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Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Mar. 31, 2013	May 08, 2013
Document and Entity Information
Entity Registrant Name	DLH Holdings Corp.
Entity Central Index Key	0000785557
Document Type	10-Q
Document Period End Date	Mar. 31, 2013
Amendment Flag	false
Current Fiscal Year End Date	--09-30
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		9,318,202
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2013	Sep. 30, 2012
CURRENT ASSETS:
Cash and cash equivalents	$ 3,196	$ 3,089
Accounts receivable, net of allowance for doubtful accounts of $0 as of March 31, 2013 and September 30, 2012	12,990	13,028
Prepaid workers' compensation	462	516
Other current assets	384	133
Total current assets	17,032	16,766
EQUIPMENT AND IMPROVEMENTS:
Furniture and equipment	139	139
Computer equipment	126	126
Computer software	417	408
Leasehold improvements	24	24
Equipment and improvements, gross	706	697
Less accumulated depreciation and amortization	(495)	(429)
Equipment and improvements, net	211	268
GOODWILL	8,595	8,595
OTHER ASSETS
Deferred financing costs, net	1	9
Other assets	766	784
Total other assets	767	793
TOTAL ASSETS	26,605	26,422
CURRENT LIABILITIES:
Bank loan payable	2,476	2,363
Current portion of capital lease obligations	48	51
Convertible debenture, net	280
Derivative financial instruments, at fair value	78
Accrued payroll	10,589	10,555
Accounts payable	2,333	2,296
Accrued expenses and other current liabilities	2,970	2,817
Liabilities from discontinued operation	178	185
Total current liabilities	18,952	18,267
LONG TERM LIABILITIES
Convertible debenture, net		202
Derivative financial instruments, at fair value		119
Capital lease obligations		22
Other long term liability	20	62
Total long term liabilities	20	405
Total liabilities	18,972	18,672
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred stock, $.10 par value; authorized 5,000 shares; none issued and outstanding
Common stock, $.001 par value; authorized 40,000 shares; issued 9,320 at March 31, 2013 and 9,268 at September 30, 2012, outstanding 9,318 at March 31, 2013 and 9,266 at September 30, 2012	9	9
Additional paid-in capital	75,327	75,207
Accumulated deficit	(67,679)	(67,442)
Treasury stock, 2 shares at cost at March 31, 2013 and September 30, 2012	(24)	(24)
Total shareholders' equity	7,633	7,750
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 26,605	$ 26,422

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2013	Sep. 30, 2012
CONSOLIDATED BALANCE SHEETS
Accounts receivable, allowance for doubtful accounts (in dollars)	$ 0	$ 0
Preferred stock, par value (in dollars per share)	$ 0.10	$ 0.10
Preferred stock, authorized shares	5,000,000	5,000,000
Preferred stock, issued shares	0	0
Preferred stock, outstanding shares	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized shares	40,000,000	40,000,000
Common stock, issued shares	9,320,000	9,268,000
Common stock, outstanding shares	9,318,000	9,266,000
Treasury stock, shares	2,000	2,000

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012
CONSOLIDATED STATEMENTS OF OPERATIONS
REVENUES	$ 13,007	$ 12,619	$ 26,002	$ 24,114
DIRECT EXPENSES	11,236	11,321	22,442	21,249
GROSS PROFIT	1,771	1,298	3,560	2,865
GENERAL AND ADMINISTRATIVE EXPENSES	1,729	1,835	3,578	3,589
DEPRECIATION AND AMORTIZATION	33	27	66	50
Income (loss) from operations	9	(564)	(84)	(774)
OTHER INCOME (EXPENSE)
Interest expense	(47)	(85)	(93)	(162)
Amortization of deferred financing costs	(52)	(40)	(106)	(86)
Change in value of financial instruments	(20)	(28)	41	(84)
Other income, net	1	2	5	2
Total other income (expense)	(118)	(151)	(153)	(330)
Loss before income taxes	(109)	(715)	(237)	(1,104)
INCOME TAX EXPENSE	0		0
NET LOSS	$ (109)	$ (715)	$ (237)	$ (1,104)
NET LOSS PER SHARE - BASIC AND DILUTED
Net loss per share (in dollars per share)	$ (0.01)	$ (0.12)	$ (0.03)	$ (0.18)
WEIGHTED AVERAGE BASIC AND DILUTED SHARES OUTSTANDING	9,318	6,077	9,301	6,072

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (237)	$ (1,104)
Adjustments to reconcile net loss to net cash used in operating activities, net of divested business:
Depreciation and amortization including debt costs	172	122
Change in fair value of derivative financial instruments	(41)	84
Compensation expense related to employee stock option grants	69	66
Compensation expense related to employee restricted stock grants		50
Compensation expense related to director restricted stock grants	54	123
Share based expense on non employee options		12
Warrants issued to consultants	6	6
Other non cash compensation		10
Changes in operating assets and liabilities, net of divested business:
Accounts receivable	38	(1,019)
Other current assets	(198)	(55)
Other assets		2
Accounts payable, accrued payroll, accrued expenses and other current liabilities	223	782
Other long term liabilities	(42)	37
Net cash provided by/(used in) operating activities	44	(884)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment, leasehold improvements and software	(9)	(86)
Net cash used in investing activities	(9)	(86)
CASH FLOWS FROM FINANCING ACTIVITIES
Net advances on revolving line of credit	113	855
Rights offering expenses	(9)	(5)
Repayments on capital lease obligations	(25)	(8)
Cash flows from discontinued operation	(7)	(33)
Net cash provided by financing activities	72	809
Net increase/(decrease) in cash and cash equivalents	107	(161)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	3,089	763
CASH AND CASH EQUIVALENTS AT END OF PERIOD	3,196	602
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest	45	$ 122
Cash paid during the period for income taxes	$ 11

ORGANIZATION AND BUSINESS:	6 Months Ended
ORGANIZATION AND BUSINESS:	Mar. 31, 2013
ORGANIZATION AND BUSINESS:
ORGANIZATION AND BUSINESS:	(1) ORGANIZATION AND BUSINESS: For more than 25 years, DLH Holdings Corp. (together with its subsidiaries, “DLH” or the “Company” and also referred to as “we,” “us” and “our”) has provided professional services through its subsidiaries to the U.S. Government. DLH’s corporate headquarters and its principal executive offices are located in Atlanta, Georgia. DLH employs approximately 1,100 skilled health care and support personnel, technicians, logisticians, and engineers, at more than 25 locations around the United States. DLH’s operating subsidiary, DLH Solutions, Inc., is organized into three broad integrated business areas: Healthcare Delivery Solutions, Logistics and Technical Services, and Contingency / Staff Augmentation Services. Our government customers, a majority of whom are within the Departments of Defense (“DoD”) and Veterans Affairs (“DVA”), which represent approximately 97% of the Company’s revenue, benefit from our proven leadership processes, technical excellence, industry-leading productivity and affordability enhancement tools, and Lean Six Sigma-based quality improvement processes. The remaining portion of DLH’s business is comprised of customers within other federal agencies, including the Center for Disease Control and Prevention, the Departments of Justice, Agriculture, Interior and the Federal Emergency Management Agency, at locations throughout the United States. For the fiscal year ended September 30, 2012 and the six months ended March 31, 2013 approximately 54% of our revenue was derived from the Healthcare Delivery Solutions business unit, approximately 45% of our revenue was derived from the Logistics & Technical Services business unit, and less than 1% of revenue was derived from the Contingency/Staff Augmentation line of service. *Corporate History* DLH Holdings Corp. was originally incorporated in New Jersey in 1969 as a payroll staffing company. Through several strategic transactions over recent decades, the Company has evolved considerably and in early 2010, made the strategic decision to build the Company around its government services entity, DLH Solutions, Inc. This transformation began with the divestiture of its commercial business and replacement of the CEO and CFO of the Company with executives with skills and experience more closely aligned with the Company’s new direction. The Company is now completely focused on government services both as a prime contractor as well as a partner with other government contractors. The Company’s other wholly-owned subsidiaries are not actively operating. In June 2012, the Company amended its certificate of incorporation to change its corporate name to DLH Holdings Corp.

