Share-Based Payments

12 Months Ended

Jun. 30, 2015

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

Equity Incentive Plan

The 2011 Executive Incentive Plan (the "Plan") of the Company was approved on February 21, 2011 by the written consent of the holder of a majority of the Company's outstanding common stock. The Plan provides the Company the ability to grant to any officer, director, employee, consultant or other person who provides services to the Company or any related entity, options, stock appreciation rights, restricted stock awards, dividend equivalents and other stock-based awards and performance awards, provided that only employees are entitled to receive incentive stock options in accordance with IRS guidelines. The Company reserved 3,750,000 shares of common stock for delivery under the Plan. Pursuant to the Executive Incentive Plan and the employment agreements, between February 15, 2011 and June 30, 2015, the Compensation Committee of the Company's Board of Directors authorized the grants of restricted stock and stock options described below.

Restricted Stock

The per share fair value of RSUs granted with service conditions was determined on the date of grant using the fair market value of the shares on that date and is recognized as an expense over the requisite service period. This information does not include RSUs granted as part of the acquisitions of Wetpaint and Choose Digital described in Note 4.



Description	Shares		Weighted Average Grant Date Fair Value
Nonvested at June 30, 2014	396,370		$	95.57
Granted	1,794,841		3.20
Vested	(1,512,496	)	17.10
Forfeited and canceled	(212,458	)	3.20
Nonvested at June 30, 2015	466,257		$	41.00

Compensation expense related to restricted stock was $24,649 and $19,622 for the years ended June 30, 2015 and 2014, respectively. As of June 30, 2015, there was $12,967 in unrecognized share-based compensation costs related to restricted stock.

Stock Options

The following table summarizes the Company's stock option activity for year ended June 30, 2015:



Description	Number of Options		Weighted average exercise price		Weighted average remaining contractual life (years)	Aggregate intrinsic value
Outstanding at June 30, 2014	989,066		$	30.09	9.44	$	—
Granted	610,335		2.97		—	—
Exercised	(35,000	)	2.33		—	27
Forfeited and canceled	(382,583	)	47.75		—	4
Outstanding at June 30, 2015	1,181,818		11.19		8.97	15
Exercisable at June 30, 2015	818,097		$	13.59	8.97	$	—

The Company accounts for stock options based on the fair market value on the date of grant, with the resulting expense recognized over the requisite service period. The fair value of each option award is estimated using the Black-Scholes option valuation model. Expected volatility is based on the historical volatility of the price of the Company's stock. The risk-free interest rate is based on U.S. Treasury Notes with a term equal to the expected life of the option. The Company uses historical data to estimate expected dividend yield, expected life and forfeiture rates. Options generally have an expiration of 10 years and vest over a period of 3 or 4 years. The fair value of options granted during the years ended June 30, 2015 and 2014 were estimated based on the following weighted average assumptions:



Description	Year Ended June 30, 2015			Year Ended June 30, 2014
Expected volatility	80		%	80		%
Risk-free interest rate	1.82		%	1.92		%
Expected dividend yield	—			—
Expected life (in years)	6.50			6.49
Estimated fair value per option granted	$	2.11		$	3.73

Compensation expense related to stock options of $3,650 and $7,014 is included in the accompanying Consolidated Statements of Operations in Selling, general and administrative expenses for the years ended June 30, 2015 and 2014, respectively. As of June 30 2015, there was approximately $1,173 of unrecognized stock-based compensation cost related to stock options, which will generally be recognized over a four year period.