(

) Share-Based Compensation

For the

fiscal years ended

June 30, 2017

and

2016,

the Company recorded share-based compensation expense related to grants from equity incentive plans of

$1.9

million and

$2.0

million, respectively.

income tax benefit was recognized in the statements of operations and

share-based compensation expense was capitalized as part of any assets for the fiscal years ended

June 30, 2017

and

2016.

November 2016,

the Company’s stockholders approved the

2016

Equity Incentive Plan (

“2016

Equity Plan”), which replaced and superseded our amended

2007

Omnibus Equity and Incentive Plan (“Prior Plan”). Under the

2016

Equity Plan all outstanding awards under the Prior Plan will become available for issuance under the

2016

Equity Plan if such awards are forfeited or otherwise terminate.

Stock Options

The fair value of each stock option award was estimated at its respective date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:

	Fiscal Years Ended June 30,
	201 7			201 6
R isk-free interest rate		1.23	%		1.40	%
Dividend yield		—			—
Expected volatility		.67			.75
Expected life of options (years)		3.6			4.8
F air value of options granted	$	0.47		$	1.26

The risk-free rate interest rate is based on the expected life of the option and the corresponding U.S

. Treasury bond, which in most cases is the U.S.

five

year Treasury bond. The expected term of stock options granted is derived from actual and expected option behavior and represents the period of time that options granted are expected to be outstanding. Expected volatility is based on the historical volatility of the Company’s publicly traded common stock.

The following table summarizes the stock option activity for the

fiscal years end

June 30, 2017

and

2016:

	Number of		Weighted Average Exercise Price		Weighted-Average Remaining Contractual		Aggregate Intrinsic Value
	Stock Options		Per Option		Term		($0000)

Balance at June 30, 201 5		3,364,117	$	5.58		7.9	$	—
Granted		1,636,667		2.17
Exercised		—		—
Forfeited or expired		(249,361)		12.77

Balance at June 30, 201 6		4,751,423		4.07		6.6	$	—
Granted		3,582,000		0.90
Exercised		—		—
Forfeited		(489,543)		2.33
E xpired		(277,238)		11.64
Balance at June 30, 2017		7,566,642	$	2.40		7.7	$	—

The total intrinsic value of stock options exercised during the

fiscal years ended

June 30, 2017

and

2016

was

zero

, and

cash proceeds were received by the Company. Further,

actual tax benefits were realized, as the Company currently records a full valuation allowance for all tax benefits due to uncertainties with respect to its ability to generate sufficient taxable income in the future.

The following tables summarize information relating to outstanding and exercisable

stock options as of

June 30, 2017:

			June 30, 201 7
			Outstanding						Exercisable
Exercise Prices			Number of Shares		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number of Shares		Weighted Average Exercise Price
					(In Years)
$0.49	—	$1.21		2,272,000		9.76	$	0.65		-	$	-
$1.30	—	$1.95		1,607,467		9.01		1.38		243,217		1.51
$2.02	—	$6.11		3,558,940		5.90		3.02		2,470,156		3.27
$6.65	—	$34.86		128,235		2.32		29.14		128,235		29.14
				7,566,642		7.66	$	2.40		2,841,608	$	4.28

Restricted Stock Awards.

A summary of the Company’s outstanding restricted stock activity for the fiscal years ended

June 30, 2017

and

2016

is as follows:

				Weighted-Average
				Grant Date
	Shares			Fair Value
Outstanding at June 30, 2015		8,750		$	3.93
Granted		—			—
Forfeited		—			—
Outstanding at June 30, 201 6		8,750			3.93
Granted		—			—
Released		(8,750	)		3.93
Forfeited		—			—
Outstanding at June 30, 201 7		—		$	—

Restricted

Stock Units

and Market Stock Units (MSUs).

A summary of the Company’s outstanding restricted stock and market stock unit (MSU) activity for the fiscal years ended

June 30, 2017

and

2016

is as follows:

	Shares			Weighted Average Grant Date Fair Value
Outstanding at June 30, 201 5		96,581		$	3.23
Awarded		2,500			2.49
Released		(45,716	)		2.44
Forfeited		(6,334	)		2.41
Unvested at June 30, 2016		47,031			7.69
Awarded		—			—
Released		—			—
Forfeited		(47,031	)		7.69
Outstanding at June 30, 2017		—		$	—

December 2013,

the Company awarded

108,133

MSUs to employees that

could have vested on

January 1, 2017.

The vesting of these awards was subject to the respective employee’s continued employment through this settlement period. The number of MSUs granted represented the target number of units that are eligible to be earned based on the attainment of certain market-based criteria involving the Company’s stock price. The stock price criteria was

not

met and the MSUs were forfeited at

January 1, 2017.

Compensation expense, including the effect of forfeitures, was recognized over the applicable service period.

As of

June 30,

2017

and

2016

there was

$2.0

and

$2.6

million, respectively, of unrecognized share-based compensation expense related to all unvested share-based awards, discounted for future forfeitures. This balance is expected to be recognized over a weighted-average period of

1.4

years.