Dynasil Corporation of America (DYSL) 10-Q 14 Aug 18 2018 Q3 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	9 Months Ended
	Jun. 30, 2018	Aug. 06, 2018
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2018
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q3
Entity Registrant Name	DYNASIL CORP OF AMERICA
Entity Central Index Key	30,831
Current Fiscal Year End Date	--09-30
Entity Filer Category	Smaller Reporting Company
Trading Symbol	DYSL
Entity Common Stock, Shares Outstanding		17,317,611

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2018	Sep. 30, 2017
Current Assets
Cash and cash equivalents	$ 1,511,000	$ 2,415,000
Accounts receivable, net of allowances of $183,000 and $200,000 at June 30, 2018 and September 30, 2017, respectively	3,766,000	3,407,000
Costs in excess of billings and unbilled receivables	1,065,000	1,317,000
Inventories, net of reserves	4,457,000	4,326,000
Prepaid expenses and other current assets	792,000	973,000
Total current assets	11,591,000	12,438,000
Property, Plant and Equipment, net	7,960,000	7,032,000
Other Assets
Intangibles, net	959,000	987,000
Deferred tax asset	3,167,000	2,642,000
Goodwill	5,907,000	5,940,000
Security deposits	58,000	58,000
Total other assets	10,091,000	9,627,000
Total Assets	29,642,000	29,097,000
Current Liabilities
Equipment line of credit	281,000	0
Current portion of long-term debt	1,652,000	2,007,000
Capital lease obligations, current	52,000	91,000
Accounts payable	1,924,000	2,380,000
Deferred revenue	109,000	129,000
Accrued expenses and other liabilities	2,652,000	2,667,000
Total current liabilities	6,670,000	7,274,000
Long-term Liabilities
Long-term debt, net of current portion	1,090,000	1,045,000
Capital lease obligations, net of current portion	62,000	81,000
Deferred tax liability, net	230,000	234,000
Other long-term liabilities	172,000	38,000
Total long-term liabilities	1,554,000	1,398,000
Stockholders' Equity
Common Stock, $0.0005 par value, 40,000,000 shares authorized, 18,091,931 and 17,893,763 shares issued, 17,281,771 and and 17,083,603 shares outstanding at June 30, 2018 and September 30, 2017, respectively.	9,000	9,000
Additional paid in capital	21,756,000	21,406,000
Accumulated other comprehensive income (loss)	(666,000)	(539,000)
Accumulated deficit	(39,000)	(919,000)
Less 810,160 shares of treasury stock - at cost	(986,000)	(986,000)
Total Dynasil stockholders' equity	20,074,000	18,971,000
Noncontrolling interest	1,344,000	1,454,000
Total stockholders' equity	21,418,000	20,425,000
Total Liabilities and Stockholders' Equity	$ 29,642,000	$ 29,097,000

CONSOLIDATED BALANCE SHEETS _Pa

CONSOLIDATED BALANCE SHEETS [Parenthetical] - USD ($)	Jun. 30, 2018	Sep. 30, 2017
Allowance for doubtful accounts (in dollars)	$ 183,000	$ 200,000
Common stock, par value (in dollars per share)	$ 0.0005	$ 0.0005
Common stock, shares authorized	40,000,000	40,000,000
Common stock, shares issued	18,091,931	17,893,763
Common stock, shares outstanding	17,281,771	17,083,603
Treasury stock, shares	810,160	810,160

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Net revenue	$ 10,542,000	$ 8,836,000	$ 29,985,000	$ 28,065,000
Cost of revenue	6,367,000	5,472,000	18,326,000	17,386,000
Gross profit	4,175,000	3,364,000	11,659,000	10,679,000
Operating expenses:
Sales and marketing	288,000	255,000	955,000	848,000
Research and development	177,000	176,000	701,000	707,000
General and administrative	3,100,000	3,205,000	9,519,000	9,321,000
Total operating expenses	3,565,000	3,636,000	11,175,000	10,876,000
Income (loss) from operations	610,000	(272,000)	484,000	(197,000)
Interest expense, net	44,000	53,000	132,000	164,000
Income (loss) before taxes	566,000	(325,000)	352,000	(361,000)
Income tax expense (benefit)	190,000	(111,000)	(404,000)	(2,769,000)
Net income (loss)	376,000	(214,000)	756,000	2,408,000
Less: Net loss attributable to noncontrolling interest	(15,000)	(64,000)	(124,000)	(197,000)
Net income (loss) attributable to common stockholders	391,000	(150,000)	880,000	2,605,000
Net income (loss)	376,000	(214,000)	756,000	2,408,000
Other comprehensive income (loss):
Foreign currency translation	(384,000)	212,000	(127,000)	(18,000)
Total comprehensive income (loss)	(8,000)	(2,000)	629,000	2,390,000
Less: comprehensive income (loss) attributable to noncontrolling interest	(15,000)	(64,000)	(124,000)	(197,000)
Total comprehensive income (loss) attributable to common stockholders	$ 7,000	$ 62,000	$ 753,000	$ 2,587,000
Basic net income (loss) per common share	$ 0.02	$ (0.01)	$ 0.05	$ 0.15
Diluted net income (loss) per common share	$ 0.02	$ (0.01)	$ 0.05	$ 0.15
Weighted average shares outstanding
Basic	17,203,965	16,945,744	17,127,834	16,879,864
Diluted	17,221,199	16,945,744	17,147,228	16,879,864

CONSOLIDATED STATEMENT OF CHANG

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - 9 months ended Jun. 30, 2018 - USD ($)	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Other Comprehensive Income (Loss) [Member]	Accumulated Deficit [Member]	Treasury Stock [Member]	Noncontrolling Interest [Member]
Balance at Sep. 30, 2017	$ 20,425,000	$ 9,000	$ 21,406,000	$ (539,000)	$ (919,000)	$ (986,000)	$ 1,454,000
Balance (in shares) at Sep. 30, 2017		17,893,763				810,160
Issuance of shares of common stock under employee stock purchase plan	13,000	$ 0	13,000	0	0	$ 0	0
Issuance of shares of common stock under employee stock purchase plan (in shares)		11,593				0
Stock-based compensation costs	351,000	$ 0	337,000	0	0	$ 0	14,000
Stock-based compensation costs (in shares)		186,575				0
Foreign currency translation adjustment	(127,000)	$ 0	0	(127,000)	0	$ 0	0
Net income (loss)	756,000	0	0	0	880,000	0	(124,000)
Balance at Jun. 30, 2018	$ 21,418,000	$ 9,000	$ 21,756,000	$ (666,000)	$ (39,000)	$ (986,000)	$ 1,344,000
Balance (in shares) at Jun. 30, 2018		18,091,931				810,160

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash flows from operating activities:
Net income (loss)	$ 756,000	$ 2,408,000
Adjustments to reconcile net income (loss) to net cash:
Stock compensation expense	351,000	343,000
Foreign exchange loss (gain)	13,000	11,000
Depreciation and amortization	927,000	926,000
Deferred income taxes	(524,000)	(2,775,000)
Non-cash R&D services	209,000	238,000
Other	(6,000)	68,000
Other changes in assets and liabilities:
Accounts receivable, net	(362,000)	74,000
Inventories	(153,000)	(408,000)
Costs in excess of billings and unbilled receivables	253,000	25,000
Prepaid expenses and other assets	42,000	188,000
Accounts payable	(447,000)	(197,000)
Accrued expenses and other liabilities	55,000	(480,000)
Deferred revenue	(20,000)	(129,000)
Net cash from operating activities	1,094,000	292,000
Cash flows from investing activities:
Purchases of property, plant and equipment	(1,788,000)	(455,000)
Purchase of intangibles	(65,000)	(78,000)
Net cash from investing activities	(1,853,000)	(533,000)
Cash flows from financing activities:
Proceeds from issuance of common stock	13,000	13,000
Principal payments on capital leases	(72,000)	(80,000)
Proceeds from (payments of) equipment line of credit, net	281,000	0
Proceeds from (payments of) bank and subordinated debt, net	(329,000)	(490,000)
Net cash from financing activities	(107,000)	(557,000)
Effect of exchange rates on cash and cash equivalents	(38,000)	(19,000)
Net change in cash and cash equivalents	(904,000)	(817,000)
Cash and cash equivalents, beginning	2,415,000	2,607,000
Cash and cash equivalents, ending	1,511,000	1,790,000
Supplemental disclosures of cash flow information:
Cash paid during the year for: Interest	109,000	136,000
Cash paid during the year for: Tax payments (refunds)	7,000	3,000
Non cash activities:
Assets purchased under capital leases	12,000	0
Recapitalization of Xcede - conversion of non controlling notes payable to preferred stock	0	(3,103,000)
Subsidiary stock options issued to settle liabilities	0	75,000
Subsidiary debt issued to fund research activities	$ 0	$ 500,000

Basis of Presentation

Basis of Presentation	9 Months Ended
	Jun. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation and Significant Accounting Policies [Text Block]	Note 1 - Basis of Presentation The accompanying consolidated balance sheet as of June 30, 2018, the consolidated statements of operations and comprehensive income (loss) for the three and nine months ended June 30, 2018 and 2017, changes in stockholders’ equity for the nine months ended June 30, 2018 and cash flows for the nine months ended June 30, 2018 and 2017 of Dynasil Corporation of America and subsidiaries (the “Company”), and the related information contained in these notes have been prepared by management and are unaudited. Xcede Technologies, Inc. (“Xcede”) is a joint venture between Dynasil Biomedical and Mayo Clinic to spin out and separately fund the development of a tissue sealant technology. As of June 30, 2018, Dynasil Biomedical owned 63% of Xcede’s stock and, as a result, Xcede is included in the Company’s consolidated balance sheets, results of operations and cash flows. The remaining 37% of Xcede’s stock is owned by others and is accounted for under the rules applicable to non-controlling interest. Certain prior year balances have been reclassified to conform to the current year presentation. These reclassifications did not affect previously reported net income or stockholders’ equity. In the opinion of management, all adjustments (which include normal recurring and nonrecurring items) necessary to present fairly the Company’s financial position, results of operations and cash flows in conformity with generally accepted accounting principles for the periods presented have been made. Interim operating results are not necessarily indicative of operating results for a full year. The preparation of our unaudited consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the unaudited consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Certain information and note disclosures normally included in the Company's annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's September 30, 2017 Annual Report on Form 10-K previously filed by the Company with the Securities and Exchange Commission. The Company considers events or transactions that have occurred after the unaudited consolidated balance sheet date of June 30, 2018, but prior to the filing of the unaudited consolidated financial statements with the SEC on this Quarterly Report on Form 10-Q, to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure, as applicable. Subsequent events have been evaluated through the date of the filing of this Quarterly Report on Form 10-Q with the SEC.

