Our financial assets that are measured at fair value on a recurring basis as of September 30, 2016 are as follows:

Our financial assets that are measured at fair value on a recurring basis as of June 30, 2016 are as follows:

Concurrent Computer Corporation

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) - continued

(Amounts in thousands, except for share and per share data)

Our financial assets that are measured at fair value on a recurring basis as of September 30, 2015 are as follows:

Our financial assets that are measured at fair value on a recurring basis as of June 30, 2015 are as follows:

On September 9, 2015, we sold the customer contracts and intellectual property related to our multi-screen video analytics product line for $3,500 pursuant to an Asset Purchase Agreement (“APA”) dated August 31, 2015 with Verimatrix, Inc. (“Verimatrix”), a privately-held video revenue security company based in San Diego, California. The APA includes customary terms and conditions, including provisions that require the Company to indemnify Verimatrix for certain losses that it incurs as a result of a breach by the Company of its representations and warranties in the APA and certain other matters. Proceeds from the sale are payable to the Company as follows: (1) a $2,750 payment to the Company in cash (received on September 10, 2015), (2) a $375 deferred payment which will be paid to the Company by Verimatrix on or before June 30, 2016 (less any portion used to make indemnification payments, if necessary) and (3) $375 placed in escrow which amount will be released to the Company on or before June 30, 2016 (less any portion used to make indemnification payments to Verimatrix after exhaustion of the deferred payment).

The customer contracts and intellectual property sold had a net book value of $188 (which was included in intangible assets, net in our consolidated balance sheet). As a result of the sale, we also included $1,016 (net liability, consisting primarily of unearned deferred revenue) of related assets and liabilities not sold or transferred in the transaction in the calculation of the recorded gain. Additionally, we incurred $212 in legal, accounting and other expenses that would not have been incurred otherwise. As a result, we recorded a net gain of $4,116 in our condensed consolidated statement of operations for the three months ended September 30, 2015.

As noted above, on July 1, 2015, we adopted ASU 2014-08 regarding discontinued operations. As a result, we evaluated the sale of our multi-screen video analytics product line in light of this new standard. We concluded that the sale of our multi-screen video analytics product line in September 2015 was not a “material shift” (as defined in ASU 2014-08) for us and therefore, is not considered a discontinued operation. In accordance with ASU 2014-08, the following information is being provided:

Concurrent Computer Corporation

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) - continued

(Amounts in thousands, except for share and per share data)

¹Through date of sale on September 9, 2015

Components of Provision (Benefit) for Income Taxes

The domestic and foreign components of income (loss) before the provision (benefit) for income taxes are as follows:

We recorded an income tax benefitexpense for our domestic and foreign subsidiaries of $117$128 and an income tax expensebenefit of $177$117 during the three months ended September 30, 20152016 and 2014,2015, respectively. The components of the provision (benefit) for income taxes are as follows:

For the three months ended September 30, 2016, the domestic tax expense is higher than the prior year due to the full valuation allowance that is now being applied to any tax benefit generated from operating losses. The domestic expense is primarily attributable to interest and penalties on uncertain tax positions and minimum state taxes in a number of jurisdictions for the three months ended September 30, 2016. The foreign tax expense is lower than the prior year primarily due to the release of valuation allowance attributable to the tax impact of the gain on sale of our multi-screen video analytics product line. Any other domestic differences are due to differences in projected(1) lower pretax book income in Japan and permanent book/(2) a reduction in the statutory tax differences between the two periods. The foreign tax expense is higher as compared to the prior year, primarily due to higher Japanese pretax book incomerate in Japan for the three months ended September 30, 2015 as2016, compared to the same period forfrom the prior year.

Net Operating Losses

As of June 30, 2015,2016, we had U.S. federal net operating loss carryforwards (“NOLs”) of approximately $92,826$89,937 for income tax purposes, of which none expire in fiscal year 2016,2017, and the remainder expire at various dates through 2034.fiscal year 2035. We recently completed an evaluation of the potential effect of Section 382 of the Internal Revenue Code of 1986 (the “Code”) on our ability to utilize these net operating losses. The study concluded that we have not had an ownership change for the period from July 22, 1993 to June 30, 2015.2016. If we experience an ownership change as defined in Section 382 of the Code, our ability to use these NOLs will be substantially limited, which could therefore significantly impair the value of that asset. On March 1, 2016, we adopted a Tax Asset Preservation Plan (“TAPP”) in order to protect the value of our NOLs. At our 2016 Annual Meeting held on October 26, 2016, our shareholders adopted a formal amendment to our certificate of incorporation with terms substantially similar to the TAPP. The TAPP terminated in accordance with its terms on November 3, 2016 concurrent with the effectiveness of the amendment to our certificate of incorporation.