LIQUIDITY AND SIGNIFICANT ACCOUNTING POLICIES:

6 Months Ended

Mar. 31, 2013

LIQUIDITY AND SIGNIFICANT ACCOUNTING POLICIES:

LIQUIDITY AND SIGNIFICANT ACCOUNTING POLICIES:

(2) LIQUIDITY AND SIGNIFICANT ACCOUNTING POLICIES:

Liquidity

In recent years, the Company has sought to finance its operations and capital expenditures through the sale of equity securities, convertible notes and more recently, through the proceeds from a rights offering. The Company’s immediate sources of liquidity include cash and cash equivalents, accounts receivable, unbilled receivables and access to its asset-based credit facility with Presidential Financial Corporation. The Company’s operating liabilities are largely predictable and consist of vendor and payroll related obligations. The Company’s operations require substantial working capital to fund the future growth of its business model with expanded business development efforts, and planned capital expenditures to support a larger customer base.

At March 31, 2013, the Company had a net working capital deficit of approximately $1.9 million and an accumulated deficit of approximately $67.7 million. For the six months ended March 31, 2013, the Company incurred an operating loss and a net loss of approximately $0.1 million and $0.2 million, respectively.

In May 2012, the Company entered into an amendment to its Loan and Security Agreement (“the Loan Agreement”) with Presidential Financial Corporation (“the Lender”) pursuant to which the Lender agreed to increase the available line of credit from $3,000,000 to a maximum amount of $6,000,000 and to increase the maximum amount available under the unbilled accounts facility of the Loan Agreement from $500,000 to $1,000,000. However, as described in greater detail in Note 6 below, the Company’s ability to borrow against the increased available credit is subject to the satisfaction of a number of conditions, and presently, the maximum availability under this loan facility is $3,000,000, subject to eligible accounts receivable. At March 31, 2013, the amount of unused availability was $38,000. The amount outstanding on the loan facility as of March 31, 2013 was $2,476,000. The base term of the Loan Agreement ends on July 29, 2013, after which the Agreement will automatically renew annually, unless terminated by either party.

Management believes, at present, that: (a) cash and cash equivalents of approximately $3.2 million as of March 31, 2013; (b) the amounts available under its line of credit of $38,000 (which will vary depending upon the amount of eligible assets); (c) forecasted operating cash flow; and (d) prospective effects of cost reduction programs and initiatives should be sufficient to support the Company’s operations for twelve months from the date of these financial statements. However, should any of the above- referenced factors not occur substantially as currently expected, there could be a material adverse effect on the Company’s ability to access the level of liquidity necessary for it to sustain operations at current levels for the next twelve months. In such an event, management may be forced to make further reductions in spending or seek additional sources of capital to support our operations. If the Company raises additional funds by selling shares of common stock or convertible securities, the ownership of its existing shareholders would be diluted.

Presently, the Company derives all of its revenue from agencies of the Federal government. For both the three and six months ended March 31, 2013, the Company derived approximately 97% of its revenue from various contracts awarded by the DVA, including under a single source Blanket Purchase Agreement awarded in fiscal 2011. The Blanket Purchase Agreement had an original estimated total contract value of approximately $145,000,000, which is attributable to our provision of services over a five year period of performance that is scheduled to expire on October 31, 2016. The five year term of the agreement includes a base year and four option years. The agreement is subject to the Federal Acquisition Regulations, and there can be no assurance as to the actual amount of services that the Company will ultimately provide under the agreement. This agreement represented approximately 50% of the Company’s revenues for both the three and six months ended March 31, 2013. In addition, the Company also provides services to the DVA pursuant to contractual work orders that run through September 30, 2013 which are not currently the subject of requests for proposals and may in due course be further extended by the DVA, although no assurances can be given that this will occur. The Company’s results of operations, cash flows and financial condition would be materially adversely affected in the event that we are unable to continue our relationships with the DVA or suffer a significant diminution in the quantity of services that they procure from the Company.

Basis of Presentation

The consolidated interim financial statements included herein have been prepared by DLH, without audit, pursuant to the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States of America generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. DLH believes that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in DLH’s fiscal 2012 Annual Report on Form 10-K, which was filed on December 14, 2012. This interim financial information reflects, in the opinion of management, all adjustments necessary (consisting only of normal recurring adjustments and changes in estimates, where appropriate) to present fairly the results for the interim periods. The results of operations and cash flows for such interim periods are not necessarily indicative of the results for the full year.

The accompanying consolidated financial statements include the accounts of DLH and its subsidiaries, all of which are wholly owned. All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include valuation of goodwill, expected settlement amounts of accounts receivable, measurement of prepaid workers’ compensation, valuation allowances established against accounts receivable and deferred tax assets, measurement of payroll tax contingencies, accounts payable, workers’ compensation claims and accrued expenses and the valuation of financial instruments associated with debt agreements. In addition, the Company estimates overhead charges and allocates such charges throughout the year. Actual results could differ from those estimates. In particular, a material reduction in the fair value of goodwill would have a material adverse effect on the Company’s financial position and results of operations.

Revenue Recognition

DLH’s revenue is derived from professional and other specialized service offerings to US Government agencies through a variety of contracts, some of which are fixed-price in nature and/or sourced through Federal Supply Schedules administered by the General Services Administration (“GSA”) at fixed unit rates or hourly arrangements. We generally operate as a prime contractor, but have also entered into contracts as a subcontractor. The recognition of revenue from fixed rates is based upon objective criteria that generally do not require significant estimates that may change over time. DLH recognizes and records revenue on government contracts when it is realized, or realizable, and earned. DLH considers these requirements met when: (a) persuasive evidence of an arrangement exists; (b) the services have been delivered to the customer; (c) the sales price is fixed or determinable and free of contingencies or significant uncertainties; and (d) collectability is reasonably assured.

Revenues related to retroactive billings in 2008 from an agency of the Federal government were recognized when: (1) the Company developed and calculated an amount for such prior period services and had a contractual right to bill for such amounts under its arrangements, (2) there were no remaining unfulfilled conditions for approval of such billings and (3) collectability was reasonably assured based on historical practices with the DVA. The related direct costs, principally comprised of salaries and benefits, were accrued to match the recognized reimbursements from the Federal agency; upon approval, wages will be processed for payment to the employees.

During the year ended September 30, 2008, DLH recognized revenues of $10.8 million and direct costs of $10.1 million related to these non-recurring arrangements. At March 31, 2013 and September 30, 2012, the amount of the remaining accounts receivable with the DVA approximated $9.3 million and accrued liabilities for salaries to employees and related benefits totaled $8.7 million. The $9.3 million in accounts receivable was unbilled to the DVA at March 31, 2013 and September 30, 2012.

In April 2012, the Company received formal contract modifications from the DVA concerning the retroactive billing matter for which revenue was accrued in 2008. The contract modifications from the DVA incorporate relevant wage determinations covering largely 2006 and 2007 applying to the Company’s historical contracts with DVA during those periods. These government modifications initiate the procedures whereby the Company may invoice the DVA in accordance with the modified wage determinations and subsequently make timely retroactive payments to employees (active and inactive) covering work performed at the certain locations. The Company expects to follow the process directed by and in conjunction with the Department of Labor and the DVA in generating these invoices. Although the timing cannot be guaranteed, at present, the Company expects to bill and collect such amounts within the next twelve months.

The Company continues to support the Government’s review of the detailed supporting calculations for the retroactive billings and to negotiate an incremental final amount related to indirect costs and fees applied to these retroactive billings. The additional indirect costs and fees are estimated to be between $0.4 million and $0.6 million. The Company has developed these estimates under the same contractual provisions applied to the sites that were settled in 2008. However, because these amounts remain subject to government review, no assurances can be given that any amounts the Company may receive will be within the range specified above.

Goodwill

In accordance with applicable accounting standards, DLH does not amortize goodwill. DLH continues to review its goodwill for possible impairment or loss of value at least annually or more frequently upon the occurrence of an event or when circumstances indicate that a reporting unit’s carrying amount is greater than its fair value. At September 30, 2012, we performed a goodwill impairment evaluation. We performed both a qualitative and quantitative assessment of factors to determine whether it was necessary to perform the goodwill impairment test. Based on the results of the work performed, the Company has concluded that no impairment loss was warranted at September 30, 2012. Factors including non-renewal of a major contract (see Note 2—Liquidity) or other substantial changes in business conditions could have a material adverse effect on the valuation of goodwill in future periods and the resulting charge could be material to future periods’ results of operations. If an impairment write off of all the goodwill became necessary in future periods, a charge of up to $8.6 million would be expensed in the Consolidated Statement of Operations. All remaining goodwill is attributable to the DLH Solutions operating subsidiary.

Income Taxes

DLH accounts for income taxes in accordance with the “liability” method, whereby deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reflected on the consolidated balance sheet when it is determined that it is more likely than not that the asset will be realized. This guidance also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax asset will not be realized. At March 31, 2013 and 2012, the Company recorded a 100% valuation allowance against its net deferred tax assets.