Recent Accounting Pronouncement

Recent Accounting Pronouncements	9 Months Ended
	Jun. 30, 2018
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
New Accounting Pronouncements and Changes in Accounting Principles [Text Block]	Note 2 – Recent Accounting Pronouncements Effective October 1, 2017, the Company adopted the guidance issued in Accounting Standard Update 2016-09, Improvements to Employee Share-Based Payment Accounting, Effective October 1, 2017, the Company adopted the guidance issued in Accounting Standard Update 2016-17, Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control , which amends the consolidation guidance on how a reporting entity that is the single decision maker of a VIE should treat indirect interests in the entity held through related parties that are under common control with the reporting entity when determining whether it is the primary beneficiary of that VIE. The adoption of this ASU did not have an impact on the Company’s financial statements. Revenue from Contracts with Customers (Topic 606) Section A—Summary and Amendments That Create Revenue from Contracts with Customers (Topic 606) and Other Assets and Deferred Costs—Contracts with Customers (Subtopic 340-40). In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, Revenue from Contracts with Customers As of June 30, 2018, the Company has made significant progress towards completing its assessment of the potential effects of ASU 2014-09 and its amendments on its consolidated financial statements, and is actively assessing the potential effects on business processes, systems and controls to support revenue recognition and the related disclosures under this ASU. The Company is required to adopt the new standards on October 1, 2018, and expects to do so using the modified retrospective transition method with the cumulative effect of initially applying the guidance recognized at the date of initial application. With the assistance of a third party engaged for this purpose, the Company’s assessment includes a detailed review of representative contracts from each of the Company’s revenue streams and a comparison of its historical accounting policies and practices to the new standard. The Company's preliminary assessment of this adoption method supports the determination that there are no expected changes in the accounting for the Research segment’s contract research revenue. Across other revenue streams, the timing of revenue recognition could be affected for multiple types of contracts, primarily multiple element contracts in its Optics segment, but those differences are not expected to have a material impact on the consolidated financial statements. However, the Company's assessment is not yet finalized and is subject to change. Additionally, the Company is currently evaluating any tax implications the adoption of this new standard may have on the consolidated financial statements. As part of this analysis, the Company is evaluating its information technology capabilities and systems, and does not expect to incur significant information technology costs to modify systems currently in place. The Company is in the process of assessing its current revenue controls, and identifying and implementing any changes that may be necessary to comply with its new revenue policies and the provisions of ASU 2014-09, which will be effective for the Company as of October 1, 2018. Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting. In May 2017, the FASB issued ASU No. 2017-09 which was issued to clarify and reduce both (i) diversity in practice and (ii) cost and complexity when applying the guidance in Topic 718, “Compensation – Stock Compensation” to changes in the terms and conditions of a share-based payment award. This update is required beginning with the Company’s 2019 fiscal year and should be applied prospectively to award modifications after the effective date. The Company is currently in the process of assessing the impact of this ASU on its consolidated financial statements. Business Combinations (Topic 805): Clarifying the Definition of a Business: In January 2017, the FASB issued ASU 2017-01 which clarifies the definition of a business for determining whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The guidance is effective for the Company beginning October 1, 2018. The Company is currently in the process of assessing the impact of this ASU on its consolidated financial statements. Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. In October 2016, the FASB issued ASU 2016-16 which eliminates the exception, other than for inventory transfers, under current U.S. GAAP under which the tax effects of intra-entity asset transfers (intercompany sales) are deferred until the transferred asset is sold to a third party or otherwise recovered through use. Upon adoption of ASU 2016-16, the Company will recognize the tax expense from the sale of that asset in the seller’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. Any deferred tax asset that arises in the buyer’s jurisdiction would also be recognized at the time of the transfer. This new guidance is effective for the Company beginning in fiscal 2019, with early adoption permitted. Modified retrospective adoption is required with any cumulative-effect adjustment recorded to retained earnings as of the beginning of the period of adoption. The cumulative-effect adjustment, if any, would consist of the net impact from (1) the write-off of any unamortized tax expense previously deferred and (2) recognition of any previously unrecognized deferred tax assets, net of any necessary valuation allowances. The adoption of this standard is not expected to have a material impact on the Company’s financial statements. Service Concession Arrangements (Topic 853): Determining the Customer of the Operation Services. In May 2017, the FASB issued ASU 2017-10 which provides guidance for operating entities when they enter into a service concession arrangement with a public-sector grantor. The ASU becomes effective for the Company at the beginning of its 2019 fiscal year, at the time the Company adopts Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers Leases (Topic 842). In February 2016, the FASB issued ASU No. 2016-02, Leases Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment: In January 2017, the FASB issued ASU 2017-04 which simplifies the test for goodwill impairment by eliminating Step 2 from the Goodwill impairment test. This new guidance is effective for the Company beginning in fiscal year 2021. The adoption of this standard is not expected to have a material impact on the Company’s financial statements. On December 22, 2017, the date the Tax Cuts and Jobs Act (“2017 Tax Act”) was signed into law, the Securities and Exchange Commission staff issued Staff Accounting Bulletin No. 118

