##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 FORM 10-K
 þ
    
    ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended June 30, 2009
 OR
 o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from
  to
 Commission File No. 0-51838
 Global Traffic Network, Inc.
  Nevada
(State or other jurisdiction of 
incorporation or organization)
    
    33-1117834
(I.R.S. Employer Identification No.)
 880 Third Avenue, 6th Floor
New York, New York 10022
 (212) 896-1255
  Name of Each ExchangeTitle of Each Class:
    
    on which Registered:Common Stock, $.001 par value
    
    The Nasdaq Stock Market
 o þ
 o þ
 þ o
 o o
 þ
  Large accelerated filer o
Accelerated filer þ
Non-accelerated filer o(Do not check if a smaller reporting company)
Smaller Reporting Company o o þ




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##### 



TABLE OF CONTENTS
 Part I
    
    
    1Item. 1 Business
    
    
    1Item 1A. Risk Factors
    
    
    9Item 1B. Unresolved Staff Comments
    
    
    20Item 2. Properties
    
    
    20Item 3. Legal Proceedings
    
    
    20Item 4. Submission of Matters to a Vote of Security Holders
    
    
    20Part II
    
    
    20Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
    
    
    20Item 6. Selected Financial Data
    
    
    22Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    24Item 7A. Qualitative and Quantitative Disclosures about Market Risk
    
    
    34Item 8. Financial Statements and Supplementary Data
    
    
    35Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    35Item 9A. Controls and Procedures
    
    
    35Item 9B. Other Information
    
    
    36Part III
    
    
    36Item 10. Directors, Executive Officers and Corporate Governance
    
    
    36Item 11. Executive Compensation
    
    
    38Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    53Item 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    54Item 14. Principal Accountant Fees and Services
    
    
    54Part IV
    
    
    55Item 15. Exhibits and Financial Statement Schedules
    
    
    55SIGNATURES
    
    
    57EXHIBIT INDEXSubsidiariesConsent of BDO Kendalls Audit & Assurance (NSW-VIC) Pty Ltd302 Certification of Chief Executive Officer302 Certification of Chief Financial OfficerSection 906 Certifications of CEO and CFOPress ReleaseEX-10.13EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1EX-99.1




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Part I
 
 Item. 1 Business
 Our Company and Its Subsidiaries
    Recent Acquisitions and Related Transactions  Acquisition of The Unique Broadcasting Company
Limited
    1




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Overview of Our Business and Its History
  
    
    Australia Traffic Network.We began providing traffic
reports to radio stations in Australia in 1997 and currently
deliver traffic reports to radio stations and traffic
reports, video and other services to television stations in
Australia. In July 2005, we began leveraging our radio
traffic reporting services as a platform to launch
advertising imbedded in news reports on radio stations in
Australia.According to AC Nielsen, our Australian information reports
have a weekly reach of approximately 7.9 million radio
listeners (ages ten and over), which represents
approximately 100% of the commercial radio listeners, and
approximately 6.1 million television viewers (ages 13 and
over), which represents over 50% of the commercial
television viewers, in each case throughout the five major
Australian markets.The number of Australian network affiliate stations from
which we receive advertising inventory and the number of
Australian markets in which we operate are set forth below:
 Number of
    
    Number ofAustralia
    
    Affiliate Stations
    
    MarketsRadio traffic reports
    
    
    80
    
    
    
    18Radio news reports
    
    
    24
    
    
    
    7TV reports
    
    
    14
    
    
    
    7
 We also provide traffic reports to approximately 63 stations on the ABC
radio network, which is the public, non-commercial radio network in
Australia. Although we are acknowledged as the source of the traffic
reports we provide to the ABC stations, the stations are not included in
the table above or any other analysis contained in this report because we
receive no advertising inventory from the ABC stations due to the
non-commercial nature of their broadcast operations.We conduct our Australian business operations through Australia Traffic
Network, which became our wholly-owned subsidiary as a result of the Share
Exchange.
    
    Canadian Traffic Network.We began delivering traffic reports to radio
stations in Canada in December 2005 and we currently deliver traffic and/or
news information reports to approximately 86 radio stations and five
television stations. Effective April 2, 2007, we acquired substantially all
of the assets of Wise Broadcasting Network Inc., after which we commenced
providing news, weather, sports and business information reports to radio
stations on a limited basis. This information is primarily aggregated from
third parties. According to BBM Canada, the Canadian industry consortium
for audience ratings, our Canadian information reports have a weekly reach
of approximately 8.6 million radio listeners (ages 18 and over), which
represents over 32% of the commercial radio listeners, and a weekly reach
of more than 1.7 million television viewers (ages 18 and over), which
represents approximately 7% of commercial television viewers, in Canada.The number of Canadian network affiliate stations from which we receive
advertising inventory and the number of Canadian markets in which we
operate are set forth below:
 Number ofCanada
    
    Affiliate Stations
    
    Number of MarketsRadio traffic reports
    
    
    70
    
    
    
    8Radio news, sports, business and weather reports
    
    
    26
    
    
    
    2TV reports
    
    
    5
    
    
    
    5
 2




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
    
    UK Traffic Network.On March 1, 2009, our wholly owned subsidiary UK Traffic Network acquired all the outstanding
share capital of The Unique Broadcasting Company Limited (Unique) from UBC Media plc (UBC), which we have
subsequently renamed Global Traffic Network (UK) Commercial Limited (UK Commercial Traffic Network). We
currently provide radio traffic reporting services to approximately 250 radio stations and radio entertainment
news reports to approximately 115 radio stations in the United Kingdom. According to RAJAR, our information
reports have a weekly reach of approximately 24 million commercial radio listeners aged 15 and over, representing
approximately 78% of all commercial radio listenership. Currently, our traffic and entertainment news service is
sold on a national basis only. Our plan is to sell the advertising associated with these networks on a regional
basis in the future, however, certain of our affiliate contracts prohibit the sale of the advertising inventory on
anything other than a national basis and we will be unable to do so unless we are successful in modifying or
eliminating these contractual restrictions.
 NumberUnited Kingdom
    
    Of StationsRadio traffic reports
    
    
    251Radio entertainment news reports
    
    
    115
    Industry Background and Trends
   3




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Our Business Model, Products and Services
     Preparation of Information Reports
      4




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United Kingdom
    
    Australia
    
    CanadaLeased
    
    Owned
    
    Leased
    
    Owned
    
    Leased
    
    OwnedFixed Wing Aircraft
    
    
    0
    
    
    
    2
    
    
    
    2
    
    
    
    1
    
    
    
    2
    
    
    
    0Helicopters
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    4
    
    
    
    0
    
    
    
    7
  Delivery of Our Information Reports
   Significant Network Affiliates
 Austereo Pty Limited (Austereo).
 Australian Radio Network Pty Limited (ARN).
  Corus Entertainment Inc. (Corus).
 GCAP Media Services Limited (Global).
 Bauer Radio
Limited (Bauer).
 5




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Generating Revenue Through Advertising Sales
    Advertising on a Network Basis.
 Our Customer Base of Advertising Clients.
 Australia
    
    Canada
    
    United Kingdom  Woolworths
    
      Tom Tom
    
     Mercedes  GIO Insurance
    
      Canadian Direct Insurance
    
     Volkswagen  McDonalds
    
      General Motors
    

 Kwik Fit  New South Wales Lotteries
    
      Canadian Blood Services
    
     COI  Target Australia
    
      McDonalds
    
     Vauxhall  Virgin Blue Airways
    
      Western Canada Lottery
    
     T Mobile
   6




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Our Sales Force.
  Our Strategy
  
    
    Expand the geographic markets we serve.We began our
operations in Australia in 1997, commenced operations in
Canada in December 2005 and began broadcasting in the
United Kingdom in October 2007 and completed the Unique
acquisition in the United Kingdom in March 2009. We intend
to continue to expand the geographic scope of the markets
in which we operate, targeting markets that have: (i) large
population clusters in tight geographic areas; (ii) a free
market advertising culture similar to the United States;
and (iii) established information centers for traffic data.
We intend to leverage our existing customer base of global
marketers to sell our advertising inventory in the new
markets that we enter, enabling advertisers to efficiently,
effectively and economically reach major population
centers.
    
    Increase the number of network affiliates using our radio
traffic reports within existing markets.Although we
currently operate in eight of the largest population
centers in Canada, we believe that there are substantial
opportunities for continued growth in our Canadian radio
network. We are currently exploring and plan to enter the
remaining large markets in Canada that we find to be
economically feasible. In addition, because our operations
in Canada are still at a relatively early stage, there is
significant opportunity for growth by adding network
affiliates in our existing markets.
    
    Accumulate additional advertising inventory by continuing
to expand the scope of our information reports.We intend
to leverage our established relationships with broadcasters
in the Australian, Canadian and United Kingdom markets by
continuing to expand the scope of our information reports.
 Radio News Reports.
 TV Reports.
 
    
    Continue to strengthen marketing, sales and inventory
management operations.We continue to implement new
operating strategies to increase revenue growth and drive
profitability. In order to increase the percentage of our
commercial advertising inventory sold in Australia and
Canada, we have: (i) increased our sales force and acquired
extensive research and sales and marketing materials; (ii)
hired additional sales managers to better manage the
activities of our sales representatives; and (iii)
automated our commercial
 7




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advertising inventory management
system to improve inventory control and pricing. We are in
the process of combining the best practices of our
Australian and Canadian operations with those of our
recently acquired United Kingdom operations.
    
    Grow our business through strategic acquisitions.
Historically, our expansion strategy has focused on organic
growth. Although we expect that organic growth will
continue to be a significant source of expansion, we also
intend to explore growth through the acquisition of
businesses that have strong relationships with broadcasters
which we can leverage. For example, in April 2007, our
Canadian operations acquired substantially all the assets
of Wise Broadcasting Network Inc. In March 2009, we
completed our acquisition of Unique, which provided radio
traffic services to approximately 230 radio stations and
entertainment news services to approximately 125 radio
stations in the United Kingdom.
 Corporate Structure
   Competition
    8




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Environmental Regulation
  Intellectual Property
   Employees
   Properties
  Legal Matters
  Available Information
 http://www.sec.gov
  
 Item 1A.
    
    Risk Factors
  9




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
    
    our inability to compete successfully with current or future competitors within our industry;
    
    our inability to retain members of our executive management or other key employees;
    
    the termination or impairment of our relationships with key network affiliates;
    
    the termination or impairment of our advertiser relationships;
    
    our inability to manage our growth effectively;
    
    our inability to successfully expand into additional international markets;
    
    fluctuations in foreign currency exchange rates and the results of hedging transactions, if any;
    
    our inability to obtain additional debt or equity financing, if required; and
    
    unforeseen litigation.
   Our past operating results may not be indicative of our future performance and we may be unable to
continue operating successfully in our existing markets or to establish successful operations in
additional markets.
  We have previously incurred operating losses in connection with the introduction of radio news
reports inventory in Australia and we may be unable to continue to conduct our expanded operations
profitably.
  We have incurred operating losses in connection with our expansion of operations into Canada and
may be unable to operate profitably in that market.
  10




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We have incurred operating losses in connection with our expansion of operations into the United
Kingdom and may be unable to operate profitably in the United Kingdom.
  There is significant risk and uncertainty surrounding our acquisition of The Unique Broadcasting
Company Limited from UBC Media Group plc.
  We have incurred operating losses in connection with our formation of Mobile Traffic Network and
our contemplated expansion of its operations and may be unable to operate Mobile Traffic Network
profitably in the United States or elsewhere.
   11




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Our financial success depends on our ability to compete successfully in obtaining and maintaining
contracts with radio and television stations and we may be unable to acquire or renew such
contracts.
    12




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Our financial success depends on our ability to compete successfully in selling commercial
advertising inventory to advertisers and we may be unable to sell such inventory.
   Our ability to sell commercial advertising and generate revenues may be subject to economic and
industry fluctuations that are beyond our control.
   
    
    unfavorable economic conditions, both general and relative
to radio and television broadcasting and all related media
industries, which may cause companies to reduce their
expenditures on advertising;
    
    unfavorable shifts in population and other demographics
which may cause our network affiliates to lose customers,
viewers and listeners and possibly terminate operations;
    
    an increased level of competition for advertising dollars,
which may lead to lower advertising rates as our network
affiliates attempt to retain customers or which may cause
our network affiliates to lose customers to their
competitors who offer lower rates than our network
affiliates are able or willing to match;
    
    technological changes and innovations that our network
affiliates are unable to adopt or are late in adopting that
offer more attractive advertising, listening or viewing
alternatives than what our network affiliates currently
offer, which may lead to a loss of advertising customers or
to lower advertising rates; and
 13




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
    
    changes in governmental regulations and policies and
actions of federal regulatory bodies which could restrict
the advertising media which our network affiliates employ
or restrict some or all of our customers that operate in
regulated areas from using certain advertising media, or
from advertising at all.
  Potential consolidation of radio and television stations in the markets in which we operate and
will operate in the future may result in reduction of our negotiating leverage for Affiliate
Contracts and, subsequently, may increase costs and risk of loss with respect to our Affiliate
Contracts.
  The loss of Austereo Pty Limited or Australian Radio Network Pty Limited as one of our network
affiliates in Australia would significantly decrease the amount of our commercial advertising
inventory, which could have an adverse effect on our results of operations and our stock price.
  The loss of Corus Entertainment, Inc. as one of our network affiliates in Canada would
significantly decrease the amount of our commercial advertising inventory in Canada, which could
have an adverse effect on our results of operations and our stock price.
  14




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The loss of GCAP Media Services Limited or Bauer Radio Limited as one of our network affiliates in
the United Kingdom would significantly decrease the amount of our commercial advertising inventory,
which could have an adverse effect on our results of operations and our stock price.
  Our business is subject to risks based on our compliance with multiple legal and regulatory regimes
due to our international operations.
  Our revenues may be adversely affected by fluctuations in currency exchange rates.
  If we fail to expand into new markets, we may be unable to increase our revenue and expand our
profits in the future.
  15




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Inexperience in additional international markets increases the risk that international expansion
efforts will not be successful.
  