The Financial Accounting Standards Board (“FASB”) has issued authoritative guidance that clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements and prescribes a recognition threshold of more-likely-than-not to be sustained upon examination. Measurement of the tax uncertainty occurs if the recognition threshold has been met. This interpretation also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods and disclosures. The Company conducts business solely in the U.S. and, as a result, also files income taxes in various states and other jurisdictions. Given the substantial net operating losses and the related valuation allowance established against such amounts, the Company has concluded that it does not have any uncertain tax positions. There have been no income tax related interest or penalties for the periods presented in these consolidated financial statements. In the normal course of business, the Company and its subsidiaries are subject to examination by Federal and state taxing authorities. The Company’s income tax returns for years subsequent to fiscal 2009 are currently open, by statute, for review by authorities. However, there are no examinations currently in progress and the Company is not aware of any pending audits.

Stock-Based Compensation

Compensation costs for the portion of equity awards (for which the requisite service has not been rendered) that are outstanding are recognized as the requisite service is rendered. The compensation cost for that portion of awards shall be based on the grant-date fair value of those awards as calculated for recognition purposes under applicable guidance. As of March 31, 2013, there is approximately $170,000 of unrecognized compensation expense remaining that is related to non-vested stock based awards to be recognized in future periods.

Stock Options, Warrants and Restricted Stock

For options that vest based on the Company’s common stock achieving and maintaining defined market prices, the Company values these awards with a binomial model that utilizes various probability factors and other criterion in establishing fair value of the grant. The related compensation cost is recognized over the derived service period determined in the valuation.

From time to time, the Company grants restricted stock awards to non-employee directors and employees under existing plans. The Company recognizes non-cash compensation expense over the various vesting periods.

Stock compensation expense totaled $38,000 for all awards for the three month period ended March 31, 2013, and totaled $48,000 for all awards for the three months ended March 31, 2012.

Stock compensation expense totaled $129,000 for all awards for the six month period ended March 31, 2013, and totaled $219,000 for all awards for the six months ended March 31, 2012.

Certain awards vest upon satisfaction of certain performance criteria. As permitted, the Company will not recognize expense on the performance based shares until it is probable that these conditions will be achieved. Such charges could be material in future periods.

On November 21, 2012, the Company granted its chief executive officer options to purchase 250,000 shares of common stock under the Company’s 2006 Long Term Incentive Plan, as amended. The options, to the extent vested, shall be exercisable for a period of ten years at the per share exercise price equal to the fair market value of the Company’s common stock on the effective date of the amendment. The options will vest in full if the closing price of the Company’s Common Stock equals or exceeds the lesser of (i) $4.00 per share or (ii) a per share price equal to 200% of the exercise price, in each case for ten consecutive trading days. Stock expense recognized for the six months ending March 31, 2013 totaled approximately $4,000.

Warrants are issued from time-to-time to non-employee third parties in order to induce then to enter in certain transactions with the Company. The Company recognizes non-cash expense related to such activity over the estimated period of performance.

Effective as of November 15, 2012, the Company granted an aggregate of 52,500 shares of restricted stock to its non-executive directors, consistent with its compensation policy for non-executive directors. These shares were issued pursuant to the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended. The shares vested immediately and stock expense of $54,000 was recognized in November 2012. Additionally, at March 31, 2013, there were 52,500 shares of unvested restricted stock outstanding from prior year grants to non-executive directors. There is $150,000 of unrecognized expense related to these unvested restricted stock awards.

The stock option activity for the six months ended March 31, 2013 is as follows:

	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Options outstanding, September 30, 2012	1,362,500	$	1.19	8.6	$	140,000
Granted	250,000	$	0.95
Cancelled
Exercised	—	—
Options outstanding, March 31, 2013	1,612,500	$	1.15	8.4	$	70,000

At March 31, 2013, there were 412,500 options outstanding that were vested and exercisable and an additional 1,200,000 options outstanding that vest to the recipients when the market value of the Company’s stock achieves and maintains defined levels.

The aggregate intrinsic value in the table above 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.

The Company recognized expense for warrants issued to consultants of $3,000 for both the three months ended March 31, 2013 and 2012

The Company recognized expense for warrants issued to consultants of $6,000 for both the six months ended March 31, 2013 and 2012.

Changes in Shareholders’ Equity

The following are the changes in Shareholders’ Equity for the six months ended March 31, 2013:

(AMOUNTS IN THOUSANDS)

				Additional										Total
	Common Stock			Paid-In			Accumulated			Treasury Stock				Shareholders’
	Shares	Amount		Capital			Deficit			Shares	Amount			Equity

BALANCE, September 31, 2012	9,266	$	9	$	75,207		$	(67,442	)	2	$	(24	)	$	7,750

Director restricted stock grants	52			54										54
Warrants issued to consultants				6										6
Expense related to employee stock option grants				69										69
Fees related to rights offering				(9		)								(9		)
Net loss							(237		)					(237		)

BALANCE, March 31, 2013	9,318	$	9	$	75,327		$	(67,679	)	2	$	(24	)	$	7,633

Fair Value of Financial Instruments

The Company has financial instruments, principally accounts receivable, accounts payable, loan payable, notes payable, and accrued expense. Due to the short term nature of these instruments, DLH estimates that the fair value of all financial instruments at March 31, 2013 and September 30, 2012 does not differ materially from the aggregate carrying values of these financial instruments recorded in the accompanying consolidated balance sheets. In addition, the Company presents certain common stock warrants and embedded conversion features associated with Convertible Debentures and accounts for such derivative financial instruments at fair value (See Note 7).

Earnings (Loss) Per Share

Basic earnings (loss) per share is calculated by dividing income (loss) available to common shareholders by the weighted average number of common shares outstanding and restricted stock grants that vested or are likely to vest during the period. Diluted earnings (loss) per share is calculated by dividing income (loss) available to common shareholders by the weighted average number of basic common shares outstanding, adjusted to reflect potentially dilutive securities.

The effects of common stock equivalents of 1,686,346 are anti-dilutive for the three and six months ended March 31, 2013. The effects of common stock equivalents of approximately 1,423,486 are anti-dilutive for the three and six months ended March 31, 2012.

DISCONTINUED OPERATION:

6 Months Ended

Mar. 31, 2013

DISCONTINUED OPERATION:

DISCONTINUED OPERATION:

(3) DISCONTINUED OPERATION:

Non-Recurring Gain or Loss

There were no non-recurring gains or losses from discontinued operations for the three months ended March 31, 2013.

Condensed Financial Information

In previous periods, the Company has accrued expenses related to the shutdown of discontinued businesses. The following chart details liabilities from the discontinued operation (amounts in thousands):

Liabilities	March 31, 2013		September 30, 2012
Accrued expenses and other current liabilities	$	178	$	185

- Definition

The entire disclosure for the facts and circumstances leading to the completed or expected disposal, manner and timing of disposal, the gain (loss) recognized in the income statement and the income statement caption that includes that gain (loss), amounts of revenues and pretax profit or loss reported in discontinued operations, the segment in which the disposal group was reported, and the classification (whether sold or classified as held for sale) and carrying value of the assets and liabilities comprising the disposal group. Includes all disposal groups, including those classified as components of the entity (discontinued operations).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1361-107760

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-Topic 360
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6391110&loc=d3e2941-110230

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 144
-Paragraph 43-48
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