Xcede Technologies, Inc. Joint

Xcede Technologies, Inc. Joint Venture	9 Months Ended
	Jun. 30, 2018
Equity Method Investments and Joint Ventures [Abstract]
Equity Method Investments and Joint Ventures Disclosure [Text Block]	Note 3 – Xcede Technologies, Inc. Joint Venture In October 2013, the Company, through its subsidiary Dynasil Biomedical (“DBM”), formed Xcede, a joint venture with Mayo Clinic, in order to spin out and separately fund the development of its hemostatic tissue sealant technology, which formerly comprised the majority of its expense within the Biomedical segment. Beginning at its inception and through November 2016, Xcede funded its pre-clinical research activities through the issuance of convertible notes bearing interest at 5% (the “Notes”) pursuant to a note purchase agreement dated October 2013 and most recently amended in November 2016 that provided for the issuance of up to $5.2 million in the aggregate principal amount of the Notes from external investors and certain directors and officers of the Company. The Notes were convertible into equity of Xcede. In November 2016, Dynasil committed to invest $1.2 million of cash into Xcede over the following 18 months, all of which was invested prior to January 31, 2018, in exchange for Series B convertible preferred stock of Xcede (“Series B Preferred”). The value of the Series B Preferred, as it is wholly owned by DBM, was eliminated in consolidation. In conjunction with Dynasil’s committed investment, all $5.5 million in existing Notes and accrued interest were converted into 5,394,120 shares of Series A convertible preferred stock of Xcede (“Series A Preferred”) at a 20% discount to the price per share of the Series B Preferred, in accordance with the amended provisions of the Notes. The original conversion terms of the Notes were amended to require conversion into Series A Preferred rather than the class of stock issued in conjunction with the financing (Series B Preferred). Because the original conversion terms of the Notes were amended and as a result of assessing the impact of the rights and features of the Note amendment and their effect on the value to the issuer and holders, the transaction is recorded at fair value with a resulting gain on extinguishment of debt in the quarter ended December 31, 2016. Fair value was determined by management based on an independent valuation using a market and income approach and an option pricing model to allocate value to the respective shares. The fair value of the Series A Preferred was approximately $3.6 million on the date of issuance, as compared to the carrying value of the convertible principal and accrued interest of $5.5 million, resulting in a gain of approximately $1.9 million. Due to the related party nature of the transaction, this gain was recorded within the equity of Xcede. Of that $1.9 million, approximately $1.6 million was attributed to DBM and eliminated in consolidation, and approximately $0.3 million was attributed to noncontrolling interest. Series A Preferred participants included both outside investors (accounted for as noncontrolling interest) and DBM. The outside investors converted $3.1 million of Notes and accrued interest into 3,055,551 shares of Series A Preferred. DBM converted the remaining $2.4 million of Notes and accrued interest into 2,338,569 shares of Series A Preferred, the value of which is eliminated in consolidation. Each share of Series A Preferred and Series B Preferred (together the “Preferred Stock”) shall be convertible, at the option of the holder, into such number of fully paid and non-assessable shares of Xcede common stock (“Common Stock”) as determined by dividing the original issue price, as defined, by the conversion price in effect on the date of conversion, which is 1:1. Each holder of the Preferred Stock shall have one vote for each share of Common Stock that the holder of the Preferred Stock would be entitled to receive upon the conversion of the holder’s Preferred Stock into Common Stock. Upon any liquidation event, which includes certain change of control events, following payment of pre-equity distributions, the remaining proceeds or net assets of Xcede shall be paid and distributed in the following amounts and order of priority: (1) to satisfy the liquidation preference payment due to each holder of Series B Preferred, (2) to satisfy the liquidation preference payment due to each holder of Series A Preferred, (3) payment in full of any acquisition transaction payment, and (4) the remaining assets available to be distributed ratably among the holders of the Common Stock. If a liquidation event were to occur, the Series A Preferred’s liquidation value would be $1.016 per share and Series B Preferred’s liquidation value would be $1.27 per share. As of June 30, 2018, the liquidation value of the Series B Preferred would be approximately $1.5 million and the Series A Preferred would be approximately $5.5 million, of which $2.4 million is DBM’s portion and $3.1 million would be attributed to noncontrolling shareholders. As of June 30, 2018, DBM owned approximately 63% of Xcede’s outstanding Common Stock and Preferred Stock and, as a result, Xcede is included in the Company’s consolidated balance sheets, results of operations and cash flows. Due to the Series A Preferred having a liquidation preference and therefore not representing a residual interest, cumulative net losses of Xcede are attributed only to common stockholders in accordance with common stock ownership. Noncontrolling interest represents the value of the Series A Preferred and common stock not owned by DBM plus 17% of cumulative losses of Xcede based on the 17% common stock ownership held by noncontrolling interests. Due to the issuance of Preferred Stock, DBM’s ownership percentage in Xcede decreased to less than 80%. Based on this ownership percentage, beginning in fiscal year 2017, Xcede is no longer included in the Dynasil consolidated federal tax return and the Company is no longer able to offset taxable income or benefit from net operating losses and other tax attributes related to Xcede. (See Note 11 – Income Taxes.) As previously disclosed, in January 2016, Xcede announced that it had signed three agreements with Cook Biotech Inc. of West Lafayette, Indiana (“CBI”), including a Development Agreement, a License Agreement and a Supply Agreement, in connection with the development, regulatory approval and production of Xcede’s hemostatic patch (“Xcede Patch”). In November 2016, Xcede entered into another Services Agreement, a Secured Promissory Note, a Loan Agreement, a Security Agreement and an Intellectual Property Security Agreement (collectively the “Note Agreement”) with CBI, in which CBI committed to fund the pre-clinical testing of, and subject to the receipt of applicable regulatory approvals to initiate first in human clinical trial for, the Xcede Patch. Under the terms of the Note Agreement, in exchange for the services performed by CBI, Xcede committed to a multiple draw credit facility in the aggregate amount not to exceed $1.5 million. The Note Agreement made available three draws of principal, each in the amount of $500,000, upon satisfaction of conditions identified in the Note Agreement. The principal amounts outstanding bear interest at a fixed rate of 2% and are secured by all the rights of Xcede under the Development Agreement, Supply Agreement, and License Agreement, all the rights to the data and work product arising from the clinical trial being performed under the Services Agreement, all regulatory approvals for the Xcede Patch, all patent and patent applications owned or controlled by Xcede, and all trademark and service mark registrations and applications. The note was recorded at fair value net of unamortized discount based on an imputed interest rate of 5.4%. The outstanding principal and unpaid interest are due and payable in full at the earlier of closing of an acquisition transaction or December 31, 2025. Xcede will recognize research and development expense as the related services are performed by CBI. There was approximately $8,000 and $33,000 of research and development expense recognized during the three months ended June 30, 2018 and 2017, respectively. There was approximately $209,000 and $238,000 recognized during the nine months ended June 30, 2018 and 2017, respectively. On July 20, 2018, Xcede received a notice of termination from CBI, its collaboration partner with respect to the Xcede Patch currently under development. CBI asserted its termination rights under the Services Agreement dated November 16, 2016 and Development Agreement dated January 6, 2016 between Xcede and CBI, claiming that the results of a recent animal study showed that it is not commercially reasonable, in CBI’s assessment, to continue to the next development phase of the Xcede Patch. Upon a valid termination, CBI has no obligation to conduct further developmental activities with respect to the Xcede Patch, including any further in-kind funding under the Loan Agreement dated November 16, 2016 between Xcede and CBI. In addition, CBI has asserted that these study results trigger an immediate repayment of the $500,000 promissory note owed by Xcede to CBI under the Loan Agreement, which otherwise has a stated maturity of December 31, 2025. The Xcede promissory note is collateralized by a security interest which CBI has in all of Xcede’s intellectual property. While Xcede vigorously contests this assertion, at this time it is unclear how this matter will be resolved between Xcede and CBI. The Company continues to carry the promissory note in long-term debt. As a result of this action by CBI, Xcede has halted clinical trial preparations at this time and has curtailed its operations to a minimal level while the Board of Directors of Xcede evaluates alternatives, including the viability of modifying the Xcede Patch to address the shortcomings cited by CBI and/or the possible sale or license of Xcede IP assets, subject to amending the security interest described above. There can be no assurances with respect to any such alternatives. Dynasil is the sole holder of Xcede Series B Preferred Stock, which ranks senior to the other classes of outstanding Xcede equity, but junior to all Xcede indebtedness. Dynasil also owns shares of Xcede Series A Preferred Stock and Common Stock. On an as-converted basis, Dynasil indirectly owns about 63% of the shares outstanding. Dynasil has no contractual obligation with respect to Xcede indebtedness. The Xcede promissory note is a contractual obligation solely of Xcede and is secured by Xcede’s intellectual property. Dynasil’s Biomedical segment consists of a single business unit, Dynasil Biomedical Corporation, which has no operations other than to its equity ownership in Xcede. Since inception, this segment has had no revenue and has operated at a substantial loss. Dynasil does not currently anticipate any material impairment of assets or write-offs affecting its consolidated financial statements with respect to this segment as a result of this development.

Inventories

Inventories	9 Months Ended
	Jun. 30, 2018
Inventory Disclosure [Abstract]
Inventory Disclosure [Text Block]	Note 4 - Inventories Inventories, net of reserves, consists of the following: June 30, September 30, 2018 2017 Raw Materials $ 2,362,000 $ 2,540,000 Work-in-Process 1,066,000 798,000 Finished Goods 1,029,000 988,000 $ 4,457,000 $ 4,326,000

Intangible Assets

Intangible Assets	9 Months Ended
	Jun. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets Disclosure [Text Block]	Note 5 – Intangible Assets Intangible assets at June 30, 2018 and September 30, 2017 consist of the following: Useful Gross Accumulated June 30, 2018 Life (years) Amount Amortization Net Acquired Customer Base 5 to 15 $ 722,000 $ 588,000 $ 134,000 Know How 15 512,000 341,000 171,000 Trade Names Indefinite 274,000 - 274,000 Patents 20 397,000 17,000 380,000 Biomedical Technologies 5 260,000 260,000 - $ 2,165,000 $ 1,206,000 $ 959,000 Useful Gross Accumulated September 30, 2017 Life (years) Amount Amortization Net Acquired Customer Base 5 to 15 $ 737,000 $ 551,000 $ 186,000 Know How 15 512,000 316,000 196,000 Trade Names Indefinite 281,000 - 281,000 Patents 20 333,000 9,000 324,000 Biomedical Technologies 5 260,000 260,000 - $ 2,123,000 $ 1,136,000 $ 987,000 Amortization expense for the three months ended June 30, 2018 and 2017 was $28,000 and $24,000, respectively. Amortization expense for the nine months ended June 30, 2018 and 2017 was $84,000 and $75,000, respectively. Estimated amortization expense for each of the next five fiscal years and thereafter is as follows: 2018 (3 months) 2019 2020 2021 2022 Thereafter Total Acquired Customer Base $ 20,000 $ 80,000 $ 34,000 $ - $ - $ - $ 134,000 Know How 9,000 34,000 34,000 34,000 34,000 26,000 171,000 Patents 3,000 11,000 11,000 11,000 11,000 162,000 209,000 $ 32,000 $ 125,000 $ 79,000 $ 45,000 $ 45,000 $ 188,000 $ 514,000 As of June 30, 2018, Xcede had $171,000 in patents that have not yet been granted, therefore, the amortization related to these patents is not included in the five-year amortization table above. The Company continually assesses whether events or changes in circumstances have occurred that may warrant revision of the estimated useful lives of its long-lived assets or whether the remaining balances of those assets should be evaluated for possible impairment. There were no changes, aside from foreign exchange rate fluctuations, in the carrying value of long-lived assets, during the nine months ended June 30, 2018 and 2017.

Goodwill

Goodwill	9 Months Ended
	Jun. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill Disclosure [Text Block]	Note 6 – Goodwill Goodwill is subject to an annual impairment test. The Company considers many factors which may indicate the requirement to perform additional, interim impairment tests. These include: · A significant adverse long term outlook for any of its industries; · An adverse finding or rejection from a regulatory body involved in new product regulatory approvals; · Failure of an anticipated commercialization of a product or product line; · Unanticipated competition or the introduction of a disruptive technology; · The testing for recoverability under the Impairment or Disposal of Long-Lived Assets Subsections of Subtopic 360-10 of a significant asset group within a reporting unit; · A loss of key personnel; and · An expectation that a reporting unit carrying goodwill, or a significant portion of a reporting unit, will be sold or otherwise disposed of. There were no changes, aside from foreign exchange rate fluctuations, in the carrying value of goodwill, during the nine months ended June 30, 2018 and 2017.

Debt

Debt	9 Months Ended
	Jun. 30, 2018
Debt Disclosure [Abstract]
Debt Disclosure [Text Block]	Note 7 – Debt Senior Debt On July 31, 2018, the Company converted the outstanding balance on the equipment line of credit with Middlesex Savings Bank (“Middlesex”) of approximately $750,000, of which $281,000 was outstanding on June 30, 2018, into a five year term note with an interest rate of 5.66%. Additionally, on August 9, 2018, the Company’s equipment line of credit was renewed for $750,000 through April 30, 2019, at which time the outstanding balance will be converted into a five year term note. As part of the renewal process and due to the additional credit being extended to the Company, the Middlesex loan and security agreement was amended on August 9, 2018 to decrease the maximum debt leverage ratio covenant to 2.5x from 3.0x. On both March 31, 2018 and June 30, 2018, the Company was in compliance with all but one of the financial covenants contained in the loan agreement with Middlesex that require us to maintain certain ratios of earnings before interest, taxes, depreciation and amortization to fixed charges and to total debt and senior debt. On August 9, 2018, Middlesex issued a waiver for these events, as this circumstance arose due to the timing of equipment purchases as the Company invests for the future. The current year forecast shows Dynasil quickly resolving this situation and coming back into compliance with this covenant for the end of the fiscal year. Subordinated Debt On January 3, 2018, the Company amended the Note Purchase Agreement with Massachusetts Capital Resource Company to reinstate the interest only payment requirements of the loan and defer principal repayment requirements to November 30, 2018. Such amendment also increased the interest rate of the note from six percent (6%) to seven percent (7%) per annum.