    
    Challenges caused by distance, language and cultural differences;
    
    increased labor costs as a result of the existence or prevalence of collective bargaining arrangements, prevailing
compensation structures and other employment-related matters;
    
    legal, legislative and regulatory restrictions;
    
    foreign exchange controls that might prevent us from repatriating cash earned in countries outside the United States;
    
    longer payment cycles in some countries;
    
    potentially adverse tax consequences in the United States and in the foreign countries in which we operate;
    
    nationalization or seizure of private assets; and
    
    higher costs associated with doing business internationally.
  If we fail to secure adequate financing in the future, our continued growth and financial
performance may suffer.
  16




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If we fail to manage our growth effectively by investing in the necessary infrastructure, the
quality of our products and services may suffer, negatively impacting our Affiliate Contracts.
  Aircraft operations involve risks that may not be covered by our insurance or may increase our
operating costs.
    The loss of the services of William L. Yde III, our Chairman, Chief Executive Officer and
President, or Scott E. Cody, our Chief Operating Officer and Chief Financial Officer, or other key
employees, or the failure to attract additional key individuals, could materially adversely affect
our business.
   A substantial majority of our operations are out-sourced to third parties in the United Kingdom.
  17




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Our broadcasts are subject to regulatory bodies whose rules and regulations may adversely affect
our business.
  Because our operating subsidiaries are organized
under the laws of foreign jurisdictions and
substantially all of our assets are
located outside of the United States, you may have difficulties collecting on judgments rendered
against us in United States courts.
  We have been, and will continue to be,
required to implement and maintain additional finance and accounting
systems, procedures and controls in order to satisfy requirements under the Sarbanes-Oxley Act of
2002 and the listing requirements of the NASDAQ Global Market, which will increase our costs and
divert managements time and attention.
    18




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In the absence of an active trading market for shares of our common stock, the price of our
common stock may be subject to wide fluctuations and you may find it difficult to resell shares of
our common stock.
   
    
    variations in our operating results;
    
    addition or loss of significant network affiliates or advertisers;
    
    changes in the economies in which we provide our information services;
    
    the departure of the Chairman of our Board of Directors or other key executive officers;
    
    the level and quality of securities analysts coverage of our common stock;
    
    announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships,
joint ventures or capital commitments;
    
    entry into new international markets and the costs associated therewith;
    
    changes in the governmental regulations to which we will be subject in various countries;
    
    announcements by third parties of significant claims or proceedings against us;
    
    the availability of new media for delivery of traffic and news reporting services; and
    
    future sales of our common stock or other debt or equity securities, including sales by existing holders.
  The concentration of our common stock ownership by our current management will limit your
ability to influence corporate matters.
  Our Board of Directors ability to issue blank check preferred stock and any anti-takeover
provisions we adopt may depress the value of our common stock.
  Our common stock could be delisted from the NASDAQ Global Market, which delisting could hinder
your ability to obtain accurate quotations on the price of our common stock, or dispose of our
common stock in the secondary market.
 19




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Our low share price and small market capitalization precludes certain institutional investors
from holding our stock
  Because we do not intend to pay dividends on our common stock, you must rely on stock
appreciation for any return on your investment.
  
 Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
  
 Item 3. Legal Proceedings
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Part II
 
 Item 5. Market for Registrants Common Equity and Related Stockholder Matters.
   High
    
    LowFiscal 2008Quarter Ended September 30, 2007
    
    $
    7.50
    
    
    $
    6.25Quarter Ended December 31, 2007
    
    $
    7.51
    
    
    $
    5.00Quarter Ended March 31, 2008
    
    $
    9.19
    
    
    $
    6.07Quarter Ended June 30, 2008
    
    $
    10.96
    
    
    $
    7.75Fiscal 2009Quarter Ended September 30, 2008
    
    $
    10.63
    
    
    $
    8.16Quarter Ended December 31, 2008
    
    $
    9.18
    
    
    $
    4.28Quarter Ended March 31, 2009
    
    $
    6.19
    
    
    $
    3.03Quarter Ended June 30, 2009
    
    $
    5.32
    
    
    $
    2.98
  20




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STOCK PERFORMANCE GRAPH
    
 Dividends
  Securities Authorized for Issuance under Equity Compensation Plans
  21




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Number ofSecuritiesRemainingNumber of
    
    
    
    
    
    AvailableSecurities to be
    
    Weighted
    
    for FutureIssued Upon
    
    Average
    
    IssuanceExercise of
    
    Exercise Price
    
    Under EquityOutstanding
    
    of Outstanding
    
    CompensationPlan category
    
    Options
    
    Options
    
    PlansEquity compensation plans approved by security holders:Amended and Restated 2005 Stock Incentive Plan
    
    
    890,067
    
    
    $
    5.56
    
    
    
    674,999Total:
    
    
    890,067
    
    
    $
    5.56
    
    
    
    674,999Equity compensation plans not approved by stockholders:None
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    
    
    
    
    
    
    
    
    
 
 Item 6. Selected Financial Data
    22




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In thousands except per share data
 2009
    
    2008
    
    2007
    
    2006
    
    2005Income statement data for
the year ended June 30:Revenues
    
    $
    60,337
    
    
    $
    50,953
    
    
    $
    31,699
    
    
    $
    19,502
    
    
    $
    15,380Operating expenses (exclusive
of depreciation and
amortization expense shown
separately below)
    
    
    40,937
    
    
    
    30,456
    
    
    
    21,835
    
    
    
    15,309
    
    
    
    8,708Selling, general and
administrative expenses
    
    
    15,615
    
    
    
    15,214
    
    
    
    10,120
    
    
    
    6,415
    
    
    
    4,175Depreciation and amortization
    
    
    2,547
    
    
    
    1,500
    
    
    
    907
    
    
    
    587
    
    
    
    282Net operating income (loss)
    
    
    1,238
    
    
    
    3,783
    
    
    
    (1,163
    )
    
    
    (2,809
    )
    
    
    2,215Interest expense
    
    
    39
    
    
    
    90
    
    
    
    170
    
    
    
    319
    
    
    
    99Other (income) expense
    
    
    (973
    )
    
    
    (1,604
    )
    
    
    (546
    )
    
    
    (220
    )
    
    
    (18
    )Net income (loss) before taxes
    
    
    2,172
    
    
    
    5,297
    
    
    
    (787
    )
    
    
    (2,908
    )
    
    
    2,134Income tax expense
    
    
    3,257
    
    
    
    3,565
    
    
    
    1,230
    
    
    
    88
    
    
    
    698Net (loss) income
    
    
    (1,085
    )
    
    
    1,732
    
    
    
    (2,017
    )
    
    
    (2,996
    )
    
    
    1,436(Loss) income per common share:Basic
    
    $
    (0.06
    )
    
    $
    0.10
    
    
    $
    (0.16
    )
    
    $
    (0.31
    )
    
    $
    0.17Diluted
    
    $
    (0.06
    )
    
    $
    0.10
    
    
    $
    (0.16
    )
    
    $
    (0.31
    )
    
    $
    0.17Cash dividends declared
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    233
    
    
    
    
 In thousands
 Balance sheet data at June 30:
 2009
    
    2008
    
    2007
    
    2006
    
    2005Cash and cash equivalents
    
    $
    21,419
    
    
    $
    37,541
    
    
    $
    7,278
    
    
    $
    14,649
    
    
    $
    51Total assets
    
    
    69,170
    
    
    
    62,602
    
    
    
    23,840
    
    
    
    24,288
    
    
    
    6,616Long-term obligations
    
    
    3,785
    
    
    
    871
    
    
    
    1,161
    
    
    
    1,508
    
    
    
    1,911Total liabilities
    
    
    21,866
    
    
    
    13,876
    
    
    
    9,007
    
    
    
    8,680
    
    
    
    5,420Stockholders equity
    
    
    47,304
    
    
    
    48,726
    
    
    
    14,833
    
    
    
    15,608
    
    
    
    1,196
 23




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Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
 EXECUTIVE OVERVIEW
   
 
 
 
  The Services We Provide  Radio Traffic Reports, Radio News Reports and TV Reports.
   Our Sources of Revenue  Sale of Commercial Airtime Inventory
   24




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Our Expenses
  Australia
    
    Canada
    
    United KingdomLeased
    
    Owned
    
    Leased
    
    Owned
    
    Leased
    
    OwnedFixed-wing aircraft
    
    
    2
    
    
    
    1
    
    
    
    2
    
    
    
    0
    
    
    
    0
    
    
    
    2Helicopters
    
    
    0
    
    
    
    4
    
    
    
    0
    
    
    
    7
    
    
    
    0
    
    
    
    0
  Basis of Presentation
  Australia
 Exchange
    
    BalanceIncome Statement Period
    
    Rate
    
    Sheet Date
    
    Exchange RateThree month period ended June 30, 2009
    
    
    0.7611
    
    
    June 30, 2009
    
    
    0.8064Three month period ended March 31, 2009
    
    
    0.6645Three month period ended December 31, 2008
    
    
    0.6654Three month period ended September 30, 2008
    
    
    0.8875Three month period ended June 30, 2008
    
    
    0.9444
    
    
    June 30, 2008
    
    
    0.9586Three month period ended March 31, 2008
    
    
    0.9060Three month period ended December 31, 2007
    
    
    0.8890Three month period ended September 30, 2007
    
    
    0.8483Three month period ended June 30, 2007
    
    
    0.8314Three month period ended March 31, 2007
    
    
    0.7863Three month period ended December 31, 2006
    
    
    0.7718Three month period ended September 30, 2006
    
    
    0.7541
 25




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Canada
 Exchange
    
    BalanceIncome Statement Period
    
    Rate
    
    Sheet Date
    
    Exchange RateThree month period ended June 30, 2009
    
    
    0.8567
    
    
    June 30, 2009
    
    
    0.8604Three month period ended March 31, 2009
    
    
    0.8037Three month period ended December 31, 2008
    
    
    0.8259Three month period ended September 30, 2008
    
    
    0.9598Three month period ended June 30, 2008
    
    
    0.9902
    
    
    June 30, 2008
    
    
    0.9790Three month period ended March 31, 2008
    
    
    0.9954Three month period ended December 31, 2007
    
    
    1.0189Three month period ended September 30, 2007
    
    
    0.9566Three month period ended June 30, 2007
    
    
    0.9103Three month period ended March 31, 2007
    
    
    0.8534Three month period ended December 31, 2006
    
    
    0.8776Three month period ended September 30, 2006
    
    
    0.8922
 United Kingdom
 Exchange
    
    BalanceIncome Statement Period
    
    Rate
    
    Sheet Date
    
    Exchange RateThree month period ended June 30, 2009
    
    
    1.5522
    
    
    June 30, 2009
    
    
    1.6458Three month period ended March 31, 2009
    
    
    1.4369Three month period ended December 31, 2008
    
    
    1.5681Three month period ended September 30, 2008
    
    
    1.8921Three month period ended June 30, 2008
    
    
    1.9718
    
    
    June 30, 2008
    
    
    1.9923Three month period ended March 31, 2008
    
    
    1.9783Three month period ended December 31, 2007
    
    
    2.0438Three month period ended September 30, 2007
    
    
    2.0217Three month period ended June 30, 2007
    
    
    1.9850Three month period ended March 31, 2007
    
    
    1.9551Three month period ended December 31, 2006
    
    
    1.9174
  Year
    
    Yearended
    
    endedJune 30, 2009
    
    June 30, 2008(in thousands)
    
    (in thousands)AustraliaNet revenue
    
    $
    (8,690
    )
    
    $
    5,488Operating expense
    
    
    (4,711
    )
    
    
    2,762Sales, general & administrative expense
    
    
    (1,752
    )
    
    
    1,216CanadaNet revenue
    
    
    (1,042
    )
    
    
    720Operating expense
    
    
    (1,113
    )
    
    
    730Sales, general & administrative expense
    
    
    (307
    )
    
    
    247United KingdomNet revenue
    
    
    (2,969
    )
    
    NMOperating expense
    
    
    (2,857
    )
    
    NMSales, general & administrative expense
    
    
    (322
    )
    
    NMAustralia, Canada and United Kingdom combinedNet revenue
    
    
    (12,701
    )
    
    
    6,208Operating expense
    
    
    (8,681
    )
    
    
    3,492Sales, general & administrative expense
    
    
    (2,381
    )
    
    
    1,463
 26




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##### Table of Contents



Seasonality of Business
  Results of Operations
 Year Ended June 30, 2009 Compared With Year Ended June 30, 2008
 Revenues.
 Basis of Presentation,
 Operating expenses. Changes in Key Operating Statistics in Local Currencies, Changes in Key Operating Statistics in Local Currencies,
 Selling, general and administrative expenses.
 27




---



##### Table of Contents



Changes in Key Operating Statistics in Local
Currencies, Changes in
Key Operating Statistics in Local Currencies,
 Depreciation and amortization expense. Changes in Key Operating Statistics in Local Currencies,
 Interest expense.
 Other income.
 Income tax expense. Changes in
Key Operating Statistics in Local Currencies
 Net income (loss). Changes in Key Operating Statistics in Local Currencies
 Changes in Key Operating Statistics in Local Currencies
  28




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##### Table of Contents



Australian Operations:
 Year
    
    YearEnded
    
    Ended
    
    PercentageJune 30,
    
    June 30,
    
    IncreaseKey operating statistic
    
    2009
    
    2008
    
    (Decrease)(In thousands)
    
    (In thousands)Revenue
    
    $
    57,396
    
    
    $
    49,323
    
    
    
    16.4
    %Operating
expenses (exclusive of depreciation and amortization expense shown separately below)
    
    
    30,390
    
    
    
    24,871
    
    
    
    22.2
    %Selling, general and administrative expenses
    
    
    11,706
    
    
    
    10,964
    
    
    
    6.8
    %Depreciation and amortization expense
    
    
    994
    
    
    
    903
    
    
    
    10.1
    %Interest expense
    
    
    52
    
    
    
    101
    
    
    
    (48.5
    )%Other (income)
    
    
    (878
    )
    
    
    (539
    )
    
    
    62.9
    %Income tax expense
    
    
    4,542
    
    
    
    3,932
    
    
    
    15.5
    %Net income
    
    
    10,590
    
    
    
