DYSL Dynasil Corp of America

Item 8.01 Other Events

On May 1, 2019, the Board of Directors (the “Board”) of Dynasil Corporation of America, a Delaware corporation (the “Company”), upon the recommendation of the Special Committee of the Board consisting of independent directors, approved a transaction whereby the Company would effect a reverse/forward stock split of the Company’s shares of common stock, in conjunction with terminating the Company’s public company reporting obligations and delisting the Company’s common stock from the Nasdaq Capital Market, subject to obtaining the requisite approval of the Company’s stockholders at a Special Meeting of Stockholders to be held for that purpose, which is currently expected to occur in the summer of 2019.

Specifically, the Board recommended and approved a transaction whereby the Company would effect a 1-for-8,000 reverse stock split of the Company’s common stock (the “Reverse Stock Split”), followed immediately by a 8,000-for-1 forward stock split of the Company’s common stock (the “Forward Stock Split,” and together with the Reverse Stock Split, the “Transaction”). Stockholders owning fewer than 8,000 shares of common stock at the effective time of the Transaction would receive $1.15 in cash, without interest, for each share of common stock held by them at the effective time of the Transaction, and thereafter they would no longer be stockholders of the Company. Stockholders owning 8,000 or more shares at the effective time of the Transaction (“Continuing Stockholders”) would not be entitled to receive any cash for their fractional share interests resulting from the Transaction, if any. The Forward Stock Split, which would immediately follow the Reverse Stock Split, would reconvert whole shares and fractional share interests held by the Continuing Stockholders back into the same number of shares of the Company’s common stock held by such Continuing Stockholders immediately before the effective time of the Transaction. As a result of the Forward Stock Split, the total number of shares of the Company’s common stock held by a Continuing Stockholder would not change as a result of the Transaction. The Company estimates that approximately 1.4 million shares of the Company’s common stock (or less than 8% of the shares of common stock currently outstanding) would be cashed out in the Transaction and the aggregate cost to the Company of the Transaction would be approximately $1.6 million, plus transaction expenses, which are estimated to be approximately $650,000. The Company expects to fund such costs using cash-on-hand and borrowings available under its existing credit facilities.

The Transaction will be submitted to a vote of the Company’s stockholders at a Special Meeting of Stockholders to be called for that purpose. The Board has instructed the Company’s management to prepare and file a preliminary proxy statement with respect to the Transaction. Approval of the Transaction requires the affirmative vote of a majority of the shares cast (represented in person or by proxy) and entitled to vote at the Special Meeting of Stockholders. As of May 1, 2019, the Company’s directors and executive officers owned approximately 37% of the issued and outstanding shares of the Company’s common stock and are expected to vote “FOR” the transaction. The terms and contemplated timeline of the Transaction, including the manner of determining the fair value for fractional share interests to be cashed out in the Transaction, will be set forth in the preliminary proxy statement and a transaction statement on Schedule 13E-3 filed by the Company outlining the Transaction. The Transaction may be considered a “going private” transaction as defined in Rule 13e-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as it is part of a plan to terminate the registration of (or “deregister”) the Company’s common stock under Section 12(g) of the Exchange Act and suspend the Company’s duty to file periodic reports and other information with the SEC under Section 13(a) thereunder, and to delist the Company’s common stock from the Nasdaq Capital Market.

If consummated, the Reverse Stock Split and Forward Stock Split would apply directly only to record holders of the Company’s common stock. Persons who hold shares of the Company’s common stock in “street name” are encouraged to contact their bank, broker or other nominee for information on how the Transaction may affect any shares of the Company’s common stock held for their account.

The Board may abandon the Transaction at any time prior to the filing and effectiveness of the applicable amendments to the Company’s certificate of incorporation, even after stockholder approval, if the Board determines in its business judgment that the Transaction is no longer in the best interests of the Company or its stockholders.

On May 2, 2019, the Company issued a press release and letter to employees announcing the Transaction. The press release and letter are attached hereto as Exhibits 99.1 and 99.2, respectively, and are incorporated by reference herein.