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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, 2007
 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.
  Delaware
(State or other jurisdiction of incorporation or organization)
    
    33-1117834
(I.R.S. Employer Identification No.)
 800 Second Avenue, 5th Floor
New York, New York 10017
 (212) 896-1255
  Title of Each Class:
    
    Name of Each Exchange
on which Registered:Common Stock, $.001 par value
    
    The Nasdaq Stock Market
 o þ
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 þ o
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TABLE OF CONTENTS
 Part IItem. 1 BusinessItem 1A. Risk FactorsItem 1B. Unresolved Staff CommentsItem 2. PropertiesItem 3. Legal ProceedingsItem 4. Submission of Matters to a Vote of Security HoldersPart IIItem 5. Market for Registrants Common Equity and Related Stockholder MattersItem 6. Selected Financial DataItem 7. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 7A. Qualitative and Quantitative Disclosures about Market RiskItem 8. Financial Statements and Supplementary DataItem 9. Changes In and Disagreements with Accountants on Accounting and Financial DisclosureItem 9A. Controls and ProceduresItem 9B. Other InformationPart IIIItem 10. Directors and Executive Officers of the RegistrantItem 11. Executive CompensationItem 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder MattersItem 13. Certain Relationships and Related TransactionsItem 14. Principal Accountant Fees and ServicesPart IVItem 15. Exhibits and Financial Statement SchedulesSIGNATURESEXHIBIT INDEXCertification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification Pursuant to Section 906Consent of BDO Kendalls (NSW)302 Certification of Chief Executive Officer302 Certification of Chief Financial Officer906 Certification of CEO and CFOExhibit 99.1




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Part I
 
 Item. 1 Business
 Our Company and Its Subsidiaries
    Overview of Our Business and Its History
  
    
    Australia Traffic Network.We began providing traffic
reports to radio stations in Australia in 1997 and we
currently deliver traffic reports to radio stations and
traffic reports, video and other services to television
stations in Australia. We currently deliver traffic
information reports to 72 radio stations in 17 Australian
markets. In July 2005, we began leveraging our radio
traffic reporting services as a platform to launch general
news reporting services to radio stations in Australia, and
we currently obtain news advertising inventory from 22
radio stations in seven Australian markets. We also provide
traffic reports and/or video services to 14 television
stations in seven Australian markets.According to AC Nielsen, our Australian information reports have a weekly
reach of approximately 7.6 million radio listeners (ages ten and over), which
represents over 94% of the commercial radio listeners, and approximately 7.7
million television viewers (ages 14 and over), which represents over 62% of the
commercial television viewers, in each case throughout the five major Australian
markets.The number of network affiliate stations that comprise our Australian
network affiliates and the number of Australian markets in which we operate are
set forth below:
 Number of
    
    Number ofAustralia
    
    Affiliate Stations
    
    MarketsRadio traffic reports
    
    
    72
    
    
    
    17Radio news reports
    
    
    22
    
    
    
    7TV reports
    
    
    14
    
    
    
    7
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We also provide traffic reports to approximately 14 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 herein because we do not receive any advertising inventory to
sell on the 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 73 radio stations and three television stations and we
expect to begin providing reports to two additional
television stations shortly. 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 more than 7.5 million radio listeners
(ages 18 and over), which represents over 29% 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.
  Number of
    
    Number ofCanada
    
    Affiliate Stations
    
    MarketsRadio traffic reports
    
    
    61
    
    
    
    7Radio news, sports, business and weather reports
    
    
    19
    
    
    
    3TV reports
    
    
    3
    
    
    
    3
    Industry Background and Trends
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Our Business Model, Products and Services
      Preparation of Information Reports
  3




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Delivery of Our Information Reports
   Significant Network Affiliates
 Austereo Pty Limited (Austereo).
 Australian Radio Network Pty Limited (ARN).
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Corus Entertainment, Inc.
 Mutual Sales Representation Agreement with Metro Networks Communications.
 Generating Revenue Through Advertising Sales
    Advertising on a Network Basis.
 Our Customer Base of Advertising Clients.
 Australia
    
    Canada Borders Bookstores
    
     20th Century Fox GIO Insurance
    
     Allstate Insurance New South Wales Lotteries
    
     General Motors News Corp.
    
     Honda Target Australia
    
     HSBC Virgin Atlantic Airways
    
     McDonalds
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Our Sales Force.
  Our Competitive Advantages
  
    
    Leading market share in our established markets.We are
the largest third-party provider of traffic reports to
radio and television stations in Australia and have a
majority of the market. We have 72 affiliate stations in 17
markets for radio traffic reports and 14 affiliate stations
in seven markets for TV reports. We also maintain
significant inventory of advertising embedded within radio
news reports with 22 affiliate stations in seven markets.
Our market share gives us the ability to offer an
advertising platform that reaches a larger audience than
otherwise available to traditional radio and television
advertisers.
    
    Larger network audience for advertisers.We reach
approximately 7.6 million radio listeners and approximately
7.7 million television viewers in the five largest
Australian markets on a weekly basis and more than 7.5
million radio listeners and more than 1.7 million
television viewers in Canada on a weekly basis. Our
business model enables us to aggregate those respective
radio and television audiences and offer advertisers a
critical mass of listeners and viewers than can be reached
with their marketing messages in a cost-effective manner.
Other advertising alternatives currently available to
advertisers to reach that same audience size typically
require significant resources for them to contact,
negotiate, create and deliver their advertising to many
individual stations.
    
    Established relationships with leading global advertisers.
We have been selling our commercial airtime inventory to
our advertising clients, many of which are leading global
companies, for more than nine years in Australia and have
consistently provided advertisers with a broad-based,
local, regional or national audience through a single
purchase of commercial advertising inventory. Since July 1,
2006, our advertising customers have included nine of the
top ten Australian advertisers and 16 of the top 20 global
advertisers, as published by AdvertisingAge. We believe our
strong relationships with global advertisers will provide
us with a significant advantage in cross-selling our
advertising inventory as we enter new markets.
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
    
    Leverageable operating structure.Our business model is
leverageable and offers a significant advantage because we
derive incrementally higher margins as we add network
affiliates, provide additional types of reports to network
affiliates and sell more advertising inventory.
    
    Experienced management team.The members of our senior
management team have extensive experience in building
operations to provide information reports to broadcasters.
Our senior management has demonstrated the ability to
successfully grow our business organically through
expansion into new geographic markets. As a group, our
executive officers have an average of over 20 years of
experience in the broadcast industry.
 Our Strategy
  
    
    Expand the geographic markets we serve.We began our
operations in Australia in 1997 and commenced operations in
Canada in December 2005. We have recently started to
explore opportunities for expansion into several European
markets and have formed a subsidiary in the United Kingdom
in anticipation of commencing operations in the United
Kingdom market. We typically target 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 the ten largest population centers in
Australia and in seven of the largest population centers in
Canada, we believe that there are substantial opportunities
for continued growth in our radio networks. As new radio
licenses continue to be issued in Australia, we believe
that opportunities are available to increase market
penetration by establishing relationships with
newly-established radio stations. 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.
    
    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 and Canadian markets by continuing to
expand the scope of our information reports.
 Radio News Reports.We believe that consolidation in the radio industry
may increase the demand for our radio news reports as radio station owners are
likely to increase their outsourcing of various programming elements in order
to lower costs. We plan to focus on increasing the number of radio stations
broadcasting our radio news reports within our current markets, which we
believe will in turn increase our commercial advertising inventory, expand our
audience reach and result in increased revenue from the sale of such inventory.TV Reports.We have developed an infrastructure of airborne video
surveillance and broadcast equipment. In addition, through agreements with
various governmental agencies, we have access to over 1,500 static mounted
traffic surveillance cameras in Australia and approximately 450 static mounted
surveillance cameras in Canada. We use this infrastructure to offer traffic and
breaking news video to our television broadcasters and currently provide
service to 14 television stations in seven Australian markets and three
television stations in three Canadian markets. In many of our television
markets, we provide TV reports that include proprietary video coverage from our
helicopters that can cover news stories and traffic conditions at any time,
subject to weather conditions and air traffic control restrictions. In
addition, our access to strategically located fixed-position ground-based
camera systems offer network affiliates coverage of crucial traffic arteries
and allows us to provide panoramic views of the cities in which such cameras
are located. We intend to expand our TV reports to additional network
affiliates in our Australian and Canadian markets, which would provide us with
additional advertising inventory.
 