    9,091
    
    
    
    16.5
    %
  Canadian Operations:
 Year
    
    YearEnded
    
    Ended
    
    PercentageJune 30,
    
    June 30,
    
    IncreaseKey operating statistic
    
    2009
    
    2008
    
    (Decrease)(In thousands)
    
    (In thousands)Revenue
    
    $
    8,023
    
    
    $
    6,701
    
    
    
    19.7
    %Operating
expenses (exclusive of depreciation and amortization expense shown separately below)
    
    
    8,425
    
    
    
    6,880
    
    
    
    22.5
    %Selling, general and administrative expenses
    
    
    2,348
    
    
    
    2,279
    
    
    
    3.0
    %Depreciation and amortization expense
    
    
    881
    
    
    
    674
    
    
    
    30.7
    %Interest expense
    
    
    
    
    
    
    
    
    
    
    Other (income)
    
    
    (30
    )
    
    
    (18
    )
    
    
    66.7
    %Income tax expense
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    
    (3,601
    )
    
    
    (3,114
    )
    
    
    15.6
    %
  United Kingdom Operations:
 Year
    
    YearEnded
    
    Ended
    
    PercentageJune 30,
    
    June 30,
    
    IncreaseKey operating statistic
    
    2009
    
    2008
    
    (Decrease)(In thousands)
    
    (In thousands)Revenue
    
    £
    6,892
    
    
    £
    
    
    
    
    N/AOperating
expenses (exclusive of depreciation and amortization expense shown separately below)
    
    
    6,706
    
    
    
    667
    
    
    
    905.4
    %Selling, general and administrative expenses
    
    
    751
    
    
    
    201
    
    
    
    273.6
    %Depreciation and amortization expense
    
    
    661
    
    
    
    10
    
    
    
    6,510.0
    %Interest expense
    
    
    
    
    
    
    
    
    
    
    Other (income) expense
    
    
    (7
    )
    
    
    3
    
    
    
    (333.3
    )%Income tax (benefit) expense
    
    
    (87
    )
    
    
    
    
    
    
    N/ANet loss
    
    
    (1,132
    )
    
    
    (881
    )
    
    
    28.5
    %
 Year Ended June 30, 2008 Compared With Year Ended June 30, 2007
  Revenue.
 29




---



##### Table of Contents



Operating expenses.
 Selling, general and administrative expenses.
 Depreciation and amortization expense.
 Interest expense.
 Other income.
 Income tax expense.
 Net income (loss).
 30




---



##### Table of Contents



Changes in Key Operating Statistics in Local Currencies.
 Australian Operations:
 Year
    
    Year
    
    PercentageEnded
    
    Ended
    
    IncreaseKey operating statistic
    
    June 30, 2008
    
    June 30, 2007
    
    (Decrease)(In thousands)
    
    (In thousands)Revenue
    
    $
    49,323
    
    
    $
    36,038
    
    
    
    36.9
    %Operating expenses (exclusive of
depreciation and amortization shown
separately below)
    
    
    24,871
    
    
    
    20,964
    
    
    
    18.6
    %Selling, general and administrative expenses
    
    
    10,964
    
    
    
    8,941
    
    
    
    22.6
    %Depreciation and amortization expense
    
    
    903
    
    
    
    898
    
    
    
    0.6
    %Interest expense
    
    
    101
    
    
    
    169
    
    
    
    (40.2
    )%Other (income)
    
    
    (539
    )
    
    
    (62
    )
    
    
    769.4
    %Income tax expense
    
    
    3,932
    
    
    
    1,543
    
    
    
    154.8
    %Net income
    
    
    9,091
    
    
    
    3,585
    
    
    
    153.6
    %
 Canadian operations:
 Year
    
    Year
    
    PercentageEnded
    
    Ended
    
    IncreaseKey operating statistic
    
    June 30, 2008
    
    June 30, 2007
    
    (Decrease)(In thousands)
    
    (In thousands)Revenue
    
    $
    6,701
    
    
    $
    3,689
    
    
    
    81.6
    %Operating expenses (exclusive of
depreciation and amortization shown
separately below)
    
    
    6,880
    
    
    
    5,640
    
    
    
    22.0
    %Selling, general and administrative expenses
    
    
    2,279
    
    
    
    2,145
    
    
    
    6.2
    %Depreciation and amortization expense
    
    
    674
    
    
    
    228
    
    
    
    195.6
    %Interest expense
    
    
    
    
    
    
    43
    
    
    
    (100.0
    )%Other (income)
    
    
    (18
    )
    
    
    (75
    )
    
    
    (76.0
    )%Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    %Net loss
    
    
    (3,114
    )
    
    
    (4,292
    )
    
    
    (27.4
    )%
 Liquidity and Capital Resources
  Operating activities.
 Investing activities.
 Financing activities.
 Effect of exchange rate changes.
 31




---



##### Table of Contents



Income Taxes.
 32




---



##### Table of Contents



Contractual Commitments
  Payments due by periodLess
    
    
    
    
    
    
    
    
    
    
    Morethan
    
    
    1-3
    
    
    4-5
    
    
    ThanContractual Obligations
    
    Total
    
    
    1 Year
    
    
    Years
    
    
    Years
    
    
    5 Years(in thousands)Long-Term Debt Obligations
    
    $
    383
    
    
    $
    326
    
    
    $
    57
    
    
    $
    
    
    
    
    Interest on Long-Term Debt Obligations
    
    
    13
    
    
    
    11
    
    
    
    2
    
    
    
    
    
    
    
    Operating Lease Obligations
    
    
    2,748
    
    
    
    832
    
    
    
    1,261
    
    
    
    485
    
    
    
    170Outsource Provider Obligations
    
    
    10,994
    
    
    
    3,259
    
    
    
    6,188
    
    
    
    1,547
    
    
    
    Station Obligations
    
    
    78,410
    
    
    
    30,828
    
    
    
    43,883
    
    
    
    3,699
    
    
    
    Total
    
    $
    92,548
    
    
    $
    35,256
    
    
    $
    51,391
    
    
    $
    5,731
    
    
    $
    170
 Critical Accounting Policies
   Revenue recognition.
 Cash and cash equivalents.
 Accounts receivable.
 Income taxes.
 33




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##### Table of Contents



Recent Accounting Pronouncements
      
 Item 7A. Qualitative and Quantitative Disclosures about Market Risk
  Interest Rate Risk
  34




---



##### Table of Contents



Foreign Currency Exchange Risk
  Accounts Receivable
  Off-Balance Sheet Arrangements
  
 Item 8. Financial Statements and Supplementary Data
    
 Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
  
 Item 9A. Controls and Procedures
 Disclosure controls and procedures
  Internal control over financial reporting
 Managements Annual Report on Internal Control Over Financial Reporting
   35




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##### Table of Contents



Excluded Acquired Companies
   Changes in Internal Control Over Financial Reporting
  
 Item 9B. Other Information
 Results of Operations and Financial Condition.
   
 Part III
 
 Item 10. Directors, Executive Officers and Corporate Governance
  IndependentName
    
    Age
    
    Position
    
    DirectorDirectors and Executive OfficersWilliam L. Yde III
    
    56
    
    Chairman, Chief Executive Officer and President
    
    NoScott E. Cody
    
    43
    
    Chief Operating Officer and Chief Financial Officer
    
    Ivan N. Shulman
    
    47
    
    Senior Vice President and Director of International Sales
    
    Gary L. Worobow
    
    44
    
    Executive Vice President, Business and Legal Affairs
    
    Dale C. Arfman
    
    56
    
    Director
    
    NoGary O. Benson
    
    65
    
    Director
    
    YesShane E. Coppola
    
    43
    
    Director
    
    YesStuart R. Romenesko
    
    46
    
    Director
    
    YesWilliam M. Mower
    
    51
    
    Director
    
    YesOther Key EmployeesB. William Pezzimenti
    
    59
    
    President and Director of Australia Traffic Network
    
    
  William L. Yde III
 36




---



##### Table of Contents



Scott E. Cody
 Ivan N. Shulman
 Gary L. Worobow
 Dale C. Arfman
 Gary O. Benson
 Shane E. Coppola
 Stuart R. Romenesko
 William M. Mower
 B. William Pezzimenti
 37




---



##### Table of Contents



Compliance with Section 16(a) of the Exchange Act
  Corporate Governance, Ethics and Business Conduct
    Audit Committee of the Board of Directors
  
 Item 11. Executive Compensation
 Compensation Discussion and Analysis
  Overview of Compensation Program
  38




---



##### Table of Contents




    
    Base salary;
    
    Annual cash incentive compensation (bonus);
    
    Non-equity incentive plan compensation (sales commissions); and
    
    Stock options and/or restricted stock.
     Role of our Compensation Committee
   39




---



##### Table of Contents



Elements of 2009 Executive Compensation
 Base Salary. Description of Employment
Agreements and Arrangements, Salary, and Bonus Amounts.
    Annual Bonus.
 40




---



##### Table of Contents



Fiscal Year
    
    EBITDA Target
    
    Actual EBITDA2008
    
    $5.1 million
    
    $5.3 million2009
    
    $10.3 million
    
    $3.5 million*
 
 *
    
    excludes the impact of the Companys acquisition of Unique Long Term Incentive Program.
   41




---



##### Table of Contents



Non-Equity Incentive Plan Compensation  Sales Commissions and Bonuses.
   42




---



##### Table of Contents



Severance and Other Benefits Upon Termination of Employment
    Tax Deductibility of Compensation
  Compensation Committee Report
  The Compensation Committee:
 Shane E. Coppola
William M. Mower
 Summary Compensation Table
  43




---



##### Table of Contents



Fiscal
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Non- EquityName and
    
    Year
    
    
    
    
    
    
    
    
    
    Stock
    
    Option
    
    Incentive PlanPrincipal
    
    Ended
    
    
    
    
    
    
    
    
    
    Awards
    
    Awards
    
    Compensation
    
    All OtherPosition
    
    June 30
    
    Salary ($)
    
    Bonus ($)
    
    ($)(1)
    
    ($)(1)
    
    ($)
    
    Compensation ($)
    
    Total ($)William L. Yde III
    
    
    2009
    
    
    $
    450,000
    
    
    $
    112,500
    
    
    $
    0
    
    
    $
    0
    
    
    $
    0
    
    
    $
    12,000
    (10)
    
    $
    574,500Chairman, President 
and Chief
    
    
    2008
    
    
    $
    400,000
    
    
    $
    0
    
    
    $
    0
    
    
    $
    0
    
    
    $
    200,000
    (14)
    
    $
    12,000
    (10)
    
    $
    612,000Executive Officer
    
    
    2007
    
    
    $
    362,500
    
    
    $
    50,000
    
    
    $
    0
    
    
    $
    0
    
    
    $
    0
    
    
    $
    4,000
    (10)
    
    $
    416,500Scott E. Cody
    
    
    2009
    
    
    $
    315,000
    
    
    $
    50,000
    
    
    $
    34,000
    
    
    $
    218,388
    
    
    $
    0
    
    
    $
    12,000
    (10)
    
    $
    629,388Chief Financial
Officer and Chief Operating
    
    
    2008
    
    
    $
    300,000
    
    
    $
    0
    
    
    $
    10,363
    
    
    $
    193,110
    
    
    $
    100,000
    (15)
    
    $
    12,000
    (10)
    
    $
    615,473Officer
    
    
    2007
    
    
    $
    223,769
    
    
    $
    0
    
    
    $
    0
    
    
    $
    95,125
    
    
    $
    0
    
    
    $
    12,504
    (2)
    
    $
    331,398Dale C. Arfman (9)
    
    
    2009
    
    
    $
    175,000
    
    
    $
    0
    
    
    $
    0
    
    
    $
    0
    
    
    $
    0
    
    
    $
    12,000
    (10)
    
    $
    187,000Treasurer and Secretary
    
    
    2008
    
    
    $
    175,000
    
    
    $
    0
    
    
    $
    0
    
    
    $
    0
    
    
    $
    0
    
    
    $
    12,000
    (10)
    
    $
    187,0002007
    
    
    $
    175,000
    
    
    $
    0
    
    
    $
    0
    
    
    $
    0
    
    
    $
    0
    
    
    $
    4,000
    (10)
    
    $
    179,000Ivan N. Shulman
    
    
    2009
    
    
    $
    350,000
    
    
    $
    0
    
    
    $
    34,000
    
    
    $
    157,832
    
    
    $
    83,973
    (11)
    
    $
    12,000
    (10)
    
    $
    637,805Senior Vice President
and Director of
    
    
    2008
    
    
    $
    307,765
    
    
    $
    0
    
    
    $
    10,363
    
    
    $
    164,367
    
    
    $
    175,596
    (7)
    
    $
    12,000
    (10)
    
    $
    670,091International Sales
    
    
    2007
    
    
    $
    254,886
    
    
    $
    100,000
    
    
    $
    0
    
    
    $
    81,540
    
    
    $
    0
    
    
    $
    6,500
    (10)
    
    $
    442,926B. William Pezzimenti
(3)
    
    
    2009
    
    
    $
    390,954
    
    
    $
    0
    
    
    $
    0
    
    
    $
    116,264
    
    
    $
    92,175
    (12)
    
    $
    52,786
    (5)
    
    $
    652,179President and Director
of
    
    
    2008
    
    
    $
    430,520
    
    
    $
    0
    
    
    $
    0
    
    
    $
    71,032
    
    
    $
    188,353
    (6)
    
    $
    24,608
    (5)
    
    $
    714,513Australia Traffic
Network
    
    
    2007
    
    
    $
    282,930
    
    
    $
    0
    
    
    $
    0
    
    
    $
    34,433
    
    
    $
    206,062
    (4)
    
    $
    21,562
    (5)
    
    $
    544,987Gary Worobow (8)
    
    
    2009
    
    
    $
    83,333
    
    
    $
    20,833
    
    
    $
    72,018
    (13)
    
    $
    49,300
    (13)
    
    $
    0
    
    
    $
    4,000
    (10)
    
    $
    229,484Executive Vice
President, Business and Legal
    
    
    2008
    
    
    $
    0
    
    
    $
    0
    
    
    $
    17,195
    (13)
    
