6.Short-Term and Long-Term Investments

As of June 30, 2018 and 2017, we held restricted cash in short-term bank guarantees. The restricted cash provides financial assurance that we will fulfill certain customer obligations in China. The cash is restricted as to withdrawal or use while the related bank guarantee is outstanding. Interest is earned on the restricted cash and recorded as interest income. As of June 30, 2018 and June 30, 2017 we had short-term bank guarantees of $166,000 and $239,000 respectively.

At June 30, 2018, we held a long-term investment in preferred stock that is not registered under the Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The preferred stock investment is currently recorded at $725,000 after consideration of impairment charges recorded in fiscal 2008 and 2009. We estimated that the fair market value of this investment at June 30, 2018 exceeded $725,000 based on an internal valuation model which included the use of a discounted cash flow model. The fair market analysis considered the following key inputs:

(i)

the underlying structure of the security;

(ii)

the present value of the future principal discounted at rates considered to reflect current market conditions; and

(iii)

the time horizon that the market value of the security could return to its cost and be sold.

Under ASC 820, “Fair Value Measurements” (“ASC 820”) such valuation assumptions are defined as Level 3 inputs.

The following table presents our Short-Term and Long-Term Investments by category at June 30, 2018 and 2017 (in thousands):

	June 30, 2018
Short-Term Investments	Cost		Fair Value or Carrying Value
Bank Guarantees	$	166	$	166
Mutual Funds		23		23
Time/Fixed Deposits		688		688
Total Short-Term Investments	$	877	$	877

Long-Term Investments
Preferred Stock	$	3,700	$	725
Total Long-Term Investments	$	3,700	$	725

Total Investments	$	4,577	$	1,602

	June 30, 2017
Short-Term Investments	Cost		Fair Value or Carrying Value
Bank Guarantees	$	239	$	239
Time/Fixed Deposits		1,333		1,333
Total Short-Term Investments	$	1,572	$	1,572

Long-Term Investments
Preferred Stock	$	3,700	$	725
Total Long-Term Investments	$	3,700	$	725

Total Investments	$	5,272	$	2,297