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

9 Months Ended

Jun. 30, 2018

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

Stock-based Compensation Expense

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,
		2018		2017		2018		2017
DLH employees		$	68	$	55	$	199	$	117
Non-employee directors	(a)	173		8		970		496
Total stock option expense		$	241	$	63	$	1,169	$	613

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

Unrecognized stock-based compensation expense

		(in thousands)
		June 30,
	Ref	2018		2017
Unrecognized expense for DLH employees	(a)	$	980	$	398
Unrecognized expense for non-employee directors	(b)	$	—	$	—
Total unrecognized expense		$	980	$	398

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. The remaining term for the weighted average expense of these shares will be 53 months.

Ref (b): Unrecognized stock expense related to prior year's equity grants of restricted stock to non-employee directors, based on performance criteria, in accordance with DLH compensation policy for non-employee directors.

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
	Ref	Shares		Price		Term	Value
Options outstanding September 30, 2017		1,994		$	3.83	6.4	$	8,489
Granted		217		$	6.33
Exercised		(42	)	$	1.69
Options outstanding, June 30, 2018		2,169		$	4.38	5.9	$	6,514

Stock Options Fair Value Assumptions

Utilizing a volatility range of 50% along with assumptions of a 10 year term and the aforementioned 10-day stock price threshold results in an indicated range of value of the Options granted during the current fiscal year as follows using the Monte Carlo Method.

										Volatility
										50%
					Vesting				Expected
	Strike		Stock		Threshold		Risk-Free		Term	Calculated
Grant Date	Price		Price		Price		Rate		(Years)	Fair Value
11/29/2017	$	6.46	$	6.46	$	12.00	2.4	%	10	$	3.98
12/01/2017	$	6.28	$	6.28	$	8.00	2.4	%	10	$	3.87
12/01/2017	$	6.28	$	6.28	$	10.00	2.4	%	10	$	3.82
Notes:
Results based on 100,000 simulations

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
		June 30,	September 30,
	Ref	2018	2017
Vested and exercisable	(a)	1,335	1,327
Unvested		834	667
Options outstanding		2,169	1,994

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