Note 3 - Investments

12 Months Ended

Jul. 01, 2018

Notes to Financial Statements

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

3.

INVESTMENTS

The Company’s marketable securities are categorized as available-for-sale securities. The cost for marketable securities was determined using the specific identification method. The fair values of marketable securities are based on the quoted market price for those securities. At

July 1, 2018,

short-term investments consisted of a mutual fund that invests in mortgage backed securities, certificates of deposits and U.S. Treasury bills with maturities of generally

three

months to

one

year. The fair value of short-term investments was

$2,157,875.

At

July 2, 2017,

short-term investments consist of a mutual fund that invests in mortgage backed securities and certificates of deposits with maturities of generally

three

months to

one

year, and the fair value of short-term investments was

$2,951,315.

Non-current investments at

July 1, 2018

and

July 2, 2017

are marketable securities which primarily consist of telecommunications stocks. Unrealized gains and losses are reported as a component of accumulated other comprehensive earnings in Stockholders’ Equity.

As of

July 1, 2018,

$39,450

in gross unrealized losses were from its investments in federal agency mortgage backed securities which had a fair value of

$1,824,846.

As of

July 2, 2017,

the Company had

$17,248

of gross unrealized gains from its investments in federal agency mortgage backed securities owned through a mutual fund which had a fair value of

$2,817,392.

In

August 2017

the Company redeemed

$1,000,000

of this fund to meet the

August 2017

dividend payment.

The Company’s investments were as follows:

	Original Cost		Unrealized Gain		Unrealized Loss			Fair Value
Ju ly 1 , 20 1 8
Equity securities	$	1,279,914	$	3,545,288	$	(8,398	)	$	4,816,804
Mutual fund		1,864,296		-		(39,450	)		1,824,846
Certificates of deposits & Treasury bills		333,029		-		-			333,029
Ju ly 2 , 20 1 7
Equity securities	$	1,279,914	$	3,996,702	$	(4,298	)	$	5,272,318
Mutual fund		2,800,144		17,248		-			2,817,392
Certificates of deposits		133,922		-		-			133,922

During fiscal

2018

and fiscal

2017,

the Company had certain equity securities with cumulative unrealized losses of

$8,398

and

$4,298

respectively.

	Less than 12 months					12 Months or greater					Total
July 1, 2018	Fair Value		Unrealized loss			Fair Value		Unrealized loss			Fair Value		Unrealized loss
Equity securities	$	711	$	(479	)	$	1,608	$	(7,919	)	$	2,319	$	(8,398	)

	Less than 12 months				12 Months or greater					Total
July 2, 2017	Fair Value		Unrealized loss		Fair Value		Unrealized loss			Fair Value		Unrealized loss
Equity securities	$	-	$	-	$	5,229	$	(4,298	)	$	5,299	$	(4,298	)

The equity securities portfolio includes the following stocks:

AT&T shares	82,112
Manulife shares	2,520
NCR shares	774
Teradata shares	774
Vodafone shares	6,471
CenturyLink shares	4,398
Frontier Communications shares	300
Sprint shares	40,000
Verizon shares	31,904
Windstream shares	135
Uniti shares	815

On

May 25, 2018,

Windstream completed a

1

-for-

5

reverse split reducing Bowl America’s holdings to

135

shares. On

July 10, 2017

Frontier Communications completed a

1

-for-

15

reverse stock split reducing Bowl America’s holdings to

300

shares.

As stated in Note

1,

the Company records its readily marketable debt and equity securities at fair value. These assets are valued in accordance with a

three

-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level

1.

Observable inputs such as quoted prices in active markets for identical assets or liabilities;

Level

2.

Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level

3.

Unobservable inputs in which there is little or

no

market data, which require the reporting entity to develop its own assumptions.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

The fair value of these assets as of

July 1, 2018

is as follows:

	Quoted		Significant				Unrealized			Cumulative
	Price for		Other		Significant		gains/(losses)			Unrealized
	Identical		Observable		Unobservable		for the			gains/(losses)
	Assets		Inputs		Inputs		Year Ended			as of
Description	(Level 1)		(Level 2)		(Level 3)		July 1, 2018			July 1, 2018
Equity securities	$	4,816,804	$	-	$	-	$	(455,514	)	$	3,536,890
Mutual fund		1,824,846		-		-		(62,572	)		(39,450	)
Certificates of deposits		-		333,029		-		-			-
TOTAL	$	6,641,650	$	333,029		-	$	(518,086	)	$	3,497,440

The fair value of these assets as of

July 2, 2017

was as follows:

	Quoted		Significant				Unrealized			Cumulative
	Price for		Other		Significant		gains/(losses)			Unrealized
	Identical		Observable		Unobservable		for the			gains/(losses)
	Assets		Inputs		Inputs		Year Ended			as of
Description	(Level 1)		(Level 2)		(Level 3)		July 2, 2017			July 2, 2017
Equity securities	$	5,272,318	$	-	$	-	$	(729,508	)	$	3,992,404
Mutual fund		2,817,392		-		-		(91,507	)		17,248
Certificates of deposits		-		133,922		-		-			-
TOTAL	$	8,089,710	$	133,922		-	$	(821,015	)	$	4,009,652

The fair value of certificates of deposits is estimated using net present value techniques and comparing the values to certificates with similar terms.