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

12 Months Ended

Sep. 30, 2016

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)
		Year Ended
	Ref	September 30,
		2016		2015
DLH employees		$	90	$	302
Non-employee directors	(a)	376		177
Total stock option expense		$	466	$	479

Ref (a): Equity grants of restricted stock to non-employee directors, in accordance with DLH compensation policy for non-employee directors.

Unrecognized stock-based compensation expense



		(in thousands)
		Period Ended
		September 30,
	Ref	2016		2015
Unrecognized expense for DLH employees	(a)	$	18	$	44
Unrecognized expense for non-employee directors	(b)	24		96
Total unrecognized expense		$	42	$	140

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 has been based on the grant-date fair value of those awards as calculated for recognition purposes under applicable guidance. For options that vest based on the Company’s common stock achieving and maintaining defined market prices, the Company values the awards with a binomial model that utilizes various probability factors and other criterion in establishing fair value of the grant. The related compensation expense is recognized over the derived service period determined in the valuation. This expense is expected to be recognized within the next twelve months.

Ref (b): Unrecognized stock expense related to prior years equity grants of restricted stock to non-employee directors, based on performance criteria, in accordance with DLH compensation policy for non-employee directors. The shares will vest and expense will be recorded within the next twelve months.

Stock Option Activity

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



					(in years)
					Weighted
				Weighted	Average	(in thousands)
		(in thousands)		Average	Remaining	Aggregate
		Number of		Exercise	Contractual	Intrinsic
	Ref	Shares		Price	Term	Value
Options outstanding, September 30, 2014		2,380		$1.40	7.8	$	1,589
Canceled		(56	)	$1.40
Options outstanding, September 30, 2015		2,324		$1.40	6.8	$	3,649
Granted	(a)	25		$2.80
Exercised		(123	)	$1.40
Options outstanding, September 30, 2016		2,226		$1.43	5.8	$	7,581

Ref (a): Option grants to DLH employees were valued using a binomial model, under the following criteria:



Risk free interest rate	1.01	%
Contractual term	10 years
Dividend yield	—	%
Expected lives	10 years
Expected volatility	106	%
Fair value per option	$2.55

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

Ref (a): Option grants to DLH employees were valued using a binomial model, under the following criteria:



Risk free interest rate	1.01	%
Contractual term	10 years
Dividend yield	—	%
Expected lives	10 years
Expected volatility	106	%
Fair value per option	$2.55

Stock Option Shares Outstanding, Vested and Expected to Vest

Stock options shares outstanding, vested and unvested for the period ended:



		(in thousands)
		Number of Shares
		September 30,
	Ref	2016	2015
Vested and exercisable	(a)	1,909	1,093
Unvested	(b)	317	1,231
Options outstanding		2,226	2,324

Ref (a): Weighted average exercise price of vested and exercisable shares was $1.48 and $1.40 at September 30, 2016 and 2015, respectively. Aggregate intrinsic value was $6.4 million and $1.6 million at September 30, 2016 and 2015, respectively. Weighted average contractual term was 6.0 years and 7.3 years at September 30, 2016 and 2015, respectively.

Ref (b): Certain awards vest upon satisfaction of certain performance criteria.