As of June 30, 2015,2016, we havehad state NOLs of $52,310$51,346 and foreign NOLs of $28,153.$28,208. The state NOLs expire between fiscal year 20152017 and fiscal year 2035. The foreign NOLs expire according to the rules of each country and have ancountry. Currently, none of the jurisdictions in which the Company has foreign NOLs are subject to expiration due to indefinite carryforward period.periods.

Concurrent Computer Corporation

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) - continued

(Amounts in thousands, except for share and per share data)

Valuation Allowance

Realization of our deferred tax assets is dependent primarily on the generation of future taxable income. In considering the need for a valuation allowance, we consider our historical and future projected operations along with other positive and negative evidence in assessing if sufficient future taxable income will be generated to use the existing deferred tax assets. The following summarizes our conclusions on the need for a valuation allowance in each jurisdiction as of September 30, 2015:2016:

U.S. - For– As of June 30, 2016, we believed the three months endedweight of negative evidence was greater than the existing positive evidence and concluded that it was more-likely-than-not that we would be unable to realize our U.S. net deferred tax assets. As a result, a full valuation allowance was established on our U.S. net deferred tax assets which continue to remain in place as of September 30, 2015,2016. For future periods in which we sold the assets associated with our multi-screen video analytics product line, generatingremain in a gain of $4,116. This realized gain will now allow us to utilize an additional amount offull valuation allowance thatposition, we were unablewould expect our U.S. tax provision expense to consider in our estimate of future earnings at the end of fiscal year 2015. We are recognizing a release of $1,355 of the valuation allowance on federal and state NOLs that will be used to offset this gain. Other than this discrete item in fiscal year 2016, we do not believe that there has been a significant change in our business in the U.S. that would require a reassessment of our conclusion at the end of fiscal year 2015 with regardlimited to the valuation allowance. We will continue to evaluatealternative minimum tax (if applicable) for federal tax purposes, which approximates 2% of earnings before income taxes, state taxes in various jurisdictions, and interest and penalties on our assumptions each quarter regarding the need for a valuation allowance and will make appropriate adjustments as necessary.uncertain tax positions.

U.K. - During our fiscal year 2014, a change in U.K. tax law relative to treatment of research and development expenses allowed us to release $214 of valuation allowances against deferred tax assets that we believe are now realizable as a result of the current period tax law change. We believe that in light of this law change, we will now generate sufficient taxable income to fully utilize our net deferred tax assets in the U.K.

Japan - Our subsidiary in Japan has a long history of profitable operations, and we continue to project profitability in Japan for the foreseeable future. Therefore, we continue to believe that we will fully realize the net deferred tax assets in Japan, and no valuation allowance is needed.

Other Foreign Jurisdictions - We also evaluated the need for a continued full valuation allowance against our foreign deferred tax assets in other jurisdictions. We concluded that a full valuation allowance against our deferred tax assets for other foreign jurisdictions was warranted due to, among other reasons, (i) the realized cumulative accounting losses, (ii) our long history of taxable losses and (iii) our uncertainty with respect to generating future taxable income in the near term given our recently completed projections and other inherent uncertainties in our business.

We are beginning to show greater profitability in our German operations. While we continue to have cumulative losses over a 12-quarter period, it is possible that we could become cumulatively profitable over a 12-quarter period in the next 12 to 24 months should profitable operations continue. We will continue to monitor results in Germany to determine if a change in our valuation allowance conclusion is needed.

Each quarter, we assess the total weight of positive and negative evidence and evaluate whether release of all or any portion of the valuation allowance is appropriate. Should we come to the conclusion that a release of our valuation allowances is required, or that additional valuation allowance is required, there could be a significant increase or decrease in net income and earnings per share in the period of release, or the additional valuation allowance, due to the impact on the tax rate.

Unrecognized Tax Benefits

The Company has evaluated its unrecognized tax benefits and determined that there has not been a material change in the amount of such benefits for the three months ended September 30, 2015.