Earnings (Loss) Per Common Shar

Earnings (Loss) Per Common Share	9 Months Ended
	Jun. 30, 2018
Earnings Per Share [Abstract]
Earnings Per Share [Text Block]	Note 8 – Earnings (Loss) Per Common Share Basic earnings (loss) per common share is computed by dividing the net income or loss attributable to common shares by the weighted average number of common shares outstanding. Diluted earnings per common share adjusts basic earnings per share for the effects of common stock options, common stock warrants, convertible preferred stock and other potential dilutive common shares outstanding during the periods. For purposes of computing diluted earnings per share for the three and nine months ended June 30, 2018 and 2017, no common stock options were included in the calculation of dilutive shares as all of the 160,537 and 196,769 common stock options outstanding, respectively, had exercise prices above the applicable period’s average market price per share and their inclusion would be anti-dilutive. For both the three and nine months ended June 30, 2017, 70,000 shares of unvested restricted common stock were excluded from the calculation of dilutive shares, as the effect of their inclusion would be anti-dilutive. Additionally, for the three months ended June 30, 2017, no common share equivalents related to stock options or unvested restricted stock were included in the calculation of dilutive shares, since there was a loss attributable to common shareholders and the inclusion of common share equivalents would be anti-dilutive. The computation of the weighted shares outstanding for the three months ended June 30, 2018 and 2017 is as follows: June 30, 2018 June 30, 2017 Weighted average shares outstanding Basic 17,203,965 16,945,744 Effect of dilutive securities Stock Options - - Restricted Stock 17,234 - Dilutive Average Shares Outstanding 17,221,199 16,945,744 The computation of the weighted shares outstanding for the nine months ended June 30, 2018 and 2017 is as follows: June 30, 2018 June 30, 2017 Weighted average shares outstanding Basic 17,127,834 16,879,864 Effect of dilutive securities Stock Options - - Restricted Stock 19,394 - Dilutive Average Shares Outstanding 17,147,228 16,879,864

Stock Based Compensation

Stock Based Compensation	9 Months Ended
	Jun. 30, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]	Note 9 - Stock Based Compensation The fair value of the stock options granted is estimated at the date of grant using the Black-Scholes option pricing model. The expected volatility was determined with reference to the historical volatility of the Company's stock. The Company uses historical data to estimate option exercise within the valuation model. The expected term of options granted represents the period of time that the options granted are expected to be outstanding. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury rate in effect at the time of grant. The dividend yield is expected to be zero because historically the Company has not paid dividends on common stock. The Company’s Xcede joint venture adopted an Equity Incentive Plan in 2013 which provides for, among other incentives, the granting of options to purchase shares in Xcede’s common stock to officers, directors, employees and consultants. The options granted generally vest over a three year period. The fair value of the stock options granted is estimated at the date of grant using the Black-Scholes option pricing model using assumptions generally consistent with those used for Company stock options. Because Xcede is not publicly traded, the expected volatility is estimated with reference to the average historical volatility of a group of publicly traded companies that are believed to have similar characteristics to Xcede. Stock compensation expense for the three and nine months ended June 30, 2018 and 2017 is as follows: Three Months Ended Three Months Ended June 30, 2018 June 30, 2017 Stock Grants $ 78,000 $ 60,000 Restricted Stock Grants 14,000 13,000 Option Grants - 12,000 Employee Stock Purchase Plan 1,000 1,000 Subsidiary Option Grants 27,000 30,000 Total $ 120,000 $ 116,000 Nine Months Ended Nine Months Ended June 30, 2018 June 30, 2017 Stock Grants $ 209,000 $ 183,000 Restricted Stock Grants 40,000 39,000 Option Grants 17,000 37,000 Employee Stock Purchase Plan 2,000 2,000 Subsidiary Option Grants 83,000 82,000 Total $ 351,000 $ 343,000 At June 30, 2018, there was approximately $71,000 in unrecognized stock compensation cost for Dynasil, which is expected to be recognized over a weighted average period of approximately twelve months. Restricted Stock Grants A summary of restricted stock activity for the nine months ended June 30, 2018 is presented below: Restricted Stock Activity for the Nine Months ended ‎ June 30, 2018 Shares Weighted-Average ‎ Grant-Date Fair Value Nonvested at September 30, 2017 70,000 $ 1.73 Granted 20,000 1.37 Vested (30,000 ) 1.73 Cancelled - - Nonvested and expected to vest at June 30, 2018 60,000 $ 1.61 Stock Option Grants During the nine months ended June 30, 2018, no Dynasil stock options were granted. A summary of stock option activity for the nine months ended June 30, 2018 is presented below: Options Outstanding Weighted Average ‎ Exercise Price per ‎ Share Weighted Average Remain Contractual Term (in Years) Balance at September 30, 2017 196,769 $ 1.98 1.64 Outstanding and exercisable at September 30, 2017 196,769 $ 1.98 1.64 Granted - - Exercised - - Cancelled (36,232 ) 1.82 Balance at June 30, 2018 160,537 $ 2.01 1.18 Outstanding and exercisable at June 30, 2018 160,537 $ 2.01 1.18 Subsidiary Stock Option Grants During the three months ended June 30, 2018, no Xcede stock options were granted. A summary of Xcede stock option activity for the nine months ended June 30, 2018 is presented below: Options Outstanding Weighted Average Exercise Price per Share Weighted Average Remain Contractual Term (in Years) Balance at September 30, 2016 123,147 $ 2.30 1.69 Outstanding and exercisable at September 30, 2016 123,147 $ 2.30 1.69 Granted 95,602 1.80 2.59 Exercised - - Cancelled (21,980 ) 3.03 Balance at June 30, 2017 196,769 $ 1.98 1.89 Outstanding and exercisable at June 30, 2017 196,769 $ 1.98 1.89 At June 30, 2018, the Company’s Xcede joint venture had approximately $70,000 of unrecognized stock compensation expense associated with stock options expected to be recognized over a weighted average period of seven months.

Segment, Customer and Geographi

Segment, Customer and Geographical Reporting	9 Months Ended
	Jun. 30, 2018
Segment Reporting [Abstract]
Segment Reporting Disclosure [Text Block]	Note 10 – Segment, Customer and Geographical Reporting Segment Financial Information Dynasil reports three reportable segments: contract research (“Contract Research”), optics (“Optics”) and biomedical (“Biomedical”). Within these segments, there is a segregation of operating segments based upon the organizational structure used to evaluate performance and make decisions on resource allocation, as well as availability and materiality of separate financial results consistent with that structure. The Optics segment aggregates four operating segments – Dynasil Fused Silica, Optometrics, Hilger Crystals (“Hilger”), and Evaporated Metal Films – that manufacture commercial products, including optical crystals for sensing in the security and medical imaging markets, as well as optical components, optical coatings and optical materials for scientific instrumentation and other applications. The Contract Research segment is one of the largest small business participants in U.S. government-funded research. The Biomedical segment consists of a single operating segment, Dynasil Biomedical Corporation (“Dynasil Biomedical”), a medical technology incubator which owns rights to certain early stage medical technologies. Dynasil Biomedical holds common and preferred stock in the Xcede joint venture which is developing a tissue sealant technology and currently has no other operations. The Company’s segment information for the three months ended June 30, 2018 and 2017 is summarized below: Results of Operations for the Three Months Ended June 30, 2018 Optics Contract ‎ Research Biomedical Total Revenue $ 6,159,000 $ 4,383,000 $ - $ 10,542,000 Gross profit 2,299,000 1,876,000 - 4,175,000 GM % 37 % 43 % - 40 % Operating expenses 1,721,000 1,760,000 84,000 3,565,000 Operating income (loss) 578,000 116,000 (84,000 ) 610,000 Depreciation and amortization 261,000 53,000 3,000 317,000 Capital expenditures 707,000 76,000 20,000 803,000 Intangibles, net 408,000 171,000 380,000 959,000 Goodwill 968,000 4,939,000 - 5,907,000 Total assets $ 21,117,000 $ 8,018,000 $ 507,000 $ 29,642,000 Results of Operations for the Three Months Ended June 30, 2017 Optics Contract ‎ Research Biomedical Total Revenue $ 4,837,000 $ 3,999,000 $ - $ 8,836,000 Gross profit 1,655,000 1,709,000 - 3,364,000 GM % 34 % 43 % - 38 % Operating expenses 1,619,000 1,640,000 377,000 3,636,000 Operating income (loss) 36,000 69,000 (377,000 ) (272,000 ) Depreciation and amortization 248,000 52,000 1,000 301,000 Capital expenditures 179,000 54,000 26,000 259,000 Intangibles, net 468,000 205,000 394,000 1,067,000 Goodwill 955,000 4,939,000 - 5,894,000 Total assets $ 19,488,000 $ 8,004,000 $ 690,000 $ 28,182,000 The Company’s segment information for the nine months ended June 30, 2018 and 2017 is summarized below: Results of Operations for the Nine Months Ended June 30, 2018 Optics Contract ‎ Research Biomedical Total Revenue $ 17,011,000 $ 12,974,000 $ - $ 29,985,000 Gross profit 6,038,000 5,621,000 - 11,659,000 GM % 35 % 43 % - 39 % Operating expenses 5,154,000 5,297,000 724,000 11,175,000 Operating income (loss) 884,000 324,000 (724,000 ) 484,000 Depreciation and amortization 738,000 179,000 10,000 927,000 Capital expenditures 1,635,000 153,000 65,000 1,853,000 Intangibles, net 408,000 171,000 380,000 959,000 Goodwill 968,000 4,939,000 - 5,907,000 Total assets $ 21,117,000 $ 8,018,000 $ 507,000 $ 29,642,000 Results of Operations for the Nine Months Ended June 30, 2017 Optics Contract ‎ Research Biomedical Total Revenue $ 14,524,000 $ 13,541,000 $ - $ 28,065,000 Gross profit 5,144,000 5,535,000 - 10,679,000 GM % 35 % 41 % - 38 % Operating expenses 4,544,000 5,182,000 1,150,000 10,876,000 Operating income (loss) 600,000 353,000 (1,150,000 ) (197,000 ) Depreciation and amortization 719,000 200,000 7,000 926,000 Capital expenditures 373,000 88,000 72,000 533,000 Intangibles, net 468,000 205,000 394,000 1,067,000 Goodwill 955,000 4,939,000 - 5,894,000 Total assets $ 19,488,000 $ 8,004,000 $ 690,000 $ 28,182,000 Customer Financial Information For both the three and nine months ended June 30, 2018 and 2017, no customer in the Optics segment represented more than 10% of the total segment revenue. For the three months ended June 30, 2018, four customers of the Contract Research segment, three various agencies of the U.S. Government and one commercial customer, each represented more than 10% of the total segment revenue. For the nine months ended June 30, 2018, three customers of the Contract Research segment, all various agencies of the U.S. Government, each represented more than 10% of the total segment revenue. For the three and nine months ended June 30, 2017, three customers of the Contract Research segment, all various agencies of the U.S. Government, each represented more than 10% of the total segment revenue. For the three months ended June 30, 2018 and 2017, these customers made up 72% and 52%, respectively, of Contract Research revenue. For the nine months ended June 30, 2018 and 2017, these customers made up 59% and 58%, respectively, of Contract Research revenue. Geographic Financial Information Revenue by geographic location in total and as a percentage of total revenue, for the three months ended June 30, 2018 and 2017 are as follows: Three Months Ended Three Months Ended June 30, 2018 June 30, 2017 Geographic Location Revenue % of Total Revenue % of Total United States $ 7,512,000 71 % $ 6,928,000 78 % Europe 2,029,000 19 % 962,000 11 % Other 1,001,000 10 % 946,000 11 % $ 10,542,000 100 % $ 8,836,000 100 % Revenue by geographic location in total and as a percentage of total revenue, for the nine months ended June 30, 2018 and 2017 are as follows: Nine Months Ended Nine Months Ended June 30, 2018 June 30, 2017 Geographic Location Revenue % of Total Revenue % of Total United States $ 22,993,000 77 % $ 22,051,000 78 % Europe 4,662,000 15 % 3,262,000 12 % Other 2,330,000 8 % 2,752,000 10 % $ 29,985,000 100 % $ 28,065,000 100 %

