2)               105,555             172,222

</TABLE>

                                      F-12
<PAGE>
DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2002 AND 2001

Note 5   Long-Term Debt (continued)

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

                                                           2002             2001
Capital lease obligations payable in total monthly
installments of $5,328 including interest at rates
ranging from 10.2% to 11.2% due April 2003 and
April 2004, secured by equipment                          64,518          118,580
                                                      -----------        ----------
                                                     $1,116,187        $1,535,680
Less current portion                                   (202,477)         (419,493)
                                                      -----------       ------------
                                                     $  913,710          $1,116,187
                                                      ===========        ============

</TABLE>
The current portion includes $49,146 and $54,062 payable under capital
lease obligations at September 30, 2002 and 2001.  The aggregate maturities
of long-term debt, including capital lease obligations as of September 30,
2002 are as follows:

                                       Capital Lease  Total Long-
                        Notes Payable  Obligations    Term Debt
                        -------------- -------------  -----------
September 30, 2004     125,552             15,372         140,924
September 30, 2005     772,786                  0         772,786
                      ----------       -----------      -----------
                    $  898,338          $  15,372      $  913,710
                      ==========       ===========      ===========

Note 7 - Other Expense

      The Company's other expense for the years ended September 30, 2002 and
2001 consists of the following:

                                      2002              2001
Recyclable inventory write-off     $        0          $ 175,000
Loss on project abandonment                 0             57,911
                                    ----------          ---------
                                   $        0          $ 232,911
                                    ==========          =========

Note 8 - Income Taxes

The Company's income tax expense (benefit) for the years ended September
30, 2002 and 2001 are as follows:

                        2002               2001

Current
Federal             $     0             $51,300
State                     0              17,300
                   --------            --------
                          0              68,600
Deferred
Federal                   0             (51,300)
State                     0             (17,300)
                   --------            --------
                    $     0             $     0
                   ========            ========

                                      F-13
<PAGE>
DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2002 AND 2001


Note 8 - Income Taxes (continued)

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, 2002 and 2001 are as follows:

                                         2002                2001
Taxes at statutory rates applied to
 Income (loss) before income taxes      $( 334,200)              $  64,500
Increase (reduction) in tax resulting
 from:
  Depreciation                            (  4,100)                  4,700
  Loss on asset impairme                   230,400                       0
  Inventories                             (  4,400)                (12,150)
  Accounts receivable                        1,700                 ( 1,760)
  Vacation pay                             (   100)                  1,140
  State income taxes                       (29,300)                 12,200
  Net operating loss carryforwards         140,000                 (68,630)
                                        ----------               ----------
                                         $       0               $       0
                                        ==========               ==========

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, 2002 and 2001 are as follows:


                                            2002                2001
Inventories                             $  26,800           $  32,000
Vacation pay                                7,900               8,000
Accounts receivable                         2,000                 0
Depreciation                              124,600            (134,200)
Net operating loss carryforwards          329,500             200,500
Less valuation allowance                 (490,800)           (106,300)
                                        ---------           ----------
                                        $       0           $       0
                                        =========           ==========

Based on the company's history of significant fluctuations in net earnings
there is uncertainty as to the realization of certain net operating loss
carryforwards. Accordingly, a valuation allowance has been provided for those
deferred tax assets since management believes it is more likely than not that
the tax benefit will not be realized.  At September 30, 2002, the Company has
approximately $880,000 of net operating loss carryforwards to offset future
taxable income for federal tax purposes expiring in various years through
2020.  In addition, the main operating Company has approximately $337,000 of
net operating loss carryforwards to offset certain future state taxable
income, expiring in various years through 2008.
                                      F-14
<PAGE>

DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2002 AND 2001

Note 9 - Stockholders' Equity

Stock Based Compensation

The Company adopted Stock Incentive Plans in 1996 and 1999 which provide
for, among other incentives, the granting to officers, directors, employees and
consultants options to purchase shares of the Company's common stock.  The
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 on the date of grant over a five-year period expiring through
2005. 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 1,350,000 shares, of which
675,023 shares of common stock are available for future purchases under
the plan at September 30, 2002.

