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Stock-Based Compensation and Equity Grants (Tables) | 9 Months Ended
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Jun. 30, 2024
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 in our consolidated statements of operations as follows (in thousands):
|  | Three Months Ended |  | Nine Months Ended |
|  | June 30, |  | June 30, |
|  | 2024 |  | 2023 |  | 2024 |  | 2023 |
DLH employees (a) |  | $ | 537 |  |  | $ | 489 |  |  | $ | 1,851 |  |  | $ | 1,481 |  |
Non-employee directors (b) |  | 180 |  |  | 179 |  |  | 439 |  |  | 539 |  |
Total stock option expense |  | $ | 717 |  |  | $ | 668 |  |  | $ | 2,290 |  |  | $ | 2,020 |  |
(a) Included in this amount are equity grants of restricted stock units ("RSU") to Executive Officers, which were issued in accordance with the DLH long-term incentive compensation policy in this fiscal year, including both RSU and stock option grants to employees during prior fiscal years. The RSUs issued and outstanding totaled 429,320 and 337,578 shares at June 30, 2024 and 2023, respectively. During the three months ended June 30, 2024 and 2023, there were no grants awarded to Executive Officers. For the nine months ended June 30, 2024 and 2023, the Company granted 169,544 and 197,174 shares of restricted stock units, respectively. During the nine months ended June 30, 2024, 84,773 shares of the RSUs granted have performance-based vesting criteria and the remaining 84,771 shares have service-based vesting criteria. During the nine months ended June 30, 2023, 141,892 shares of the RSUs granted have performance-based vesting criteria and the remaining 55,282 shares have service-based vesting criteria. The RSUs granted during the nine months ended June 30, 2024 and 2023, were valued as follows using the Monte Carlo Method, and will be amortized over the 3-year measurement period. (b) Equity grants of RSUs were made in accordance with DLH compensation policy for non-employee directors and a total of 61,525 and 50,367 restricted stock units were issued and outstanding at June 30, 2024 and 2023, respectively. These grants have service-based vesting criteria and vest at the end of this fiscal year. Unrecognized stock-based compensation expense is presented in the table below (in thousands):
|  | June 30, |
|  | 2024 |  | 2023 |
Unrecognized expense for DLH employees (a) |  | $ | 6,119 |  |  | $ | 7,358 |  |
Unrecognized expense for non-employee directors |  | 180 |  |  | 155 |  |
Total unrecognized expense |  | $ | 6,299 |  |  | $ | 7,513 |  |
(a) On a weighted average basis, the unrecognized expense as of June 30, 2024 is expected to be recognized within the next 3.17 years.
Summary of Performance Vesting Critera | The fair value of RSUs issued during the nine months ended June 30, 2024 and 2023 is presented in the table below:
|  |  |  |  |  | Volatility |
|  |  |  |  |  | 50% |
Grant Date | Performance Vesting Base | Performance Vesting Criteria |  | (Years) |  | Fair Value |
December 15, 2023 | Revenue | Revenue increase at the end of the performance period as compared to the year ended September 30, 2023 |  | 3 |  | $ | 3.82 |  |
December 15, 2023 | Stock price | Stock price is at least $25.65 per share average for the 30 days prior to the end of the performance period |  | 3 |  | $ | 5.36 |  |
January 27, 2023 | Revenue | Revenue increase at the end of the performance period as compared to the year ended September 30, 2022 |  | 3 |  | $ | 3.51 |  |
January 27, 2023 | Stock price | Stock price is at least $33.21 per share average for the 30 days prior to the end of the performance period |  | 3 |  | $ | 2.92 |  |
Notes: |  |  |  |  |  |  |
Results based on 100,000 simulations |  |  |  |  |
Schedule of Stock Option Activity | A summary of the Company's stock option awards is as follows:
|  |  |  |  |  | (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, 2023 |  | 2,278 |  |  | $ | 8.40 |  |  | 5.80 |  | $ | 8,693 |  |
Granted |  | — |  |  | — |  |  | — |  |  | — |  |
Exercised |  | (535) |  |  | 5.03 |  |  | — |  |  | — |  |
Cancelled |  | (75) |  |  | 11.66 |  |  | — |  |  | — |  |
Options outstanding, June 30, 2024 |  | 1,668 |  |  | $ | 8.94 |  |  | 5.70 |  | $ | 7,370 |  |
Vested and exercisable, June 30, 2024 |  | 1,408 |  |  | $ | 8.19 |  |  | 5.30 |  | $ | 7,293 |  |
Schedule of Option Shares Outstanding, Vested and Expected to Vest | Stock option shares outstanding, vested and unvested balance as follows (in thousands):
|  |  | June 30, |  | September 30, |  |
|  |  | 2024 |  | 2023 |  |  |  |
Vested and exercisable |  |  | 1,408 |  |  | 1,608 |  |  |  |  |
Unvested (a) |  |  | 260 |  |  | 670 |  |  |  |  |
Options outstanding |  |  | 1,668 |  |  | 2,278 |  |  |  |  |
(a) Certain awards vest upon satisfaction of certain performance criteria.

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