Income Taxes

Income Taxes	9 Months Ended
	Jun. 30, 2018
Income Tax Disclosure [Abstract]
Income Tax Disclosure [Text Block]	Note 11 - Income Taxes 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 carry forwards. 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. Dynasil Corporation of America and its wholly-owned U.S. subsidiaries file a consolidated federal income tax return and various state returns. The Company’s U.K. subsidiary files tax returns in the U.K. Prior to November 18, 2016, the Company’s subsidiary, Xcede was included in the federal and state tax returns filed by Dynasil. As of November 18, 2016, Dynasil’s ownership in Xcede was reduced to approximately 59%. As a result, Xcede is no longer included in Dynasil’s federal consolidated tax return and files a separate federal return. Xcede continues to be included in the Dynasil consolidated state tax filings pursuant to the respective state tax requirements. In assessing the ability to realize the net deferred tax assets, management considers various factors including taxable income in carryback years, future reversals of existing taxable temporary differences, tax planning strategies and projections of future taxable income, to determine whether it is more likely than not that some portion or all of the net deferred tax assets will not be realized. As a result of Xcede’s de-consolidation from the Company’s federal tax returns, the Company will no longer be able to offset taxable income with Xcede’s current or cumulative net operating losses. Upon review of relevant criteria for the new Dynasil federal consolidated group, it was determined that it is more likely than not that the federal deferred tax assets of the new Dynasil federal consolidated group will be realized based upon positive earnings history and expected future profits of the group. As a result, the federal deferred tax asset valuation allowance associated with the Dynasil federal consolidated group was reversed resulting in an income tax benefit in the amount of $2.7 million during the quarter ending December 31, 2016. Going forward, as the Company records income, it will be able to utilize the NOLs (net operating losses) within its deferred tax assets. Based upon the Company’s recent losses and uncertainty of future profits, the Company has determined that the uncertainty regarding the realization of the Company’s state and separate Xcede deferred tax assets is sufficient to warrant the continued need for a valuation allowance against these deferred tax assets. The Company applies the authoritative provisions related to accounting for uncertainty in income taxes. As required by these provisions, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more-likely-than-not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being reached upon ultimate settlement with the relevant tax authority. As of June 30, 2018 and September 30, 2017, the Company has no liabilities for uncertain tax positions. Interest and penalty charges, if any, related to uncertain tax positions would be classified as income tax expense in the accompanying consolidated statement of operations. As of June 30, 2018 and September 30, 2017, the Company had no accrued interest or penalties related to uncertain tax positions. The Company currently has no federal or state tax examinations in progress. On December 22, 2017, the 2017 Tax Act was signed into law. The 2017 Tax Act, which was effective on December 22, 2017, significantly revised the U.S. tax code by, among other changes, lowering the corporate income tax rate from 35% to 21%, requiring a one-time transition tax on accumulated foreign earnings of certain foreign subsidiaries that were previously tax deferred and creating new taxes on certain foreign sourced earnings. At June 30, 2018, the Company has not completed its accounting for the tax effects of the 2017 Tax Act; however, the Company has made a reasonable estimate of the effects on its existing deferred tax balances and the one-time transition tax. The Company is reviewing and will continue to review its accounting of the tax effects of the 2017 Tax Act through the end of the fiscal year. The Company re-measured certain U.S. deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%, and provisionally recorded an income tax expense of $0.5 million related to such re-measurement in the first quarter of fiscal 2018. It is still analyzing certain aspects of the Tax Act and refining its calculations during the measurement period. The one-time transition tax is based on the total unremitted earnings of the Company’s foreign subsidiary, Hilger, which has previously been deferred from U.S. income taxes. The Company recorded a provisional amount for its one-time transition liability of its foreign subsidiary resulting in additional income tax expense of $0.2 million in the first quarter of fiscal 2018. The Company has not yet completed its calculation of the total unremitted earnings of Hilger. The transition tax is based in part on the amount of those earnings held in cash and other specified assets. The amount may change when the Company finalizes the calculation of Hilger’s total unremitted earnings previously deferred from U.S. federal taxation and finalizes the amounts held in cash or other specified assets. There are Research and Experimentation tax credits available at both the federal and state levels resulting from the PATH Act of 2015 (“PATH 2015 R&E Tax Credit”). These credits are designed to encourage and reward companies for efforts in areas of research and experimentation. In June 2018, the Company completed a study encompassing all business activities and contracts in these areas for the years 2012 through 2016. As a result, the Company will have net tax credits of approximately $1.3 million on its federal income tax returns for the years ended September 30, 2012, 2013, 2014, 2015 and 2016 and approximately $0.8 million in state tax credits for the same time periods. During the quarter ended June 30, 2018, the Company completed its state PATH 2015 R&E Tax Credit analysis which resulted in an additional $800,000 of tax credits, largely against future state tax expenses. Due to the Company’s state tax filing status requiring Dynasil to continue to consolidate the Xcede losses for state tax purposes, this credit had a full tax valuation reserve applied to it and, accordingly, is not reflected in the statement of operations for the quarter. The PATH 2015 R&E Tax Credit totals approximately $2.1 million, of which the Federal component of $1.3 million is reflected in the Statement of Operations for the nine months ended June 30, 2018. This $800,000 of additional state PATH 2015 R&E Tax Credit is available as an offset to future state tax expenses. The effective tax rates were 34% and 34% The Company files its tax returns as prescribed by the tax laws of the jurisdictions in which it operates. The Company’s tax filings for federal and state jurisdictions for the tax years beginning with 2014 are still subject to examination.

Subsequent Events

Subsequent Events	9 Months Ended
	Jun. 30, 2018
Subsequent Events [Abstract]
Subsequent Events [Text Block]	Note 12 – Subsequent Events On July 20, 2018, Xcede received a notice of termination from CBI, its collaboration partner with respect to the Xcede Patch currently under development. CBI asserted its termination rights under the Services Agreement dated November 16, 2016 and Development Agreement dated January 6, 2016 between Xcede and CBI, claiming that the results of a recent animal study showed that it is not commercially reasonable, in CBI’s assessment, to continue to the next development phase of the Xcede Patch. Upon a valid termination, CBI has no obligation to conduct further developmental activities with respect to the Xcede Patch, including any further in-kind funding under the Loan Agreement dated November 16, 2016 between Xcede and CBI. In addition, CBI has asserted that these study results trigger an immediate repayment of the $500,000 promissory note owed by Xcede to CBI under the Loan Agreement, which otherwise has a stated maturity of December 31, 2025. The Xcede promissory note is collateralized by a security interest which CBI has in all of Xcede’s intellectual property. While Xcede vigorously contests this assertion, at this time it is unclear how this matter will be resolved between Xcede and CBI. See Note 3 for additional information. On July 31, 2018, the Company converted the outstanding balance on the equipment line of credit with Middlesex Savings Bank (“Middlesex”) of approximately $750,000, of which $281,000 was outstanding on June 30, 2018, into a five year term note with an interest rate of 5.66%. Additionally, on August 9, 2018, the Company’s equipment line of credit was renewed for $750,000 through April 30, 2019, at which time the outstanding balance will be converted into a five year term note. As part of the renewal process and due to the additional credit being extended to the Company, the Middlesex loan and security agreement was amended on August 9, 2018 to decrease the maximum debt leverage ratio covenant to 2.5x from 3.0x​​​​​​​. On both March 31, 2018 and June 30, 2018, the Company was in compliance with all but one of the financial covenants contained in the loan agreement with Middlesex that require us to maintain certain ratios of earnings before interest, taxes, depreciation and amortization to fixed charges and to total debt and senior debt. On August 9, 2018, Middlesex issued a waiver for these events, as this circumstance arose due to the timing of equipment purchases as the Company invests for the future. The current year forecast shows Dynasil quickly resolving this situation and coming back into compliance with this covenant for the end of the fiscal year. The Company has evaluated subsequent events through the date the financial statements were released.