During the years ended September 30, 2002 and 2001, -0- and 480,000 stock
options were granted annually with exercise prices of $1.50 per share in 2001
representing the fair market values on the date of grant. No options were
exercised in 2002. During the years ended September 30, 2001 15,500 options were
exercised.   The Company cancelled 85,000 and 42,500 options during the years
ended September 30, 2002 and 2001, respectively.  Compensation expense relating
to non-employee stock options granted during the years ended September 30, 2002
and 2001 was $-0-.

A summary of stock option activity for the years ended September 30, 2002
and 2001 is presented below:

                                                Exercise Price
                                              Shares      Per Share
                                            --------- --------------
Options outstanding at October 31, 2000      126,977    $ .56 - $4.25

Granted in 2001                               480,000       $1.50
Exercised in 2001                            ( 15,500)  $ .56 - $2.00
Cancelled in 2001                            ( 42,500)  $ .56 - $2.00
                                             ---------
Options outstanding at September 30, 2001     548,977   $ .56 - $4.25

Granted in 2002                                     0
Exercised in 2002                                   0
Cancelled in 2002                            ( 85,000)  $ .56 - $4.25
                                            ---------
Options outstanding at September 30, 2002     463,977   $ .56 - $4.25
                                            =========

Options exercisable at September 30, 2002     463,977   $ .56 - -$4.25
                                            =========

                                      F-15
<PAGE>
DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2002 AND 2001

Note 9   Stockholders' Equity (continued)

Stock Based Compensation (continued)

At September 30, 2001, the Company had warrants outstanding to purchase
6,450 shares of the Company's common stock at exercise prices of $3.00 per
share, exercisable through June 1, 2002.  No warrants were exercised during
the years ended September 30, 2002 and 2001 and were cancelled in June 2002.
No warrants were outstanding in September 30 ,2002.


Pro Forma Fair Value Disclosures

The Company accounts for all plans under APB Opinion No. 25, under which no
compensation cost has been recognized since all options granted during 2001 have
been granted at the fair market value of the Company's common stock. No options
were granted during the year ended September 30, 2002. Had compensation cost for
these plans been determined in accordance with SFAS No. 123, the Company's net
income and net income per common share for 2001 would have been as follows:

                                          2002                2001

Net income                              ($982,838)          $ 94,115
                                        ==========          ========
Basic net income per common share:      ($   0.41)          $   0.04
                                        ==========          ========

Under SFAS No. 123, the fair value of each option was estimated on the date of
grant using the Black Scholes option-pricing model.  Based on the assumptions
presented below, the weighted average fair value of options granted was $1.19
option in 2001. No options were granted in during the year ended September 30,
2002.

2001

Expected life of option in years         5.0
Risk-free interest rate                  5.5%
Expected volatility                     61.0%
Dividend yield                           0.0%

 The effects of applying SFAS No. 123 for the purpose of providing pro forma
disclosures may not be indicative of the effects on reported net income and net
income per share for future years, as the pro forma disclosures include the
effects of only those awards granted after October 1, 1996.

                                      F-16
<PAGE> DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2002 AND 2001


Note 9 - Stockholders' Equity (continued

Employee Stock Purchase Plan

On July 25, 2000, the Company's Employee Stock Purchase Plan was amended
with an effective date of January 1, 1999. The Plan permits substantially all
employees to purchase common stock at a purchase price of 85% of the fair
market value of the shares. Under the plan, a total of 150,000 shares
have been reserved for issuance.

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, 2002 and 2001, 25,180, and 5,591 shares of common
stock were issued under the plan for aggregate purchase prices of $6,671,
and $3,553, respectively.

Note 10 - Profit Sharing Plan

The Company has 401k Plan for the benefit of its employees.  The Company
did not make a contribution to the plan during the years ended September 30,
2002 and 2001.

Note 11 - Related Party Transactions

The Company paid consulting fees to other stockholders/directors totaling
$9,000 and $-0- during the years ended September 30, 2002 and 2001.

