Item 9A. CONTROLS AND PROCEDURES

As required by Rule 13a-15(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated, as of the end of the period covered by this report, the effectiveness of our disclosure controls and procedures as defined in Exchange Act Rule 13a-15(e). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that due to material weaknesses in our internal control over financial reporting described below in Management’s Report on Internal Control over Financial Reporting, our disclosure controls and procedures were not effective as of June 30, 2016.

Notwithstanding the identified material weaknesses, management believes the consolidated financial statements included in this Annual Report on Form 10-K fairly present, in all material respects, our financial condition, results of operations and cash flows as of and for the periods presented in accordance with U.S. generally accepted accounting principles.

b. M__anagement’s R__eport on I__nternal C__ontrol over F__inancial R__eporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Management, including our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financial reporting as of June 30, 2016. In making this assessment, our management used the criteria for effective internal control over financial reporting described in “Internal Control—Integrated Framework (2013),” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting for external purposes in accordance with U.S. generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Accordingly, even effective internal control over financial reporting can only provide reasonable assurance of achieving its control objectives.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis.

We acquired Cliniqa on July 8, 2015 and Zephyrus on March 14, 2016. Cliniqa and Zephyrus represented approximately 9.0% of our total assets and 5.3% of our total revenues as of and for the year ended June 30, 2016. We excluded from our assessment of the effectiveness of our internal control over financial reporting as of June 30, 2016 internal control over financial reporting associated with Cliniqa and Zephyrus.

Based on our assessment and those criteria, management has concluded that our internal control over financial reporting was not effective as of June 30, 2016 due to the material weaknesses described as follows:

The Company did not maintain an effective control environment and effective risk assessment, information and communication, and monitoring processes. Specifically, the Company did not have:

As a consequence, the Company did not have effective control activities over the establishment of general information technology controls (GITCs) for certain of its IT platforms, specifically program change controls and user access. Due to the impact of these ineffective GITCs, automated controls and manual controls that rely on data produced by and maintained within these IT system applications, including the general ledger, were also ineffective. Therefore, the Company failed to maintain effective controls that were fully responsive to risks over the completeness and accuracy of data used in the financial reporting process, potentially impacting all financial statement accounts.

Although no material misstatements were identified in our consolidated financial statements, these control deficiencies create a reasonable possibility that a material misstatement to the consolidated financial statements will not be prevented or detected on a timely basis. We have concluded that the deficiencies represent material weaknesses in our internal control over financial reporting and our internal control over financial reporting was not effective as of June 30, 2016.

The Company’s internal control over financial reporting as of June 30, 2016 has been audited by KPMG LLP, an independent registered public company accounting firm. KPMG LLP’s report contains an adverse opinion on the effectiveness of our internal control over financial reporting, which is included in Item 8 in this Form 10-K.

The Company is in the process of improving its procedures relating to the completeness and accuracy of system generated reports utilized in the financial reporting process. On July 1, 2016, management implemented a new ERP system at its Minneapolis location. With the implementation of the new ERP system, management expects to transition to a more automated control environment with reduced dependency on manual controls. With this increased focus on automated application controls, management will also ensure it has established and maintained effective GITCs.

The material weaknesses will not be considered remediated until the applicable remedial controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. We believe this remediation will occur in fiscal 2017 and will strengthen our internal control over financial reporting and will prevent a reoccurrence of the material weaknesses described above.

There were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the Company’s most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

PART III