Note 7 - Investments

9 Months Ended

Sep. 30, 2018

Notes to Financial Statements

Investments And Notes Receivable Disclosure [Text Block]

7.

INVESTMENTS

During the

three

months ended

March 31, 2016,

CUI Global's

8.5%

ownership investment in Test Products International, Inc. ("TPI"), recognized under the cost method, was exchanged for a note receivable from TPI of

$0.4

million (

$0.3

million balance at

September 

30,

2018

and

December 31, 2017),

which was the carrying value of the investment, earning interest at

5%

per annum, due

June 30, 2019.

The Company recorded

$4

thousand and

$5

thousand of interest income from the note in the

three

months ended

September 30, 2018

and

2017,

respectively. The Company recorded

$13

thousand and

$13

thousand of interest income from the note in the

nine

months ended

September 

30,

2018

and

2017,

respectively. The interest receivable is settled on a quarterly basis via a non-cash offset against the finders-fee royalties earned by TPI on GasPT sales. Any remaining finders-fee royalties balance is offset against the note receivable quarterly. The Company also received a

$19

thousand cash payment against the note in the

nine

months ended

September 

30,

2017.

CUI Global reviewed the note receivable for non-collectability as of

September 

30,

2018

and concluded that

no

allowance was necessary. For more details on this investment see Note

2

- Summary of Significant Accounting policies to CUI Global's financial statements filed in Item

8

of the Company's latest Form

10

-K filed with the SEC on

March 14, 2018.

During

July 2018,

CUI Global made an investment of

$0.5

million in a convertible note receivable with Virtual Power Systems (“VPS”) to support the

two

companies’ continued collaboration and development of industry transforming Software Defined Power technologies. The note accrues interest at

2%

per annum and the interest is compounded annually. Unless converted into shares earlier, principal and accrued interest will convert automatically on the maturity date (

October 27, 2019)

into shares of VPS common stock at the then current fair market value. If VPS receives gross proceeds greater than

$3

million prior to the maturity date in a sale or series of sales of equity securities, the principal and unpaid accrued interest of the note will automatically convert into shares at

80%

of the price paid per share for equity securities by investors at that time. The fair market value of the investment at

September 30, 2018

is estimated to be the same as its current carrying value with

no

gains recorded since acquisition.