Note 12 - Supplemental Disclosure of Cash Flow Information

                                                    2002           2001
Cash paid during the year for:
  Interest                                      $  99,599      $ 178,191
                                                =========      =========
Noncash investing and financing activities:

  Acquisition of property, plant and equipment  $ 160,739      $ 233,601
  Debt incurred                                 (       0)      (122,300)
                                                ---------      ----------
  Cash paid for property and equipment          $ 160,739      $ 111,301
                                                =========      ==========
Note 13 - Subsequent Event

      In November 2002, the Company reactivated its share buy-back program
originally initiated in October 2001. Under the plan, the Company may
repurchase its own stock on a periodic basis. No shares were repurchased
during the year ended September 30, 2002 or as of the date of this report.

                                      F-17
<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.


                                PART III

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

     Five of our directors were elected to serve for one year at our Annual
meeting of the shareholders held on January 29, 2002. The sixth director, Mr.
David Manzi, was elected as a board member at the June 4, 2002 board of
directors meeting. 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 December 12, 2002,
are as follows:

Name                                    Age       Position
---------------                         ---       --------
James Saltzman                          58        Chairman of the Board
John Kane                               51        President, CEO, CFO,
                                                   Treasurer, Director,
Nathan Schwartz                         42        Director
Dr. Peter P. Bihuniak                   53        Director
Robert Lear                             57        Director
David Manzi                             41        Director
Bruce Leonetti                          48        Vice President

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

     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 2002 with the reporting requirements of
Section 16(a) of the Securities Exchange Act of 1934.

     James Saltzman, Chairman, 58, has been a member of the Board
since  February  1998.   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.
He  served  as  a  director of Xyvision, Inc.,  a  publicly  held
company  that develops, markets, integrates and supports  content
management and publishing software, since 1992, and was  Chairman
of the Board of such company from February 1994 to February 1995.
On  September 19, 2001, in the matter of Securities and  Exchange
Commission  v. James S. Saltzman, Civil Action No. 00?CV?2468  in
the  United  States  District Court for the Eastern  District  of
Pennsylvania,  Saltzman consented, without admitting  or  denying
the allegations of the Commission's Complaint, to the entry of  a
Final  Judgment  and Order in the case, to an  order  permanently
enjoining  him from violating Sections 17(a)(2) and  17(a)(3)  of
the  Securities Act of 1933 and Section 206(2) of the  Investment
Advisers Act of 1940, and requiring him to pay disgorgement  plus
prejudgment  interest in the amount of $1,920,340,  and  a  civil
penalty  in  the  amount of $50,000. The  Order  was  entered  on
September 19, 2001, by the Honorable Anita B. Brody.

     Also  on  January  31, 2001, the Commission  instituted  and
simultaneously  settled  an  Administrative  Proceeding   against
Saltzman pursuant to Section 203(f) of the Advisers Act.  Without
admitting   or   denying  the  Commission's  findings,   Saltzman
consented  to  the  entry  of  an  Order  suspending   him   from
association  with any investment adviser for a period  of  twelve
months.  The  basis  for  the Administrative  Proceeding  against
Saltzman and the Commission's findings was the entry of the Final
Judgment  and Order in the District Court action.  The suspension
from  association with any investment adviser has been lifted  as
twelve months have now elapsed.

     The  Commission's  Complaint in the  District  Court  action
alleged  that  from  at  least 1994  through  February  4,  2000,
Saltzman,  as  investment adviser to Saltzman Partners,  violated
the  securities  laws  at issue by failing to  disclose  material
information  relating  to loans to him by  Saltzman  Partners  in
annual  financial statements of Saltzman Partners that were  sent
to   the  limited  partners,  namely,  that  he  had  taken   out
approximately $1.78 million in loans from Saltzman Partners, that
by  1999  the  loans amounted to approximately  20%  of  Saltzman
Partners' assets, and that the loans violated specific  terms  of
the  loan  provisions in the governing Partnership Agreement  and
Private  Placement Memorandum. Prior to the entry  of  the  Final
Judgment and Order, Saltzman fully repaid with interest the loans
he had taken from Saltzman Partners, thus satisfying the Order of
disgorgement by the District Court.