    $
    49,300
    (13)
    
    $
    0
    
    
    $
    0
    
    
    $
    66,495Affairs
    
    
    2007
    
    
    $
    0
    
    
    $
    0
    
    
    $
    0
    
    
    $
    27,732
    (13)
    
    $
    0
    
    
    $
    3,000
    (16)
    
    $
    30,732
 
 (1)
    
    Amounts shown reflect the dollar amount recognized for financial
statement reporting purposes for fiscal 2009, 2008 and 2007 in
accordance with FAS 123(R). Assumptions used in calculating this
amount are included in Note 12 to our audited financial
statements for the fiscal year ended June 30, 2009, which are
included elsewhere in this report.(2)
    
    Consists of $6,504 of reimbursement for health benefit premiums
paid by the employee and $6,000 in payments in lieu of medical
insurance.(3)
    
    Mr. Pezzimenti is paid in Australian dollars. For the purposes of
this table, his compensation has been converted to United States
dollars utilizing the average monthly exchange rate for the
fiscal years ended June 30, 2009, 2008 and June 30, 2007.(4)
    
    Represents non-equity incentive plan compensation in the form of
monthly sales-based commissions. Our Chief Executive Officer
established monthly sales targets for The Australia Traffic
Network for the fiscal year ended June 30, 2007. If The Australia
Traffic Network achieved at least 100% of its sales target for a
particular month, Mr. Pezzimenti was entitled to receive a
commission payment equal to the amount by which 2% of that
months net sales exceeded his monthly base salary. If Australia
Traffic Network achieved at least 95% but less than 100% of its
sales target for the month, Mr. Pezzimenti was entitled to
receive a commission payment equal to the amount by which 1.5% of
that months net sales exceeded his monthly base salary. Mr.
Pezzimenti was not entitled to receive commissions for any month
in which Australia Traffic Network failed to achieve at least 95%
of its sales target. However, we agreed to true-up the
commission payments to Mr. Pezzimenti on a quarterly basis such
that Mr. Pezzimenti was entitled to received the entire 2% or
1.5% of net sales, as applicable, if Australian Traffic Network
failed to achieve 100% or 95% of its sales target for a
particular month but achieved the applicable threshold percentage
of the cumulative sales targets for the entire three month
period.(5)
    
    Consists of automobile related costs incurred for the benefit of
the employee. At the beginning of fiscal 2009 we transferred
ownership of the automobile used by Mr. Pezzimenti but owned by
us to Mr. Pezzimenti in exchange for the elimination of the
obligation to provide him a company paid automobile. The
compensation for fiscal 2009 represents the book value of the
automobile at the time of transfer, which we believe approximated
the fair value of the automobile. 44




---



##### Table of Contents



(6)
    
    Represents non-equity incentive plan compensation in the form of monthly sales bonuses. Our Chief Executive
Officer established monthly sales targets for Australia Traffic Network for the fiscal year ended June 30, 2008
and provided monthly incentives of approximately $11,000 and $5,000 based on these sales targets.(7)
    
    Represents non-equity incentive plan compensation in the form of monthly sales commissions. Mr. Shulman was
entitled to receive monthly cash commissions equal to a percentage of Canada Traffic Networks monthly net
revenues provided that such net revenues exceed certain thresholds. The applicable commission percentage is 1%
if net revenues for the month exceed C$400,000, 2% if net revenues for the month exceed C$500,000, 3% if net
revenues for the month exceed C$600,000, 4% if net revenues for the month exceed $700,000 or 4.5% if net
revenues exceed C$800,000. The thresholds are all measured in Canadian dollars, which is the functional
currency of Canadian Traffic Network and the commissions earned are then converted into U.S. dollars for
payment to Mr. Shulman.(8)
    
    Mr. Worobow served on our Board of Directors from December 8, 2006 until March 1, 2009. Effective March 1,
2009, Mr. Worobow resigned as a director and commenced employment with the Company as its Executive Vice
President, Business and Legal Affairs. Compensation for periods prior to March 1, 2009 pertains to his service
on our Board of Directors.(9)
    
    Mr. Arfman resigned as our Secretary and Treasurer effective June 30, 2009. Mr. Arfman continues to serve on
our Board of Directors.(10)
    
    Consists of an additional $1,000 per month paid to executive in lieu of the Company providing medical insurance.(11)
    
    Represents non-equity incentive plan compensation in the form of monthly sales commissions. Mr. Shulman was
entitled to receive monthly cash commissions equal to a percentage of Canada Traffic Networks monthly net
revenues provided that such net revenues exceed certain thresholds. The applicable commission percentage was 1%
if net revenues for the month exceeded C$700,000, 2% if net revenues for the month exceeded C$800,000, 3% if
net revenues for the month exceeded C$900,000, or 4% if net revenues for the month exceeded C$1,000,000. The
thresholds were all measured in Canadian dollars, which is the functional currency of Canadian Traffic Network
and the commissions earned were then converted into U.S. dollars for payment to Mr. Shulman.(12)
    
    Represents non-equity incentive plan compensation in the form of monthly sales bonuses. Mr. Pezzimenti
received monthly sales-based bonuses of approximately $9,000 and $13,000 (based on the average exchange rate
for fiscal 2009) in fiscal year 2009 for achieving sales targets set by our Chief Executive Officer. The
targets for 2009 approximated 100% and 104% of Australia Traffic Networks fiscal 2009 monthly sales budgets.
Australia Traffic Networks annual sales budget was approximately A$58.9 million.(13)
    
    Reflects the dollar amount recognized for financial statement reporting purposes in accordance with FAS 123(R)
for fiscal 2009 that is associated with restricted stock and stock options granted in connection with Mr. Worobows service as a
director of the Company.(14)
    
    Mr. Yde was eligible to receive a bonus of 50% of his base salary based upon the Company exceeding a fiscal
2008 EBITDA goal of $5.1 million. For purposes of the bonus calculation, EBITDA is defined as operating income
plus depreciation and amortization, excluding the impact of other income and expense. Actual 2008 EBITDA was
approximately $5.3 million.(15)
    
    Mr. Cody was eligible to receive a bonus of $100,000 based upon the Company exceeding a fiscal 2008 EBITDA goal
of $5.1 million. For purposes of the bonus calculation, EBITDA is defined as operating income plus depreciation
and amortization, excluding the impact of other income and expense. Actual 2008 EBITDA was approximately $5.3
million.(16)
    
    Represents cash fees paid for attendance at board meetings in
Mr. Worobows capacity as a director of the Company. 45




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##### Table of Contents



Compensation of Named Executive Officers
   Description
of Employment Agreements and Arrangements, Salary, and Bonus Amounts
 Employment Agreement with William L. Yde III
 Salary and Bonus.
 Confidentiality, Non-competition and Non-solicitation.
 
    
    Providing services to any of our competitors anywhere
outside of the United States similar to those provided to
us during his employment;
    
    soliciting or attempting to induce any of our customers,
suppliers, licensees, licensors or other business relations
to cease doing business with us; or
    
    soliciting or attempting to induce any of our employees to
leave our employ, or to work for, render services or
provide advice to or supply our confidential business
information or trade secrets to any third person or entity.
 Employment Agreement with Scott E. Cody
 Salary and Bonus.
 Equity-based Incentives.
 46




---



##### Table of Contents



Confidentiality, Non-competition and Non-solicitation.
 
    
    providing services to any of our competitors anywhere
outside of the United States similar to those provided to
us during his employment;
    
    soliciting or attempting to induce any of our customers,
suppliers, licensees, licensors or other business relations
to cease doing business with us; or
    
    soliciting or attempting to induce any of our employees to
leave our employ, or to work for, render services or
provide advice to or supply our confidential business
information or trade secrets to any third person or entity.
 Employment Agreement with Dale C. Arfman
 Salary and Bonus.
  Confidentiality, Non-competition and Non-solicitation.
 
    
    providing services to any of our competitors anywhere
outside of the United States similar to those provided to
us during his employment;
    
    soliciting or attempting to induce any of our customers,
suppliers, licensees, licensors or other business relations
to cease doing business with us; or
    
    soliciting or attempting to induce any of our employees to
leave our employ, or to work for, render services or
provide advice to or supply our confidential business
information or trade secrets to any third person or entity.
 Employment Arrangement with Ivan N. Shulman
 Salary and Bonus.
 47




---



##### Table of Contents



Equity-based Incentives.
 Confidentiality, Non-competition and Non-solicitation.
 Employment Arrangement with B. William Pezzimenti
 Salary and Bonus. B.
 Equity-based Incentives.
 Confidentiality, Non-competition and Non-solicitation Agreement with William Pezzimenti
  Employment Agreement with Gary L. Worobow
 Salary and Bonus.
 Confidentiality, Non-competition and Non-solicitation.
 
    
    Providing services to any of our competitors anywhere
outside of the United States similar to those provided to
us during his employment;
    
    soliciting or attempting to induce any of our customers,
suppliers, licensees, licensors or other business relations
to cease doing business with us; or
 48




---



##### Table of Contents




    
    soliciting or attempting to induce any of our employees to
leave our employ, or to work for, render services or
provide advice to or supply our confidential business
information or trade secrets to any third person or entity.
 Grants of Plan-Based Awards in Fiscal 2009
  Option Awards:Stock Awards:
    
    Number of
    
    Exercise orNumber of
    
    Securities
    
    Base
    
    Grant DateShares of
    
    Underlying
    
    Price of
    
    Fair Value ofStock
    
    Options
    
    Option
    
    Stock and OptionName
    
    Grant Date
    
    (#)
    
    (#)
    
    Awards ($/Sh)
    
    Awards (2)William L. Yde III
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Scott E. Cody
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Gary L. Worobow
    
    February 26, 2009
    
    
    20,000
    (1)
    
    
    
    
    
    
    
    
    
    $
    92,000Dale C. Arfman
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Ivan N. Shulman
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    B, William Pezzimenti
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 
 (1)
    
    Represents a restricted stock grant subject to transfer and
forfeiture restrictions that lapse in three annual installments
of 6,667 shares each on February 26, 2010 and February 26, 2011
and 6,666 on February 26, 2011 which was granted pursuant to Mr.
Worobow serving on our Board of Directors.(2)
    
    Amounts shown reflect the dollar amount recognized for financial
statement reporting purposes in accordance with FAS 123(R) that
will be expensed over the vesting period. Assumptions used in
calculating this amount are included in Note 12 to our audited
financial statements for the fiscal year ended June 30, 2009,
which are included elsewhere in this report. Global Traffic Network, Inc. 2005 Stock Incentive Plan
   Outstanding Equity Awards at 2009 Fiscal Year-End
  49




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##### Table of Contents



Option Awards
    
    Stock AwardsNumber of
    
    Number ofSecurities
    
    SecuritiesUnderlying
    
    Underlying
    
    
    
    
    
    
    
    
    
    
    
    
    
    Market ValueUnexercised
    
    Unexercised
    
    
    
    
    
    
    
    
    
    Number of Shares
    
    of SharesOptions
    
    Options
    
    Option
    
    Option
    
    of Stock that have
    
    of Stock that(#)
    
    (#)
    
    Exercise
    
    Expiration
    
    not Vested
    
    have not VestedName
    
    Exercisable
    
    Unexercisable
    
    Price ($)
    
    Date
    
    (#)
    
    ($)(11)William L. Yde III
    
    
    0
    
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Scott E. Cody
    
    
    100,000
    
    
    
    0
    
    
    $
    5.00
    
    
    March 23, 2016
    
    
    
    
    
    
    Scott E. Cody
    
    
    66,666
    
    
    
    33,334
    (2)
    
    $
    5.25
    
    
    March 29, 2017
    
    
    
    
    
    
    Scott E. Cody
    
    
    16,666
    
    
    
    34,334
    (3)
    
    $
    6.80
    
    
    March 12, 2018
    
    
    
    
    
    
    Scott E. Cody
    
    
    0
    
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    10,000
    (10)
    
    $
    37,900Dale C. Arfman
    
    
    0
    
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Ivan N. Shulman
    
    
    50,000
    
    
    
    0
    
    
    $
    6.28
    
    
    May 8, 2016
    
    
    
    
    
    
    Ivan N. Shulman
    
    
    33,334
    
    
    
    16,666
    (5)
    
    $
    4.66
    
    
    December 8, 2016
    
    
    
    
    
    
    Ivan N. Shulman
    
    
    33,334
    
    
    
    16,666
    (6)
    
    $
    7.05
    
    
    May 8, 2017
    
    
    
    
    
    
    Ivan N. Shulman
    
    
    0
    
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    10,000
    (10)
    
    $
    37,900B. William Pezzimenti
    
    
    50,000
    
    
    
    0
    
    
    $
    5.00
    
    
    March 23, 2016
    
    
    
    
    
    
    B. William Pezzimenti
    
    
    3,334
    
    
    
    6,666
    (8)
    
    $
    6.68
    
    
    October 24, 2017
    
    
    
    
    
    
    B. William Pezzimenti
    
    
    20,000
    
    
    
    80,000
    (9)
    
    $
    6.80
    
    
    March 12, 2018
    
    
    
    
    
    
    Gary L. Worobow
    
    
    33,334
    
    
    
    16,666
    (1)
    
    $
    4.66
    
    
    March 11, 2019
    
    
    
    
    
    
    Gary L. Worobow
    
    
    0
    
    
    
    0
    
    
    
    
    
    
    
    
    
    13,333
    (4)
    
    $
    50,532Gary L. Worobow
    
    
    0
    
    
    
    0
    
    
    
    
    
    
    
    
    
    20,000
    (7)
    
    $
    75,800
 
 (1)
    
    Vests with respect of 16,666 shares on December 8, 2009(2)
    
    Vests with respect to 33,334 shares on March 29, 2010.(3)
    
    Vests with respect to 16,667 shares each on March 12, 2010 and March 12, 2011.(4)
    
    Vests with respect to 6,667 shares on February 20, 2010 and 6,666 shares on
February 20, 2011. Market value is based on $3.79 per share, the closing price of
our common stock on June 30, 2009, the last day of our fiscal year(5)
    
    Vests with respect to 16,666 shares on December 8, 2009.(6)
    