    
    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, 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
advertising inventory management system to improve
inventory control and pricing.
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
    
    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.
 Corporate Structure
    Competition
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Environmental Regulation
  Intellectual Property
  Employees
   Properties
  Legal Matters
  
 Item 1A. Risk Factors
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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 unsuccessful expansion into 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 limited experience in delivering news information reporting services which
may hinder our ability to provide these services successfully.
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We have incurred operating losses in connection with the introduction of radio
news reports in Australia and we may be unable to conduct our expanded operations
profitably.
  We have limited experience in the television broadcast market which may hinder our
ability to provide our TV reports and expand into the television market successfully.
  We have incurred operating losses in connection with our expansion of operations
into Canada and may be unable to operate profitably in Canada.
  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.
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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.
    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.
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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;
    
    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
    
    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.
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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 Ltd. 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.
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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.
  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.
  We intend to expand into additional international markets and our inexperience in
those markets increases the risk that our international expansion efforts will not be
successful.
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
    
    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.
  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.
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If we fail to expand into new markets, we may be unable to increase our revenue and
expand our profits in the future.
  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.
  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 non-cash 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 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.
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If an active trading market for shares of our common stock does not develop, 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.
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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.
  Because we do not intend to pay dividends on our common stock, you must rely on
stock appreciation for any return on your investment.
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Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
  
 Item 3. Legal Proceedings
  
 Item 4. Submission of Matters to a Vote of Security Holders
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Part II
 
 Item 5. Market for Registrants Common Equity and Related Stockholder Matters.
   High
    
    LowFiscal 2006Quarter Ended March 31, 2006
    
    $
    7.00
    
    
    $
    5.00Quarter Ended June 30, 2006
    
    $
    6.41
    
    
    $
    4.64Fiscal 2007Quarter Ended September 30, 2006
    
    $
    5.63
    
    
    $
    3.11Quarter Ended December 31, 2006
    
    $
    5.30
    
    
    $
    4.00Quarter Ended March 31, 2007
    
    $
    5.60
    
    
    $
    3.66Quarter Ended June 30, 2007
    
    $
    7.99
    
    
    $
    4.67
  STOCK PERFORMANCE GRAPH
    COMPARISON OF 15 MONTH CUMULATIVE TOTAL RETURN*
 
 
 
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Dividends
    23




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Securities Authorized for Issuance under Equity Compensation Plans
   Number ofSecuritiesNumber of
    
    
    
    
    
    RemainingSecurities
    
    Weighted
    
    Availableto be Issued Upon
    
    Average
    
    for Future IssuanceExercise of
    
    Exercise Price
    
    Under EquityOutstanding
    
    of Outstanding
    
    CompensationPlan category
    
    Options
    
    Options
    
    PlansEquity compensation plans approved by security holders:2005 Stock Incentive Plan
    
    
    695,000
    
    
    $
    5.11
    
    
    
    505,000Total:
    
    
    695,000
    
    
    $
    5.11
    
    
    
    505,000Equity compensation plans not approved by stockholders:None
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    
    
    
    
    
    
    
    
    
 Use of Proceeds
   
 Item 6. Selected Financial Data
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In thousands except per share data
 2007
    
    2006
    
    2005
    
    2004
    
    2003(unaudited)Income statement data for
the year ended June 30:Net revenues
    
    $
    31,699
    
    
    $
    19,502
    
    
    $
    15,380
    
    
    $
    11,154
    
    
    $
    5,709Operating expenses
    
    
    21,835
    
    
    
    15,309
    
    
    
    8,708
    
    
    
    7,871
    
    
    
    2,369Selling, general and
administrative expenses
    
    
    10,120
    
    
    
    6,415
    
    
    
    4,175
    
    
    
    2,750
    
    
    
    2,003Depreciation and amortization
    
    
    907
    
    
    
    587
    
    
    
    282
    
    
    
    205
    
    
    
    117Operating (loss) income
    
    
    (1,163
    )
    
    
    (2,809
    )
    
    
    2,215
    
    
    
    328
    
    
    
    1,220Interest expense
    
    
    170
    
    
    
    319
    
    
    
    99
    
    
    
    93
    
    
    
    23Other (income) expense
    
    
    (546
    )
    
    
    (220
    )
    
    
    (18
    )
    
    
    29
    
    
    
    17Net (loss) income before taxes
    
    
    (787
    )
    
    
    (2,908
    )
    
    
    2,134
    
    
    
    206
    
    
    
    1,180Income tax expense
    
    
    1,230
    
    
    
    88
    
    
    
    698
    
    
    
    74
    
    
    
    348Net (loss) income
    
    
    (2,017
    )
    
    
    (2,996
    )
    
    
    1,436
    
    
    
    132
    
    
    
    832(Loss) income per common share:Basic and diluted
    
    $
    (0.16
    )
    
    $
    (0.31
    )
    
    $
    0.17
    
    
    $
    0.02
    
    
    $
    0.10Cash dividends declared
    
    
    
    
    
    
    233
    
    
    
    
    
    
    
    
    
    
    
    182
 In thousands
 Balance sheet data at June 30:
 2007
    
    2006
    
    2005
    
    2004
    
    2003(unaudited)
    
    (unaudited)Cash and cash equivalents
    
    $
    7,278
    
    
    $
    14,649
    
    
    $
    51
    
    
    $
    318
    
    
    $
    649Total assets
    
    
    23,840
    
    
    
    24,288
    
    
    
    6,616
    
    
    
    3,848
    
    
    
    3,373Long-term obligations
    
    
    1,161
    
    
    
    1,508
    
    
    
    1,911
    
    
    
    1,044
    
    
    
    808Total liabilities
    
    
    9,007
    
    
    
    8,680
    
    
    
    5,420
    
    
    
    3,535
    
    
    
    2,503Stockholders equity
    
    
    14,833
    
    
    
    15,608
    
    
    
    1,196
    
    
    
    313
    
    
    
    870
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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.
  
    
    Radio traffic reports:Through our information-gathering
infrastructure and the use of external traffic information
services, we provide daily scheduled customized traffic
reports to radio stations that contract to receive our
services.
    
    Radio news reports:In July 2005, we began building upon
our radio traffic reports platform by obtaining and selling
advertising inventory embedded within radio news reports.
    
    TV reports:In 2003, we began providing regularly scheduled
video traffic reports to television stations. In addition,
because our aircraft are often already in the air covering
traffic conditions, they are often first to arrive at the
scene of a breaking news story. In a strategic effort to
expand our reach into the television markets, we have been
using this on-the-scene presence to compile video footage
of such breaking news, which we provide to certain
television stations that contract for our regularly
scheduled TV reports in those markets where we produce
video.
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Our Sources
of Revenue  Sale of Commercial Airtime Inventory
   Our Expenses
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Australia
    
    CanadaLeased
    
    Owned
    
    Leased
    
    OwnedFixed-wing aircraft
    
    3
    
    
    
    1
    
    
    
    1
    
    
    
    0Helicopters
    
    0
    
    
    
    4
    
    
    
    2
    
    
    
    5
   Basis of Presentation
  Australia
 Exchange
    
    BalanceIncome Statement Period
    
    Rate
    
    Sheet Date
    
    Exchange RateThree month period ended June 30, 2007
    
    
    0.8314
    
    
    June 30, 2007
    
    
    0.8493Three month period ended March 31, 2007
    
    
    0.7863Three month period ended December 31, 2006
    
    
    0.7718Three month period ended September 30, 2006
    
    
    0.7541Three month period ended June 30, 2006
    
    
    0.7467
    
    
    June 30, 2006
    
    
    0.7423Three month period ended March 31, 2006
    
    
    0.7394Three month period ended December 31, 2005
    
    
    0.7437Three month period ended September 30, 2005
    
    
    0.7593Three month period ended June 30, 2005
    
    
    0.7691Three month period ended March 31, 2005
    
    
    0.7781Three month period ended December 31, 2004
    
    
    0.7578Three month period ended September 30, 2004
    
    
    0.7099
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Canada
 Exchange
    
    BalanceIncome Statement Period
    
    Rate
    
    Sheet Date
    
    Exchange RateThree month period ended June 30, 2007
    
    
    0.9103
    
    
    June 30, 2007
    
    
    0.9386Three month period ended March 31, 2007
    
    
    0.8534Three month period ended December 31, 2006
    
    
    0.8776Three month period ended September 30, 2006
    
    
    0.8922Three month period ended June 30, 2006
    
    
    0.8907
    
    
    June 30, 2006
    
    
    0.8958Three month period ended March 31, 2006
    
    
    0.8693Three month period ended December 31, 2005
    
    
    0.8521Three month period ended September 30, 2005
    
    
    0.8315
 United Kingdom
 Exchange
    
    BalanceIncome Statement Period
    
    Rate
    
    Sheet Date
    
    Exchange RateThree month period ended June 30, 2007
    
    
    1.9850
    
    
    June 30, 2007
    
    
    2.0088Three month period ended March 31, 2007
    
    
    1.9551Three month period ended December 31, 2006
    
    
    1.9174
 Seasonality of Business
  Results of Operations
 Year Ended June 30, 2007 Compared With Year Ended June 30, 2006
  Revenue.
 Operating expenses.
 29