                                      -8-
<PAGE>
      John Kane, 51, President, CEO, CFO and Treasurer, has  been
with  Dynasil Corporation since January 1997. On December 1, 2000
he  was  appointed President of the Company and  assumed  primary
responsibility  for the day-to-day operations.  He  took  on  the
additional  position  of CEO on August  1,  2001.  Prior  to  his
appointment  as President Mr. Kane served as the Chief  Financial
Officer  of the Company. Preceding joining the Company  he  spent
three  years  as  an independent financial consultant,  primarily
engaged  in the design and implementation of accounting  systems.
He  was the Chief Financial Officer of Delaware River Stevedores,
Inc.  from  1985 to 1993. Mr. Kane earned a B.B.A  in  accounting
from  Temple  University  in  1975, and  is  a  certified  public
accountant.

      Nathan  Schwartz, 42, has been a member of the Board  since
February 1996. He is an attorney and financial advisor, providing
legal  and financial advice to numerous financial service clients
since  1992.  Mr. Schwartz earned a B.A. in History  from  Kenyon
College  in  1982,  a Masters in Public/Private  Management  from
Columbia  University in 1986, and a J.D. from the  University  of
Pittsburgh in 1989.

      Dr.  Peter P. Bihuniak, 53, has been a member of the  Board
since  February  1997. He has held his current position  of  Vice
President  of  Technology for BPSolar since 1998.  From  1995  to
1997,  he  served  as  Director of Research  and  Development  of
Pilkington,   Libbey-Owens-Ford  in   Toledo,   Ohio,   directing
invention  and  development  efforts for  high  performance  flat
glass.  From  1988  to  1995,  Dr.  Bihuniak  served  in  various
positions  with PPG Industries, Inc., one of the major  producers
of flat and fabricated flat glass products, serving most recently
as General Manager, Flat Glass Specialty Products Division. Prior
to that, he was with General Electric, Lighting Products where he
was  responsible for Materials Technology.  He began  his  career
with  Corning where he held a number of technical and  technology
management  positions  in various specialty materials,  including
synthetic silicas and optical wave-guides.  He received his  B.S,
Summa  cum  Laude  from Rutgers University,  his  M.S.  from  the
University  of  California at Berkeley and his  PhD  from  Alfred
University.

      Robert  Lear,  57,  has been a member of  the  Board  since
February  1998.  He  is  President and CEO  of  Penn  Independent
Corporation,  an  Insurance Holding Company.  He  has  held  that
position  since September 1996 and previously served as Executive
Vice  President-Finance  and  Chief  Financial  Officer  of  that
company  for more than seven years. He was Vice President-Finance
and  Chief Financial Officer of Penn-America Group, Inc. from its
formation  in July 1993 until March 1995, and still serves  Penn-
America  Group,  Inc.  as  a  director.  Prior  to  joining  Penn
Independent,  Mr.  Lear had over 15 years  of  public  accounting
experience, specializing in the insurance industry. Mr. Lear is a
certified public accountant.

     David Manzi, has been a member of the Board since June 2002.
Since November 1999, Mr. Manzi has served as President and CEO of
Special   Optics  Inc.,  a  Wharton  New  Jersey   company   that
specializes  in the design and manufacture of diffraction-limited
lens   systems  used  in  high  resolution  imaging   and   laser
applications.  Mr. Manzi served as General Manager  and  as  Vice
President  of  Special Optics from 1991 through 1999.   Prior  to
Special  Optics he served in various capacities from 1988 through
1991,  including Product Manager, for Synoptics,  a  division  of
Litton  Corporation.  Mr. Manzi earned his B.S. degree in Physics
from the Pennsylvania State University in 1986.

     Bruce Leonetti, 47, Vice President - Sales and Marketing has been with
Dynasil Corporation since January 1999. He previously served in the same
position with the Company for 14 years prior to 1993 when he left for a
position as a development officer for the Engineering School at the
University of Pennsylvania. Mr. Leonetti earned a B.A. in Political
Science from the University of Pennsylvania in 1976.

                                      -9-
<PAGE>
 ITEM 10. EXECUTIVE COMPENSATION

                            Summary Compensation Table
<TABLE>
<CAPTION>

                                                                      Long Term Compensation
                                                                      ----------------------
                                  Annual Compensation                          Awards             Payouts
                                  -------------------                          ------             -------
                                                       Other                         Securities    Long-
Name and                                               Annual       Restricted       Underlying    Term      All other
Principle                                              Compen-        Stock            Options    Incentive   compen-
Position       Year     Salary ($)     Bonus ($)      sation ($)     Awards ($)          ($)      Plans ($)  sation ($)
---------      ----     ----------     ---------      ----------    -----------       ---------   ---------  ----------
<S>            <C>       <C>           <C>            <C>           <C>               <C>         <C>        <C>

John           2002     110,000
Kane,          2001     114,122          18,565
President      2000     100,327                             2,625
Treasurer,



Bruce          2001      93,385
Leonetti,      2000      89,000
VP             1999      90,712           8,647

</TABLE>

Employment Agreements

      The current employment agreement with John Kane, President,
CEO, Chief Financial Officer and Treasurer, commenced on December
1,  2000  and will continue for a three-year period, after  which
the agreement will automatically renew 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.  Kane has agreed to work for us  full  time,  and
receives  an annual base salary of $110,000. Mr. Kane's agreement
also  provides for performance bonuses, and an additional  annual
bonus  at the discretion of our Board of Directors. The agreement
also  provides  for  a  401(k)  pension  plan,  health  insurance
benefits  and contains eighteen-month non-competition  provisions
that prohibit him from competing with us.

      The  current employment agreement with Bruce Leonetti, Vice
President  of Marketing and Sales, which commenced on January  1,
2002, will terminate on December 31, 2002, and he will receive  a
severance consideration of three months' salary. A search for his
replacement is ongoing.

                                      -10-
<PAGE>
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, 2002 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     Saltzman Partners (2)             416,615                   17.33%
           621 East Germantown Pike
           Suite 105
           Plymouth Meeting, PA  19401

Common     James Saltzman(3)                 127,370                    5.10%
           4 Tower Bridge, Ste. 222
           200 Barr Harbour Drive
           West Conshohocken, PA  19428

Common     Nathan Schwartz(4)                 83,394                    3.37%
           4 Tower Bridge, Ste. 222
           200 Barr Harbour Drive
           West Conshohocken, PA  19428

Common     Dr. Peter P. Bihuniak(5)           69,000                    2.79%
           17101 Hidden Point Drive
           Chagrin Falls, OH   44023

Common     Robert Lear(6)                    236,236                    9.55%
           420 South York Road
           Hatboro, PA   19040

Common     John Kane(7)                      60,425                     2.46%
           149 Plowshare Road
           Norristown, PA  19403

Common     Bruce Leonetti (8)                55,300                     2.26%
           200 Birdwood Avenue
           Haddonfield, NJ   08033

All Officers and Directors
as a Group                                  631,725                    22.56%

------------

(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
November 30, 2002 was 2,404,123.

(2)James Saltzman disclaims beneficial ownership of the 416,615 shares owned
by Saltzman Partners.

(3)Includes options to purchase 3,000 shares of the Company's common stock at
$3.52 per share and options to purchase 90,000 shares of the Company's common
stock at $1.50 per share.
                                      -11-
<PAGE>
(4)Includes options to purchase 3,000 shares of the Company's common stock at
$3.52 per share, options to purchase 3,000 shares of the Company's common
stock at $1.17 per share, options to purchase 3,000 shares of the Company's
common stock at $.56 per share and options to purchase 60,000 shares of the
Company's common stock at $1.50 per share.

(5)Includes options to purchase 3,000 shares of the Company's common stock at
$3.52 per share, options to purchase 3,000 shares of the Company's common
stock at $1.17 per share, options to purchase 3,000 shares of the Company's
common stock at $.56 per share and options to purchase 60,000 shares of the
Company's common stock at $1.50 per share.

(6)Includes options to purchase 3,000 shares of the Company's common stock at
$3.52 per share, options to purchase 3,000 shares of the Company's common
stock at $1.17 per share,  options to purchase 3,000 shares of the Company's
common stock at $.56 per share and options to purchase 60,000 shares of the
Company's common stock at $1.50 per share ; also includes 167,236 shares
owned by Penn Independent Corporation, for which Mr. Lear disclaims
beneficial ownership.

(7)Includes options to purchase 5,500 shares of the Company's common stock at
$2.65 per share and options to purchase 45,000 shares of the Company's stock
at $1.50 per share.