    Vests with respect to 16,666 shares on May 8, 2010.(7)
    
    Vests with respect to 6,667 shares each on February 26, 2010 and February 26, 2011
and 6,666 shares on February 26, 2012. Market value is based on $3.79 per share,
the closing price of our common stock on June 30, 2009, the last day of our fiscal
year(8)
    
    Vests with respect to 3,333 shares on each on October 24, 2009 and October 24, 2010.(9)
    
    Vests with respect to 20,000 shares on each on March 12, 2010, March 12, 2011, March 12, 2012 and March 12, 2013.(10)
    
    Vests with respect to 5,000 shares on each of March 12, 2010 and March 23, 2011. Market value is based on $3.79 per share, the closing price
of our common stock on June 30, 2009, the last day of our fiscal year.(11)
    
    Based on $3.79 per share, which was the closing price on June 30, 2009, the last day of our fiscal year. Option Exercises and Stock Vested
  50




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##### Table of Contents



Option Awards
    
    Stock AwardsNumber of Shares
    
    
    
    
    
    Number of SharesAcquired on
    
    Value Realized
    
    Acquired on
    
    Value RealizedExercise
    
    on Exercise
    
    Vesting
    
    on VestingName
    
    (#)
    
    ($)
    
    (#)
    
    ($)William L. Yde III
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    Scott E Cody
    
    
    
    
    
    $
    
    
    
    
    5,000
    
    
    $
    22,100Gary L. Worobow
    
    
    
    
    
    $
    
    
    
    
    6,667
    
    
    $
    33,535Dale C. Arfman
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    Ivan N. Shulman
    
    
    16,600
    
    
    $
    85,490
    
    
    
    5,000
    
    
    $
    22,100B. William Pezzimenti
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
 Potential Payments Upon Termination or Change-in-Control
    Director Compensation  Fiscal 2009
 FeesEarned or
    
    Stock
    
    Option
    
    All OtherPaid in
    
    Awards
    
    Awards
    
    All OtherName
    
    Cash ($)
    
    ($)(1)
    
    ($)(1)
    
    ($)
    
    Total ($)Gary O. Benson(2)(3)
    
    $
    
    
    
    $
    72,018
    
    
    $
    25,094
    
    
    
    
    
    
    $
    97,112Shane E. Coppola(2)(3)
    
    $
    
    
    
    $
    72,018
    
    
    $
    34,624
    
    
    
    
    
    
    $
    106,642William M. Mower (5)
    
    $
    
    
    
    $
    10,418
    
    
    $
    
    
    
    
    
    
    
    $
    10,418Stuart R. Romenesko(2)(3)
    
    $
    
    
    
    $
    72,018
    
    
    $
    41,550
    
    
    
    
    
    
    $
    113,568Gary L. Worobow(2)(3)(4)
    
    $
    
    
    
    $
    72,018
    
    
    $
    49,300
    
    
    
    
    
    
    $
    121,318
 51




---



##### Table of Contents



(1)
    
    Amounts shown reflect the dollar amount recognized for financial statement
reporting purposes for fiscal 2008 in accordance with FAS 123(R). Assumptions used
in calculating this amount are included in Note 12 to our audited financial
statements for the fiscal year ended June 30, 2009, which are included elsewhere in
this report.(2)
    
    As of June 30, 2009, the director held stock options to purchase up to a total of
50,000 shares of our common stock.(3)
    
    As of June 30, 2009, the director held 33,333 restricted shares of our common stock.(4)
    
    Mr. Worobow resigned from the board effective March 1, 2009.(5)
    
    As of June 30, 2009, the director held 20,000 restricted shares of our common stock.  Compensation Committee Interlocks and Insider Participation
  Limitation of Liability and Indemnification of Officers and Directors; Commission Position on
Indemnification for Securities Act Liabilities
   
    
    any breach of his or her duty of loyalty to us or our stockholders;
    
    acts or omissions not in good faith which involve intentional misconduct or a knowing violation of law;
 52




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##### Table of Contents




    
    the payment of dividends or the redemption or purchase of stock in violation of Nevada law; or
    
    any transaction from which the director derived an improper personal benefit.
  
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
  Shares
    
    Percentage ofName and Address of Beneficial Owner
    
    Beneficially Owned
    
    TotalWilliam L. Yde III
    
    
    3,104,739
    (1)
    
    
    16.98
    %Dale C. Arfman
    
    
    2,058,375
    (14)
    
    
    11.26
    %Scott E. Cody
    
    
    198,333
    (2)(6)
    
    
    1.07
    %Ivan N. Shulman
    
    
    141,914
    (3)(12)
    
    
    *William Pezzimenti
    
    
    90,001
    (10)
    
    
    *Gary O. Benson
    
    
    142,000
    (4)(7)(8)
    
    
    *Shane E. Coppola
    
    
    90,000
    (7)(8)
    
    
    *Stuart R. Romenesko
    
    
    73,334
    (7)(9)
    
    
    *Gary L. Worobow
    
    
    73,334
    (7)(9)
    
    
    *William M. Mower
    
    
    20,000
    (13)
    
    
    *All Directors and Named Executive Officers as a group (11 people)
    
    
    5,992,030
    (5)
    
    
    31.83
    %Gruber
& McBaine Capital Management LLC (11) 
50 Osgood Place Penthouse Suite  
San Francisco, CA 94133
    
    
    1,382,600
    
    
    
    7.56
    %T. Rowe Price Associates, Inc. (11)  
100 East Pratt Street 10th Floor  
Baltimore, MD 21202-1009
    
    
    2,212,624
    
    
    
    12.10
    %
 
 *
    
    Less than 1%(1)
    
    Includes 2,361,747 shares that have been pledged as security for
a loan. Also includes an aggregate of 742,992 shares held by
third parties which Mr. Yde has the power to vote under separate
voting agreements.(2)
    
    Includes 183,333 shares issuable upon the exercise of options
that are currently exercisable or will become exercisable within
the next 60 days.(3)
    
    Includes 100,068 shares issuable upon the exercise of options
are that are currently exercisable or will become exercisable
within the next 60 days.(4)
    
    Includes 52,000 shares held by Goben Enterprises LP, a limited
partnership of which Mr. Benson is a General Partner.(5)
    
    Include 540,070 shares issuable upon the exercise of options are
that are currently exercisable or will become exercisable within
the next 60 days.(6)
    
    Includes 10,000 shares of restricted common stock.(7)
    
    Includes 33,333 shares of restricted common stock.(8)
    
    Includes 50,000 shares issuable upon the exercise of options
that are currently exercisable or will become exercisable within
the next 60 days. 53




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##### Table of Contents



(9)
    
    Includes 33,334 shares issuable upon the exercise of options
that are currently exercisable or will become exercisable within
the next 60 days.(10)
    
    Includes 90,001 shares issuable upon exercise of options that
are currently exercisable or will become exercisable within the
next 60 days.(11)
    
    Based on the most recent report filed pursuant to Section 16 of
the Securities Exchange Act of 1934, as amended, or the most
recent Schedule 13D, 13F or 13G filed with the securities and
Exchange Commission, as applicable.(12)
    
    Includes 30,000 shares of restricted common stock.(13)
    
    Includes 20,000 shares of restricted common stock.(14)
    
    Includes 12,132 shares held by spouse. Excludes 24,746 shares
held in various trusts of which Mr. Arfmans spouse is trustee. 
 Item 13. Certain Relationships and Related Transactions, and Director Independence
 Certain Relationships and Related Transactions
  Director Independence
  
 Item 14. Principal Accountant Fees and Services
 Fees billed to Company by Its Independent Registered Public Accounting Firm
  Fiscal Year
    
    Fiscal YearEnded June 30,
    
    Ended June 30,2009
    
    2008Audit Fees (1)
    
    $
    320,790
    
    
    $
    314,109Audit-Related Fees (2)
    
    
    11,854
    
    
    
    0Tax Fees (3)
    
    
    0
    
    
    
    0All Other Fees (4)
    
    
    0
    
    
    
    0Total Fees
    
    $
    332,644
    
    
    $
    314,109
 
 (1)
    
    Audit Fees consist of fees for professional services
rendered for the integrated audit of the Companys consolidated
annual financial statements and review of the interim
consolidated financial statements included in
quarterly reports and services that are normally
provided in connection with statutory and regulatory
filings or engagements.(2)
    
    Audit-Related Fees consist principally of assurance
and related services that are reasonably related to
the performance of the audit or review of the
Companys financial statements but not reported under
the caption Audit Fees above. Included in the fees is
$11,854 for the fiscal year ended June 30, 2009 that were treated as acquisition costs. 54




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##### Table of Contents



(3)
    
    Tax Fees consist of fees for tax compliance, tax advice, and tax planning.(4)
    
    All Other Fees typically consist of fees for permitted non-audit products and services provided.
  Pre-Approval Policy
   
 Part IV
 
 Item 15.
    
    Exhibits and Financial Statement Schedules
 Documents filed as part of this Form 10-K:
 
 Financial Statement Schedule:
  55




---



##### Table of Contents



Exhibits:
 ExhibitNo.
    
    Description2.1
    
    Share Purchase Agreement dated February 1, 2009 by and among
UBC Media Group plc, Global Traffic Network (UK) Limited and
Global Traffic Network, Inc. (incorporated by reference to
Exhibit 10.1 to Form 8-K filed February 3, 2009)2.2
    
    Deed of Amendment to Share Purchase Agreement Relating to The
Unique Broadcasting Company Limited dated July 23, 2009 by and
among UBC Media Group plc, Global Traffic Network (UK) Limited
and Global Traffic Network, Inc. (incorporated by reference to
Exhibit 10.1 to the Current Report on Form 8-K filed July 28,
2009)3.1
    
    Articles of Incorporation of Global Traffic Network, Inc., a
Nevada corporation (incorporated by reference to Exhibit 3.1
to the Current Report on Form 8-K filed February 26, 2008).3.2
    
    Bylaws of Global Traffic Network, Inc., a Nevada corporation
(incorporated by reference to Exhibit 3.2 to the Current
Report on Form 8-K filed February 26, 2008).4.1
    
    Form of Specimen Stock Certificate.4.2
    
    Underwriters Warrant Agreement dated March 29, 2006 between
Global Traffic Network, Inc. and Feltl and Company, Inc. and
related Warrant Certificate. (incorporated by reference to
Appendix A of Exhibit 1.1 to the Form S-l registration
statement of the registrant (File No. 333-130417)).10.1
    
    Information Report Supply Agreement dated June 24, 2008 by and
between The Australia Traffic Network Pty Limited and Austereo
Pty Limited (incorporated by reference to Exhibit to the Annual Report
on Form 10-K filed September 9, 2008).10.2
    
    Employment Agreement dated November 18, 2005 by and between
Global Traffic Network, Inc. and William L. Yde III
(incorporated by reference to Exhibit 10.12 to the Form S-l
registration statement of the registrant (File No.
333-130417)).10.3
    
    Amendment No. 1 to Employment Agreement dated July 1, 2008
between Global Traffic Network, Inc. and William L. Yde III
(incorporated by reference to Exhibit 10.1 to the Current
Report on Form 8-K filed July 3, 2008).10.4
    
    Employment Agreement dated November 18, 2005 by and between
Global Traffic Network, Inc. and Dale C. Arfman (incorporated
by reference to Exhibit 10.13 to the Form S-l registration
statement of the registrant (File No. 333-130417)).10.5
    
    Employment Agreement dated February 14, 2006 by and between
Global Traffic Network, Inc. and Scott E. Cody (incorporated
by reference to Exhibit 10.16 to the Form S-l registration
statement of the registrant (File No. 333-130417)).10.6
    
    Amendment No. 2 to Employment Agreement dated July 1, 2008
between Global Traffic Network, Inc. and Scott E. Cody
(incorporated by reference to Exhibit 10.2 to the Current
Report on Form 8-K filed July 3, 2008).10.7
    
    Form of Global Traffic Network, Inc. Stock Option Agreement
(2005 Stock Incentive Plan  Employee Non-Qualified)
(incorporated by reference to Exhibit 10.14 to the Form S-l
registration statement of the registrant (File No.
333-130417)).10.8
    
    Form of Global Traffic Network, Inc. Stock Option Agreement
(2005 Stock Incentive Plan  Director) (incorporated by
reference to Exhibit 10.15 to the Form S-l registration
statement of the registrant (File No. 333-130417)).10.9
    
    Form of Global Traffic Network, Inc. Restricted Stock
Agreement (2005 Stock Incentive Plan) (incorporated by
reference to Exhibit 10.1 to the Current Report on Form 8-K
filed April 11, 2008).10.10
    
    Employment Agreement dated March 1, 2009 by and between Global
Traffic Network, Inc. and Gary L. Worobow (incorporated by
reference to Exhibit 10.1 to the Current Report on Form 8-K
filed March 13, 2009).10.11
    
    Amended and Restated 2005 Stock Incentive Plan (incorporated
by reference to Exhibit A to amended Schedule 14A filed on
February 18, 2009).10.12
    
    Resignation and Consulting Letter Agreement dated July 25,
2009 by and between Global Traffic Network, Inc. and Dale
Arfman (incorporated by reference to Exhibit 10.2 to the
Current Report on Form 8-K filed July 28, 2009).10.13
    
    Amendment effective July 1, 2009 to Information Report Supply
Agreement dated June 24, 2008 by and between The Australia
Traffic Network Pty Limited and Austereo Pty Limited.16.1
    
    Letter from BDO Kendalls NSW dated January 20, 2009 re: Change
in Certifying Accountant (incorporated by reference to Exhibit
16.1 to the Current Report on Form 8-K filed January 20,
2009).21.1
    
    Subsidiaries of Global Traffic Network, Inc.23.1
    
    Consent of BDO Kendalls Audit & Assurance (NSW-VIC) Pty Ltd.31.1
    
    Certification of Chief Executive Officer pursuant to
Securities Exchange Act Rules 13a-15(e) and 15d-15(e) as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.31.2
    
    Certification of Chief Financial Officer pursuant to
Securities Exchange Act Rules 13a-15(e) and 15d-15(e) as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.32.1
    
    Certification of Chief Executive Officer and Chief Financial
Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.99.1
    
    Press release dated September 10, 2009.
 