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##### Table of Contents



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




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##### Table of Contents



Changes in Key Operating Statistics in Local Currencies.
 Year
    
    Year
    
    PercentageEnded
    
    Ended
    
    IncreaseKey operating statistic
    
    June 30, 2007
    
    June 30, 2006
    
    (Decrease)(In thousands)
    
    (In thousands)Revenue
    
    $
    36,038
    
    
    $
    25,447
    
    
    
    41.6
    %Operating expenses
    
    
    20,964
    
    
    
    17,943
    
    
    
    16.8
    %Selling, general and administrative expenses
    
    
    8,941
    
    
    
    6,201
    
    
    
    44.2
    %Depreciation and amortization expense
    
    
    898
    
    
    
    711
    
    
    
    26.3
    %Interest expense
    
    
    169
    
    
    
    259
    
    
    
    (34.7
    %)Other (income)
    
    
    (62
    )
    
    
    (12
    )
    
    
    416.7
    %Income tax expense
    
    
    1,543
    
    
    
    122
    
    
    
    1,164.8
    %Net income
    
    
    3,585
    
    
    
    223
    
    
    
    1,507.6
    %
 Year Ended June 30, 2006 Compared With Year Ended June 30, 2005
  Revenue.
 Operating expenses.
  Calgary
    
    December 19, 2005Toronto
    
    January 16, 2006Hamilton
    
    January 30, 2006Vancouver
    
    February 13, 2006Montreal
    
    February 27, 2006Winnipeg
    
    March 2, 2006Edmonton
    
    April 12, 2006
 31




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##### Table of Contents



Selling, general and administrative expenses.
 Depreciation and amortization expenses.
 Interest expense.
 Income tax expense.
 Net income (loss)
 Changes in Key Operating Statistics in Local Currencies.
 Year
    
    Year
    
    PercentageEnded
    
    Ended
    
    IncreaseKey operating statistic
    
    June 30, 2006
    
    June 30, 2005
    
    (Decrease)(In thousands)
    
    (In thousands)Revenue
    
    $
    25,447
    
    
    $
    20,402
    
    
    
    24.7
    %Operating expenses
    
    
    17,943
    
    
    
    11,513
    
    
    
    55.8
    %Selling, general and administrative expenses
    
    
    6,201
    
    
    
    5,363
    
    
    
    15.6
    %Depreciation and amortization expense
    
    
    711
    
    
    
    374
    
    
    
    90.1
    %Interest expense
    
    
    259
    
    
    
    132
    
    
    
    96.2
    %Other (income)
    
    
    (12
    )
    
    
    (24
    )
    
    
    (50.0
    %)Income tax expense
    
    
    122
    
    
    
    925
    
    
    
    (86.8
    %)Net income
    
    
    223
    
    
    
    2,119
    
    
    
    (89.5
    %)
 32




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##### Table of Contents



Liquidity and Capital Resources
  Operating activities.
 Investing activities.
 Financing activities.
     33




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##### Table of Contents



Income Taxes.
  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
including shareholder note
    
    $
    1,490
    
    
    $
    668
    
    
    $
    761
    
    
    $
    61
    
    
    
    Interest on Long-Term Debt Obligations
    
    
    146
    
    
    
    83
    
    
    
    61
    
    
    
    2
    
    
    
    Operating Lease Obligations
    
    
    2,417
    
    
    
    396
    
    
    
    775
    
    
    
    652
    
    
    
    594Station Obligations
    
    
    22,614
    
    
    
    17,415
    
    
    
    5,199
    
    
    
    
    
    
    
    Total
    
    $
    26,667
    
    
    $
    18,562
    
    
    $
    6,796
    
    
    $
    715
    
    
    $
    594
 Critical Accounting Policies
   34




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##### Table of Contents



Revenue
recognition.
 Cash and cash equivalents.
 Accounts receivable.
 Income taxes.
  Recent Accounting Pronouncements
    35




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##### Table of Contents



Item 7A. Qualitative and Quantitative Disclosures about Market Risk
  Interest Rate Risk
  Foreign Currency Exchange Risk
  Accounts receivable
  Off-Balance Sheet Arrangements
  
 Item 8. Financial Statements and Supplementary Data
   36




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##### Table of Contents



Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
  
 Item 9A. Controls and Procedures
 Evaluation of disclosure controls and procedures
  Changes in internal control over financial reporting
   
 Item 9B. Other Information
 Results of Operations and Financial Condition.
   37




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##### Table of Contents



Part III
 
 Item 10. Directors and Executive Officers of the Registrant
  IndependentName
    
    Age
    
    Position
    
    DirectorDirectors and Executive OfficersWilliam L. Yde III
    
    
    54
    
    
    Chairman, Chief Executive Officer and President
    
    NoScott E. Cody
    
    
    41
    
    
    Chief Operating Officer and Chief Financial Officer
    
    Dale C. Arfman
    
    
    54
    
    
    Treasurer, Secretary and Director
    
    NoIvan N. Shulman
    
    
    45
    
    
    Senior Vice President and Director of International Sales
    
    Gary O. Benson
    
    
    63
    
    
    Director
    
    YesShane E. Coppola
    
    
    41
    
    
    Director
    
    YesRobert L. Johander
    
    
    61
    
    
    Vice Chairman
    
    YesStuart R. Romenesko
    
    
    44
    
    
    Director
    
    YesGary L. Worobow
    
    
    42
    
    
    Director
    
    YesOther Key EmployeesWilliam Pezzimenti
    
    
    57
    
    
    President and Director of Australia Traffic Network
    
    
  William L. Yde III
 Scott E. Cody
 Dale C. Arfman
 Ivan N. Shulman
 Gary O. Benson
 38




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##### Table of Contents



Shane E.
Coppola
 Robert L.
Johander
 Stuart R.
Romenesko Director Training & Certification
Program
 Gary L.
Worobow
 William
Pezzimenti
 Compliance with Section 16(a) of the Exchange Act
   39




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##### Table of Contents



Corporate Governance, Ethics and Business Conduct
    Audit Committee of the Board of Directors
   40




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##### Table of Contents



Item 11. Executive Compensation
 Compensation Discussion and Analysis
  Overview of Compensation Program
  
    
    Base salary;
    
    Annual cash incentive compensation (bonus);
    
    Non-equity incentive plan compensation (sales commissions); and
    
    Stock options.
    41




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##### Table of Contents



Role of our Compensation Committee
     Elements of 2007 Executive Compensation
 Base Salary.
 42




---



##### Table of Contents



Annual
Bonus.
  Long Term Incentive Program.
    Non-Equity Incentive Plan Compensation  Sales Commissions.
 43




---



##### Table of Contents



Severance and Other Benefits Upon Termination of Employment
    Tax Deductibility of Compensation
  Summary Compensation Table  Fiscal 2007
  44




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##### Table of Contents



Fiscal
    
    
    
    
    
    
    
    
    
    
    
    
    
    Non-EquityName and
    
    Year
    
    
    
    
    
    
    
    
    
    Option
    
    Incentive PlanPrincipal
    
    Ended
    
    
    
    
    
    
    
    
    
    Awards
    
    Compensation
    
    All OtherPosition
    
    June 30
    
    Salary ($)
    
    Bonus ($)
    
    ($)(1)
    
    ($)
    
    Compensation ($)
    
    Total ($)William L. Yde III
    
    
    2007
    
    
    $
    366,500
    
    
    $
    50,000
    
    
    $
    0
    
    
    $
    0
    
    
    $
    0
    
    
    $
    416,500President and
Chief Executive
OfficerScott E. Cody 
Chief Financial
Officer and Chief
Operating Officer
    
    
    2007
    
    
    $
    229,769
    
    
    $
    0
    
    
    $
    95,125
    
    
    $
    0
    
    
    $
    6,504
    (2)
    
    $
    331,398Dale C.
Arfman 
Treasurer and
Secretary
    
    
    2007
    
    
    $
    179,000
    
    
    $
    0
    
    
    $
    0
    
    
    $
    0
    
    
    $
    0
    
    
    $
    179,000Ivan N.
Shulman 
Senior Vice
President and
Director of
International
Sales
    