COMMITMENTS AND CONTINGENCIES:	6 Months Ended
COMMITMENTS AND CONTINGENCIES:	Mar. 31, 2013
COMMITMENTS AND CONTINGENCIES:
COMMITMENTS AND CONTINGENCIES:	(4) COMMITMENTS AND CONTINGENCIES: Payroll Taxes From 2006 through 2009, DLH received notices from the Internal Revenue Service (“IRS”) claiming taxes, interest and penalties due related to payroll taxes predominantly from its former PEO operations which were sold in fiscal 2003. DLH also received notices from the IRS reporting overpayments of taxes. Management believes that these notices are predominantly the result of misapplication of payroll tax payments between its legal entities. Until the sale of certain assets related to the former PEO operations, DLH operated through 17 subsidiaries, and management believes that the IRS has not correctly identified payments made through certain of the different entities, therefore leading to the notices. Through the fiscal year ended September 30, 2009, DLH worked with the IRS to resolve these discrepancies and had certain interest and penalty claims abated. DLH also received notices from the Social Security Administration claiming variances in wage reporting compared to IRS transcripts. DLH believes the notices from the Social Security Administration are directly related to the IRS notices received. DLH believes it has fully responded to the notices issued. DLH believes that after the IRS applies all the funds correctly, any significant interest and penalties will be abated; however, there can be no assurance that each of these matters will be resolved favorably. In settling various years for specific subsidiaries with the IRS, the Company received refunds for those specific periods; however, as the process of settling and concluding on other periods and subsidiaries is not yet completed, the potential exists for related penalties and interest. The remaining liability ($1.4 million at March 31, 2013 and $1.3 million at December 31, 2012) has been recorded in accounts payable and includes estimated accrued penalties and interest totaling approximately $600,000. The Company believes it has accrued for the entire estimated remaining liability, inclusive of interest and penalties through the date of the financial statements. The Company may incur additional interest and may incur possible additional penalties through the future date that this obligation is settled. However, it is not currently possible to estimate what, if any, additional amount(s) may be due in the future, given the uncertain timing and nature of any future settlement negotiations. No payments were made in fiscal 2012 or year to date in fiscal 2013. Management believes that the ultimate resolution of these remaining payroll tax matters will not have a significant adverse effect on its financial position or future results of operations. The Company’s intention is that it will in due course seek to negotiate a mutually satisfactory payment plan with the IRS, but there is no assurance that it would be successful in doing so and the Company’s future cash flows and liquidity could therefore be materially affected by this matter. Legal Proceedings As the Company has previously reported, it was advised of a claim by the U.S. Attorney based on an alleged failure to pay certain classes of employees the prevailing wages as required by the Service Contract Act during the years 2003-2010. The Company is continuing to review the data allegedly supporting the claims with the U.S. Department of Justice and has provided additional data as requested in an effort to determine whether any wage adjustment is required. These claims appear, in part, to be part of the claims previously disclosed by the Company and related to services provided to the Department of Veterans Affairs by DLH. Until the analysis of the data is complete, we cannot finally determine either the merits of the claim or the potential impact on the Company; however, the Company continues to believe it has acted in conformity with its contractual commitments and no wage adjustment is required. Additionally, the Company also believes it has fully responded to all requests related to these claims. Nevertheless, there can be no assurance that an adverse decision or settlement would not have a material adverse impact on the Company. As a commercial enterprise and employer, the Company is subject to various claims and legal actions in the ordinary course of business. These matters can include professional liability, employment-relations issues, workers’ compensation, tax, payroll and employee-related matters, other commercial disputes arising in the course of its business, and inquiries and investigations by governmental agencies regarding our employment practices or other matters. Other than as reported elsewhere in this report, the Company is not aware of any pending or threatened litigation that it believes is reasonably likely to have a material adverse effect on its results of operations, financial position or cash flows. Employment Agreements From time to time, we enter into employment agreements with certain key executives which provide for fixed compensation, criterion for earning bonuses and other incentives and, in certain instances, issuance of share based equity grants. These agreements generally continue until terminated by the employee or the Board of Directors or, upon the occurrence of defined certain events or circumstances (including a defined change in control), and provide for salary continuance for specified periods of generally no more than a year and or lump sum payments in the event of a change of control of up to 150% of annual salary.

- Definition

The entire disclosure for commitments and contingencies.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 825
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6449706&loc=d3e16207-108621

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-Name Accounting Standards Codification
-Topic 460
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=6398077&loc=d3e12565-110249

Reference 3: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 450
-SubTopic 20
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6952336&loc=d3e14435-108349

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.25)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

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-Name Accounting Standards Codification
-Topic 440
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6394976&loc=d3e25287-109308

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Interpretation (FIN)
-Number 14
-Paragraph 3
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
-Paragraph 9, 10, 11, 12
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

PREPAID WORKERS' COMPENSATION:	6 Months Ended
PREPAID WORKERS' COMPENSATION:	Mar. 31, 2013
PREPAID WORKERS' COMPENSATION:
PREPAID WORKERS' COMPENSATION:	(5) PREPAID WORKERS’ COMPENSATION: As part of the Company’s discontinued PEO operations, DLH had a workers’ compensation program with Zurich American Insurance Company (“Zurich”) which covered the period from March 22, 2002 through November 16, 2003, inclusive. Payments for the policy were made to a trust monthly based on projected claims for the policy period. Interest on all assets held in the trust is credited to DLH. Payments for claims and claims expenses are made from the trust. From time-to-time, trust assets have been refunded to the Company based on Zurich’s overall assessment of claims experience and historical and projected settlements. The final amount of trust funds that could be refunded to the Company is subject to a number of uncertainties (e.g. claim settlements and experience, health care costs, the extended statutory filing periods for such claims); however, based on a third party’s study of claims experience, DLH estimates that at March 31, 2013, the remaining prepaid asset of $0.5 million will be received within the next twelve months.

DEBT:	6 Months Ended
DEBT:	Mar. 31, 2013
DEBT:
DEBT:	(6) DEBT: Loan Facility On July 29, 2010, DLH Solutions entered into a Loan and Security Agreement (the “Loan Agreement”) with Presidential Financial Corporation (the “Lender”). Under the Loan Agreement, the Lender agreed to provide a two (2) year secured loan facility to DLH Solutions in an aggregate amount of up to $1.5 million, upon the further terms and subject to the conditions of the Loan Agreement. In November, 2010, the Lender agreed by means of an amendment to the Loan Agreement to increase the maximum amount available under the facility from $1.5 million to $2.5 million and on February 9, 2011, we entered into a further amendment to the Loan Agreement pursuant to which the Lender agreed to further increase our maximum availability under the Loan Agreement from $2.5 million to $3.0 million and to provide an unbilled receivable facility within the limits of the Loan Agreement. The February 2011 amendment also extended the term of the Loan Agreement by 12 months, to July 29, 2013, after which the Agreement will automatically renew annually, unless terminated by either party. In May 2012, the Company entered into a further amendment to the Loan Agreement (the “Fifth Amendment”) pursuant to which the Lender agreed to increase the available line of credit from $3,000,000 to a maximum amount of $6,000,000 and to increase the maximum amount available under the unbilled accounts facility of the Loan Agreement from $500,000 to $1,000,000. The Company’s ability to borrow against the increased available credit, however, is subject to the satisfaction of certain conditions. The Fifth Amendment provides for an initial sublimit under the maximum loan amount of $3,000,000 (the “Initial Sublimit”) and an adjusted sublimit of $4,000,000 (the “Adjusted Sublimit”). The Initial Sublimit of $3,000,000 will remain in effect until the satisfaction of the following conditions: (i) the repayment of the $500,000 over-advance accommodation agreed to by Lender as of May 9, 2012, (ii) the Company’s demonstration of the need for the increase, (iii) the Company’s continued compliance with the Loan Agreement, and (iv) Lender, in its sole discretion, agrees to increase the Initial Sublimit. In the event that the foregoing conditions are satisfied, the credit available to under the Loan Agreement shall remain subject to the Adjusted Sublimit until the parties receive any required waivers or consents from the holders of the Company’s subordinated Convertible Debentures issued as of July 28, 2011 and Lender, in its sole discretion, agrees to such further increase. In addition, the increased availability under the unbilled accounts facility of the Loan Agreement is subject to the satisfaction of the same conditions that are applicable to Initial Sublimit. Accordingly, until these conditions are satisfied, the current borrowing limits remain in effect. DLH Solutions’ ability to request loan advances under the Loan Agreement is subject to (i) computation of DLH Solutions’ advance availability limit based on “eligible accounts receivables” (as defined in the Loan Agreement) multiplied by the “Accounts Advance Rate” established by the Lender which initially shall be 85% and may be increased or decreased by the Lender in exercise of its discretion; and (ii) compliance with the covenants and conditions of the loan. An interest rate premium of 2% is payable in respect of any advances secured by unbilled accounts receivable, which are subject to a sub-facility limit of $500,000 and an advance rate of 75%. The loan is secured by a security interest and lien on all of DLH Solutions’ cash accounts, account deposits, letters of credit and investment property, chattel paper, furniture, fixtures and equipment, instruments, investment property, general intangibles, deposit accounts, inventory, other property, all proceeds and products of the foregoing (including proceeds of any insurance policies and claims against third parties for loss of any of the foregoing) and all books and records related thereto. Under the Loan and Security Agreement, interest accrues at the greater of (a) 3.25% or (b) (i) 1.95% above the Wall Street Journal Prime rate on the accounts receivable portion of the credit line and (ii) 3.95% above the Wall Street Journal Prime rate on the unbilled accounts portion. In addition, DLH Solutions will pay certain other related fees and expense reimbursements including a monthly service charge of 0.65% based on the average daily loan balance which shall accrue daily and be due and payable on the last day of each month so long as the Loan Agreement is outstanding. The interest rate on the Accounts Receivable portion of the loan was 5.2% at both March 31, 2013 and 2012. The interest rate on the Unbilled Accounts portion was 7.2% at both March 31 2013 and 2012. At March 31, 2013, based on current eligible accounts receivable, the amount of the unused availability under the line was $38,000. The amount outstanding as of March 31, 2013 was $2,476,000. The Loan Agreement requires compliance with customary covenants and contains restrictions on the Company’s ability to engage in certain transactions. Among other matters, under the loan agreement we may not, without consent of the Lender, (i) merge or consolidate with another entity, form any new subsidiary or acquire any interest in a third party; (ii) acquire any assets except in the ordinary course of business; (iii) enter into any transaction outside the ordinary course of business; (iv) sell or transfer collateral; (v) make any loans to, or investments in, any affiliate or enter into any transaction with an affiliate other than on an arms-length basis; (vi) incur any debt outside the ordinary course of business; (vii) pay or declare any dividends or other distributions; or (viii) redeem, retire or purchase any of our equity interests exceeding $50,000. Further, without the consent of the Lender, the Company is also restricted from making any payments in respect of other outstanding indebtedness. The Lender agreed to eliminate the tangible net worth covenant as part of the Fifth Amendment. The Lender may terminate the Loan Agreement at any time upon 60 days written notice after December 31, 2012 and the Loan Agreement provides for customary events of default following which the Lender may, at its option, terminate the loan agreement and accelerate the repayment of any amount outstanding. The defined events of default include, among other things, a material adverse change in the Company’s circumstances, or if the Lender deems itself insecure in the ability of the Company to repay its obligations, or as to the sufficiency of the collateral. On May 9, 2012, Presidential Financial Corporation agreed to allow the Company to borrow up to $500,000 under its facility with the Company in excess of the eligible collateral, but subject to the maximum loan amount of $3,000,000. This arrangement expired with the closing of the rights offering on June 15, 2012. There were no advances against this facility. In consideration of the Lender entering into the Fifth Amendment, we agreed to pay a monthly collateral monitoring fee, a documentation fee and at the time that we may borrow amounts in excess of the Initial Sublimit, an origination fee of 1% of the increased availability. The Company has concurrently executed a Corporate Guaranty Agreement with Lender pursuant to which it has guaranteed all of the obligations of DLH Solutions under the Loan Agreement.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References + Details

