UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Act of 1934
Date of Report (Date of earliest event reported) September 30, 2008
--------------------------
Dynasil Corporation of America
- -----------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 22-1734088
- ------------------------------------ -----------
(State or other (IRS Employer
jurisdiction of incorporation) Identification No.)
385 Cooper Road, West Berlin, New Jersey, 08091
- -----------------------------------------------------------------------
(Address of principal executive offices)
(856)-767-4600
-------------------------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
- -----------------------------------------------------------------------
(Former name or former address, if changed since last report)
Item 1.01 Entry into a Material Definitive Agreement
On September 30, 2008, Dynasil Corporation of America, a Delaware
corporation ("Dynasil"), borrowed $2 million pursuant to a subordinated
term loan (the "Term Loan") made to Dynasil by RMD Instruments, LLC, a
Massachusetts limited liability company. The Term Loan provides for
monthly interest only payments at an 8% annual interest rate, with a
balloon repayment of principal after six months. Proceeds of the Term
Loan will be used to provide Dynasil with additional working capital to
support Dynasil's previously reported July 1, 2008 RMD Instruments
asset acquisition and Radiation Monitoring Devices, Inc. merger
transaction, as well as for Dynasil's general working capital purposes.
One use of the additional working capital is to support the growth of
government research grants at Radiation Monitoring Devices, Inc.
Including proceeds of the Term Loan, Dynasil's preliminary cash balance
at September 30, 2008 was approximately $3 million, with an additional
$723,000 available for borrowing at that time under an existing bank
loan facility.
As set forth above, the Term Loan bears interest at 8% per annum
and has a six month term. It requires only monthly payment of interest
over the six month period. After six months, the full balance of the
Term Loan is due, although it may be prepaid without penalty. The Term
Loan also is not collateralized or otherwise secured. Dynasil's
failure to timely make a required payment under the Term Loan is the
principal event of default entitling the lender to accelerate payment
of the Term Loan and exercise its other remedies, all of which Dynasil
believes are customary for loans of this type. RMD Instruments, LLC
may be deemed to be a related party to Dynsail since it was the entity
that sold specific assets and liabilities to Dynasil on July 1, 2008.
Also on that date, its members became significant Dynasil shareholders
and two of its members are now Dynasil employees. In connection with
the Term Loan, Dynasil and RMD Instruments, LLC executed and delivered
to Susquehanna Bank a customary form of a subordination agreement which
specifies that the Term Loan is subordinate in right of payment and
priority to Susquehanna Bank's loans to Dynasil. Reference is made to
the complete and final form of the Term Loan which is filed as an
Exhibit to this Report and which is incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth above under Item 1.01 is incorporated
herein by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers.
Effective October 1, 2008, Dynasil's outside Directors increased
the salary for Mr. Craig T. Dunham, CEO and President, from $150,000 to
$175,000 per year. The timing of the increase coincided with the
renewal of Mr. Dunham's employment agreement. No other changes were
made to Mr. Dunham's employment arrangements. The increase was based
largely in recognition of the fact that Dynasil's revenues and size
have approximately tripled as a result of recently events. Dynasil
believes that Mr. Dunham's new salary is approximately 90% of the CEO
median base pay for comparable companies as reported in a national
salary survey.
Item 8.01 Other Events
On October 6, 2008, Dynasil sent a letter to its stockholders
which is filed as an Exhibit to this Report and will be also issued as
a press release.
ITEM 9. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
10.1 Form of Subordinated Term Loan dated September 30, 2008 by
and among RMD Instruments, LLC and Dynasil.
99.1 Dynasil Corporation of America letter to stockholders dated
October 6, 2008.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
DYNASIL CORPORATION OF AMERICA
Date: October 6, 2008 By: /s/ Craig Dunham
----------------------------------
Craig Dunham
President and Chief Executive Officer
EXHIBIT INDEX
10.1 Form of Subordinated Term Loan dated September 30,
2008 by and among RMD Instruments, LLC and Dynasil.
99.1 Dynasil Corporation of America letter to shareholders
dated October 6, 2008.