    
    2007
    
    
    $
    261,386
    
    
    $
    100,000
    
    
    $
    81,540
    
    
    $
    0
    
    
    $
    0
    
    
    $
    442,926William
Pezzimenti(3) 
President and
Director of Australia Traffic
Network
    
    
    2007
    
    
    $
    282,930
    
    
    $
    0
    
    
    $
    34,433
    
    
    $
    206,062
    (4)
    
    $
    21,562
    (5)
    
    $
    544,987Kenneth A.
Casseri(6) 
Former President
of Canadian
Traffic Network
    
    
    2007
    
    
    $
    116,667
    (7)
    
    $
    0
    
    
    $
    0
    
    
    $
    0
    
    
    $
    172,680
    (8)
    
    $
    289,347
 
 (1)
    
    Amounts shown reflect the dollar amount recognized for financial statement
reporting purposes for fiscal 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, 2007, which are
included elsewhere in this report.(2)
    
    Consists of reimbursement for health benefit premiums paid by the employee.(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 year ended June 30, 2007.(4)
    
    Consists of 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. During the fiscal
year ended June 30, 2007, Mr. Pezzimenti received aggregate sales commissions
of $206,062.(5)
    
    Consists of automobile related costs incurred for the benefit of the employee.(6)
    
    Mr. Casseri commenced employment with us on May 16, 2005. On January 16,
2007, we entered into a severance agreement with Mr. Casseri pursuant to
which he resigned as an officer of Canadian Traffic Network, effective
immediately, and as an employee of our company effective January 31, 2007.(7)
    
    Represents salary paid to Mr. Casseri through January 31, 2007, the
termination date of his employment with our company.(8)
    
    Represents a one-time $150,000 cash severance payment made to Mr. Casseri on
February 1, 2007 and $22,680 paid to Mr. Casseri as reimbursement for
automobile lease payments, $19,320 of which related to the period of time
following the termination of his employment. 45




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##### Table of Contents



Compensation of Named Executive Officers
   Description of Employment Agreements, 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.
 46




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##### Table of Contents



Stock Options.
 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.
 Stock Options.
 47




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##### Table of Contents



Confidentiality, Non-competition and Non-solicitation.
 Confidentiality, Non-competition and Non-solicitation Agreement with William
Pezzimenti
  Grants of Plan-Based Awards in Fiscal 2007
  Option Awards:Number ofSecurities
    
    Exercise or
    
    Grant DateUnderlying
    
    Base
    
    Fair Value ofOptions
    
    Price of Option
    
    OptionName
    
    Grant Date
    
    (#)
    
    Awards ($/Sh)
    
    AwardsWilliam L. Yde III
    
    
    
    
    0
    
    
    
    
    
    
    
    Scott E. Cody
    
    March 29, 2007
    
    
    100,000
    (1)
    
    $
    5.25
    
    
    $
    315,100Dale C. Arfman
    
    
    
    
    0
    
    
    
    
    
    
    
    Ivan N. Shulman
    
    December 8, 2006
    
    
    50,000
    (2)
    
    $
    4.66
    
    
    $
    147,900Ivan N. Shulman
    
    May 8, 2007
    
    
    50,000
    (3)
    
    $
    7.05
    
    
    $
    215,100William Pezzimenti
    
    
    
    
    0
    
    
    
    
    
    
    
    Kenneth A. Casseri
    
    
    
    
    0
    
    
    
    
    
    
    
    
 
 (1)
    
    Represents a discretionary option grant that vests with respect
to 33,333 shares on each of March 29, 2008 and March 29, 2009
and with respect to 33,334
shares on March 29, 2010. The option
has an exercise price equal to the fair market value of our
common stock on the date of grant.(2)
    
    Represents a discretionary option grant that vests with respect
to 16,667 shares on each of December 8, 2007 and December 8, 2008
and with respect to 16,666 shares on December 8, 2009. The option
has an exercise price equal to the fair market value of our
common stock on the date of grant.(3)
    
    Option granted pursuant to Mr. Shulmans employment arrangement
with our company. Under the terms of this arrangement, we granted
Mr. Shulman an option to purchase 50,000 shares of our common
stock on May 8, 2006 at an exercise price equal to the fair
market value of our common stock on the date of grant, and we
agreed to grant Mr. Shulman additional 50,000 share stock options
on each of May 8, 2007 and May 8, 2008, provided that he remains
an employee of ours on such dates. Each of these options vests or
will vest in three equal annual installments commencing on the
one-year anniversary of the date of grant and has or will have an
exercise price equal to the fair market value of our common stock
on the date of grant. 48




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##### Table of Contents



Global Traffic Network, Inc. 2005 Stock Incentive Plan
   Outstanding Equity Awards at 2007 Fiscal Year-End
  Option AwardsNumber of
    
    Number ofSecurities
    
    SecuritiesUnderlying
    
    UnderlyingUnexercised
    
    UnexercisedOptions
    
    Options
    
    
    
    
    
    Option(#)
    
    (#)
    
    Option Exercise
    
    ExpirationName
    
    Exercisable
    
    Unexercisable
    
    Price ($)
    
    DateWilliam L. Yde III
    
    
    0
    
    
    
    0
    
    
    
    
    
    
    
    Scott E. Cody
    
    
    33,334
    
    
    
    66,666
    (1)
    
    $
    5.00
    
    
    March 23, 2016Scott E. Cody
    
    
    0
    
    
    
    100,000
    (2)
    
    $
    5.25
    
    
    March 29, 2017Dale C. Arfman
    
    
    0
    
    
    
    0
    
    
    
    
    
    
    
    Ivan N. Shulman
    
    
    16,667
    
    
    
    33,333
    (3)
    
    $
    6.28
    
    
    May 8, 2016Ivan N. Shulman
    
    
    0
    
    
    
    50,000
    (4)
    
    $
    4.66
    
    
    December 8, 2016Ivan N. Shulman
    
    
    0
    
    
    
    50,000
    (5)
    
    $
    7.05
    
    
    May 8, 2017William Pezzimenti
    
    
    16,667
    
    
    
    33,333
    (6)
    
    $
    5.00
    
    
    March 23, 2016
 
 (1)
    
    Vests with respect to 33,333 shares on each of March 23, 2008 and March 23, 2009.(2)
    
    Vests with respect to 33,333 shares on each of March 29, 2008 and March 29, 2009 and with respect to
33,334 shares on March 29, 2010.(3)
    
    Vests with respect to 16,667 shares on May 8, 2008 and with respect to 16,666 shares on May 8, 2009.(4)
    
    Vests with respect to 16,667 shares on each of December 8, 2007 and December 8, 2008 and with respect to
16,666 shares on December 8, 2009.(5)
    
    Vests with respect to 16,667 shares on each of May 8, 2008 and May 8, 2009 and with respect to 16,666
shares on May 8, 2010.(6)
    
    Vests with respect to 16,667 shares on March 23, 2008 and with respect to 16,666 shares on March 23, 2009. 49




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Potential Payments Upon Termination or Change-in-Control
    Severance Agreement with Kenneth A. Casseri
  50




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Director Compensation  Fiscal 2007
 OptionFees Earned or
    
    Awards
    
    All OtherName
    
    Paid in Cash ($)
    
    ($)(1)
    
    Compensation ($)
    
    Total ($)Gary O. Benson(2)
    
    $
    3,000
    
    
    $
    34,433
    
    
    
    
    $
    37,433Shane Coppola(2)
    
    $
    3,000
    
    
    $
    35,700
    
    
    
    
    $
    38,700Robert L. Johander(3)
    
    $
    3,000
    
    
    $
    0
    
    
    
    
    $
    3,000Stuart R. Romenesko(2)
    
    $
    0
    
    
    $
    15,582
    
    
    
    
    $
    15,582Gary L. Worobow(2)
    
    $
    3,000
    
    
    $
    27,732
    
    
    
    
    $
    30,732
 
 (1)
    
    Amounts shown reflect the dollar amount recognized for financial
statement reporting purposes for fiscal 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, 2007, which are included elsewhere in
this report.(2)
    
    As of June 30, 2007, the director held stock options to purchase
up to a total of 50,000 shares of our common stock.(3)
    
    Mr. Johander held no stock options as of June 30, 2007.   Compensation Committee Interlocks and Insider Participation
  Limitation of Liability and Indemnification of Officers and Directors; Commission
Position on Indemnification for Securities Act Liabilities
   51




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##### Table of Contents




    
    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;
    
    the payment of dividends or the redemption or purchase of stock in violation of Delaware 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
    
    
    3,905,786
    (1)
    