EQUITY AND CONVERTIBLE DEBENTURES FINANCING:	6 Months Ended
EQUITY AND CONVERTIBLE DEBENTURES FINANCING:	Mar. 31, 2013
EQUITY AND CONVERTIBLE DEBENTURES FINANCING:
EQUITY AND CONVERTIBLE DEBENTURES FINANCING:	(7) EQUITY AND CONVERTIBLE DEBENTURES FINANCING: On June 1, 2011, the Company entered into a debenture purchase agreement (the “Debenture Purchase Agreement”) with entities affiliated with Wynnefield Capital, Inc. (the “Debenture Purchasers”), providing for a standby commitment pursuant to which the Debenture Purchasers agreed to purchase convertible debentures (the “Convertible Debentures”) in an aggregate principal amount of up to $350,000 (the “Total Commitment Amount”). In addition, the Company issued the Debenture Purchasers warrants to purchase an aggregate of 53,846 shares of common stock (the “Warrants”) in consideration of their agreement to provide the Total Commitment Amount. The Debenture Purchasers are entities affiliated with Wynnefield Capital, Inc., the Company’s largest shareholder. Mr. Peter Black, a member of the Company’s Board of Directors, is an employee of Wynnefield Capital. On July 28, 2011, the Company drew down the entire amount of the Total Commitment amount available under the Debenture Purchase Agreement and issued the Convertible Debentures in the aggregate principal amount of $350,000 to the Debenture Purchasers. The Convertible Debentures will mature on October 28, 2013, and bear interest at the rate of the greater of the prime rate plus 5%, or 10% per annum, payable at maturity or upon redemption of such Convertible Debentures. The interest rate at March 31, 2013 was 10%. The Convertible Debentures were initially convertible into shares of the Company’s common stock at an initial conversion price of $1.30 per share, which was in excess of the fair market value of the Company’s common stock at that date. The initial conversion rate is subject to adjustment to account for certain customary events and also includes weighted-average anti-dilution protection for future issuances by the Company, subject to certain exclusions. The Company can also redeem the outstanding Convertible Debentures at any time at 120% of the remaining principal amount, plus accrued but unpaid interest. The Warrants are exercisable for five years at an initial exercise price equal to $1.00. The initial exercise price of the Warrants is subject to adjustment for certain customary events and includes weighted average anti-dilution protection for future issuances by the Company, subject to certain exclusions. In connection with the parties’ entry into the Debenture Purchase Agreement, the Company, DLH Solutions, the Debenture Purchasers and Presidential Financial Corporation entered into subordination agreements concerning the terms of the subordination of the Convertible Debentures to the secured loan facility provided by Presidential Financial Corporation. Under the subordination agreements, the Company may not make payments on the Convertible Debentures unless no “Event of Default” exists under the secured loan facility, both before and as a result of such payments. As a result of the rights offering in June 2012, the conversion rate of the Convertible Debentures was adjusted to $1.25 and the exercise price of the Warrants was adjusted from $1.00 to $0.96 per share. Direct costs associated with the Debenture Purchase Agreement totaled $32,000. These costs have been capitalized as deferred financing costs and amortized over the period that such debentures are outstanding or the Debenture Agreement is effective. In addition, an initial value of $42,000 was ascribed to the warrants and it was determined that at July 28, 2011, because of appreciation in the Company’s stock price, the embedded conversion feature included in the Convertible Debentures had a fair value of $289,000 at the time of issuance of the Convertible Debentures; such amount is also being expensed over the life of the Convertible Debentures and the unamortized amounts have been deducted from the value of the Convertible Debentures as noted below. As a result of the rights offering the initial value of the warrants were revalued with minimal change and the value of the Convertible Debenture of $289,000 was revalued at $307,000. At March 31, 2013, there were 53,846 warrants outstanding and the principal amount of the Convertible Debentures is convertible into 280,682 shares of common stock under the terms of the conversion feature embedded in the Convertible Debentures. The amount of shares of common stock under the conversion feature embedded in the Convertible Debenture was revalued from 269,230 shares to 280,682 as a result of adjustment to the conversion price due to the rights offering. Because the warrants and the conversion feature embedded in the Convertible Debenture have a weighted average anti-dilution feature that in certain circumstances could provide the holders with protection against changes in the market value of the Company’s common stock, they are required under applicable accounting standards to be recorded at fair value as of each reporting period. At March 31, 2013 and September 30, 2012, the Company evaluated the fair value of the Warrants and the embedded conversion feature of the Convertible Debentures using a binomial valuation model and recorded other income in the amount of $41,000 for the six months ended March 31, 2013, to reflect the net difference between their carrying values at September 30, 2012 and their fair values as of March 31, 2013 using the closing stock price as of March 31, 2013 for a total value of $78,000. On March 16, 2012, the Company filed a registration statement on Form S-1 with the Securities and Exchange Commission for a rights offering in which existing stockholders of the Company received non-transferable rights to purchase $4.2 million of additional shares of its common stock. Under the terms of the rights offering, the Company distributed, at no charge to the holders of its common stock as of the record date of April 10, 2012, non- transferable subscription rights for each share of common stock owned on the record date. Each subscription right entitled the holder to purchase 0.532 shares of the Company’s common stock at a price of $1.30 per share. The rights offering also includes an over-subscription privilege, which entitled a holder who exercises its basic subscription privilege in full the right to purchase additional shares of common stock that remain unsubscribed at the expiration of the rights offering, subject to the availability and pro rata allocation of shares among persons exercising this over-subscription right. In connection with the rights offering, on April 30, 2012, the Company entered into a standby purchase agreement with Wynnefield Capital, Inc. (“Wynnefield Capital”), which owned, prior to the rights offering, approximately 21% of the Company’s Common Stock through certain affiliated entities. Pursuant to the standby purchase agreement, Wynnefield Capital (or affiliated assignees) agreed to acquire from us in the rights offering, subject to the satisfactions of specified conditions, the shares of common stock that relate to any rights that remain unexercised at the expiration of the rights offering. We entered into a registration rights agreement with Wynnefield Capital whereby we agreed, at our cost and expense, to register for resale under the Securities Act of 1933, all shares of common stock beneficially owned by Wynnefield Capital, including shares purchased by Wynnefield Capital in the rights offering as well as shares potentially received upon exercise of the conversion feature of the Convertible Debt and upon exercise of the associated warrants. This registration statement was declared effective by the SEC in January 2013. The Company completed the closing of the rights offering on June 15, 2012 and raised gross proceeds of $4.2 million from the sale of 3,230,769 shares of its common stock. As a result, the total number of shares of the Company’s common stock outstanding increased to 9,305,702 shares. Officers and directors purchased an aggregate of 137,678 shares in the rights offering and entities affiliated with Wynnefield Capital purchased a total of 2,840,251 shares of our common stock.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS AFFECTING THE COMPANY:	6 Months Ended
	Mar. 31, 2013
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS AFFECTING THE COMPANY:
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS AFFECTING THE COMPANY:	(8) RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS AFFECTING THE COMPANY: In December 2011, the FASB amended disclosure concerning offsetting assets and liabilities. The amendments in the update requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position, including the effect or potential effect of rights of setoff associated with certain financial instruments and derivative instruments. Entities are required to disclose both gross information and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. This scope would include derivatives, sale and repurchase agreements and reverse sale and repurchase agreements, and securities borrowing and securities lending arrangements. The amendment is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. An entity should provide the disclosures required by those amendments retrospectively for all comparative periods presented. The Company is currently evaluating the prospective effects, if any, of adopting this guidance. In August 2012, the FASB issued technical amendments and corrections to SEC sections, effective for the period ended September 30, 2012. The adoption of this guidance did not have a material effect on the financial statements. In October 2012, the FASB issued technical corrections and improvements, which include revisions to prior guidance on numerous topics, including Convertible Debentures. The effective date of these revisions is for fiscal years beginning after December 15, 2012. The Company is currently evaluating the prospective effects, if any, of adopting this guidance. In January 2013, the FASB issued clarifying guidance related to the amended disclosure requirements concerning offsetting assets and liabilities which had previously been issued in December 2011. This guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The Company is currently evaluating the prospective effects, if any, of adopting this guidance. In February 2013, the FASB amended its guidance related to the reporting of amounts reclassified out of accumulated other comprehensive income. The amendments are effective prospectively for reporting periods beginning after December 15, 2012. The Company is currently evaluating the prospective effects, if any, of adopting this guidance.

