Stock-based Compensation, Equity Grants, and Warrants (Tables)

9 Months Ended

Jun. 30, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-based compensation expense, shown in the table below, is recorded in general and administrative expenses included in our statement of operations:



		(in thousands)				(in thousands)
		Three Months Ended				Nine Months Ended
	Ref	June 30,				June 30,
		2014		2013		2014		2013
DLH employees		$	78	$	40	$	263	$	105
Non-employee directors	(a)	—		—		109		54
Warrants to consultants	(b)	—		3		—		9
Total compensation expense		$	78	$	43	$	372	$	168

Ref (a): Equity grants of restricted stock to non-executive directors, in accordance with DLH compensation policy for non-executive directors. The shares vested immediately and stock expense was recognized accordingly.

Ref (b): Warrants are issued from time-to-time to non-employee third parties in order to induce them to enter into certain transactions with the Company. The Company recognizes non-cash expense related to such activity over the estimated period of performance.

Unrecognized stock-based compensation expense



		(in thousands)
		Period Ended
		June 30,
	Ref	2014		2013
Unrecognized expense for DLH employees	(a)	$	196	$	131
Unrecognized expense for non-employee directors	(b)	150		150
Total unrecognized expense		$	346	$	281

Ref (a): Compensation expense for the portion of equity awards for which the requisite service has not been rendered is recognized as the requisite service is rendered. The compensation expense for that portion of awards shall be based on the grant-date fair value of those awards as calculated for recognition purposes under applicable guidance.

Ref (b): Unrecognized stock expense related to prior years equity grants of restricted stock to non-executive directors, based on performance criteria, in accordance with DLH compensation policy for non-executive directors. The shares will vest upon future satisfaction of specified performance.

Stock Option Activity

This amount will change based on the fair market value of the Company’s stock.

(in years)

Weighted

Average

(in thousands)

Average

Remaining

Aggregate

Number of

Exercise

Contractual

Intrinsic

Ref

Price

Term

Value

Options outstanding, September 30, 2013

1,613

$1.15

7.9

388

Granted

(a)

605

$1.35

Cancelled

(63

)

$1.35

Options outstanding, June 30, 2014

2,155

$1.20

7.9

1,482

Ref (a): Shares granted in conjunction with stock option awards and employment agreement extensions during first quarter of fiscal 2014.

Stock Options Shares Anti-dilutive for the Period



		(in thousands)				(in thousands)
		Number of Shares				Number of Shares
		Three Months Ended				Nine Months Ended
		June 30,				June 30,
	Ref	2014		2013		2014		2013
Options outstanding		2,155		1,613		2,155		1,613
Warrants	(a)	20		74		20		74
Less effect of dilutive securities		(75	)	(18	)	(94	)	—
Stock option shares anti-dilutive		2,100		1,669		2,081		1,687

Ref (a): June 2013 periods include Wynnefield warrants of 53,846 shares that were exercised in October 2013. See Note 12 for further information.

Stock Option Shares Outstanding, Vested and Expected to Vest



		(in thousands)
		Number of Shares
		June 30,
	Ref	2014	2013
Vested and exercisable		463	413
Unvested	(a)	1,692	1,200
Options outstanding		2,155	1,613

Ref (a): Certain awards vest upon satisfaction of certain performance criteria. The Company will not recognize expense on the performance based shares until it is probable that these conditions will be achieved. Such charges could be material in future periods.