 
    
    Confidential treatment has been granted as to certain portions of
this exhibit pursuant to Rule 406 of the Securities Act and/or Rule
24b-2 of the Exchange Act.
    
    Confidential treatment has been requested for certain
portions of this exhibit pursuant to Rule 406 of the Securities Act and/or Rule
24b-2 of the Exchange Act. 56




---



##### Table of Contents



SIGNATURES
  GLOBAL TRAFFIC NETWORK, INC.Date: September 10, 2009
    By:
    /s/ Scott E. CodyScott E. CodyChief Financial Officer and
Chief Operating Officer  Signature
    
    Title
    
    Date/s/ William L. Yde III
William L. Yde III
    
    Chairman of the Board,
Chief Executive Officer
and President (Principal
Executive Officer) and Director
    
    September 10, 2009/s/ Scott E. Cody
Scott E. Cody
    
    Chief Financial Officer and
Chief Operating Officer
(Principal Financial Officer and
Principal Accounting Officer)
    
    September 10, 2009/s/ Dale C. Arfman
    
    Treasurer, Secretary and Director
    
    September 10, 2009Dale C. Arfman/s/ Gary O. Benson
Gary O. Benson
    
    Director
    
    September 10, 2009/s/ Shane E. Coppola
Shane E. Coppola
    
    Director
    
    September 10, 2009/s/ William M. Mower
William M. Mower
    
    Director
    
    September 10, 2009/s/ Stuart R. Romenesko
Stuart R. Romenesko
    
    Director
    
    September 10, 2009
 57




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##### Table of Contents



Global Traffic Network, Inc.
Index to Consolidated Financial Statements
And Financial Statement Schedule
 1. Consolidated Financial Statements
 PageReports of Independent Registered Public Accounting Firm
    
    
    F-1Consolidated Balance Sheets at June 30, 2009 and 2008
    
    
    F-3Consolidated Statements of Income for the years ended June 30, 2009, 2008 and 2007
    
    
    F-4Consolidated Statements of Shareholders Equity for the years ended June 30, 2009, 2008 and 2007
    
    
    F-5Consolidated Statements of Cash Flows for the years ended June 30, 2009, 2008 and 2007
    
    
    F-6Notes to Consolidated Financial Statements
    
    
    F-7
 2. Financial Statement Schedules:
  58




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
    Internal
ControlIntegrated Framework
 BDO Kendalls Audit & Assurance (NSW  VIC) Pty Limited
 
 F-1




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 Internal ControlIntegrated Framework
       BDO Kendalls Audit & Assurance (NSW  VIC) Pty Limited
 
 F-2




---



##### Table of Contents



GLOBAL TRAFFIC NETWORK, INC.


CONSOLIDATED BALANCE SHEETS


(In thousands except share amounts)
 June 30,
    
    
    June 30,2009
    
    
    2008ASSETS:Current Assets:Cash and cash equivalents
    
    $
    21,419
    
    
    $
    37,541Accounts receivable net of allowance for doubtful
accounts of $150 and $292 at June 30, 2009 and
June 30, 2008
    
    
    15,986
    
    
    
    13,355Prepaids and other current assets
    
    
    1,421
    
    
    
    961Deferred tax assets
    
    
    208
    
    
    
    262Total current assets
    
    
    39,034
    
    
    
    52,119Property and equipment, net
    
    
    7,569
    
    
    
    8,964Intangible assets, net
    
    
    17,200
    
    
    
    418Goodwill
    
    
    4,688
    
    
    
    Deferred tax assets
    
    
    115
    
    
    
    141Other assets
    
    
    564
    
    
    
    960Total assets
    
    $
    69,170
    
    
    $
    62,602LIABILITIES AND SHAREHOLDERS EQUITY:Current Liabilities:Accounts payable and accrued expenses
    
    $
    14,649
    
    
    $
    8,067Deferred revenue
    
    
    1,198
    
    
    
    1,293Income taxes payable
    
    
    1,908
    
    
    
    3,186Current portion of long term debt
    
    
    326
    
    
    
    459Total current liabilities
    
    
    18,081
    
    
    
    13,005Long term debt, less current portion
    
    
    57
    
    
    
    482Deferred tax liabilities
    
    
    3,410
    
    
    
    Other liabilities
    
    
    318
    
    
    
    389Total liabilities
    
    
    21,866
    
    
    
    13,876Common stock, $.001 par value; 100,000,000 shares
authorized; 18,264,834 and 18,156,133 shares
issued and outstanding as of June 30, 2009 and
2008
    
    
    18
    
    
    
    18Preferred stock, $.001 par value; 10,000,000
authorized; 0 issued and outstanding as of June
30, 2009 and 2008
    
    
    
    
    
    
    Additional paid in capital
    
    
    50,146
    
    
    
    49,015Accumulated other comprehensive income
    
    
    1,398
    
    
    
    2,866Accumulated deficit
    
    
    (4,258
    )
    
    
    (3,173
    )Total shareholders equity
    
    
    47,304
    
    
    
    48,726Total liabilities and shareholders equity
    
    $
    69,170
    
    
    $
    62,602
  F-3




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##### Table of Contents



GLOBAL TRAFFIC NETWORK, INC.


CONSOLIDATED STATEMENTS OF INCOME


(In thousands except share and per share amounts)
 Year Ended June 30,2009
    
    
    2008
    
    
    2007Revenues
    
    $
    60,337
    
    
    $
    50,953
    
    
    $
    31,699Operating expenses (exclusive of
depreciation and amortization expense shown
separately below)
    
    
    40,937
    
    
    
    30,456
    
    
    
    21,835Selling, general and administrative expenses
    
    
    15,615
    
    
    
    15,214
    
    
    
    10,120Depreciation and amortization expense
    
    
    2,547
    
    
    
    1,500
    
    
    
    907Net operating income (loss)
    
    
    1,238
    
    
    
    3,783
    
    
    
    (1,163
    )Interest expense
    
    
    39
    
    
    
    90
    
    
    
    170Other (income) (including interest income of
$1,015, $1,600, and $471 for the years ended
June 30, 2009, 2008 and 2007)
    
    
    (1,050
    )
    
    
    (1,617
    )
    
    
    (554
    )Other expense
    
    
    77
    
    
    
    13
    
    
    
    8Net income (loss) before income taxes
    
    
    2,172
    
    
    
    5,297
    
    
    
    (787
    )Income tax expense
    
    
    3,257
    
    
    
    3,565
    
    
    
    1,230Net (loss) income
    
    $
    (1,085
    )
    
    $
    1,732
    
    
    $
    (2,017
    )(Loss) income per common share:Basic
    
    $
    (0.06
    )
    
    $
    0.10
    
    
    $
    (0.16
    )Diluted
    
    $
    (0.06
    )
    
    $
    0.10
    
    
    $
    (0.16
    )Weighted average common shares outstanding:Basic
    
    
    18,065,671
    
    
    
    17,648,410
    
    
    
    12,870,000Diluted
    
    
    18,065,671
    
    
    
    17,831,855
    
    
    
    12,870,000
  F-4




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##### Table of Contents



GLOBAL TRAFFIC NETWORK, INC.


CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY


For the years ended June 30, 2009, 2008 and 2007
(Amounts in thousands except share amounts)
 AccumulatedAdditional
    
    
    
    
    
    
    Other
    
    
    TotalCommon Stock
    
    
    Paid In
    
    
    Accumulated
    
    
    Comprehensive
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Capital
    
    
    Deficit
    
    
    Income (Loss)
    
    
    (Loss) Income
    
    
    TotalBalance, June 30, 2006
    
    
    12,870,000
    
    
    $
    13
    
    
    $
    18,169
    
    
    $
    (2,888
    )
    
    $
    314
    
    
    
    
    
    
    $
    15,608Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,017
    )
    
    
    
    
    
    
    (2,017
    )
    
    
    (2,017
    )Stock based
compensation
    
    
    
    
    
    
    
    
    
    
    358
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    358Foreign currency
translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    884
    
    
    
    884
    
    
    
    884Comprehensive net
loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,133
    )
    
    
    Balance, June 30, 2007
    
    
    12,870,000
    
    
    
    13
    
    
    
    18,527
    
    
    
    (4,905
    )
    
    
    1,198
    
    
    
    
    
    
    
    14,833Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,732
    
    
    
    
    
    
    
    1,732
    
    
    
    1,732Stock based
compensation
    
    
    110,000
    
    
    
    
    
    
    
    782
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    782Follow-on offering of
common stock
    
    
    5,175,000
    
    
    
    5
    
    
    
    29,706
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,711Exercise of stock
options
    
    
    3,334
    
    
    
    
    
    
    
    15
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15Repurchase and retire
shares
    
    
    (2,201
    )
    
    
    
    
    
    
    (15
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15
    )Foreign currency
translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,668
    
    
    
    1,668
    
    
    
    1,668Comprehensive net
income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,400
    
    
    
    Balance, June 30, 2008
    
    
    18,156,133
    
    
    
    18
    
    
    
    49,015
    
    
    
    (3,173
    )
    
    
    2,866
    
    
    
    
    
    
    
    48,726Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,085
    )
    
    
    
    
    
    
    (1,085
    )
    
    
    (1,085
    )Cashless exercise of stock options
    
    
    8,701
    
    
    
    
    
    
    
    (23
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (23
    )Stock based
compensation
    
    
    100,000
    
    
    
    
    
    
    
    1,154
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,154Foreign currency
translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,468
    )
    
    
    (1,468
    )
    
    
    (1,468
    )Comprehensive net
loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (2,553
    )
    
    
    Balance, June 30, 2009
    
    
    18,264,834
    
    
    $
    18
    
    
    $
    50,146
    
    
    $
    (4,258
    )
    
    $
    1,398
    
    
    
    
    
    
    $
    47,304
  F-5




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##### Table of Contents



GLOBAL TRAFFIC NETWORK, INC.


CONSOLIDATED STATEMENTS OF CASH FLOWS


(Amounts in thousands)
 Year ended June 30,2009
    
    
    2008
    
    
    2007Cash flows from operating activities:Net (loss) income
    
    $
    (1,085
    )
    
    $
    1,732
    
    
    $
    (2,017
    )Adjustments to reconcile net (loss) income to net cash provided by operating
activities:Depreciation and amortization
    
    
    2,547
    
    
    
    1,500
    
    
    
    907Allowance for doubtful accounts
    
    
    (142
    )
    
    
    199
    
    
    
    82Non-cash compensation expense
    
    
    1,154
    
    
    
    782
    
    
    
    358Change in deferred taxes
    
    
    (188
    )
    
    
    (48
    )
    
    
    (54
    )Loss (gain) on disposal of assets
    
    
    62
    
    
    
    
    
    
    
    (66
    )Changes in assets and liabilities (net of effects from acquisition of business):Accounts receivable
    
    
    (45
    )
    
    
    (4,044
    )
    
    
    (2,942
    )Prepaid and other current assets and other assets
    
    
    (817
    )
    
    
    (602
    )
    
    
    (200
    )Accounts payable and accrued expenses and other liabilities
    
    
    292
    
    
    
    1,615
    
    
    
    1,429Deferred revenue
    
    
    (69
    )
    
    
    1,216
    
    
    
    6Income tax refund
    
    
    
    
    
    
    
    
    
    
    28Income taxes payable
    
    
    (735
    )
    
    
    1,796
    
    
    
    899Net cash provided by (used in) operating activities
    
    
    974
    
    
    
    4,146
    
    
    
    (1,570
    )Cash flows from investing activities:Purchase of property and equipment
    
    
    (1,627
    )
    
    
    (3,287
    )
    
    
    (3,114
    )Acquisition of business
    
    
    (13,133
    )
    
    
    (697
    )
    
    
    (355
    )Net proceeds from disposal of equipment
    
    
    
    
    
    
    
    
    
    
    632Purchase of intangibles
    
    
    
    
    
    
    (120
    )
    
    
    Net cash used in investing activities
    
    
    (14,760
    )
    
    
    (4,104
    )
    
    
    (2,837
    )Cash flows from financing activities:Repayment of long term debt
    
    
    (377
    )
    
    
    (693
    )
    
    
    (577
    )Net proceeds (repayments) of bank overdraft line of credit
    
    
    
    
    
    
    
    
    
    
    (611
    )Repayment of shareholder notes payable
    
    
    
    
    
    
    
    
    
    
    (2,000
    )Proceeds from public offerings of stock, net
    
    
    
    
    
    
    29,711
    
    
    
    Net cash (used in) provided by financing activities
    
    
    (377
    )
    
    
    29,018
    
    
    
    (3,188
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    (1,959
    )
    
    
    1,203
    
    
    
    224Net(decrease) increase in cash and cash equivalents
    
    
    (16,122
    )
    
    
    30,263
    
    
    
    (7,371
    )Cash and cash equivalents at beginning of fiscal year
    
    
    37,541
    
    
    
    7,278
    
    
    
    14,649Cash and cash equivalents at end of fiscal year
    
    $
    21,419
    
    
    $
    37,541
    
    
    $
    7,278Supplemental disclosures of cash flow information:Cash paid during fiscal year for:Interest
    
    $
    39
    
    
    $
    90
    
    
    $
    170Income taxes
    
    $
    3,876
    
    
    $
    1,813
    
    
    $
    385Non-cash financing and investing activities:Property acquired other than for cash
    
    $
    
    
    
    $
    
    
    
    $
    75
  F-6




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##### Table of Contents



GLOBAL TRAFFIC NETWORK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands except share and per share amounts)
 NOTE 1  Description of the Companys Business
   NOTE 2  Basis of Presentation
     NOTE 3  Summary of Significant Accounting Policies
 a) Use of Estimates
  F-7




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##### Table of Contents



b) Revenue recognition
  c) Operating expenses
  d) Station compensation and reimbursement
   June 30,2009Year 1
    
    $
    30,828Year 2
    
    
    24,427Year 3
    
    
    19,456Year 4
    
    
    3,699Year 5
    
    
    Thereafter
    
    
    
 e) Cash and cash equivalents
  Year ended
    
    
    Year endedJune 30,
    
    
    June 30,2009
    
    
    2008Cash and cash equivalents consist of the following:Domestic
    
    $
    1,381
    
    
    $
    22,435Foreign
    
    
    20,038
    
    
    