- Definition

The entire disclosure of changes in accounting principles, including adoption of new accounting pronouncements, that describes the new methods, amount and effects on financial statement line items.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Direct Effects of a Change in Accounting Principle
-URI http://asc.fasb.org/extlink&oid=6510796

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-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=6507316

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-Paragraph b
-Subparagraph 6
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+ Details

ECONOMIC DEPENDENCY:	6 Months Ended
ECONOMIC DEPENDENCY:	Mar. 31, 2013
ECONOMIC DEPENDENCY:
ECONOMIC DEPENDENCY:	(9) ECONOMIC DEPENDENCY: A major customer is defined as a customer from whom the Company derives at least 10% of its revenues. In each of the fiscal quarters ended March 31, 2013 and 2012, revenue from the U.S. Government accounted, either directly or indirectly, for 100% of the Company’s total revenue. Within the U.S. Government, our largest customer in the fiscal quarter ending March 31, 2013 continued to be the DVA, accounting for 97% and 95% of revenue in the fiscal quarters ending March 31, 2013 and 2012 respectively, and with whom the Company held over a dozen contracts and/or task orders for logistics, pharmaceutical, and medical services, all subject to the Federal Acquisition Regulations. Accordingly, DLH remains particularly dependent on the continuation of its relationship with the DVA.

- Definition

The entire disclosure for any concentrations existing at the date of the financial statements that make an entity vulnerable to a reasonably possible, near-term, severe impact. This disclosure informs financial statement users about the general nature of the risk associated with the concentration, and may indicate the percentage of concentration risk as of the balance sheet date.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Paragraph 18
-URI http://asc.fasb.org/extlink&oid=6927468&loc=d3e6351-108592

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13537-108611

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 94-6
-Paragraph 21, 22, 24
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15A
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

SUBSEQUENT EVENTS:	6 Months Ended
SUBSEQUENT EVENTS:	Mar. 31, 2013
SUBSEQUENT EVENTS:
SUBSEQUENT EVENTS:	(10) SUBSEQUENT EVENTS: On May 3, 2013, the Company received a staff deficiency letter from The Nasdaq Stock Market (“ Nasdaq ”) notifying the Company that for the past 30 consecutive business days, the closing bid price per share of its common stock was below the $1.00 minimum bid price requirement for continued listing on The Nasdaq Capital Market, as required by Nasdaq Listing Rule 5550(a)(2) (the “ Listing Rule “) and that the Company is not in compliance with the Listing Rule. Nasdaq has provided the Company with an initial grace period of 180 calendar days, or until October 30, 2013, to regain compliance by sustaining a closing bid price of at least $1.00 per share for a minimum of 10 consecutive business days. Management has evaluated subsequent events through the date that the Company’s financial statements were issued. Based on this evaluation, the Company has determined that no subsequent events have occurred which require disclosure through the date that these financial statements were issued.

LIQUIDITY AND SIGNIFICANT ACCOUNTING POLICIES: (Policies)

6 Months Ended

Mar. 31, 2013

LIQUIDITY AND SIGNIFICANT ACCOUNTING POLICIES:

Liquidity

Liquidity

Basis of Presentation

Basis of Presentation

Use of Estimates

Use of Estimates

Revenue Recognition

Revenue Recognition

Goodwill

Goodwill

Income Taxes

Income Taxes

Stock-Based Compensation

Stock-Based Compensation

Stock Options, Warrants and Restricted Stock

Stock compensation expense totaled $38,000 for all awards for the three month period ended March 31, 2013, and totaled $48,000 for all awards for the three months ended March 31, 2012.

Stock compensation expense totaled $129,000 for all awards for the six month period ended March 31, 2013, and totaled $219,000 for all awards for the six months ended March 31, 2012.

The stock option activity for the six months ended March 31, 2013 is as follows:

	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Options outstanding, September 30, 2012	1,362,500	$	1.19	8.6	$	140,000
Granted	250,000	$	0.95
Cancelled
Exercised	—	—
Options outstanding, March 31, 2013	1,612,500	$	1.15	8.4	$	70,000

The Company recognized expense for warrants issued to consultants of $3,000 for both the three months ended March 31, 2013 and 2012

The Company recognized expense for warrants issued to consultants of $6,000 for both the six months ended March 31, 2013 and 2012.

Changes in Shareholders' Equity

Changes in Shareholders’ Equity

The following are the changes in Shareholders’ Equity for the six months ended March 31, 2013:

(AMOUNTS IN THOUSANDS)

				Additional										Total
	Common Stock			Paid-In			Accumulated			Treasury Stock				Shareholders’
	Shares	Amount		Capital			Deficit			Shares	Amount			Equity

BALANCE, September 31, 2012	9,266	$	9	$	75,207		$	(67,442	)	2	$	(24	)	$	7,750

Director restricted stock grants	52			54										54
Warrants issued to consultants				6										6
Expense related to employee stock option grants				69										69
Fees related to rights offering				(9		)								(9		)
Net loss							(237		)					(237		)

BALANCE, March 31, 2013	9,318	$	9	$	75,327		$	(67,679	)	2	$	(24	)	$	7,633

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Earnings (Loss) Per Share

Earnings (Loss) Per Share

LIQUIDITY AND SIGNIFICANT ACCOUNTING POLICIES: (Tables)

6 Months Ended

Mar. 31, 2013

LIQUIDITY AND SIGNIFICANT ACCOUNTING POLICIES:

Schedule of stock option activity

Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Options outstanding, September 30, 2012	1,362,500	$	1.19	8.6	$	140,000
Granted	250,000	$	0.95
Cancelled
Exercised	—	—
Options outstanding, March 31, 2013	1,612,500	$	1.15	8.4	$	70,000

Schedule of changes in Stockholders' equity

(AMOUNTS IN THOUSANDS)

				Additional										Total
	Common Stock			Paid-In			Accumulated			Treasury Stock				Shareholders’
	Shares	Amount		Capital			Deficit			Shares	Amount			Equity