    
    21.64
    %Dale C. Arfman
    
    
    2,512,417
    
    
    
    13.92
    %Scott E. Cody
    
    
    33,334
    (2)
    
    
    *Ivan N. Shulman
    
    
    16,667
    (3)
    
    
    *William Pezzimenti
    
    
    16,667
    (3)
    
    
    *Kenneth A. Casseri(4)
    
    
    
    
    
    
    Gary O. Benson
    
    
    66,667
    (3)(5)
    
    
    *Shane E. Coppola
    
    
    16,667
    (3)
    
    
    *Robert L. Johander
    
    
    878,534
    (6)
    
    
    4.87
    %Stuart R. Romenesko
    
    
    
    
    
    
    Gary L. Worobow
    
    
    
    
    
    
    All Directors and Named Executive Officers as a group (11 people)
    
    
    6,568,205
    (7)
    
    
    36.20
    %Metro Networks Communications, Inc.(8)(9) 

40 West 57th Street, 15th Floor

New York, NY 10019
    
    
    1,540,195
    
    
    
    8.54
    %
 
 *
    
    Less than 1%(1)
    
    Includes 2,901,747 shares that have been pledged as security for a loan.
Also includes an aggregate of 1,004,039 shares held by third parties which Mr.
Yde has the power to vote under separate voting agreements, 878,534 shares of
which are held by the Robert L. Johander Revocable Trust u/a/d December 18, 2003.(2)
    
    Includes 33,334 shares issuable upon the exercise of options are that are
currently exercisable or will become exercisable within the next 60 days.(3)
    
    Includes 16,667 shares issuable upon the exercise of options are that are
currently exercisable or will become exercisable within the next 60 days.(4)
    
    Mr. Casseri resigned as an employee of our company effective January 31,
2007.
 52




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##### Table of Contents



(5)
    
    Includes 50,000 shares held by Goben Enterprises LP, a limited partnership
of which Mr. Benson is a General Partner.(6)
    
    Represents 878,534 shares held by the Robert L. Johander Revocable Trust
u/a/d December 18, 2003, of which Mr. Johander serves as co-trustee. Such shares
are subject to a voting agreement in favor of William L. Yde III.(7)
    
    Include 100,002 shares issuable upon the exercise of options are that are
currently exercisable or will become exercisable within the next 60 days.(8)
    
    Metro Networks Communications, Inc., a Maryland corporation, is a direct
wholly-owned subsidiary of Metro Networks, Inc., which is a direct wholly-owned
subsidiary of Westwood One, Inc.(9)
    
    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.
 53




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##### Table of Contents



Item 13. Certain Relationships and Related Transactions
        54




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##### Table of Contents



Item 14. Principal Accountant Fees and Services
 Fees billed to Company by Its Independent Registered Public Accounting Firm
  Fiscal Year
    
    
    Fiscal Year
    
    
    Fiscal YearEnded June 30,
    
    
    Ended June 30,
    
    
    Ended June 30,2007
    
    
    2006
    
    
    2005Audit Fees(1)
    
    $
    370,501
    
    
    $
    307,174
    
    
    $
    217,467Audit-Related Fees (2)
    
    
    0
    
    
    
    0
    
    
    
    0Tax Fees (3)
    
    
    0
    
    
    
    0
    
    
    
    0All Other Fees (4)
    
    
    0
    
    
    
    0
    
    
    
    0Total Fees
    
    $
    370,501
    
    
    $
    307,174
    
    
    $
    217,467
 
 (1)
    
    Audit Fees consist of fees for professional services rendered for the 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. Included in these fees are
$162,569 and $33,163 for the fiscal years ended June 30, 2006 and 2005, respectively,
associated with the filing of the registration statement under the Securities Act on Form S-1
(File No. 333-130417) effective on March 23, 2006 in connection with our initial public
offering of stock. Included in the fees are $117,232 for the fiscal
year ended June 30, 2007 associated with the filing of our
Registration Statement on Form S-1 filed in connection with the
follow-on offering of our Common Stock that closed on July 31,
2007.(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.(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
   55




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##### Table of Contents



Part IV
 
 Item 15. Exhibits and Financial Statement Schedules
 Documents filed as part of this Form 10-K:
 
 Financial Statement Schedule:
  Exhibits:
 ExhibitNo.
    
    Description3.1
    
    Certificate of Incorporation of Global Traffic Network,
Inc. (incorporated by reference to Exhibit 3.1 to the Form
S-l registration statement of the registrant (File No.
333-130417)).3.2
    
    Bylaws of Global Traffic Network, Inc. (incorporated by
reference to Exhibit 3.2 to the Form S-l registration
statement of the registrant (File No. 333-130417)).4.1
    
    Form of Specimen Stock Certificate (incorporated by
reference to Exhibit 4.1 to the Form S-l registration
statement of the registrant (File No. 333-130417)).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
    
    Global Traffic Network, Inc. 2005 Stock Incentive Plan
(incorporated by reference to Exhibit 10.1 to the Form S-l
registration statement of the registrant (File No.
333-130417)).10.2
    
    Senior Note Purchase Agreement dated November 9, 2005 by
and between Canadian Traffic Network ULC and Metro
Networks Communications, Inc. (incorporated by reference
to Exhibit 10.2 to the Form S-l registration statement of
the registrant (File No. 333-130417)).10.3
    
    Senior Secured Note dated November 9, 2005 by Canadian
Traffic Network ULC in favor of Metro Networks
Communications, Inc. (incorporated by reference to Exhibit
10.3 to the Form S-l registration statement of the
registrant (File No. 333-130417)).10.4
    
    Security Agreement dated November 9, 2005 by and between
Canadian Traffic Network ULC and Metro Networks
Communications, Inc. (incorporated by reference to Exhibit
10.4 to the Form S-l registration statement of the
registrant (File No. 333-130417)).10.5
    
    Guaranty Agreement dated November 9, 2005 by and among
Global Traffic Network, Inc., Global Traffic Canada, Inc.,
The Australia Traffic Network Pty Limited and Metro
Networks Communications, Inc. (incorporated by reference
to Exhibit 10.5 to the Form S-l registration statement of
the registrant (File No. 333-130417)).10.6
    
    Mutual Sales Representation Agreement dated November 9,
2005 by and between Metro Networks Communications, Limited
Partnership and Canadian Traffic Network ULC (incorporated
by reference to Exhibit 10.6 to the Form S-l registration
statement of the registrant (File No. 333-130417)).10.7
    
    Traffic Data Agreement dated November 9, 2005 by and
between Metro Networks Communications, Limited Partnership
and Canadian Traffic Network ULC (incorporated by
reference to Exhibit 10.7 to the Form S-l registration
statement of the registrant (File No. 333-130417)).
 56




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##### Table of Contents



ExhibitNo.
    
    Description10.8
    
    Aircraft Traffic Report Supply Agreement dated October 21,
2005 by and between Canadian Traffic Network ULC and Corus
Entertainment Inc. (incorporated by reference to Exhibit
10.8 to the Form S-l registration statement of the
registrant (File No. 333-130417)).10.9
    
    Traffic Report Supply Agreement commencing July 1, 2006 by
and between The Australia Traffic Network Pty Limited and
Austereo Pty Limited, as amended ((incorporated by
reference to Exhibit 10.9 to the Form S-l registration
statement of the registrant (File No. 333-144137)).10.10
    
    News Report Broadcasting Agreement dated July 1, 2005 by
and between The Australia Traffic Network Pty Limited and
Austereo Pty Limited (incorporated by reference to Exhibit
10.10 to the Form S-l registration statement of the
registrant (File No. 333-130417)).**10.11
    
    Securities Exchange Agreement dated December 13, 2005 by
and among Global Traffic Network, Inc., The Australia
Traffic Network Pty Limited, William L. Yde III, Dale C.
Arfman, Thomas M. Gilligan, Donald R. Bussell, Questcom
Media Brokerage, Inc. and Metro Networks Communications,
Inc. (incorporated by reference to Exhibit 10.11 to the
Form S-l registration statement of the registrant (File
No. 333-130417)).10.12
    
    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)).10.13
    
    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)).10.14
    
    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)).10.15
    
    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)).10.16
    
    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)).10.17
    
    Amendment No. 1 to Employment Agreement dated April 4,
2007 by and between Global Traffic Network, Inc. and Scott
E. Cody (incorporated by reference to Exhibit 10.1 to the
Current Report on Form 8-K filed April 4, 2007).10.18
    
    Management Agreement dated August 1, 2002 by and between
The Australia Traffic Network Pty Limited and Wisconsin
Information Systems dba Milwaukee Traffic Network
(incorporated by reference to Exhibit 10.17 to the Form
S-l registration statement of the registrant (File No.
333-130417)).21.1
    
    Subsidiaries of Global Traffic Network, Inc. (incorporated
by reference to Exhibit 10.1 to the Form S-l registration
statement of the registrant (File No. 333-130417)).23.1
31.1
    
    Consent of BDO Kendalls (NSW) (formerly BDO).