As of September 30, 2015, we had share-based compensation plans which are described in Note 11 of the consolidated financial statements included in our Annual Report on Form 10-K for the year ended June 30, 2015. We recognize stock compensation expense over the requisite service period of the individual grantees, which generally equals the vesting period. As of September 30, 2015, we had 89,447 stock options outstanding and 422,303 restricted shares outstanding (after giving effect to the retroactive rescission of 120,000 RSAs previously granted to our CEO as described in Note 2 - Immaterial Restatement of Previously Issued Financial Statements and Reclassification). No stock options were granted, exercised, or cancelled during the three months ended September 30, 2015. We recorded share-based compensation related to the issuance of restricted stock to employees and board members as follows:

2016.

Concurrent Computer Corporation

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) - continued

(Amounts in thousands, except for share and per share data)

A summary of the activity of our time-based, service condition restricted shares during the three months ended September 30, 2015, is presented below:

⁽¹⁾Reflects the retroactive rescission of 120,000 restricted stock awards previously granted to the Company's president and CEO.

During the three months ended September 30, 2015, 20,500 previously granted performance-based restricted shares were forfeited due to a failure to meet performance goals associated with our fiscal year 2015 financial results. A summary of the activity of our performance-based restricted shares during the three months ended September 30, 2015, is presented below:

Concurrent Computer Corporation

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) - continued

(Amounts in thousands, except for share and per share data)

Inventories consistAs of September 30, 2016, we had share-based compensation plans which are described in Note 10 of the following:consolidated financial statements included in our Annual Report on Form 10-K for the year ended June 30, 2016. We recognize stock compensation expense over the requisite service period of the individual grantees, which generally equals the vesting period. As of September 30, 2016, we had 70,509 stock options outstanding and 652,125 restricted shares outstanding. During the three months ended September 30, 2016, no stock options were granted or exercised; however, 13,910 stock options were cancelled. We recorded share-based compensation related to the issuance of restricted stock to employees and board members as follows:

Property and equipment consistsA summary of the following:activity of our time-based, service condition restricted shares during the three months ended September 30, 2016, is presented below:

In conjunction with the resignation of one of our directors (See Note 17 – Commitments and Contingencies – Board Representation and Standstill Agreement), we accelerated the vesting of 5,400 shares of restricted stock. This acceleration of vesting resulted in stock compensation expense of $27 during the three months ended September 30, 2016.

During the three months ended September 30, 2015,2016, we issued 50,000 performance-based restricted shares (“PSAs”) to senior and executive management. The PSAs issued in fiscal year 2016 will be released only if certain company financial performance criteria are achieved over a cumulative three-year performance period. The weighted-average grant date fair value per share for these PSAs was established on the Company wrote-off fully-depreciated property and equipment related todate the salecumulative three-year performance criteria was approved by our Board of its multi-screen video analytics product line with an original cost of $260.

Depreciation expense for property and equipment was $395 and $384 for the three months ended September 30, 2015 and 2014, respectively.

Accounts payable and accrued expenses consist of the following:

Directors (“Board”).

Concurrent Computer Corporation

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) - continued

(Amounts in thousands, except for share and per share data)

During the three months ended September 30, 2016, 5,387 previously granted performance-based restricted shares were forfeited due to a failure to meet performance goals associated with our fiscal year 2016 financial results. A summary of the activity of our performance-based restricted shares during the three months ended September 30, 2016, is presented below:

Defined Contribution Plans

We maintain a retirement savings plan available to U.S. employees that qualifies as a defined contribution plan under Section 401(k) of the Internal Revenue Code. We match 50% of the first 5% of the participants’ compensation invested by the employee in the 401(k) plan. ForWe made matching contributions of $133 and $124 during the three months ended September 30, 20152016 and 2014, we made matching contributions of $124 and $137,2015, respectively.

We also maintain a defined contribution plan (the “Stakeholder Plan”) for our U.K. based employees. The Stakeholder Plan provides for discretionary matching contributions of between 4% and 7% of the employee’s salary. We contributed $14$13 and $13$14 to the Stakeholder Plan for the three months ended September 30, 20152016 and 2014,2015, respectively.

Defined Benefit Plans

The following table provides the components of net periodic pension cost of our German defined benefit pension plans recognized in earnings for the three months ended September 30, 20152016 and 2014:2015:

We contributed $4 (paid in October 2015) and $6 to our German defined benefit pension plans for each of the three months ended September 30, 2016 and 2015, and 2014, respectively, andrespectively. We expect to make additional, similar, quarterly contributions during the remaining quarters of our fiscal year 2016.