Inventories (Tables)

Inventories (Tables)	9 Months Ended
	Jun. 30, 2018
Inventory Disclosure [Abstract]
Schedule of Inventory, Current [Table Text Block]	Inventories, net of reserves, consists of the following: June 30, September 30, 2018 2017 Raw Materials $ 2,362,000 $ 2,540,000 Work-in-Process 1,066,000 798,000 Finished Goods 1,029,000 988,000 $ 4,457,000 $ 4,326,000

Intangible Assets (Tables)

Intangible Assets (Tables)	9 Months Ended
	Jun. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Finite-Lived Intangible Assets [Table Text Block]	Intangible assets at June 30, 2018 and September 30, 2017 consist of the following: Useful Gross Accumulated June 30, 2018 Life (years) Amount Amortization Net Acquired Customer Base 5 to 15 $ 722,000 $ 588,000 $ 134,000 Know How 15 512,000 341,000 171,000 Trade Names Indefinite 274,000 - 274,000 Patents 20 397,000 17,000 380,000 Biomedical Technologies 5 260,000 260,000 - $ 2,165,000 $ 1,206,000 $ 959,000 Useful Gross Accumulated September 30, 2017 Life (years) Amount Amortization Net Acquired Customer Base 5 to 15 $ 737,000 $ 551,000 $ 186,000 Know How 15 512,000 316,000 196,000 Trade Names Indefinite 281,000 - 281,000 Patents 20 333,000 9,000 324,000 Biomedical Technologies 5 260,000 260,000 - $ 2,123,000 $ 1,136,000 $ 987,000
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]	Estimated amortization expense for each of the next five fiscal years and thereafter is as follows: 2018 (3 months) 2019 2020 2021 2022 Thereafter Total Acquired Customer Base $ 20,000 $ 80,000 $ 34,000 $ - $ - $ - $ 134,000 Know How 9,000 34,000 34,000 34,000 34,000 26,000 171,000 Patents 3,000 11,000 11,000 11,000 11,000 162,000 209,000 $ 32,000 $ 125,000 $ 79,000 $ 45,000 $ 45,000 $ 188,000 $ 514,000

Earnings (Loss) Per Common Sh21

Earnings (Loss) Per Common Share (Tables)	9 Months Ended
	Jun. 30, 2018
Earnings Per Share [Abstract]
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]	The computation of the weighted shares outstanding for the three months ended June 30, 2018 and 2017 is as follows: June 30, 2018 June 30, 2017 Weighted average shares outstanding Basic 17,203,965 16,945,744 Effect of dilutive securities Stock Options - - Restricted Stock 17,234 - Dilutive Average Shares Outstanding 17,221,199 16,945,744 The computation of the weighted shares outstanding for the nine months ended June 30, 2018 and 2017 is as follows: June 30, 2018 June 30, 2017 Weighted average shares outstanding Basic 17,127,834 16,879,864 Effect of dilutive securities Stock Options - - Restricted Stock 19,394 - Dilutive Average Shares Outstanding 17,147,228 16,879,864

Stock Based Compensation (Table

Stock Based Compensation (Tables)	9 Months Ended
	Jun. 30, 2018
Schedule Of Stock Compensation Expense [Table Text Block]	Stock compensation expense for the three and nine months ended June 30, 2018 and 2017 is as follows: Three Months Ended Three Months Ended June 30, 2018 June 30, 2017 Stock Grants $ 78,000 $ 60,000 Restricted Stock Grants 14,000 13,000 Option Grants - 12,000 Employee Stock Purchase Plan 1,000 1,000 Subsidiary Option Grants 27,000 30,000 Total $ 120,000 $ 116,000 Nine Months Ended Nine Months Ended June 30, 2018 June 30, 2017 Stock Grants $ 209,000 $ 183,000 Restricted Stock Grants 40,000 39,000 Option Grants 17,000 37,000 Employee Stock Purchase Plan 2,000 2,000 Subsidiary Option Grants 83,000 82,000 Total $ 351,000 $ 343,000
Schedule of Nonvested Restricted Stock Units Activity [Table Text Block]	A summary of restricted stock activity for the nine months ended June 30, 2018 is presented below: Restricted Stock Activity for the Nine Months ended ‎ June 30, 2018 Shares Weighted-Average ‎ Grant-Date Fair Value Nonvested at September 30, 2017 70,000 $ 1.73 Granted 20,000 1.37 Vested (30,000 ) 1.73 Cancelled - - Nonvested and expected to vest at June 30, 2018 60,000 $ 1.61
Stock Option Grants [Member]
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award [Table Text Block]	During the nine months ended June 30, 2018, no Dynasil stock options were granted. A summary of stock option activity for the nine months ended June 30, 2018 is presented below: Options Outstanding Weighted Average ‎ Exercise Price per ‎ Share Weighted Average Remain Contractual Term (in Years) Balance at September 30, 2017 196,769 $ 1.98 1.64 Outstanding and exercisable at September 30, 2017 196,769 $ 1.98 1.64 Granted - - Exercised - - Cancelled (36,232 ) 1.82 Balance at June 30, 2018 160,537 $ 2.01 1.18 Outstanding and exercisable at June 30, 2018 160,537 $ 2.01 1.18
Subsidiary Option Grants [Member]
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award [Table Text Block]	During the three months ended June 30, 2018, no Xcede stock options were granted. A summary of Xcede stock option activity for the nine months ended June 30, 2018 is presented below: Options Outstanding Weighted Average Exercise Price per Share Weighted Average Remain Contractual Term (in Years) Balance at September 30, 2016 123,147 $ 2.30 1.69 Outstanding and exercisable at September 30, 2016 123,147 $ 2.30 1.69 Granted 95,602 1.80 2.59 Exercised - - Cancelled (21,980 ) 3.03 Balance at June 30, 2017 196,769 $ 1.98 1.89 Outstanding and exercisable at June 30, 2017 196,769 $ 1.98 1.89

Segment, Customer and Geograp23

Segment, Customer and Geographical Reporting (Tables)	9 Months Ended
	Jun. 30, 2018
Segment Reporting [Abstract]
Schedule of Segment Reporting Information, by Segment [Table Text Block]	The Company’s segment information for the three months ended June 30, 2018 and 2017 is summarized below: Results of Operations for the Three Months Ended June 30, 2018 Optics Contract ‎ Research Biomedical Total Revenue $ 6,159,000 $ 4,383,000 $ - $ 10,542,000 Gross profit 2,299,000 1,876,000 - 4,175,000 GM % 37 % 43 % - 40 % Operating expenses 1,721,000 1,760,000 84,000 3,565,000 Operating income (loss) 578,000 116,000 (84,000 ) 610,000 Depreciation and amortization 261,000 53,000 3,000 317,000 Capital expenditures 707,000 76,000 20,000 803,000 Intangibles, net 408,000 171,000 380,000 959,000 Goodwill 968,000 4,939,000 - 5,907,000 Total assets $ 21,117,000 $ 8,018,000 $ 507,000 $ 29,642,000 Results of Operations for the Three Months Ended June 30, 2017 Optics Contract ‎ Research Biomedical Total Revenue $ 4,837,000 $ 3,999,000 $ - $ 8,836,000 Gross profit 1,655,000 1,709,000 - 3,364,000 GM % 34 % 43 % - 38 % Operating expenses 1,619,000 1,640,000 377,000 3,636,000 Operating income (loss) 36,000 69,000 (377,000 ) (272,000 ) Depreciation and amortization 248,000 52,000 1,000 301,000 Capital expenditures 179,000 54,000 26,000 259,000 Intangibles, net 468,000 205,000 394,000 1,067,000 Goodwill 955,000 4,939,000 - 5,894,000 Total assets $ 19,488,000 $ 8,004,000 $ 690,000 $ 28,182,000 The Company’s segment information for the nine months ended June 30, 2018 and 2017 is summarized below: Results of Operations for the Nine Months Ended June 30, 2018 Optics Contract ‎ Research Biomedical Total Revenue $ 17,011,000 $ 12,974,000 $ - $ 29,985,000 Gross profit 6,038,000 5,621,000 - 11,659,000 GM % 35 % 43 % - 39 % Operating expenses 5,154,000 5,297,000 724,000 11,175,000 Operating income (loss) 884,000 324,000 (724,000 ) 484,000 Depreciation and amortization 738,000 179,000 10,000 927,000 Capital expenditures 1,635,000 153,000 65,000 1,853,000 Intangibles, net 408,000 171,000 380,000 959,000 Goodwill 968,000 4,939,000 - 5,907,000 Total assets $ 21,117,000 $ 8,018,000 $ 507,000 $ 29,642,000 Results of Operations for the Nine Months Ended June 30, 2017 Optics Contract ‎ Research Biomedical Total Revenue $ 14,524,000 $ 13,541,000 $ - $ 28,065,000 Gross profit 5,144,000 5,535,000 - 10,679,000 GM % 35 % 41 % - 38 % Operating expenses 4,544,000 5,182,000 1,150,000 10,876,000 Operating income (loss) 600,000 353,000 (1,150,000 ) (197,000 ) Depreciation and amortization 719,000 200,000 7,000 926,000 Capital expenditures 373,000 88,000 72,000 533,000 Intangibles, net 468,000 205,000 394,000 1,067,000 Goodwill 955,000 4,939,000 - 5,894,000 Total assets $ 19,488,000 $ 8,004,000 $ 690,000 $ 28,182,000
Schedule Of Segment Revenue By Geographical Location [Table Text Block]	Revenue by geographic location in total and as a percentage of total revenue, for the three months ended June 30, 2018 and 2017 are as follows: Three Months Ended Three Months Ended June 30, 2018 June 30, 2017 Geographic Location Revenue % of Total Revenue % of Total United States $ 7,512,000 71 % $ 6,928,000 78 % Europe 2,029,000 19 % 962,000 11 % Other 1,001,000 10 % 946,000 11 % $ 10,542,000 100 % $ 8,836,000 100 % Revenue by geographic location in total and as a percentage of total revenue, for the nine months ended June 30, 2018 and 2017 are as follows: Nine Months Ended Nine Months Ended June 30, 2018 June 30, 2017 Geographic Location Revenue % of Total Revenue % of Total United States $ 22,993,000 77 % $ 22,051,000 78 % Europe 4,662,000 15 % 3,262,000 12 % Other 2,330,000 8 % 2,752,000 10 % $ 29,985,000 100 % $ 28,065,000 100 %

Basis of Presentation (Details

Basis of Presentation (Details Textual) - Xcede Technologies inc [Member]	Jun. 30, 2018	Nov. 18, 2016
Noncontrolling Interest, Ownership Percentage by Parent	63.00%	59.00%
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners	37.00%

Recent Accounting Pronounceme25

Recent Accounting Pronouncements (Details Textual) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Dec. 31, 2017	Sep. 30, 2018
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount	$ 0.5
Scenario, Plan [Member]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent		21.00%

Xcede Technologies, Inc. Join26

Xcede Technologies, Inc. Joint Venture (Details Textual) - USD ($)	1 Months Ended		3 Months Ended		9 Months Ended
	Nov. 30, 2016	Nov. 18, 2016	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Debt Conversion, Original Debt, Amount		$ 5,500,000
Gain (Loss) on Extinguishment of Debt		$ 1,900,000
Noncontrolling Interest [Member]
Debt Conversion, Original Debt, Amount	$ 3,100,000
Debt Conversion, Converted Instrument, Shares Issued	3,055,551
Gain (Loss) on Extinguishment of Debt	$ 300,000
Xcede Technologies inc [Member]
Debt Instrument, Interest Rate, Stated Percentage	5.00%
Committed Investment In Cash	$ 1,200,000
Debt Conversion, Converted Instrument, Shares Issued	5,394,120
Capital Stock Financing Discount Percentage	20.00%
Noncontrolling Interest, Description					Noncontrolling interest represents the value of the Series A Preferred and common stock not owned by DBM plus 17% of cumulative losses of Xcede based on the 17% common stock ownership held by noncontrolling interests.
Equity Method Investment, Ownership Percentage			63.00%		63.00%
Dynasil Biomedical [Member]
Debt Conversion, Original Debt, Amount	$ 2,400,000
Debt Conversion, Converted Instrument, Shares Issued	2,338,569
Gain (Loss) on Extinguishment of Debt	$ 1,600,000
External Funding [Member] | Convertible Debt [Member]
Debt Conversion, Original Debt, Amount	$ 5,200,000
Secured Promissory Note [Member] | Xcede Technologies inc [Member]
Debt Instrument, Interest Rate, Stated Percentage	2.00%
Expense Recognized In Long Term Contract			$ 8,000	$ 33,000	$ 209,000	$ 238,000
Imputed Interest Rate					5.40%
Secured Debt, Available Amount	$ 1,500,000
Secured Debt, Outstanding Amount	$ 500,000
Series B Preferred Stock [Member]
Preferred Stock, Liquidation Preference Per Share			$ 1.27		$ 1.27
Preferred Stock, Liquidation Preference, Value			$ 1,500,000		$ 1,500,000
Series A Preferred Stock [Member]
Debt Conversion, Converted Instrument, Amount					$ 3,600,000
Preferred Stock, Liquidation Preference Per Share			$ 1.016		$ 1.016
Preferred Stock, Liquidation Preference, Value			$ 5,500,000		$ 5,500,000
Series A Preferred Stock [Member] | Noncontrolling Shareholders [Member]
Preferred Stock, Liquidation Preference, Value			3,100,000		3,100,000
Series A Preferred Stock [Member] | Dynasil Biomedical [Member]
Preferred Stock, Liquidation Preference, Value			$ 2,400,000		$ 2,400,000

Inventories (Details)

Inventories (Details) - USD ($)	Jun. 30, 2018	Sep. 30, 2017
Inventory Current [Line Items]
Raw Materials	$ 2,362,000	$ 2,540,000
Work-in-Process	1,066,000	798,000
Finished Goods	1,029,000	988,000
Inventory, Net, Total	$ 4,457,000	$ 4,326,000

Intangible Assets (Details)

Intangible Assets (Details) - USD ($)	9 Months Ended	12 Months Ended
	Jun. 30, 2018	Sep. 30, 2017	Jun. 30, 2017
Finite-Lived Intangible Assets [Line Items]
Gross Amount	$ 2,165,000	$ 2,123,000
Accumulated Amortization	1,206,000	1,136,000
Net	959,000	987,000	$ 1,067,000
Acquired Customer Base [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Amount	722,000	737,000
Accumulated Amortization	588,000	551,000
Net	$ 134,000	$ 186,000
Acquired Customer Base [Member] | Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Useful Life (years)	5 years	5 years
Acquired Customer Base [Member] | Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Useful Life (years)	15 years	15 years
Know How [Member]
Finite-Lived Intangible Assets [Line Items]
Useful Life (years)	15 years	15 years
Gross Amount	$ 512,000	$ 512,000
Accumulated Amortization	341,000	316,000
Net	171,000	196,000
Trade Name [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Amount	274,000	281,000
Accumulated Amortization	0	0
Net	$ 274,000	$ 281,000
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Useful Life (years)	20 years	20 years
Gross Amount	$ 397,000	$ 333,000
Accumulated Amortization	17,000	9,000
Net	$ 380,000	$ 324,000
Biomedical Technologies [Member]
Finite-Lived Intangible Assets [Line Items]
Useful Life (years)	5 years	5 years
Gross Amount	$ 260,000	$ 260,000
Accumulated Amortization	260,000	260,000
Net	$ 0	$ 0

Intangible Assets (Details 1)

Intangible Assets (Details 1)	Jun. 30, 2018USD ($)
Finite-Lived Intangible Assets [Line Items]
2018 (3 months)	$ 32,000
2,019	125,000
2,020	79,000
2,021	45,000
2,022	45,000
Thereafter	188,000
Total	514,000
Acquired Customer Base [Member]
Finite-Lived Intangible Assets [Line Items]
2018 (3 months)	20,000
2,019	80,000
2,020	34,000
2,021	0
2,022	0
Thereafter	0
Total	134,000
Know How [Member]
Finite-Lived Intangible Assets [Line Items]
2018 (3 months)	9,000
2,019	34,000
2,020	34,000
2,021	34,000
2,022	34,000
Thereafter	26,000
Total	171,000
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
2018 (3 months)	3,000
2,019	11,000
2,020	11,000
2,021	11,000
2,022	11,000
Thereafter	162,000
Total	$ 209,000

Intangible Assets (Details Text

Intangible Assets (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Finite-Lived Intangible Assets [Line Items]
Amortization of Intangible Assets	$ 28,000	$ 24,000	$ 84,000	$ 75,000
Xcede Technologies inc [Member] | Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Pre-Grant Intangible Assets	$ 171,000		$ 171,000

Debt (Details Textual)

Debt (Details Textual) - USD ($)	1 Months Ended	9 Months Ended
	Jul. 31, 2018	Jun. 30, 2018	Aug. 09, 2018	Jan. 03, 2018	Sep. 30, 2017
Debt [Line Items]
Line of Credit, Current		$ 281,000			$ 0
Middlesex Savings Bank [Member]
Debt [Line Items]
Line of Credit Facility, Covenant Compliance		As part of the renewal process and due to the additional credit being extended to the Company, the Middlesex loan and security agreement was amended on August 9, 2018 to decrease the maximum debt leverage ratio covenant to 2.5x from 3.0x.
Line of Credit, Current		$ 281,000
Subordinate [Member]
Debt [Line Items]
Debt Instrument, Interest Rate, Stated Percentage				7.00%	6.00%
Subsequent Event [Member] | Middlesex Savings Bank [Member]
Debt [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	5.66%
Line of Credit, Current	$ 750,000
Debt Instrument, Term	5 years
Line of Credit Facility, Maximum Borrowing Capacity			$ 750,000

Earnings (Loss) Per Common Sh32

Earnings (Loss) Per Common Share (Details) - shares	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Weighted average shares outstanding
Basic	17,203,965	16,945,744	17,127,834	16,879,864
Effect of dilutive securities
Dilutive Average Shares Outstanding	17,221,199	16,945,744	17,147,228	16,879,864
Employee Stock Option [Member]
Effect of dilutive securities
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements	0	0	0	0
Restricted Stock [Member]
Effect of dilutive securities
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements	17,234	0	19,394	0

Earnings (Loss) Per Common Sh33

Earnings (Loss) Per Common Share (Details Textual) - shares	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Earnings Loss Per Common Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	160,537	196,769	160,537	196,769
Restricted Stock [Member]
Earnings Loss Per Common Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount		70,000		70,000

Stock Based Compensation (Detai

Stock Based Compensation (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Stock Based Compensation [Line Items]
Stock Compensation Expense	$ 120,000	$ 116,000	$ 351,000	$ 343,000
Stock Grants [Member]
Stock Based Compensation [Line Items]
Stock Compensation Expense	78,000	60,000	209,000	183,000
Restricted Stock Grants [Member]
Stock Based Compensation [Line Items]
Stock Compensation Expense	14,000	13,000	40,000	39,000
Option Grants [Member]
Stock Based Compensation [Line Items]
Stock Compensation Expense	0	12,000	17,000	37,000
Employee Stock Purchase Plan [Member]
Stock Based Compensation [Line Items]
Stock Compensation Expense	1,000	1,000	2,000	2,000
Subsidiary Option Grants [Member]
Stock Based Compensation [Line Items]
Stock Compensation Expense	$ 27,000	$ 30,000	$ 83,000	$ 82,000

Stock Based Compensation (Det35

Stock Based Compensation (Details 1) - Restricted Stock [Member]	9 Months Ended
	Jun. 30, 2018$ / sharesshares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares Nonvested, Beginning Balance | shares	70,000
Shares, Granted | shares	20,000
Shares, Vested | shares	(30,000)
Shares, Cancelled | shares	0
Shares, Nonvested and expected to vest, Ending Balance | shares	60,000
Weighted-Average Grant-Date Fair Value, Nonvested, Beginning Balance | $ / shares	$ 1.73
Weighted-Average Grant-Date Fair Value, Granted | $ / shares	1.37
Weighted-Average Grant-Date Fair Value, Vested | $ / shares	1.73
Weighted-Average Grant-Date Fair Value, Cancelled | $ / shares	0
Weighted-Average Grant-Date Fair Value, Nonvested, Ending Balance | $ / shares	$ 1.61

