Even Analyst had a question of too much cash !!!!
Jeff Schreiner - Feltl and Company
I guess, want to – thank you very much for taking my question. I guess, I would like to maybe talk a little bit more about the non-operational stuff, the 20,000 pound gorilla in the room considering that almost 45% of your market cap is in cash. What is the board expectations for expective allocation of capital? And how is the current allocation of capital deem effective? And is there any change that ISSI maybe looking at reviewing to better enhance shareholder returns than just sitting on cash?
Scott Howarth - President and Chief Executive Officer
Sure. As we have said in the past, I mean, basically I have three priorities for cash. First is to continue to grow the business where we have made some significant investments both as founding partners, we have even internal investment in back-end capacity etcetera; the second then is any strategic acquisitions where we can try to grow the company; and then third is to return cash to shareholders as we have done in the past through share repurchase. Now the cash that we have today, John, can explain a little bit is one we are going through liquidation of those assets and then two we have to move it back in the U.S. Now I will let him just explain briefly sort of we understand, so it’s going to take us several quarters to affect that transition as well.
In the September quarter, we have realized $2.9 million in gains on sales of Nanya shares, compared to gains of $7.3 million in the June quarter. As a reminder, in September 2012, we purchased 444 million shares of Nanya Technology Corporation for $27.1 million as part of an overall strategic foundry agreement. These shares included immediately tradable shares and restricted shares. Approximately $10.8 million was invested in 191 million restricted shares which do not become tradable for three years from the date of purchase. Due to this restriction these shares are accounted for on a cost basis are – and are included in non-current assets. The remaining $16.3 million was invested in 253 million shares that were immediately tradable and as such are mark to market each reporting period. Through September 30, we had sold tradable shares with a cost basis of $9.2 million and recognized aggregate gains of $12 million. At the end of September, the remaining tradable shares with a cost basis of $7.1 million had a market value of $16.6 million, which is included in short-term investments at September 30 since we intend to sell these tradable shares within one year. Nanya shares are traded on the Taiwan Stock Exchange under the symbol 2408.
Now to the balance sheet, on the balance sheet we ended the quarter with the $141.6 million in cash and short-term investments, an increase of $3 million from June. We generated $11.6 million in cash flow from operations in the September quarter. Inventory increased $3.9 million from June.
John Cobb - Chief Financial Officer
So Jeff, we have over $140 million in cash and short-term investments, of that $16 million is still non used shares. So as Scott mentioned, we have to liquidate those shares, but then about half of the remaining cash is actually in Taiwan. So the stock gains have been in our Taiwan subsidiary. If we were to bring that back to the U.S. now, we would have to pay a 20% withholding, which we would not b