    15,106Total cash and cash equivalents
    
    $
    21,419
    
    
    $
    37,541
  f) Accounts Receivable
  F-8




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##### Table of Contents



Allowance for Doubtful Accounts
 Balance at
    
    
    
    
    
    
    
    
    
    Balance atbeginning of
    
    Additions
    
    Deductions
    
    end ofyear
    
    Expense
    
    Write-offs
    
    YearYear ended June 30, 2009
    
    $
    292
    
    
    $
    159
    
    
    $
    (301
    )
    
    $
    150Year ended June 30, 2008
    
    $
    93
    
    
    $
    270
    
    
    $
    (71
    )
    
    $
    292Year ended June 30, 2007
    
    $
    11
    
    
    $
    111
    
    
    $
    (29
    )
    
    $
    93
 g) Property and Equipment
  Recording, broadcasting and studio equipment
    
    5 yearsFurniture, and equipment and other
    
    5 yearsMotor vehicles
    
    7 yearsHelicopters and fixed wing aircraft
    
    8 yearsHelicopter engine rebuilds
    
    3 yearsComputer equipment and software
    
    3-5 years
  h) Intangible assets
  WeightedAverageAmortizationPeriod
    
    
    June 30,(Years)
    
    
    2009
    
    
    June 30, 2008Station contracts
    
    10 years
    
    
    $
    12,565
    
    
    $
    261Radio advertising contracts
    
    4 years
    
    
    
    2,311
    
    
    
    Non-competition agreement
    
    3 years
    
    
    
    2,193
    
    
    
    Mobile phone intellectual property
    
    3 years
    
    
    
    100
    
    
    
    120Aircraft license acquisition costs
    
    
    N/A
    
    
    
    31
    
    
    
    37Total intangible assets
    
    
    N/A
    
    
    $
    17,200
    
    
    $
    418
  F-9




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##### Table of Contents



Acquired intangible assets
 As of June 30, 2009
    
    As of June 30, 2008Gross
    
    
    
    
    
    GrossCarrying
    
    Accumulated
    
    Carrying
    
    AccumulatedAmount
    
    Amortization
    
    Amount
    
    AmortizationAmortized intangible assetsStation contracts
    
    $
    13,136
    
    
    $
    571
    
    
    $
    353
    
    
    $
    92Radio advertising contracts
    
    
    2,521
    
    
    
    210
    
    
    
    
    
    
    
    Non-competition agreement
    
    
    2,467
    
    
    
    274
    
    
    
    
    
    
    
    Total
    
    $
    18,124
    
    
    $
    1,055
    
    
    $
    353
    
    
    $
    92
 Estimated future amortization expense relating to acquiredintangible assets:
    
    TotalFor the year period ended June 30, 2010
    
    $
    2,797For the year period ended June 30, 2011
    
    
    2,797For the year period ended June 30, 2012
    
    
    2,504For the year period ended June 30, 2013
    
    
    1,703For the year period ended June 30, 2014
    
    
    1,283Hereafter
    
    
    5,985
 i) Goodwill
  Balance, June 30, 2008
    
    $
    Acquisitions
    
    
    4,509Translation adjustments
    
    
    179Balance, June 30, 2009
    
    $
    4,688
 j) Income taxes
   F-10




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##### Table of Contents



k) Per share data
  Year ended
    
    Year ended
    
    Year endedJune 30, 2009
    
    June 30, 2008
    
    June 30, 2007Basic Shares Outstanding
    
    
    18,065,671
    
    
    
    17,648,410
    
    
    
    12,870,000Stock Options & Warrants
    
    
    
    
    
    
    183,445
    
    
    
    Diluted Shares Outstanding
    
    
    18,065,671
    
    
    
    17,831,855
    
    
    
    12,870,000
 l) Fair value of financial instruments
  m) Fair Value Measurements
  
    
    Level 1  Observable inputs such as quoted prices in active markets;
    
    Level 2  Inputs, other than 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 requires
the reporting entity to develop its own assumptions.
    n) Foreign currency translation
  o) Recent Accounting Pronouncements
  F-11




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##### Table of Contents



p) Concentration of Credit Risk
  q) Major Suppliers
 .
   F-12




---



##### Table of Contents



r) Other Comprehensive Income (Loss)
  NOTE 4  Related Party Transactions
   NOTE 5  Property and Equipment, Net
  Year
    
    
    YearEnded
    
    
    EndedJune 30,
    
    
    June 30,2009
    
    
    2008Helicopters and fixed wing aircraft
    
    $
    8,935
    
    
    $
    9,010Recording, broadcasting and studio equipment
    
    
    1,955
    
    
    
    2,508Furniture and equipment and other
    
    
    1,843
    
    
    
    1,586Less: Accumulated depreciation and amortization
    
    
    5,164
    
    
    
    4,140Property and equipment, net
    
    $
    7,569
    
    
    $
    8,964Plant and equipment held as security under specific loans:
    
    $
    1,190
    
    
    $
    2,066
 Year ended
    
    
    Year endedJune 30,
    
    
    June 30,2009
    
    
    2008Net property and equipment consists of the following:Domestic
    
    $
    31
    
    
    $
    39Foreign
    
    
    7,538
    
    
    
    8,925Property and equipment, net
    
    $
    7,569
    
    
    $
    8,964
 F-13




---



##### Table of Contents



NOTE 6  Accounts Payable and Accrued Expenses
  June 30,
    
    
    June 30,2009
    
    
    2008Trade payables
    
    $
    8,493
    
    
    $
    5,118Accrued payroll expenses
    
    
    1,592
    
    
    
    1,772Accrued expenses and other liabilities
    
    
    4,564
    
    
    
    1,177Total
    
    $
    14,649
    
    
    $
    8,067
  NOTE 7  Long Term Debt
  June 30,
    
    
    June 30,2009
    
    
    2008Term loan with bank, secured by all ATN assets, repaid on July 1, 2008
    
    $
    
    
    
    $
    17Financial leases with financing company, secured by automobiles, repaid
August 27, 2008 and November 1, 2007
    
    
    
    
    
    
    50Note payable to bank, secured by a helicopter, repaid November 6, 2008
    
    
    
    
    
    
    58Notes payable to bank bearing fixed interest of 6.97%, monthly principal
and interest payments of $29, secured by 2 helicopters, matures September
6, 2010
    
    
    383
    
    
    
    816383
    
    
    
    941Less current portion
    
    
    326
    
    
    
    459Long term debt less current portion
    
    
    57
    
    
    
    482
   June 30,2009Year 1
    
    $
    326Year 2
    
    
    57Year 3
    
    
    Year 4
    
    
    Year 5
    
    
    
 NOTE 8  Shareholder Notes Payable
    NOTE 9  Income Taxes
  F-14




---



##### Table of Contents



Year ended
    
    Year endedJune 30, 2009
    
    June 30, 2008Domestic
    
    Foreign
    
    Total
    
    Domestic
    
    Foreign
    
    TotalNet (loss) income
before taxes
    
    
    (4,113
    )
    
    
    6,285
    
    
    
    2,172
    
    
    
    (1,610
    )
    
    
    6,907
    
    
    
    5,297Income tax provision
    
    $
    1
    
    
    $
    3,397
    
    
    $
    3,398
    
    
    $
    25
    
    
    $
    3,631
    
    
    $
    3,656Current deferred tax
asset (liability), net
    
    
    (2
    )
    
    
    (68
    )
    
    
    (70
    )
    
    
    (25
    )
    
    
    (110
    )
    
    
    (135
    )Non-current deferred tax
asset (liability), net
    
    
    (365
    )
    
    
    (179
    )
    
    
    (544
    )
    
    
    (262
    )
    
    
    123
    
    
    
    (139
    )Tax carried forward losses
    
    
    (985
    )
    
    
    (866
    )
    
    
    (1,851
    )
    
    
    (327
    )
    
    
    (937
    )
    
    
    (1,264
    )Less: Valuation allowance
    
    
    1,352
    
    
    
    972
    
    
    
    2,324
    
    
    
    614
    
    
    
    833
    
    
    
    1,447Income tax expense
    
    $
    1
    
    
    $
    3,256
    
    
    $
    3,257
    
    
    $
    25
    
    
    $
    3,540
    
    
    $
    3,565
  Year ended
    
    
    Year endedJune 30,
    
    
    June 30,2009
    
    
    2008Deferred tax assets:Depreciation
    
    $
    87
    
    
    $
    19Deferred rent
    
    
    40
    
    
    
    53Capital losses
    
    
    5
    
    
    
    5Foreign tax credit
    
    
    132
    
    
    
    132Stock option expense
    
    
    770
    
    
    
    408Accrued expenses and other
    
    
    307
    
    
    
    327Tax carried forward losses
    
    
    7,036
    
    
    
    3,862Total deferred tax assets
    
    
    8,377
    
    
    
    4,806Deferred tax liabilitiesIntangible assets
    
    
    4,740
    
    
    
    Prepaid expenses
    
    
    36
    
    
    
    40Total deferred tax liabilities
    
    
    4,776
    
    
    
    40Net deferred tax assets before valuation allowance
    
    
    3,601
    
    
    
    4,766Valuation allowance
    
    
    (6,688
    )
    
    
    (4,363
    )Net deferred tax (liabilities) assets
    
    
    (3,087
    )
    
    
    403
 Year ended
    
    
    Year ended
    
    
    Year endedJune 30,
    
    
    June 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2007Income tax expense consists of the following:Domestic
    
    $
    1
    
    
    $
    25
    
    
    $
    Foreign
    
    
    3,256
    
    
    
    3,540
    
    
    
    1,230Income tax expense
    
    $
    3,257
    
    
    $
    3,565
    
    
    $
    1,230
  Year ended
    
    Year ended
    
    Year endedJune 30,
    
    June 30,
    
    June 30,2009
    
    2008
    
    2007Federal statutory rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %State taxes net of federal benefit
    
    
    1.5
    
    
    
    0.5
    
    
    
    0.5Differences between U.S. and foreign tax rates
    
    
    (6.5
    )
    
    
    (5.5
    )
    
    
    (5.5
    )Permanent differences between book and tax income
    
    
    13.0
    
    
    
    10.0
    
    
    
    21.6Impact of valuation allowance
    
    
    107.0
    
    
    
    27.3
    
    
    
    (207.9
    )Effective tax rate
    
    
    150.0
    %
    
    
    67.3
    %
    
    
    (156.3
    )%
 F-15




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##### Table of Contents



As of
    
    
    As ofJune 30,
    
    
    June 30,2009
    
    
    2008Domestic
    
    $
    1,487
    
    
    $
    502Foreign
    
    
    5,549
    
    
    
    3,360Total
    
    $
    7,036
    
    
    $
    3,862
    NOTE 10  Commitments and Contingencies
  June 30,2009Year 1
    
    $
    832Year 2
    
    
    748Year 3
    
    
    513Year 4
    
    
    349Year 5
    
    
    136Thereafter
    
    
    170Total
    
    $
    2,748
  F-16




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##### Table of Contents



As ofJune 30,2009Year 1
    
    $
    3,259Year 2
    
    
    3,094Year 3
    
    
    3,094Year 4
    
    
    1,547Year 5
    
    
    Thereafter
    
    
    Total
    
    $
    10,994
  NOTE 11  Capital Stock
    NOTE 12  Stock based compensation
  As of
    
    As ofJune 30,
    
    June 30,2009
    
    2008Shares authorized under plan
    
    
    1,800,000
    
    
    
    1,200,000Stock options outstanding
    
    
    (890,067
    )
    
    
    (902,500
    )Stock options exercised
    
    
    (24,934
    )
    
    
    (3,334
    )Restricted shares outstanding
    
    
    (173,332
    )
    
    
    (110,000
    )Restricted shares converted into common shares upon lapse of restrictions
    
    
    (36,668
    )
    
    
    Shares available for issuance under plan
    
    
    674,999
    
    
    
    184,166
 F-17




---



##### Table of Contents



Stock Options
  June 30,
    
    June 30,
    
    June 30,2009
    
    2008
    
    2007Risk-free interest rate
    
    
    1.74-2.71
    %
    
    
    2.49-3.99
    %
    
    
    4.53-4.71
    %Volatility factor
    
    
    61.02-75.52
    %
    
    
    57.23-57.98
    %
    
    
    60.35-65.89
    %Weighted volatility
    
    
    68.27
    %
    
    
    57.84
    %
    
    
    62.71
    %Dividend yield
    
    
    
    
    
    
    
    
    
    
    Option price
    
    $
    3.96-6.05
    
    
    $
    6.68-8.70
    
    
    $
    4.05-7.05Weighted average expected life of options
    
    6 years
    
    6.28 years
    
    6 yearsWeighted average grant date fair value
per share
    
    $
    3.07
    
    
    $
    3.92
    
    
    $
    3.08
  WeightedWeighted
    
    AverageAverage
    
    Remaining
    
    Aggregate
    
    AggregateExercise
    
    Contractual
    
    Fair
    
    IntrinsicShares
    
    Price
    
    Term
    
    Value
    
    ValueBalance, June 30, 2008
    
    
    902,500
    
    
    $
    5.83
    
    
    
    
    
    
    $
    2,703
    
    
    
    Exercisable, June 30, 2008
    
    
    327,510
    
    
    $
    4.89
    
    
    
    
    
    
    $
    828
    
    
    
    Grants
    
    
    20,000
    
    
    $
    5.01
    
    
    
    
    
    
    $
    61
    
    
    
    Exercised
    
    
    (21,600
    )
    
    $
    4.80
    
    
    
    
    
    
    
    
    
    
    
    109Forfeitures/expirations
    
    
    (10,833
    )
    
    $
    5.20
    
    
    
    
    
    
    
    (34
    )
    