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.
 
 
    
    Confidential treatment has been granted as to certain portions of this exhibit pursuant to Rule 406 of the Securities Act. 57




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##### Table of Contents



SIGNATURES
  GLOBAL TRAFFIC NETWORK, INC.Date: September 24, 2007
    By:
    /s/ Scott E. CodyScott E. CodyChief Financial Officer and Chief Operating Officer  Signature
    
    Title
    
    Date/s/ William L. Yde III
    
    Chairman of the Board,
    
    September 24, 2007William L. Yde III
    
    Chief Executive Officer
and President (Principal
Executive Officer) and Director/s/ Scott E. Cody
    
    Chief Financial Officer and
    
    September 24, 2007Scott E. Cody
    
    Chief Operating Officer
(Principal Financial Officer and
Principal Accounting Officer)/s/ Dale C. Arfman
    
    Treasurer, Secretary and Director
    
    September 24, 2007Dale C. Arfman/s/ Gary O. Benson
    
    Director
    
    September 24, 2007Gary O. Benson/s/ Shane E. Coppola
    
    Director
    
    September 24, 2007Shane E. Coppola/s/ Robert L. Johander
    
    Director
    
    September 24, 2007Robert L. Johander/s/ Stuart R. Romenesko
    
    Director
    
    September 24, 2007Stuart R. Romenesko/s/ Gary L. Worobow
    
    Director
    
    September 24, 2007Gary L. Worobow
 58




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##### Table of Contents



Global Traffic Network, Inc.
Index to Consolidated Financial Statements
And Financial Statement Schedule
 1. Consolidated Financial Statements
 PageReport of Independent Registered Public Accounting Firm
    
    
    F-1Consolidated Balance Sheets at June 30, 2007 and 2006
    
    
    F-2Consolidated Statements of Income for the years ended June 30, 2007, 2006 and 2005
    
    
    F-3Consolidated Statements of Shareholders Equity for the years ended June 30, 2007, 2006 and 2005
    
    
    F-4Consolidated Statements of Cash Flows for the years ended June 30, 2007, 2006 and 2005
    
    
    F-5Notes to Consolidated Financial Statements
    
    
    F-6
 2. Financial Statement Schedules:




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
    BDO
Kendalls (NSW)
   F-1




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##### Table of Contents



GLOBAL TRAFFIC NETWORK, INC.
 
 CONSOLIDATED BALANCE SHEETS
 (In thousands except share amounts)
 June 30,
    
    
    June 30,2007
    
    
    2006ASSETS:Current Assets:Cash and cash equivalents
    
    $
    7,278
    
    
    $
    14,649Accounts receivable net of allowance for doubtful
accounts of $93 and $11 at June 30, 2007 and June
30, 2006
    
    
    8,482
    
    
    
    4,715Prepaids and other current assets
    
    
    462
    
    
    
    350Taxes receivable
    
    
    
    
    
    
    26Deferred tax assets
    
    
    173
    
    
    
    134Total current assets
    
    
    16,395
    
    
    
    19,874Property and equipment, net
    
    
    6,568
    
    
    
    4,188Intangibles
    
    
    354
    
    
    
    29Deferred offering costs
    
    
    258
    
    
    
    Deferred tax assets
    
    
    139
    
    
    
    87Other assets
    
    
    126
    
    
    
    110Total assets
    
    $
    23,840
    
    
    $
    24,288LIABILITIES AND SHAREHOLDERS EQUITY:Current Liabilities:Bank overdraft line of credit
    
    $
    
    
    
    $
    611Accounts payable and accrued expenses
    
    
    6,032
    
    
    
    3,872Deferred revenue
    
    
    25
    
    
    
    Income taxes payable
    
    
    1,121
    
    
    
    132Current portion of long term debt
    
    
    668
    
    
    
    557Current portion of shareholder notes payable
    
    
    
    
    
    
    2,000Total current liabilities
    
    
    7,846
    
    
    
    7,172Long term debt, less current portion
    
    
    822
    
    
    
    1,286Other liabilities
    
    
    339
    
    
    
    222Total liabilities
    
    
    9,007
    
    
    
    8,680Common stock, $.001 par value; 100,000,000 shares
authorized; 12,870,000 shares issued and
outstanding as of June 30, 2007 and 2006
    
    
    13
    
    
    
    13Preferred stock, $.001 par value; 10,000,000
authorized; 0 issued and outstanding as of June
30, 2007 and 2006
    
    
    
    
    
    
    Additional paid in capital
    
    
    18,527
    
    
    
    18,169Accumulated other comprehensive income
    
    
    1,198
    
    
    
    314Accumulated deficit
    
    
    (4,905
    )
    
    
    (2,888
    )Total shareholders equity
    
    
    14,833
    
    
    
    15,608Total liabilities and shareholders equity
    
    $
    23,840
    
    
    $
    24,288
  F-2




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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 30,2007
    
    
    2006
    
    
    2005Revenues
    
    $
    31,699
    
    
    $
    19,502
    
    
    $
    15,380Operating expenses
    
    
    21,835
    
    
    
    15,309
    
    
    
    8,708Selling, general and administrative expenses
    
    
    10,120
    
    
    
    6,415
    
    
    
    4,175Depreciation and amortization expense
    
    
    907
    
    
    
    587
    
    
    
    282Net operating (loss) income
    
    
    (1,163
    )
    
    
    (2,809
    )
    
    
    2,215Interest expense
    
    
    170
    
    
    
    319
    
    
    
    99Other (income) (including interest income of $471, $189 and $7 for the years ended
June 30, 2007, 2006 and 2005)
    
    
    (546
    )
    
    
    (220
    )
    
    
    (18
    )Net (loss) income before income taxes
    
    
    (787
    )
    
    
    (2,908
    )
    
    
    2,134Income tax expense
    
    
    1,230
    
    
    
    88
    
    
    
    698Net (loss) income
    
    $
    (2,017
    )
    
    $
    (2,996
    )
    
    $
    1,436(Loss) income per common share:Basic and diluted
    
    $
    (0.16
    )
    
    $
    (0.31
    )
    
    $
    0.17Weighted average common shares outstanding:Basic and diluted
    
    
    12,870,000
    
    
    
    9,621,260
    
    
    
    8,500,000
  F-3




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##### Table of Contents



GLOBAL TRAFFIC NETWORK, INC.
 
 CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
 For the years ended June 30, 2007, 2006 and 2005
 (Amounts in thousands except share amounts)
 Retained
    
    
    AccumulatedAdditional
    
    
    Earnings
    
    
    Other
    
    
    TotalCommon Stock
    
    
    Paid In
    
    
    (Accumulated
    
    
    Comprehensive
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Capital
    
    
    Deficit)
    
    
    Income (Loss)
    
    
    Income (Loss)
    
    
    TotalBalance, June
30, 2004
    
    
    4,009,862
    
    
    $
    43
    
    
    $
    531
    
    
    
    $(540
    )
    
    
    $279
    
    
    
    
    
    
    $
    313Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,436
    
    
    
    
    
    
    
    1,436
    
    
    
    1,436Shares
repurchased and
retired
    
    
    (9,862
    )
    
    
    (39
    )
    
    
    
    
    
    
    (555
    )
    
    
    
    
    
    
    
    
    
    
    (594
    )Shares issued
    
    
    4,500,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41
    
    
    
    41
    
    
    
    41Comprehensive net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,477Balance, June
30, 2005
    
    
    8,500,000
    
    
    
    4
    
    
    
    531
    
    
    
    341
    
    
    
    320
    
    
    
    
    
    
    
    1,196Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,996
    )
    
    
    
    
    
    
    (2,996
    )
    
    
    (2,996
    )Share
subscriptions
received
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4Issuance of
shareholder
notes payable
    
    
    
    
    
    
    
    
    
    
    (1,400
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,400
    )Initial public
offering of
stock
    
    
    4,370,000
    
    
    
    5
    
    
    
    18,985
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,990Stock option
compensation
    
    
    
    
    
    
    
    
    
    
    53
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    53Dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (233
    )
    
    
    
    
    
    
    
    
    
    
    (233
    )Foreign
currency
translation
adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6
    )
    
    
    (6
    )
    
    
    (6
    )Comprehensive net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,002
    )
    
