3.	Share-Based Compensation

Share-based compensation by category is as follows (in thousands):


	Three Months Ended December 31,				Six Months Ended December 31,
	2015		2014		2015		2014
SG&A	$	72	$	124	$	180	$	263
Product development		10		20		20		20
Cost of revenues		5		10		10		10

Share-based compensation expense	$	87	$	154	$	210	$	293

We computed the estimated fair values of all option-based compensation using the Black-Scholes option pricing model and the assumptions set forth in the following table. We based our estimate of the life of these options on historical averages over the past five years and estimates of expected future behavior. The expected volatility was based on the company’s historical stock volatility. The assumptions used in the company’s Black-Scholes calculations for fiscal 2016 and 2015 are as follows:


	Risk Free Interest Rate			Dividend Yield			Volatility Factor			Weighted Average Expected Option Life (Months)
Fiscal year 2016		1.6	%		0	%		85	%		48
Fiscal year 2015		0.6	%		0	%		84	%		48

The Black-Scholes option-pricing model requires the input of highly subjective assumptions. Because the company’s employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models may not provide a reliable single measure of the fair value of share-based compensation for employee stock options. Management will continue to assess the assumptions and methodologies used to calculate estimated fair value of share-based compensation as circumstances change and additional data becomes available over time, which may result in changes to these assumptions and methodologies. Such changes could materially impact the company’s fair value determination.

On August 23, 2011, the stockholders approved the 2011 Omnibus Equity Incentive Plan (the 2011 Plan). The 2011 Plan replaces the 2010 Employee Stock Option Plan and the 2001 Non-Executive Director Stock Option Plan. On May 1, 2014, the stockholders approved an amendment to the 2011 Plan to increase the number of shares of common stock available for issuance under the plan by approximately 378,000 shares. As amended, the 2011 Plan provides for the issuance of up to approximately 750,000 shares of the company’s common stock in connection with stock options, restricted share awards and other stock compensation vehicles.

Stock option activity under the company’s stock option plans for employees and non-executive directors for the period ended December 31, 2015 is as follows (in thousands, except per share and average life data):


Employees Information	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding June 30, 2015		237		$	20.43
Granted		36			2.97
Exercised		(1	)		6.21
Expired/Forfeited		(65	)		18.09

Outstanding December 31, 2015		207		$	18.18		6.08	$	130

Exercisable December 31 2015		126		$	25.38		3.46	$	4

Expected to vest at December 31, 2015		64		$	7.29		7.94	$	99


Non-Executive Director Information	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding June 30, 2015		243		$	5.58
Granted		186			3.24
Expired		(1	)		54.00

Outstanding December 31, 2015		427			4.41		8.24	$	1,151

Exercisable December 31 2015		413		$	4.32		8.18	$	1,151

Non-executive director options are granted at market price and vest on the grant date. Certain options granted to a director serving as an interim officer vest thirty (30) days from the grant date.

As of December 31, 2015, there were approximately 41,000 restricted stock units outstanding that were granted to employees as of January 15, 2013 and January 28, 2014 in connection with the company’s compensation modification program. These restricted stock units vest when the company achieves cash flow breakeven, as defined.

As of December 31, 2015, there was approximately $326,000 of total unrecognized compensation expense related to unvested share-based compensation arrangements that is expected to be recognized over a weighted-average period of 15 months.

There were 518 options exercised for approximately $3,200 during the six month period ended December 31, 2015 and no options were exercised during the six month period ended December 31, 2014. The intrinsic value of the options exercised was not material. The weighted average grant date fair value of options granted during the six month periods ended December 31, 2015 and 2014 was approximately $1.71 and $4.50, respectively. These values were calculated using the Black-Scholes option-pricing model.

The total fair value of options vested was $321,000 and $340,000 for the six month periods ended December 31, 2015 and 2014, respectively. In December 2012, the board of directors agreed that all non-employee directors would receive all of their cash director compensation, including amounts payable for committee service, service as a committee chair and per meeting fees, in restricted shares of our common stock or stock options issued at fair value in accordance with the terms of the 2011 Plan for periods ending after December 2012. During the six months ended December 31, 2015, the company issued 13,647 shares of restricted common stock and 69,344 stock options (with a total fair value of approximately $363,000) to certain non-executive directors in connection with this program. In January 2016 the company issued 1,643 shares of restricted common stock (with a fair value of approximately $10,500) to a director under this program for the quarter ended December 31, 2015. During the six months ended December 31, 2015, the board of directors also issued 108,333 stock options (with a total fair value of approximately $153,000) to the interim chief strategy officer for services.