2017.

Concurrent Computer Corporation

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) - continued

(Amounts in thousands, except for share and per share data)

Inventories consist of the following:

Property and equipment consists of the following:

Depreciation expense for property and equipment was $455 and $395 for the three months ended September 30, 2016 and 2015, respectively.

Intangible assets, net of $140 and $143 at September 30, 2016 and June 30, 2016, respectively, consist of patents and an internet domain name (www.concurrent.com). The domain name is considered an indefinite lived intangible asset and is not amortizable. Intangible assets are included in other long-term assets, net in our consolidated balance sheets.

Amortization expense related to finite-lived intangible assets was $3 and $36 for the three months ended September 30, 2016 and 2015, respectively.

Accounts payable and accrued expenses consist of the following:

Concurrent Computer Corporation

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) - continued

(Amounts in thousands, except for share and per share data)

On September 9, 2015, we sold the customer contracts and intellectual property related to our multi-screen video analytics product line for $3,500 pursuant to an Asset Purchase Agreement (“APA”) dated August 31, 2015 with Verimatrix, Inc. (“Verimatrix”), a privately-held video revenue security company based in San Diego, California. The APA included customary terms and conditions, including provisions that require the Company to indemnify Verimatrix for certain losses that it incurs as a result of a breach by the Company of its representations and warranties in the APA and certain other matters. Proceeds from the sale were payable to the Company as follows: (1) a $2,750 payment to the Company in cash (received on September 10, 2015) , (2) a $375 deferred payment (received in full on June 30, 2016) and (3) $375 placed in escrow (released and received in full on June 30, 2016). No amounts were held back pusuant to indemnification provisions in the APA.

The customer contracts and intellectual property sold had a net book value of $188 (which was included in intangible assets, net in our consolidated balance sheet). As a result of the sale, we also included $1,016 (net liability, consisting primarily of unearned deferred revenue) of related assets and liabilities not sold or transferred in the transaction in the calculation of the recorded gain. Additionally, through September 30, 2015, we incurred $212 in legal, accounting and other expenses that would not have been incurred otherwise. As a result, we recorded a net gain of $4,116 in our consolidated statement of operations for the three months ended September 30, 2015.

On July 1, 2015, we had adopted ASU No. 2014-08,Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU 2014-08”). As a result, we evaluated the sale of our multi-screen video analytics product line in light of this new standard. We concluded that the sale of our multi-screen video analytics product line in September 2015 was not a “material shift” (as defined in ASU 2014-08) for us and therefore, was not considered a discontinued operation. The operating profit related to the multi-screen video analytics product line for the three months ended September 30, 2015 (through the date of sale) was $179.

We operateReportable Operating Segments

The “management approach” has been used to present the following segment information. This approach is based upon the way the management organizes segments within the Company for making operating decisions and assessing performance. Financial information is reported on the basis that it is used internally by the chief operating decision maker (“CODM”) for evaluating segment performance and deciding how to allocate resources to segments. The Company’s chief executive officer has been identified as the CODM.

Effective July 1, 2016, we changed the way our CODM views our operating results by providing more discrete segment financial information. As a result, our reportable operating segments now consist of Content Delivery and Real-Time.

Concurrent Computer Corporation

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Unaudited) - continued

(Amounts in twothousands, except for share and per share data)

These operating segments were determined based on the nature of the products and services as disclosed within our consolidated statementsoffered and the nature and industry of operations. We evaluate segment results using revenues andcustomers serviced. The measures that are used to assess the reportable segment’s operating performance are revenue, gross margin and operating income. Operating income for reportable segments is defined as gross margin less selling and marketing, research and development expenses, and certain general and administrative expenses. Any transactions between operating segments are eliminated in consolidation.

Additionally, corporate and unallocated costs include certain corporate sales and marketing and corporate general and administrative expenses (executive, finance, legal, risk management and human resources). These expenses are not included in the measure of segment operating income but are included in the reconciliation to income (loss) before income taxes.

Segment assets may be either directly attributable or allocated to the operating segment depending on their nature. However, segment assets are not regularly reviewed by the CODM for evaluating performance measures. Suchor allocating resources and therefore, are not presented. We recast our segment footnote to conform the presentation with our current reportable segments.

The table below represents information is shown onabout the face ofCompany’s reportable operating segments for the accompanying consolidated statements of operations. We do not identify assets on a segment basis. three months ended September 30, 2016 and 2015: