Short-Term And Long-Term Investments

9 Months Ended

Mar. 31, 2019

Investments [Abstract]

Short-Term And Long-Term Investments

6.Short-Term and Long-Term Investments

We account for our investments in accordance with ASC 320, “Investments – Debt and Equity Securities”.  Investments with a term to maturity between three months to one year are considered short-term investments. Our investments are recorded at fair value.  Upon adoption of ASU 2016-01 effective July 1, 2018, changes in the fair value of our equity securities are recognized in net income.  Prior to the adoption of ASU 2016-01, unrealized gains and losses on available-for-sale equity investments were recorded in other comprehensive income, and at each balance sheet date, we evaluated our investments for possible other-than-temporary impairment, which involved significant judgment.  In making this judgment, we reviewed factors such as the length of time and extent to which fair value had been below the cost basis, the anticipated recovery period, the financial condition of the issuer, the credit rating of the instrument and our ability and intent to hold the investment for a period of time which may be sufficient for recovery of the cost basis. Any losses determined to be other-than-temporary were charged as an impairment loss and recorded in earnings.

As of March 31, 2019 and June 30, 2018, 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 March 31, 2019 and June 30, 2018, we had short-term bank guarantees of $276,000 and $166,000, respectively.

At March 31, 2019, 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 years 2008 and 2009.  We estimated that the fair market value of this investment at March 31, 2019 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 and Disclosures” (“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 March 31, 2019 and June 30, 2018 (in thousands):

	March 31, 2019
	Cost		Fair Value or Carrying Value
Short-Term Investments
Bank Guarantees	$	276	$	276
Mutual Funds		13		13
Time/Fixed Deposits		452		452
Total Short-Term Investments	$	741	$	741
Long-Term Investments
Preferred Stock	$	3,700	$	725
Total Long-Term Investments		3,700		725
Total Investments	$	4,441	$	1,466
	June 30, 2018
	Cost		Fair Value or Carrying Value
Short-Term Investments
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