    
    Balance, June 30, 2009
    
    
    890,067
    
    
    $
    5.56
    
    
    7.65 years
    
    $
    2,657
    
    
    $
    Exercisable, June 30, 2009
    
    
    601,744
    
    
    $
    5.36
    
    
    7.34 years
    
    $
    1,639
    
    
    $
    
    F-18




---



##### Table of Contents



Restricted Stock
   WeightedAverage GrantDate Fair ValueShares
    
    Per ShareUnvested, June 30, 2008
    
    
    110,000
    
    
    $
    8.57Grants
    
    
    100,000
    
    
    $
    4.41Converted to common stock
    
    
    (36,668
    )
    
    
    Forfeited
    
    
    
    
    
    
    Unvested, June 30, 2009
    
    
    173,332
    
    
    $
    6.17
    NOTE 13  Warrant
   NOTE 14  Segment Reporting
  F-19




---



##### Table of Contents



Year ended
    
    Year ended
    
    Year endedJune 30,
    
    June 30,
    
    June 30,Australia
    
    2009
    
    2008
    
    2007Revenues
    
    
    42,707
    
    
    
    44,296
    
    
    
    28,425Interest expense
    
    
    39
    
    
    
    90
    
    
    
    132Interest revenue
    
    
    700
    
    
    
    488
    
    
    
    36Depreciation & amortization expense
    
    
    737
    
    
    
    810
    
    
    
    706Intercompany management fee expense
    
    
    1,336
    
    
    
    1,629
    
    
    
    1,772Income tax expense
    
    
    3,386
    
    
    
    3,540
    
    
    
    1,230Segment profit
    
    
    7,894
    
    
    
    8,188
    
    
    
    2,864Expenditure for property and equipment
    
    
    380
    
    
    
    382
    
    
    
    498Expenditure for intangible assets
    
    
    
    
    
    
    
    
    
    
    Segment assets
    
    
    30,658
    
    
    
    29,012
    
    
    
    14,036Current assets
    
    
    27,482
    
    
    
    25,115
    
    
    
    10,137Property & equipment, net
    
    
    2,552
    
    
    
    3,572
    
    
    
    3,610Deferred tax assets, net
    
    
    323
    
    
    
    403
    
    
    
    312Intangible assets, net
    
    
    31
    
    
    
    37
    
    
    
    33Goodwill
    
    
    
    
    
    
    
    
    
    
    Segment liabilities
    
    
    9,692
    
    
    
    14,240
    
    
    
    8,669
 Year ended
    
    Year ended
    
    Year endedJune 30,
    
    June 30,
    
    June 30,Canada
    
    2009
    
    2008
    
    2007Revenues
    
    
    6,920
    
    
    
    6,657
    
    
    
    3,274Interest expense
    
    
    
    
    
    
    
    
    
    
    38Interest revenue
    
    
    1
    
    
    
    8
    
    
    
    2Depreciation & amortization expense
    
    
    757
    
    
    
    668
    
    
    
    201Intercompany management fee expense
    
    
    
    
    
    
    
    
    
    
    Income tax expense
    
    
    
    
    
    
    
    
    
    
    Segment loss
    
    
    (3,063
    )
    
    
    (3,064
    )
    
    
    (3,756
    )Expenditure for property and equipment
    
    
    1,034
    
    
    
    2,027
    
    
    
    2,616Expenditure for intangible assets
    
    
    
    
    
    
    
    
    
    
    Segment assets
    
    
    6,849
    
    
    
    7,928
    
    
    
    5,528Current assets
    
    
    2,369
    
    
    
    3,128
    
    
    
    2,240Property & equipment, net
    
    
    4,299
    
    
    
    4,529
    
    
    
    2,958Deferred tax assets (liabilities), net
    
    
    
    
    
    
    
    
    
    
    Intangible assets, net
    
    
    167
    
    
    
    261
    
    
    
    321Goodwill
    
    
    
    
    
    
    
    
    
    
    Segment liabilities
    
    
    18,877
    
    
    
    18,087
    
    
    
    12,347
 Year ended
    
    Year ended
    
    Year endedJune 30,
    
    June 30,
    
    June 30,United Kingdom
    
    2009
    
    2008
    
    2007Revenues
    
    
    10,710
    
    
    
    
    
    
    
    Interest expense
    
    
    
    
    
    
    
    
    
    
    Interest revenue
    
    
    17
    
    
    
    3
    
    
    
    Depreciation & amortization expense
    
    
    1,015
    
    
    
    20
    
    
    
    Intercompany management fee expense
    
    
    
    
    
    
    
    
    
    
    Income tax (benefit)
    
    
    (130
    )
    
    
    
    
    
    
    Segment loss
    
    
    (1,802
    )
    
    
    (1,757
    )
    
    
    (773
    )Expenditure for property and equipment
    
    
    185
    
    
    
    837
    
    
    
    Expenditure for intangible assets
    
    
    
    
    
    
    
    
    
    
    Segment assets
    
    
    30,017
    
    
    
    2,952
    
    
    
    145Current assets
    
    
    7,671
    
    
    
    1,325
    
    
    
    145Property & equipment, net
    
    
    687
    
    
    
    824
    
    
    
    Deferred tax (liabilities), net
    
    
    (3,410
    )
    
    
    
    
    
    
    Intangible assets, net
    
    
    16,902
    
    
    
    
    
    
    
    Goodwill
    
    
    4,688
    
    
    
    
    
    
    
    Segment liabilities
    
    
    33,981
    
    
    
    5,495
    
    
    
    939
 F-20




---



##### Table of Contents



Year ended
    
    Year ended
    
    Year endedJune 30,
    
    June 30,
    
    June 30,All Other
    
    2009
    
    2008
    
    2007Revenues
    
    
    
    
    
    
    
    
    
    
    Interest expense
    
    
    
    
    
    
    
    
    
    
    Interest revenue
    
    
    297
    
    
    
    1,101
    
    
    
    433Depreciation & amortization expense
    
    
    38
    
    
    
    2
    
    
    
    Intercompany
management fee revenue
    
    
    (1,336
    )
    
    
    (1,629
    )
    
    
    (1,772
    )Income tax expense
    
    
    1
    
    
    
    25
    
    
    
    Segment loss
    
    
    (4,114
    )
    
    
    (1,635
    )
    
    
    (352
    )Expenditure for property and equipment
    
    
    28
    
    
    
    41
    
    
    
    Expenditure for intangible assets
    
    
    
    
    
    
    120
    
    
    
    Segment assets
    
    
    45,458
    
    
    
    48,167
    
    
    
    18,444Current assets
    
    
    44,443
    
    
    
    47,127
    
    
    
    17,305Property & equipment (net)
    
    
    31
    
    
    
    39
    
    
    
    Deferred tax assets (liabilities), net
    
    
    
    
    
    
    
    
    
    
    Intangible assets, net
    
    
    100
    
    
    
    120
    
    
    
    Goodwill
    
    
    
    
    
    
    
    
    
    
    Segment liabilities
    
    
    2,247
    
    
    
    630
    
    
    
    484
 June 30,
    
    June 30,
    
    June 30,Intercompany eliminations
    
    2009
    
    2008
    
    2007Segment assets
    
    
    (43,812
    )
    
    
    (25,457
    )
    
    
    (14,313
    )Current assets
    
    
    (42,931
    )
    
    
    (24,576
    )
    
    
    (13,432
    )Property & equipment (net)
    
    
    
    
    
    
    
    
    
    
    Intangible assets, net
    
    
    
    
    
    
    
    
    
    
    Goodwill
    
    
    
    
    
    
    
    
    
    
    Segment liabilities
    
    
    (42,931
    )
    
    
    (24,576
    )
    
    
    (13,432
    )
 Year ended
    
    Year ended
    
    Year endedJune 30,
    
    June 30,
    
    June 30,Total
    
    2009
    
    2008
    
    2007Revenues
    
    
    60,337
    
    
    
    50,953
    
    
    
    31,699Interest expense
    
    
    39
    
    
    
    90
    
    
    
    170Interest revenue
    
    
    1,015
    
    
    
    1,600
    
    
    
    471Depreciation & amortization expense
    
    
    2,547
    
    
    
    1,500
    
    
    
    907Intercompany management fee expense
    
    
    
    
    
    
    
    
    
    
    Income tax expense
    
    
    3,257
    
    
    
    3,565
    
    
    
    1,230Net (loss) profit
    
    
    (1,085
    )
    
    
    1,732
    
    
    
    (2,017
    )Expenditure for property and equipment
    
    
    1,627
    
    
    
    3,287
    
    
    
    3,114Expenditure for intangible assets
    
    
    
    
    
    
    120
    
    
    
    Total assets
    
    
    69,170
    
    
    
    62,602
    
    
    
    23,840Current assets
    
    
    39,034
    
    
    
    52,119
    
    
    
    16,395Property & equipment, net
    
    
    7,569
    
    
    
    8,964
    
    
    
    6,568Deferred tax (liabilities) assets, net
    
    
    (3,087
    )
    
    
    403
    
    
    
    312Intangible assets, net
    
    
    17,200
    
    
    
    418
    
    
    
    354Goodwill
    
    
    4,688
    
    
    
    
    
    
    
    Total liabilities
    
    
    21,866
    
    
    
    13,876
    
    
    
    9,007
   Revenues
    
    Traffic
    
    News
    
    Television
    
    Government
    
    TotalYear ended June 30, 2009
    
    $
    44,375
    
    
    $
    8,582
    
    
    $
    3,318
    
    
    $
    4,062
    
    
    $
    60,337Year ended June 30, 2008
    
    $
    38,951
    
    
    $
    7,385
    
    
    $
    4,617
    
    
    $
    
    
    
    $
    50,953Year ended June 30, 2007
    
    $
    24,637
    
    
    $
    4,427
    
    
    $
    2,635
    
    
    $
    
    
    
    $
    31,699
 NOTE 15  Asset Disposal Outside the Ordinary Course
   F-21




---



##### Table of Contents



NOTE 16  Quarterly Results of Operations (unaudited)
 Year ended June 30, 2009
 First
    
    Second
    
    Third
    
    Fourth
    
    For theQuarter
    
    Quarter
    
    Quarter
    
    Quarter
    
    YearRevenues
    
    $
    15,975
    
    
    $
    13,929
    
    
    $
    12,462
    
    
    $
    17,971
    
    
    $
    60,337Net operating income (loss)
    
    
    1,658
    
    
    
    1,668
    
    
    
    (1,465
    )
    
    
    (623
    )
    
    
    1,238Net income (loss)
    
    
    856
    
    
    
    890
    
    
    
    (1,784
    )
    
    
    (1,047
    )
    
    
    (1,085
    )Net income (loss) per share:Basic
    
    $
    0.05
    
    
    $
    0.05
    
    
    $
    (0.10
    )
    
    $
    (0.06
    )
    
    $
    (0.06
    )Diluted
    
    $
    0.05
    
    
    $
    0.05
    
    
    $
    (0.10
    )
    
    $
    (0.06
    )
    
    $
    (0.06
    )
 Year ended June 30, 2008
 First
    
    Second
    
    Third
    
    Fourth
    
    For theQuarter
    
    Quarter
    
    Quarter
    
    Quarter
    
    YearRevenues
    
    $
    10,981
    
    
    $
    13,160
    
    
    $
    12,216
    
    
    $
    14,596
    
    
    $
    50,953Net operating income
    
    
    252
    
    
    
    1,709
    
    
    
    179
    
    
    
    1,643
    
    
    
    3,783Net (loss) income
    
    
    (89
    )
    
    
    1,109
    
    
    
    (224
    )
    
    
    936
    
    
    
    1,732Net (loss) income per share:Basic
    
    $
    (0.01
    )
    
    $
    0.06
    
    
    $
    (0.01
    )
    
    $
    0.05
    
    
    $
    0.10Diluted
    
    $
    (0.01
    )
    
    $
    0.06
    
    
    $
    (0.01
    )
    
    $
    0.05
    
    
    $
    0.10
 NOTE 17  Acquisition of Businesses
  Current assets
    
    $
    56Fixed assets
    
    
    11Intangibles
    
    
    338Assumed liabilities
    
    
    (50
    )Purchase price
    
    $
    355
   F-22




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##### Table of Contents



Current Assets
    
    $
    3,953Intangible asset  Station Contracts
    
    
    11,162Intangible asset  Non-competition agreement
    
    
    2,147Intangible asset  Radio advertising contracts
    
    
    2,194Goodwill
    
    
    4,509Total assets acquired
    
    
    23,965Current liabilities assumed
    
    
    4,037Deferred tax liability, net
    
    
    3,091Net assets acquired
    
    
    16,837Less: Acquisition costs
    
    
    819Add: Translation adjustment
    
    
    41Cash consideration
    
    
    16,059
    AmortizationPeriodAmount
    
    
    (Years)Station contracts
    
    $
    11,162
    
    
    10 yearsRadio advertising contracts
    
    
    2,194
    
    
    4 yearsNon-competition agreement
    
    
    2,147
    
    
    3 yearsTotal intangible assets with finite lives
    
    $
    15,503
 Pro Forma Income Statement Information (unaudited)
 F-23




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##### Table of Contents



Year EndedJune 30,2009
    
    2008Pro Forma revenues
    
    $
    69,887
    
    
    $
    67,698Pro Forma net loss
    
    $
    (2,576
    )
    
    $
    (855
    )Pro forma net loss per share  basic and diluted
    
    $
    (0.14
    )
    
    $
    (0.05
    )
 F-24




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNo.
    
    Description10.13
    
    Amendment effective July 1, 2009 to
Information Report Supply Agreement dated June 24, 2008 by and between
The Australia Traffic Network Pty Limited and Austereo Pty
Limited.21.1
    
    Subsidiaries of Global Traffic Network, Inc.23.1
    
    Consent of BDO Kendalls Audit & Assurance (NSW  VIC) Pty Limited (formerly BDO).31.1
    
    Certification of Chief Executive Officer pursuant to Securities Exchange Act
Rules 13a-15(e) and 15d-15(e) as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.31.2
    
    Certification of Chief Financial Officer pursuant to Securities Exchange Act
Rules 13a-15(e) and 15d-15(e) as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32.1
    
    Certification of Chief Executive Officer and Chief Financial Officer pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.99.1
    
    Press Release dated September 10, 2009.
 
 
    
    Confidential treatment has been requested for certain
portions of this exhibit pursuant to Rule 406 of the Securities Act
and/or Rule 24b-2 of the Exchange Act.