BALANCE, September 31, 2012	9,266	$	9	$	75,207		$	(67,442	)	2	$	(24	)	$	7,750

Director restricted stock grants	52			54										54
Warrants issued to consultants				6										6
Expense related to employee stock option grants				69										69
Fees related to rights offering				(9		)								(9		)
Net loss							(237		)					(237		)

BALANCE, March 31, 2013	9,318	$	9	$	75,327		$	(67,679	)	2	$	(24	)	$	7,633

DISCONTINUED OPERATION: (Tables)

6 Months Ended

Mar. 31, 2013

DISCONTINUED OPERATION:

Schedule of details of liabilities from the discontinued operations

The following chart details liabilities from the discontinued operation (amounts in thousands):

Liabilities	March 31, 2013		September 30, 2012
Accrued expenses and other current liabilities	$	178	$	185

ORGANIZATION AND BUSINESS: (Details) - item	3 Months Ended		6 Months Ended	12 Months Ended
ORGANIZATION AND BUSINESS: (Details) - item	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Sep. 30, 2012
ORGANIZATION AND BUSINESS:
Minimum period for which entity has provided professional services to the U.S. Government			25 years
Number of employees	1,100		1,100
Minimum number of locations in which entity operates	25		25
Number of integrated business areas of DLH Solutions			3
Revenue concentration \| Geographic concentration \| Healthcare Delivery Solutions
ORGANIZATION AND BUSINESS
Concentration risk percentage			54.00%	54.00%
Revenue concentration \| Geographic concentration \| Logistics and Technical Services
ORGANIZATION AND BUSINESS
Concentration risk percentage			45.00%	45.00%
Revenue concentration \| Geographic concentration \| Contingency/Staff Augmentation \| Maximum
ORGANIZATION AND BUSINESS
Concentration risk percentage			1.00%	1.00%
Revenue concentration \| Department of Veterans Affairs \| Customer concentration
ORGANIZATION AND BUSINESS
Concentration risk percentage	97.00%	95.00%	97.00%

LIQUIDITY AND SIGNIFICANT ACCOUNTING POLICIES: (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012	Sep. 30, 2012	Sep. 30, 2008	May 31, 2012	Sep. 30, 2011	Feb. 09, 2011	Nov. 30, 2010	Jul. 29, 2010
Liquidity
Net working capital deficit	$ 1,900,000		$ 1,900,000
Accumulated deficit	67,679,000		67,679,000		$ 67,442,000
Operating loss	(9,000)	$ 564,000	84,000	$ 774,000
Net loss	109,000	715,000	237,000	1,104,000
Cash and cash equivalents	3,196,000	$ 602,000	$ 3,196,000	$ 602,000	3,089,000			$ 763,000
Period for which effects of cost reduction programs and initiatives should be sufficient to support the Company's operations			12 months
Revenue Recognition
Accrued liabilities for salaries to employees and related benefits	$ 10,589,000		$ 10,589,000		10,555,000
Goodwill
Impairment loss					0
Income Taxes
Income tax related interest or penalties			$ 0
Valuation allowance against deferred tax assets (as a percent)	100.00%	100.00%	100.00%	100.00%
Line of credit
Liquidity
Maximum availability							$ 6,000,000		$ 3,000,000	$ 2,500,000	$ 1,500,000
Current borrowing capacity	$ 3,000,000		$ 3,000,000
Amount available under the loan and security agreement	38,000		38,000
Amount outstanding	$ 2,476,000		2,476,000
Line of credit - unbilled receivables
Liquidity
Maximum availability							$ 1,000,000		$ 500,000
Maximum
Goodwill
Charge to be expensed, if an impairment of all the goodwill became necessary			8,600,000
Department of Veterans Affairs
Liquidity
Total contract value of the Blanket Purchase Agreement with the DVA			$ 145,000,000
Term of Blanket Purchase Agreement			5 years
Option term of the Blanket Purchase Agreement			4 years
Percentage of revenue generated from Blanket Purchase Agreement	50.00%		50.00%
Revenue Recognition
Contract revenue, nonrecurring						$ 10,800,000
Direct costs related to nonrecurring contract revenue						$ 10,100,000
Accounts receivable	$ 9,300,000		$ 9,300,000		9,300,000
Accrued liabilities for salaries to employees and related benefits	8,700,000		8,700,000		8,700,000
Unbilled accounts receivable	$ 9,300,000		$ 9,300,000		$ 9,300,000
Department of Veterans Affairs \| Customer concentration \| Revenue concentration
Liquidity
Concentration risk percentage	97.00%		97.00%
Department of Veterans Affairs \| Minimum
Revenue Recognition
Estimated additional indirect costs and fees associated with contract modification pending final approval			$ 400,000
Department of Veterans Affairs \| Maximum
Revenue Recognition
Estimated additional indirect costs and fees associated with contract modification pending final approval			$ 600,000

LIQUIDITY AND SIGNIFICANT ACCOUNTING POLICIES: (Details 2)			1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	Nov. 21, 2012 $ / shares shares	Nov. 15, 2012 shares	Nov. 30, 2012 USD ($)	Mar. 31, 2013 USD ($) $ / shares shares	Mar. 31, 2012 USD ($)	Mar. 31, 2013 USD ($) $ / shares shares	Mar. 31, 2012 USD ($)	Sep. 30, 2012 USD ($) $ / shares shares
Stock- Based Compensation
Remaining costs related to non-vested restricted stock awards (in dollars) \| $				$ 170,000		$ 170,000
Stock compensation expense \| $				$ 38,000	$ 48,000	129,000	$ 219,000
Other disclosures
Warrant expense recognized (in dollars) \| $						$ 6,000	6,000
Restricted Stock
Stock- Based Compensation
Stock compensation expense \| $			$ 54,000
Options outstanding (in shares) \| shares				52,500		52,500
Remaining costs related to non-vested restricted stock awards (in dollars) \| $				$ 150,000		$ 150,000
Restricted Stock \| Non-executive directors
Stock- Based Compensation
Granted (in shares) \| shares		52,500
Stock Options
Number of Shares
Outstanding at the beginning of the period (in shares) \| shares						1,362,500
Granted (in shares) \| shares						250,000
Outstanding at the end of the period (in shares) \| shares				1,612,500		1,612,500		1,362,500
Weighted Average Exercise Price
Outstanding at the beginning of the period (in dollars per share) \| $ / shares						$ 1.19
Granted (in dollars per share) \| $ / shares						0.95
Outstanding at the end of the period (in dollars per share) \| $ / shares				$ 1.15		$ 1.15		$ 1.19
Weighted Average Remaining Contractual Term
Outstanding at the end of the period						8 years 4 months 24 days		8 years 7 months 6 days
Aggregate Intrinsic Value
Outstanding at the end of the period (in dollars) \| $				$ 70,000		$ 70,000		$ 140,000
Other disclosures
Options outstanding that were vested and exercisable (in shares) \| shares				412,500		412,500
Additional options outstanding that are expected to vest (in shares) \| shares				1,200,000		1,200,000
Stock Options \| Chief executive officer \| 2006 Plan
Stock- Based Compensation
Stock compensation expense \| $						$ 4,000
Number of Shares
Granted (in shares) \| shares	250,000
Period for which options are exercisable	10 years
Common stock price per share required for vesting of options \| $ / shares	$ 4.00
Common stock price per share as a percentage of exercise price for vesting of options	2.00
Number of consecutive days considered for common stock price per share to determine vesting of options	10 days
Warrants \| Consultants
Other disclosures
Warrant expense recognized (in dollars) \| $				$ 3,000	$ 3,000	$ 6,000	$ 6,000

LIQUIDITY AND SIGNIFICANT ACCOUNTING POLICIES: (Details 3) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013	Mar. 31, 2012
Changes in Shareholders' Equity
BALANCE at the beginning of the period			$ 7,750
Director restricted stock grants			54
Warrants issued to consultants			6
Expense related to employee stock option grants			69
Fees related to rights offering			(9)
Net loss	$ (109)	$ (715)	(237)	$ (1,104)
BALANCE at the end of the period	$ 7,633		$ 7,633
Basic and Diluted:
Anti-dilutive shares	1,686,346	1,423,486	1,686,346	1,423,846
Common Stock
Changes in Shareholders' Equity
BALANCE at the beginning of the period (in shares)			9,266
BALANCE at the beginning of the period			$ 9
Director restricted stock grants (in shares)			52
BALANCE at the end of the period (in shares)	9,318		9,318
BALANCE at the end of the period	$ 9		$ 9
Additional Paid-In Capital
Changes in Shareholders' Equity
BALANCE at the beginning of the period			75,207
Director restricted stock grants			54
Warrants issued to consultants			6
Expense related to employee stock option grants			69
Fees related to rights offering			(9)
BALANCE at the end of the period	75,327		75,327
Accumulated Deficit
Changes in Shareholders' Equity
BALANCE at the beginning of the period			(67,442)
Net loss			(237)
BALANCE at the end of the period	$ (67,679)		$ (67,679)
Treasury Stock
Changes in Shareholders' Equity
BALANCE at the beginning of the period (in shares)			2
BALANCE at the beginning of the period			$ (24)
BALANCE at the end of the period (in shares)	2		2
BALANCE at the end of the period	$ (24)		$ (24)