    
    Balance, June
30, 2006
    
    
    12,870,000
    
    
    
    13
    
    
    
    18,169
    
    
    
    (2,888
    )
    
    
    314
    
    
    
    
    
    
    
    15,608Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,017
    )
    
    
    
    
    
    
    (2,017
    )
    
    
    (2,017
    )Stock option
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
    
    
    
    
    
    
    $
    14,833
  F-4




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##### Table of Contents



GLOBAL TRAFFIC NETWORK, INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Amounts in thousands)
 Year ended June 30,2007
    
    
    2006
    
    
    2005Cash flows from operating activities:Net (loss) income
    
    $
    (2,017
    )
    
    $
    (2,996
    )
    
    $
    1,436Adjustments to reconcile net (loss) income to net cash provided by operating
activities:Depreciation and amortization
    
    
    907
    
    
    
    587
    
    
    
    282Allowance for doubtful accounts
    
    
    82
    
    
    
    11
    
    
    
    Non-cash compensation expense
    
    
    358
    
    
    
    53
    
    
    
    Gain on disposal of assets
    
    
    (66
    )
    
    
    
    
    
    
    Changes in assets and liabilities (net of effects from acquisition of business):Accounts receivable
    
    
    (2,942
    )
    
    
    (1,335
    )
    
    
    (1,230
    )Deferred taxes, net
    
    
    (54
    )
    
    
    (36
    )
    
    
    (90
    )Prepaid and other current assets and other assets
    
    
    (200
    )
    
    
    (276
    )
    
    
    (5
    )Accounts payable and accrued expenses and other liabilities
    
    
    1,429
    
    
    
    1,451
    
    
    
    1,000Deferred revenue
    
    
    6
    
    
    
    (111
    )
    
    
    3Income tax refund
    
    
    28
    
    
    
    
    
    
    
    Income taxes payable
    
    
    899
    
    
    
    (277
    )
    
    
    379Net cash (used in) provided by operating activities
    
    
    (1,570
    )
    
    
    (2,929
    )
    
    
    1,775Cash flows from investing activities:Purchase of property and equipment
    
    
    (3,114
    )
    
    
    (1,988
    )
    
    
    (534
    )Acquisition of business
    
    
    (355
    )
    
    
    
    
    
    
    Net proceeds from disposal of equipment
    
    
    632
    
    
    
    
    
    
    
    Intangibles
    
    
    
    
    
    
    (8
    )
    
    
    (7
    )Net cash used in investing activities
    
    
    (2,837
    )
    
    
    (1,996
    )
    
    
    (541
    )Cash flows from financing activities:Repayment of long term debt
    
    
    (577
    )
    
    
    (549
    )
    
    
    (181
    )Net proceeds (repayments) of bank overdraft line of credit
    
    
    (611
    )
    
    
    702
    
    
    
    (440
    )Repayment of shareholder notes payable
    
    
    (2,000
    )
    
    
    (22
    )
    
    
    (208
    )Borrowings from shareholders
    
    
    
    
    
    
    2,000
    
    
    
    Dividends paid
    
    
    
    
    
    
    (275
    )
    
    
    (44
    )Repayment of shareholder promissory notes
    
    
    
    
    
    
    (1,400
    )
    
    
    Deferred offering costs
    
    
    
    
    
    
    
    
    
    
    (83
    )Proceeds from issuance of stock
    
    
    
    
    
    
    4
    
    
    
    Proceeds from initial public offering of stock, net
    
    
    
    
    
    
    19,073
    
    
    
    Due (from) to related parties, net
    
    
    
    
    
    
    (4
    )
    
    
    8Shares repurchased and retired
    
    
    
    
    
    
    
    
    
    
    (594
    )Net cash (used in) provided by financing activities
    
    
    (3,188
    )
    
    
    19,529
    
    
    
    (1,542
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    224
    
    
    
    (6
    )
    
    
    41Net (decrease) increase in cash and cash equivalents
    
    
    (7,371
    )
    
    
    14,598
    
    
    
    (267
    )Cash and cash equivalents at beginning of fiscal year
    
    
    14,649
    
    
    
    51
    
    
    
    318Cash and cash equivalents at end of fiscal year
    
    $
    7,278
    
    
    $
    14,649
    
    
    $
    51Supplemental disclosures of cash flow information:Cash paid during fiscal year for:Interest
    
    $
    170
    
    
    $
    274
    
    
    $
    129Income taxes
    
    $
    385
    
    
    $
    396
    
    
    $
    409Non-cash financing and investing activities:Property acquired under long-term debt
    
    $
    
    
    
    $
    63
    
    
    $
    1,372Property acquired other than for cash
    
    $
    75
    
    
    $
    
    
    
    $
    
  F-5




---



##### 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
  b) Revenue recognition
  c) Operating expenses
  F-6




---



##### Table of Contents



d) Station compensation and reimbursement
   June 30,2007Year 1
    
    $
    17,415Year 2
    
    
    5,033Year 3
    
    
    166Year 4
    
    
    Year 5
    
    
    Thereafter
    
    
    
 e) Cash and cash equivalents
  f) Accounts Receivable
   Allowance for Doubtful Accounts
 Additions
    
    DeductionsBalance atbeginning of
    
    
    
    
    
    
    
    
    
    Balance at end ofperiod
    
    Expense
    
    Write-offs
    
    periodYear ended June 30, 2007
    
    $
    11
    
    
    $
    111
    
    
    $
    (29
    )
    
    $
    93Year ended June 30, 2006
    
    $
    
    
    
    $
    63
    
    
    $
    (52
    )
    
    $
    11Year ended June 30, 2005
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
 F-7




---



##### Table of Contents



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 years
  h) Intangible assets
  June 30, 2007
    
    June 30, 2006Station contracts
    
    $
    321
    
    
    $
    Aircraft license
acquisition costs
    
    $
    33
    
    
    $
    29Total intangible assets
    
    $
    354
    
    
    $
    29
  Acquired intangible assets
 As of June 30, 2007GrossCarrying
    
    AccumulatedAmount
    
    AmortizationAmortized intangible assetsStation contracts
    
    $
    338
    
    
    $
    17
 F-8




---



##### Table of Contents



Estimated amortization expenseFor the year ended June 30, 2008
    
    $
    68For the year ended June 30, 2009
    
    
    68For the year ended June 30, 2010
    
    
    68For the year ended June 30, 2011
    
    
    68For the year ended June 30, 2012
    
    
    49
 i) Income taxes
  j) Per share data
  k) Fair value of financial instruments
  l) Foreign currency translation
  m) Recent Accounting Pronouncements
   F-9




---



##### Table of Contents



n) Concentration of Credit Risk
  o) Major Suppliers
    p) Deferred offering costs
  NOTE 4  Related Party Transactions
    F-10




---



##### Table of Contents



NOTE 5  Property and Equipment, Net
  Year Ended
    
    
    Year EndedJune 30,
    
    
    June 30,2007
    
    
    2006Helicopters and fixed wing aircraft
    
    $
    6,319
    
    
    $
    3,588Recording, broadcasting and studio equipment
    
    
    1,727
    
    
    
    1,304Furniture and equipment and other
    
    
    955
    
    
    
    666Less: Accumulated depreciation and amortization
    
    
    2,433
    
    
    
    1,370Property and equipment, net
    
    $
    6,568
    
    
    $
    4,188Plant and equipment held as security under specific loans:
    
    $
    1,956
    
    
    $
    1,773
   NOTE 6  Accounts Payable and Accrued Expenses
  June 30,
    
    
    June 30,2007
    
    
    2006Trade payables
    
    $
    3,793
    
    
    $
    2,936Accrued payroll expenses
    
    
    1,302
    
    
    
    640Accrued expenses and other liabilities
    
    
    937
    
    
    
    296Total
    
    $
    6,032
    
    
    $
    3,872
 F-11




---



##### Table of Contents



NOTE 7  Long Term Debt
  June 30,
    
    
    June 30,2007
    
    
    2006Term loan with bank, bearing variable interest rate of ANZ Mortgage Index rate plus .33%
(8.75% at June 30, 2007), monthly principal and interest payments of $14 secured by all ATN
assets, matures on June 30, 2008
    
    $
    184
    
    
    $
    309Financial leases with financing company, bearing fixed interest of 7.67% and 6.99%, monthly
principal and interest payments of $2 and $2, secured by automobiles, matures August 25, 2010
and April 16, 2008
    
    
    82
    
    
    
    108Note payable to bank, bearing fixed interest of 8.43%, monthly principal and interest payments
of $13, secured by a Helicopter, matures November 6, 2008
    
