Stock-based Compensation and Equity Grants (Tables)

9 Months Ended

Jun. 30, 2021

Share-based Payment Arrangement [Abstract]

Schedule of Stock-based Compensation Expense

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

		Three Months Ended				Nine Months Ended
	Ref	June 30,				June 30,
(in thousands)		2021		2020		2021		2020
DLH employees	(a)	$	356	$	95	$	968	$	306
Non-employee directors	(b)	117		87		349		260
Total stock option expense		$	473	$	182	$	1,317	$	566

Ref (a): Included in this amount are equity grants of restricted stock units to Named Executive Officers ("NEO"), which were issued in accordance with the DLH long-term incentive compensation policy in this fiscal year, and stock option grants to NEO and non-NEO company employees. The restricted stock units totaled 147,431 restricted stock units issued and outstanding at June 30, 2021.

Ref (b): Equity grants of restricted stock units were made in accordance with DLH compensation policy for non-employee directors and totaled 63,177 restricted stock units issued and outstanding at June 30, 2021.

Unrecognized stock-based compensation expense (in thousands)

		June 30,
	Ref	2021
Unrecognized expense for DLH employees	(a)	$	3,565
Unrecognized expense for non-employee directors		117
Total unrecognized expense		$	3,682

Ref (a): The remaining compensation expense 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 Monte Carlo 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. On a weighted average basis, this expense is expected to be recognized within the next 4.39 years.

Schedule of Stock Option Activity

The aggregate intrinsic value in the table below represents the total pretax intrinsic value (i.e., the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, times the number of shares) that would have been received by the option holders had all option holders exercised their in the money options on those dates. 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
	Shares	Price		Term	Value
Options outstanding, September 30, 2020	2,129	$	6.14	7.4	$	6,593
Exercised	(63)	$	3.62	—	—
Granted	245	$	10.04	—	—
Cancelled	(35)	$	7.36	—	—
Options outstanding, June 30, 2021	2,276	$	—	7.4	$	15,385

Schedule of Option Shares Outstanding, Vested and Expected to Vest

Stock options shares outstanding, vested, and unvested for the periods ended

		(in thousands)
		June 30,	September 30,
	Ref	2021	2020
Vested and exercisable	(a)	1,674	1,213
Unvested	(b)	602	916
Options outstanding		2,276	2,129

Ref (a): Weighted average exercise price of vested and exercisable shares was $3.52 and $2.25 at June 30, 2021 and September 30, 2020, respectively. Aggregate intrinsic value was approximately $13.7 and $6.1 million at June 30, 2021 and September 30, 2020, respectively. Weighted average contractual term remaining was 5.6 and 4.6 years at June 30, 2021 and September 30, 2020, respectively.

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