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Stock-based Compensation, Equity Grants, and Warrants | 9 Months Ended
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Jun. 30, 2020
Share-based Payment Arrangement [Abstract] |
Stock-based Compensation, Equity Grants, and Warrants | Stock-based Compensation, Equity Grants, and Warrants Stock-based compensation expense Options issued under equity incentive plans are designated as either an incentive stock or a non-statutory stock option. No option is granted with a term of more than 10 years from the date of grant. Exercisability of option awards may depend on achievement of certain performance measures determined by the Compensation Committee of our Board. Shares issued upon option exercise are newly issued shares. As of June 30, 2020, there were 1.1 million shares available for grant. Stock-based compensation expense, shown in the table below, is recorded in general and administrative expenses included in our statements of operations:
|  |  | (in thousands) |  |  |  | (in thousands) |  |
|  |  | Three Months Ended |  |  |  | Nine Months Ended |  |
| Ref |  | June 30, |  |  |  | June 30, |  |
|  |  | 2020 |  | 2019 |  | 2020 |  | 2019
DLH employees |  |  | $ | 95 |  |  | $ | 67 |  |  | $ | 306 |  |  | $ | 196 |
Non-employee directors | (a) |  | 87 |  |  | 132 |  |  | 260 |  |  | 395 |
Total stock option expense |  |  | $ | 182 |  |  | $ | 199 |  |  | $ | 566 |  |  | $ | 591 |
Ref (a): Equity grants of restricted stock units, in accordance with DLH compensation policy for non-employee directors were made in the first quarter of fiscal 2020 and in total 77,500 restricted stock units were issued and outstanding. Unrecognized stock-based compensation expense
|  |  | (in thousands) |  |
|  |  | June 30, |  |
| Ref |  | 2020 |  |
Unrecognized expense for DLH employees | (a) |  | $ | 1,007 |  |  |
Unrecognized expense for non-employee directors |  |  | 87 |  |  |
Total unrecognized expense |  |  | $ | 1,094 |  |  |
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. On a weighted average basis, this expense is expected to be recognized within the next 3.82 years. Stock option activity for the nine months ended June 30, 2020 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, 2019 |  |  |  | 2,134 |  |  | $ | 4.36 |  |  | 5.9 |  | $ | 4,815 |
Granted |  |  | (a) | 250 |  |  | $ | 4.17 |  |  | — |  |  | — |
Exercised |  |  |  | (345) |  |  | $ | 1.05 |  |  | — |  |  | — |
Cancelled |  |  |  | (160) |  |  | $ | 1.29 |  |  | — |  |  | — |
Options outstanding, June 30, 2020 |  |  |  | 1,879 |  |  | $ | 4.60 |  |  | 6.5 |  | $ | 7,280 |
Ref (a): Utilizing a volatility 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 quarter ended December 31, 2019, as follows using the Monte Carlo Method.
|  |  |  |  |  |  | Volatility
|  |  |  |  |  |  | 50%
|  |  |  | Vesting |  | Expected |
|  | Strike | Stock | Threshold |  | Term | Calculated
Grant Date | Ref | Price | Price | Price |  | (Years) | Fair Value
October 18, 2019 | (a) | $ | 4.17 |  | $ | 4.17 |  | Service |  | 10 | $ | 2.54 |
October 18, 2019 |  | $ | 4.17 |  | $ | 4.17 |  | $ | 8.00 |  |  | 10 | $ | 2.56 |
October 18, 2019 |  | $ | 4.17 |  | $ | 4.17 |  | $ | 10.00 |  |  | 10 | $ | 2.53 |
October 18, 2019 |  | $ | 4.17 |  | $ | 4.17 |  | $ | 12.00 |  |  | 10 | $ | 2.51 |
Notes: |  |  |  |  |  |  |
Results based on 100,000 simulations |  |  |  |  |  |  |
Ref (a): Options granted vest after completion of a one year service period. Stock options shares outstanding, vested and unvested for the period ended
|  |  | (in thousands) |  |  |  |  |  |
|  |  | June 30, |  | September 30, |  |  |  |
| Ref |  | 2020 |  | 2019 |  |  |  |
Vested and exercisable | (a) |  | 1,072 |  |  | 1,300 |  |  |  |  |
Unvested | (b) |  | 807 |  |  | 834 |  |  |  |  |
Options outstanding |  |  | 1,879 |  |  | 2,134 |  |  |  |  |
Ref (a): Weighted average exercise price of vested and exercisable shares was $1.61 and $1.51 at June 30, 2020 and September 30, 2019, respectively. Aggregate intrinsic value was approximately $5.9 million and $3.9 million at June 30, 2020 and September 30, 2019, respectively. Weighted average contractual term remaining was 3.2 and 3.8 years at June 30, 2020 and September 30, 2019, respectively. Ref (b): Certain awards vest upon satisfaction of certain performance criteria.

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- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
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