(8)Includes options to purchase 45,000 shares of the Company's stock at $1.50
per share.


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


  NONE.

                                       -12-
<PAGE>
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

3.01*     Restated Certificate of Incorporation of Registrant filed
          April 1, 1969, filed as an exhibit to Registrant's
          Registration Statement on Form 10-SB, filed October 1, 1999

3.02*     Certificate of Amendment to the Certificate of Incorporation of
          Registrant filed March 18, 1988, filed as an exhibit to
          Registrant's Registration Statement on Form 10-SB, filed October
          1, 1999

3.03*     Certificate of Amendment to the Certificate of Incorporation of
          Registrant filed April 7, 1989, filed as an exhibit to
          Registrant's Registration Statement on Form 10-SB, filed October
          1, 1999

3.04*     Certificate of Amendment to the Certificate of Incorporation of
          Registrant filed June 12, 1996, filed as an exhibit to
          Registrant's Registration Statement on Form 10-SB, filed October
          1, 1999

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

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

4.02*     Subordinated Debenture Extension Agreement, filed as an exhibit
          to Registrant's Registration Statement on Form 10-SB, filed
          October 1, 1999

4.03*     Debenture Extension Warrant, filed as an exhibit to Registrant's
          Registration Statement on Form 10-SB, filed October 1, 1999

10.01*    Loan Agreement and associated documents dated July 10, 1998 with
          Premier Bank, for a $300,000 line of credit, filed as an exhibit
          to Registrant's Registration Statement on Form 10-SB, filed
          October 1, 1999

10.02*    Loan Agreement and associated documents dated July 10, 1998 with
          Premier Bank, for a $1,300,000 line of credit

10.03*    1996 Stock Incentive Plan, filed as an exhibit to Registrant's
          Registration Statement on Form 10-SB, filed October 1, 1999

10.04*    1999 Stock Incentive Plan, filed as an exhibit to Registrant's
          Registration Statement on Form 10-SB, filed October 1, 1999

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

10.06*    Employment Agreement of John Kane dated December 1, 2000, filed
          December 28, 2000

10.07*    Audit Committee Charter

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

* Incorporated herein by reference

                                      -13-
<PAGE>


(b)  Reports on Form 8-K:  No reports on Form 8-K were filed during the last
quarter of the period covered by this report.

ITEM 14.  CONTROLS AND PROCEDURES

(a)     Evaluation of Disclosure Controls and Procedures.  The Company's
principal executive officer/principal financial officer, based on his
evaluation of the Company's disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) as of a date within 90 days prior to
the filing of this Annual Report on Form 10KSB, concluded that the Company's
disclosure controls and procedures are adequate and effective for the
purposes set forth in the definition in the Exchange Act rules.

(b)     Changes in Internal Controls.  There were no significant changes in
the Company's internal controls or in other factors that could significantly
affect the Company's internal controls subsequent to the date of the
evaluation.

                                      -14-
<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/ John Kane
        ---------------------------------
        John Kane, President, CEO, Treasurer,
        And Principal Accounting Officer

DATED:  December 23, 2002
        ---------------------------------


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:                            Chairman of the Board of
    ---------------------      Directors                      ----------------
    James Saltzman


BY: /s/ John Kane              President, CEO and             December 23, 2002
    ---------------------      Treasurer (Principal           -----------------
    John Kane                  Financial Officer and
                               Principal Accounting Officer)

BY: /s/ David Manzi            Director                       December 20, 2002
    ---------------------                                     -----------------
    David Manzi

BY: /s/ Nathan Schwartz        Director                       December 23, 2002
    ---------------------                                     -----------------
    Nathan Schwartz

BY: /s/ Peter P. Bihuniak      Director                       December 20, 2002
    ---------------------                                     -----------------
    Dr. Peter P. Bihuniak

BY: /s/ Robert Lear            Director                       December 23, 2002
    ---------------------                                     -----------------
    Robert Lear
                                      -15-
<PAGE>
               CERTIFICATION PURSUANT TO
                18 U.S.C. SECTION 1350,
                AS ADOPTED PURSUANT TO
            SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of DYNASIL CORPORATION OF AMERICA (the
"Company") on Form 10KSB for the period ending December 31, 2002 as filed
with the Securities and Exchange Commission on the date hereof (the
"Report"), I, John Kane, Chief Executive Officer of the Company, certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

          (1) The Report fully complies with the requirements of section
13(a) or 15(d) of the Securities Exchange Act of 1934; and

          (2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.