DISCONTINUED OPERATION: (Details) - USD ($) $ in Thousands	3 Months Ended
DISCONTINUED OPERATION: (Details) - USD ($) $ in Thousands	Mar. 31, 2013	Sep. 30, 2012
Discontinued Operation
Non-recurring gains or losses from discontinued operations	$ 0
Liabilities
Accrued expenses and other current liabilities	$ 178	$ 185

COMMITMENTS AND CONTINGENCIES (Details)	6 Months Ended	12 Months Ended
COMMITMENTS AND CONTINGENCIES (Details)	Mar. 31, 2013 USD ($) item	Sep. 30, 2012 USD ($)	Dec. 31, 2012 USD ($)
COMMITMENTS AND CONTINGENCIES:
Number of subsidiaries prior to sale of assets related to PEO operation \| item	17
Remaining liability for penalties and interest related to payroll taxes	$ 1,400,000		$ 1,300,000
Accrued penalties and interest related to payroll taxes	$ 600,000
Maximum percentage of annual salary used to calculate ump sum payemtn in event of change in control	150.00%
Payments made for payroll taxes	$ 0	$ 0
Wage adjustment required	$ 0

PREPAID WORKERS' COMPENSATION: (Details) - USD ($) $ in Thousands	6 Months Ended
	Mar. 31, 2013	Sep. 30, 2012
PREPAID WORKERS' COMPENSATION:
Prepaid asset	$ 462	$ 516
Workers compensation program, Zurich
PREPAID WORKERS' COMPENSATION:
Prepaid asset	$ 500
Period over which remaining prepaid asset will be received	12 months

DEBT: (Details) - USD ($)			1 Months Ended	6 Months Ended
DEBT: (Details) - USD ($)	Feb. 28, 2011	Jul. 29, 2010	May 31, 2012	Mar. 31, 2013	May 09, 2012	Mar. 31, 2012	Feb. 09, 2011	Nov. 30, 2010
DEBT
Advances against facility in excess of eligible collateral				$ 0
Loan Agreement
DEBT
Extended term of debt instrument	12 months
Monthly service charge based on the average daily loan balance (as a percent)				0.65%
Interest rate (as a percent)				5.20%		7.20%
Maximum amount of equity interest that the entity can redeem, retire or purchase				$ 50,000
Notice period to terminate the Loan Agreement				60 days
Origination fee (as a percent)				1.00%
Line of credit
DEBT
Term of debt instrument		2 years
Maximum availability		$ 1,500,000	$ 6,000,000				$ 3,000,000	$ 2,500,000
Initial sublimit			3,000,000
Adjusted sublimit			4,000,000
Repayment of over-advance accommodation			500,000
Accounts advance rate (as a percent)				85.00%
Interest rate (as a percent)				3.25%
Amount of unused availability under the line				$ 38,000
Amount outstanding				$ 2,476,000
Maximum borrowing capacity in excess of eligible collateral					$ 500,000
Line of credit \| Prime Rate
DEBT
Margin (as a percent)				1.95%
Reference rate, description				Wall Street Journal Prime rate
Line of credit - unbilled receivables
DEBT
Maximum availability			$ 1,000,000				$ 500,000
Interest rate premium (as a percent)				2.00%
Accounts advance rate (as a percent)				75.00%
Interest rate (as a percent)				7.20%		7.20%
Line of credit - unbilled receivables \| Prime Rate
DEBT
Margin (as a percent)				3.95%
Reference rate, description				Wall Street Journal Prime rate
Accounts Receivable portion
DEBT
Interest rate (as a percent)				5.20%		5.20%

EQUITY AND CONVERTIBLE DEBENTURES FINANCING (Details)						1 Months Ended		3 Months Ended		6 Months Ended
EQUITY AND CONVERTIBLE DEBENTURES FINANCING (Details)	Jun. 15, 2012 USD ($) shares	Apr. 30, 2012	Apr. 10, 2012 item $ / shares	Mar. 16, 2012 USD ($)	Jul. 28, 2011 USD ($) $ / shares	Jul. 30, 2011 shares	Jun. 01, 2011 $ / shares shares	Mar. 31, 2013 USD ($) shares	Mar. 31, 2012 USD ($)	Mar. 31, 2013 USD ($) shares	Mar. 31, 2012 USD ($)	Sep. 30, 2012 shares	Jun. 30, 2012 USD ($) $ / shares
EQUITY AND CONVERTIBLE DEBENTURES FINANCING
Income (expense) recorded related to change in the fair value of financial instruments								$ (20,000)	$ (28,000)	$ 41,000	$ (84,000)
Common stock owned by Wynnefield Capital prior to rights offering (as a percent)		21.00%
Proceeds from rights offering	$ 4,200,000
Rights offering (in shares) \| shares	3,230,769
Shares outstanding \| shares	9,305,702							9,318,000		9,318,000		9,266,000
Issuance of number of shares to officers and directors in rights offering \| shares	137,678
Issuance of number of shares to entities affiliated to Wynnefield Capital in rights offering \| shares	2,840,251
Rights
EQUITY AND CONVERTIBLE DEBENTURES FINANCING
Exercise price (in dollars per share) \| $ / shares			1.30
Rights offering, value of securities available to be issued upon exercise of rights				$ 4,200,000
Number of shares entitled by holder under each subscription right \| item			0.532
Debenture Purchase Agreement
EQUITY AND CONVERTIBLE DEBENTURES FINANCING
Direct costs under Agreement								$ 32,000		$ 32,000
Income (expense) recorded related to change in the fair value of financial instruments										41,000
Net difference between carrying value and fair value of warrants and the embedded conversion feature of the convertible debentures										$ 78,000
Debenture Purchase Agreement \| Warrants
EQUITY AND CONVERTIBLE DEBENTURES FINANCING
Warrants issued to Debenture Purchasers (in shares) \| shares							53,846
Warrant exercise period							5 years
Exercise price (in dollars per share) \| $ / shares							1.00						0.96
Value of warrants					$ 42,000
Warrants outstanding (in shares) \| shares								53,846		53,846
Debenture Purchase Agreement \| Convertible debentures
EQUITY AND CONVERTIBLE DEBENTURES FINANCING
Aggregate principal amount of notes issued					$ 350,000
Interest rate as of reporting date (as a percent)								10.00%		10.00%
Conversion price of debt into common stock (in dollars per share) \| $ / shares					$ 1.30								$ 1.25
Percentage of remaining principal amount, plus accrued but unpaid interest at which the entity can redeem the outstanding debt										120.00%
Fair value of convertible debt					$ 289,000								$ 307,000
Shares of common stock under conversion feature \| shares						269,230				280,682
Debenture Purchase Agreement \| Convertible debentures \| Minimum \| Prime Rate
EQUITY AND CONVERTIBLE DEBENTURES FINANCING
Reference rate, description										Prime rate
Margin (as a percent)								5.00%		5.00%
Debenture Purchase Agreement \| Convertible debentures \| Maximum
EQUITY AND CONVERTIBLE DEBENTURES FINANCING
Stated interest rate (as a percent)								10.00%		10.00%

ECONOMIC DEPENDENCY: (Details) - Revenue concentration - Customer concentration	3 Months Ended		6 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013
U.S. Government
ECONOMIC DEPENDENCY
Concentration risk percentage	100.00%	100.00%
DVA
ECONOMIC DEPENDENCY
Concentration risk percentage	97.00%	95.00%	97.00%

SUBSEQUENT EVENTS: (Details) - Subsequent Event	May 03, 2013 $ / shares
SUBSEQUENT EVENTS:
Number of consecutive business days of non-compliance with the Listing Rule	30 days
Required minimum bid price under Listing Rule (in dollars per share)	$ 1.00
Grace period for NASDAQ Listing Rule compliance	180 days
Minimum number of consecutive business days of bid price required during the grace period	10 days

Label	Element	Value
Share-based Compensation	us-gaap_ShareBasedCompensation	$ 5,000