2.	Immaterial Restatement of Previously Issued Financial Statements and Reclassification

Subsequent to the issuance of our fiscal year 2015 consolidated financial statements, we identified an error relating to the grant of 120,000 restricted stock awards (“RSAs”) to our president and chief executive officer (“CEO”) upon his commencement of employment in November 2014 (see Note 18 – Subsequent Events). Because the grant was determined to be non-compliant under the terms of the 2011 Stock Incentive Plan (the “Plan”) under which it was granted, in October 2015, the grant was retroactively rescinded. As a result of this error, stock compensation expense was overstated by $249 ($156 net of the related income tax effect of $93) and $44 of related accrued dividends were overstated for the year ended June 30, 2015. Since the grant occurred in the second quarter of the year ended June 30, 2015, there is no impact of this error on the three months ended September 30, 2014. The accompanying condensed consolidated balance sheet as of June 30, 2015 has been corrected for the effect of this error. The effects of this error correction on other periods in the year ended June 30, 2015 will be reflected prospectively. We have evaluated the effects of this misstatement for the year ended June 30, 2015, and the previously presented interim periods, and concluded that these periods are not materially misstated.

The impact of this misstatement on our previously issued condensed consolidated balance sheet as of June 30, 2015 is presented below:

	Consolidated Balance Sheet as of June 30, 2015
	As
	Previously				As
	Reported		Adjustments		Restated

ASSETS
Current assets:
Cash and cash equivalents	$	25,451			$	25,451
Accounts receivable, net		10,174				10,174
Inventories		3,428				3,428
Deferred income taxes - current, net		1,422				1,422
Prepaid expenses and other current assets		738				738
Total current assets		41,213		-		41,213

Property and equipment, net		2,448				2,448
Deferred income taxes, net		12,711		(93)		12,618
Other long-term assets, net		1,501				1,501
Total assets	$	57,873	$	(93)	$	57,780

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	6,342	$	(22)	$	6,320
Deferred revenue		8,362				8,362
Total current liabilities		14,704		(22)		14,682

Long-term liabilities:
Deferred revenue		1,658				1,658
Pension liability		3,189				3,189
Other long-term liabilities		1,716		(22)		1,694
Total liabilities		21,267		(44)		21,223

Commitments and contingencies

Stockholders' equity:
Shares of series preferred stock, par value $.01		-				-
Shares of class A preferred stock, par value $100		-				-
Common stock, par value $.01		91				91
Capital in excess of par value		210,456		(249)		210,207
Accumulated deficit		(173,795)		200		(173,595)
Treasury stock, at cost		(255)				(255)
Accumulated other comprehensive income (loss)		109				109
Total stockholders' equity		36,606		(49)		36,557
Total liabilities and stockholders' equity	$	57,873	$	(93)	$	57,780

Subsequent to the issuance of our fiscal year 2014 consolidated financial statements, we identified an error in the consolidated statements of cash flows relating to the presentation of spare parts purchases used to support our obligations under customer contracts. Cash outflows of $106 for the three months ended September 30, 2014 were improperly classified as investing activities rather than as operating activities in our condensed consolidated statements of cash flows. We have evaluated the effects of these misstatements for this period and concluded that this period is not materially misstated. Notwithstanding, we have corrected the accompanying condensed consolidated cash flow presentation for the three months ended September 30, 2014.

The impact of this misstatement on our previously issued condensed consolidated statements of cash flows for the three months ended September 30, 2014 is presented below:

	Consolidated Statements of Cash Flows
	for the Three months Ended Ended September 30, 2014
	As
	Previously				As
	Reported		Adjustments		Restated

Depreciation and amortization	$	501	$	(81)	$	420
Provision for excess and obsolete inventories		10		81		91
Other long-term assets, net		(4)		(106)		(110)
All other operating activities, net		(991)		-		(991)
Net cash provided by (used in) operating activities	$	(484)	$	(106)	$	(590)

Additions to property and equipment	$	(388)	$	106	$	(282)
All other investing activities, net		301		-		301
Net cash Provided by (used in) investing activities	$	(87)	$	106	$	19

The notes to the condensed consolidated financial statements have been corrected to give effect to the above items.

Reclassification

Certain prior year amounts in the consolidated financial statements have been reclassified to conform to the current year presentation. Specifically, we have reclassified our intangible assets, net with balances of $139 and $323 into other long-term assets, net in our consolidated balance sheets as of September 30, 2015 and June 30, 2015, respectively. Intangible assets at September 30, 2015 includes an internet domain name (www.concurrent.com) acquired during the three months ended September 30, 2015 for $35. The domain name is considered an indefinite-lived intangible asset and is not amortizable.

Additionally, amortization expense related to finite-lived intangible assets was $36 and $46 for the three months ended September 30, 2015 and 2014, respectively.