Stock Based Compensation (Det36

Stock Based Compensation (Details 2) - $ / shares	9 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Sep. 30, 2017	Sep. 30, 2016
Stock Option Grants [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Balance, Options Outstanding	196,769
Outstanding and exercisable, Options Outstanding	196,769
Granted, Options Outstanding	0
Exercised, Options Outstanding	0
Cancelled, Options Outstanding	(36,232)
Balance, Options Outstanding	160,537		196,769
Outstanding and exercisable, Options Outstanding	160,537		196,769
Beginning Balance, Weighted Average Exercise Price per Share	$ 1.98
Outstanding and exercisable, Weighted Average Exercise Price per Share	1.98
Granted, Weighted Average Exercise Price per Share	0
Exercised, Weighted Average Exercise Price per Share	0
Cancelled, Weighted Average Exercise Price per Share	1.82
Ending Balance, Weighted Average Exercise Price per Share	2.01		$ 1.98
Outstanding and exercisable, Weighted Average Exercise Price per Share	$ 2.01		$ 1.98
Balance, Weighted Average Remain Contractual Term (in Years)	1 year 2 months 5 days		1 year 7 months 20 days
Outstanding and exercisable, Weighted Average Remain Contractual Term (in Years)	1 year 2 months 5 days		1 year 7 months 20 days
Subsidiary Option Grants [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Balance, Options Outstanding		123,147	123,147
Outstanding and exercisable, Options Outstanding		123,147	123,147
Granted, Options Outstanding		95,602
Exercised, Options Outstanding		0
Cancelled, Options Outstanding		(21,980)
Balance, Options Outstanding		196,769		123,147
Outstanding and exercisable, Options Outstanding		196,769		123,147
Beginning Balance, Weighted Average Exercise Price per Share		$ 2.30	$ 2.30
Outstanding and exercisable, Weighted Average Exercise Price per Share		2.30	$ 2.30
Granted, Weighted Average Exercise Price per Share		1.80
Exercised, Weighted Average Exercise Price per Share		0
Cancelled, Weighted Average Exercise Price per Share		3.03
Ending Balance, Weighted Average Exercise Price per Share		1.98		$ 2.30
Outstanding and exercisable, Weighted Average Exercise Price per Share		$ 1.98		$ 2.30
Balance, Weighted Average Remain Contractual Term (in Years)		1 year 10 months 20 days		1 year 8 months 8 days
Granted, Weighted Average Remaining Contractual Term (in Year)		2 years 7 months 2 days
Outstanding and exercisable, Weighted Average Remain Contractual Term (in Years)		1 year 10 months 20 days		1 year 8 months 8 days

Stock Based Compensation (Det37

Stock Based Compensation (Details Textual)	Jun. 30, 2018USD ($)
Xcede joint venture [Member] | Subsidiary Option Grants [Member]
Class of Stock [Line Items]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options	$ 70,000
Employee Stock Plan [Member]
Class of Stock [Line Items]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options	$ 71,000

Segment, Customer and Geograp38

Segment, Customer and Geographical Reporting (Details) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Sep. 30, 2017
Segment Reporting Information [Line Items]
Revenue	$ 10,542,000	$ 8,836,000	$ 29,985,000	$ 28,065,000
Gross profit	$ 4,175,000	$ 3,364,000	$ 11,659,000	$ 10,679,000
GM %	40.00%	38.00%	39.00%	38.00%
Operating expenses	$ 3,565,000	$ 3,636,000	$ 11,175,000	$ 10,876,000
Operating income (loss)	610,000	(272,000)	484,000	(197,000)
Depreciation and amortization	317,000	301,000	927,000	926,000
Capital expenditures	803,000	259,000	1,853,000	533,000
Intangibles, net	959,000	1,067,000	959,000	1,067,000	$ 987,000
Goodwill	5,907,000	5,894,000	5,907,000	5,894,000	5,940,000
Total assets	29,642,000	28,182,000	29,642,000	28,182,000	$ 29,097,000
Optics [Member]
Segment Reporting Information [Line Items]
Revenue	6,159,000	4,837,000	17,011,000	14,524,000
Gross profit	$ 2,299,000	$ 1,655,000	$ 6,038,000	$ 5,144,000
GM %	37.00%	34.00%	35.00%	35.00%
Operating expenses	$ 1,721,000	$ 1,619,000	$ 5,154,000	$ 4,544,000
Operating income (loss)	578,000	36,000	884,000	600,000
Depreciation and amortization	261,000	248,000	738,000	719,000
Capital expenditures	707,000	179,000	1,635,000	373,000
Intangibles, net	408,000	468,000	408,000	468,000
Goodwill	968,000	955,000	968,000	955,000
Total assets	21,117,000	19,488,000	21,117,000	19,488,000
Contract Research [Member]
Segment Reporting Information [Line Items]
Revenue	4,383,000	3,999,000	12,974,000	13,541,000
Gross profit	$ 1,876,000	$ 1,709,000	$ 5,621,000	$ 5,535,000
GM %	43.00%	43.00%	43.00%	41.00%
Operating expenses	$ 1,760,000	$ 1,640,000	$ 5,297,000	$ 5,182,000
Operating income (loss)	116,000	69,000	324,000	353,000
Depreciation and amortization	53,000	52,000	179,000	200,000
Capital expenditures	76,000	54,000	153,000	88,000
Intangibles, net	171,000	205,000	171,000	205,000
Goodwill	4,939,000	4,939,000	4,939,000	4,939,000
Total assets	8,018,000	8,004,000	8,018,000	8,004,000
Biomedical [Member]
Segment Reporting Information [Line Items]
Revenue	0	0	0	0
Gross profit	$ 0	$ 0	$ 0	$ 0
GM %	0.00%	0.00%	0.00%	0.00%
Operating expenses	$ 84,000	$ 377,000	$ 724,000	$ 1,150,000
Operating income (loss)	(84,000)	(377,000)	(724,000)	(1,150,000)
Depreciation and amortization	3,000	1,000	10,000	7,000
Capital expenditures	20,000	26,000	65,000	72,000
Intangibles, net	380,000	394,000	380,000	394,000
Goodwill	0	0	0	0
Total assets	$ 507,000	$ 690,000	$ 507,000	$ 690,000

Segment, Customer and Geograp39

Segment, Customer and Geographical Reporting (Details 1) - USD ($)	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 10,542,000	$ 8,836,000	$ 29,985,000	$ 28,065,000
% of Total	100.00%	100.00%	100.00%	100.00%
United States [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 7,512,000	$ 6,928,000	$ 22,993,000	$ 22,051,000
% of Total	71.00%	78.00%	77.00%	78.00%
Europe [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 2,029,000	$ 962,000	$ 4,662,000	$ 3,262,000
% of Total	19.00%	11.00%	15.00%	12.00%
Other [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue	$ 1,001,000	$ 946,000	$ 2,330,000	$ 2,752,000
% of Total	10.00%	11.00%	8.00%	10.00%

Segment, Customer and Geograp40

Segment, Customer and Geographical Reporting (Details Textual)	3 Months Ended		9 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Optics [Member] | Sales Revenue, Segment [Member]
Segment Reporting [Line Items]
Concentration Risk, Percentage	10.00%	10.00%	10.00%	10.00%
Contract Research segment [Member] | Customer Three [Member] | Sales Revenue, Segment [Member]
Segment Reporting [Line Items]
Concentration Risk, Percentage	10.00%	10.00%	10.00%	10.00%
Contract Research segment [Member] | Customer Four [Member] | Sales Revenue, Segment [Member]
Segment Reporting [Line Items]
Concentration Risk, Percentage	10.00%	10.00%	10.00%	10.00%
Contract research revenue [Member]
Segment Reporting [Line Items]
Concentration Risk, Percentage	72.00%	52.00%	59.00%	58.00%

Income Taxes (Details Textual)

Income Taxes (Details Textual) - USD ($)	3 Months Ended				9 Months Ended		12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2018	Jun. 30, 2017	Sep. 30, 2018	Nov. 18, 2016
Income Tax [Line Items]
Income Tax Expense (Benefit)	$ 190,000		$ (111,000)	$ 2,700,000	$ (404,000)	$ (2,769,000)
Provision for Income Tax Expense		$ 500,000
Additional Income Tax Expense		$ 200,000
Effective Income Tax Rate Reconciliation, Percent	34.00%		34.00%		(115.00%)	767.00%
Research Tax Credit Carryforward [Member]
Income Tax [Line Items]
Effective Income Tax Rate Reconciliation, Tax Credit, Amount					$ 2,100,000
Effective Income Tax Rate Reconciliation at Federal Statutory Income Tax Rate, Amount					1,300,000
Deferred Tax Assets, Tax Credit Carryforwards, Research	$ 800,000				800,000
Unrecognized Tax Benefits that Would Impact Effective Tax Rate	$ 800,000				$ 800,000
Scenario, Plan [Member]
Income Tax [Line Items]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent							21.00%
Excluding The Impact Of Valuation Allowance [Member]
Income Tax [Line Items]
Effective Income Tax Rate Reconciliation, Percent					69.00%	(46.00%)
Excluding The Impact Of The 2017 Tax Act [Member]
Income Tax [Line Items]
Effective Income Tax Rate Reconciliation, Percent					(308.00%)
Xcede Technologies inc [Member]
Income Tax [Line Items]
Noncontrolling Interest, Ownership Percentage by Parent	63.00%				63.00%			59.00%

Subsequent Events (Details Text

Subsequent Events (Details Textual) - USD ($)	1 Months Ended	9 Months Ended
	Jul. 31, 2018	Jun. 30, 2018	Aug. 09, 2018	Jul. 20, 2018
Subsequent Event [Line Items]
Line of Credit Facility, Maximum Month-end Outstanding Amount		$ 281,000
Middlesex Savings Bank [Member]
Subsequent Event [Line Items]
Line of Credit Facility, Covenant Compliance		As part of the renewal process and due to the additional credit being extended to the Company, the Middlesex loan and security agreement was amended on August 9, 2018 to decrease the maximum debt leverage ratio covenant to 2.5x from 3.0x.
Subsequent Event [Member]
Subsequent Event [Line Items]
Line of Credit Facility, Maximum Amount Outstanding During Period	$ 750,000
Subsequent Event [Member] | Middlesex Savings Bank [Member]
Subsequent Event [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	5.66%
Line of Credit Facility, Maximum Borrowing Capacity			$ 750,000
Debt Instrument, Term	5 years
Xcede Technologies inc [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Notes Payable				$ 500,000