/s/ John Kane

John Kane

Chief Executive Officer
December 23, 2002



                       CERTIFICATION PURSUANT TO
                   18 U.S.C. SECTION 1350,
                   AS ADOPTED PURSUANT TO
          SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of  Dynasil Corporation of America (the
"Company") on Form 10KSB for the period ending December 31, 2002  as filed
with the Securities and Exchange Commission on the date hereof (the
"Report"), I, John Kane, Chief Financial Officer of the Company, certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

          (1) The Report fully complies with the requirements of section
13(a) or 15(d) of the Securities Exchange Act of 1934; and

          (2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.

/s/ John Kane

John Kane

Chief Financial Officer
December 23, 2002


                                      -16-
<PAGE>
                          CERTIFICATION PURSUANT TO THE
                               SARBANES-OXLEY ACT

I, John Kane, the Chief Executive Officer of Dynasil Corporation of America,
certify
that:

1. I have reviewed this annual report on Form 10-KSB of Dynasil Corporation of
America;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. I am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and have:

   a) designed such disclosure controls and procedures to ensure that material
      information relating to the registrant, including its consolidated
      subsidiaries, is made known to me by others within those entities,
      particularly during the period in which this annual report is being
      prepared;

   b) evaluated the effectiveness of the registrant's disclosure controls and
      procedures as of a date within 90 days prior to the filing date of this
      annual report (the "Evaluation Date"); and

   c) presented in this annual report my conclusions about the effectiveness of
      the disclosure controls and procedures based on my evaluation as of the
      Evaluation Date;

5. I have disclosed, based on my most recent evaluation, to the registrant's
auditors and the audit committee of registrant's board of directors (or persons
performing the equivalent functions):

   a) all significant deficiencies in the design or operation of internal
      controls which could adversely affect the registrant's ability to record,
      process, summarize and report financial data and have identified for the
      registrant's auditors any material weaknesses in internal controls; and

   b) any fraud, whether or not material, that involves management or other
      employees who have a significant role in the registrant's internal
      controls; and

6. I have indicated in this annual report whether there were significant changes
in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of my most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.

Date: December 23, 2002               /s/ John Kane
                                     -----------------------------
                                     John Kane, Chief Executive Officer

                                      -17-
<PAGE>

                          CERTIFICATION PURSUANT TO THE
                               SARBANES-OXLEY ACT

I, John Kane, the Chief  Financial  Officer of Dynasil Corporation of America,
certify that:

1. I have reviewed this annual report on Form 10-KSB of Dynasil Corporation of
America;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. I am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and have:

   a) designed such disclosure controls and procedures to ensure that material
      information relating to the registrant, including its consolidated
      subsidiaries, is made known to me by others within those entities,
      particularly during the period in which this annual report is being
      prepared;

   b) evaluated the effectiveness of the registrant's disclosure controls and
      procedures as of a date within 90 days prior to the filing date of this
      annual report (the "Evaluation Date"); and

   c) presented in this annual report my conclusions about the effectiveness of
      the disclosure controls and procedures based on my evaluation as of the
      Evaluation Date;

5. I have disclosed, based on my most recent evaluation, to the registrant's
auditors and the audit committee of registrant's board of directors (or persons
performing the equivalent functions):

   a) all significant deficiencies in the design or operation of internal
      controls which could adversely affect the registrant's ability to record,
      process, summarize and report financial data and have identified for the
      registrant's auditors any material weaknesses in internal controls; and

   b) any fraud, whether or not material, that involves management or other
      employees who have a significant role in the registrant's internal
      controls; and

6. I have indicated in this annual report whether there were significant changes
in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of my most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.

Date: December 23, 2002               /s/ John Kane
                                     -----------------------------
                                     John Kane, Chief Financial Officer

                                      -18-