    
    197
    
    
    
    288Notes payable to bank bearing fixed interest of 6.97%, Monthly principal and interest payments
of $30, secured by 2 helicopters, matures September 6, 2010
    
    
    1,022
    
    
    
    1,138Financial lease with financing company, secured by computer equipment, matures December 30, 2009
    
    
    5
    
    
    
    1,490
    
    
    
    1,843Less current portion
    
    
    668
    
    
    
    557Long term debt less current portion
    
    
    822
    
    
    
    1,286
    June 30,2007Year 1
    
    $
    668Year 2
    
    
    394Year 3
    
    
    367Year 4
    
    
    61Year 5
    
    
    
 F-12




---



##### Table of Contents



NOTE 8  Shareholder Notes Payable
       NOTE 9  Income Taxes
  Year ended
    
    Year endedJune 30, 2007
    
    June 30, 2006Domestic
    
    Foreign
    
    Total
    
    Domestic
    
    Foreign
    
    TotalNet loss before taxes
    
    
    (352
    )
    
    
    (435
    )
    
    
    (787
    )
    
    
    (560
    )
    
    
    (2,348
    )
    
    
    (2,908
    )Income tax provision
    
    $
    115
    
    
    $
    1,321
    
    
    $
    1,436
    
    
    $
    
    
    
    $
    128
    
    
    $
    128Current deferred tax
asset (liability), net
    
    
    (3
    )
    
    
    (32
    )
    
    
    (35
    )
    
    
    (78
    )
    
    
    (58
    )
    
    
    (136
    )Non-current deferred tax
asset (liability), net
    
    
    (122
    )
    
    
    (126
    )
    
    
    (248
    )
    
    
    (24
    )
    
    
    (6
    )
    
    
    (30
    )Tax carried forward losses
    
    
    
    
    
    
    (1,559
    )
    
    
    (1,559
    )
    
    
    (235
    )
    
    
    (864
    )
    
    
    (1,099
    )Less: Valuation allowance
    
    
    10
    
    
    
    1,626
    
    
    
    1,636
    
    
    
    337
    
    
    
    888
    
    
    
    1,225Income tax expense
    
    $
    
    
    
    $
    1,230
    
    
    $
    1,230
    
    
    $
    
    
    
    $
    88
    
    
    $
    88
 F-13




---



##### Table of Contents



Year ended
    
    
    Year endedJune 30,
    
    
    June 30,2007
    
    
    2006Deferred tax assets:Depreciation
    
    $
    131
    
    
    $
    43Deferred rent
    
    
    49
    
    
    
    43Capital losses
    
    
    4
    
    
    
    4Foreign tax credit
    
    
    132
    
    
    
    132Stock option expense
    
    
    146
    
    
    
    18Accrued expenses and other
    
    
    228
    
    
    
    161Tax carried forward losses
    
    
    2,598
    
    
    
    1,154Total deferred tax assets
    
    
    3,288
    
    
    
    1,555Deferred tax liabilitiesPrepaid expenses
    
    
    60
    
    
    
    54Total deferred tax liabilities
    
    
    60
    
    
    
    54Net deferred tax assets before valuation allowance
    
    
    3,228
    
    
    
    1,501Valuation allowance
    
    
    (2,916
    )
    
    
    (1,280
    )Net deferred tax assets
    
    
    312
    
    
    
    221
 Year ended
    
    Year ended
    
    Year endedJune 30,
    
    June 30,
    
    June 30,2007
    
    2006
    
    2005Income tax expense consists of the following:Domestic
    
    $
    
    
    
    $
    
    
    
    $
    Foreign
    
    
    1,230
    
    
    
    88
    
    
    
    698Income tax expense
    
    $
    1,230
    
    
    $
    88
    
    
    $
    698
  Year ended
    
    Year ended
    
    Year endedJune 30,
    
    June 30,
    
    June 30,2007
    
    2006
    
    2005Federal statutory rate
    
    
    35.0
    %
    
    
    35.0
    %
    
    
    35.0
    %State taxes net of federal benefit
    
    
    0.5
    
    
    
    0.2
    
    
    
    0.2Differences between U.S. and foreign tax rates
    
    
    (5.5
    )
    
    
    1.1
    
    
    
    (5.7
    )Permanent differences between book and tax income
    
    
    21.6
    
    
    
    2.8
    
    
    
    0.6Impact of valuation allowance
    
    
    (207.9
    )
    
    
    (42.1
    )
    
    
    2.6Effective tax rate
    
    
    (156.3
    %)
    
    
    (3.0)
    %
    
    
    32.7
    %
   F-14




---



##### Table of Contents



As of
    
    As ofJune 30,
    
    June 30,2007
    
    2006Domestic
    
    $
    175
    
    
    $
    236Foreign
    
    
    2,423
    
    
    
    918Total
    
    $
    2,598
    
    
    $
    1,154
   NOTE 10  Commitments and Contingencies
  June 30,2007Year 1
    
    $
    396Year 2
    
    
    382Year 3
    
    
    393Year 4
    
    
    343Year 5
    
    
    309Thereafter
    
    
    594
  F-15




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##### Table of Contents



Vacation of premises prior to:September 8, 2007
    
    $
    103September 8, 2008
    
    $
    75September 8, 2009
    
    $
    47September 8, 2010
    
    $
    19
    NOTE 11  Capital Stock
   NOTE 12  Stock based compensation
   June 30,
    
    June 30,2007
    
    2006Risk-free interest rate
    
    
    4.53-4.71
    %
    
    
    4.95-5.12
    %Volatility factor
    
    
    60.35-65.89
    %
    
    
    32.52
    %Weighted volatility
    
    
    62.71
    %
    
    
    32.52
    %Dividend yield
    
    
    
    
    
    
    Option price
    
    $
    7.05-4.05
    
    
    $
    6.28-5.00Weighted average expected life of options
    
    6 years
    
    
    6 yearsWeighted average grant date fair value per share
    
    $
    3.08
    
    
    $
    2.15
 F-16




---



##### Table of Contents



WeightedWeighted
    
    AverageAverage
    
    
    Remaining
    
    Aggregate
    
    AggregateExercise
    
    Contractual
    
    Fair
    
    IntrinsicShares
    
    Price
    
    Term
    
    Value
    
    ValueBalance, June 30, 2006
    
    
    325,000
    
    
    $
    5.22Grants
    
    
    395,000
    
    
    $
    5.01
    
    
    
    
    
    
    $
    1,217Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeitures/expirations
    
    
    (25,000
    )
    
    $
    5.00
    
    
    
    
    
    
    $
    (52
    )Balance, June 30, 2007
    
    
    695,000
    
    
    $
    5.11
    
    
    9.26      years
    
    $
    1,867
    
    
     $
    1,248Exercisable, June 30, 2007
    
    
    100,002
    
    
    $
    5.24
    
    
    8.79 years
    
    $
    217
    
    
    $
    165
    NOTE 13  Warrant
  NOTE 14  Segment Reporting
  F-17




---



##### Table of Contents



Australia
    
    Canada
    
    All Other
    
    TotalYear
    
    Year
    
    Year
    
    Year
    
    Year
    
    Year
    
    Year
    
    YearEnded
    
    Ended
    
    Ended
    
    Ended
    
    Ended
    
    Ended
    
    Ended
    
    EndedJune 30,
    
    June 30,
    
    June 30,
    
    June 30,
    
    June 30,
    
    June 30,
    
    June 30,
    
    June 30,2007
    
    2006
    
    2007
    
    2006
    
    2007
    
    2006
    
    2007
    
    2006Revenues
    
    
    28,425
    
    
    
    19,007
    
    
    
    3,274
    
    
    
    495
    
    
    
    
    
    
    
    
    
    
    
    31,699
    
    
    
    19,502Interest expense
    
    
    132
    
    
    
    193
    
    
    
    38
    
    
    
    126
    
    
    
    
    
    
    
    
    
    
    
    170
    
    
    
    319Depreciation/amortization
    
    
    706
    
    
    
    530
    
    
    
    201
    
    
    
    57
    
    
    
    
    
    
    
    
    
    
    
    907
    
    
    
    587Income tax expense (benefit)
    
    
    1,230
    
    
    
    88
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,230
    
    
    
    88Segment profit (loss)
    
    
    2,864
    
    
    
    165
    
    
    
    (3,756
    )
    
    
    (2,601
    )
    
    
    (1,125
    )
    
    
    (560
    )
    
    
    (2,017
    )
    
    
    (2,996
    )Segment assets
    
    
    14,036
    
    
    
    8,037
    
    
    
    5,528
    
    
    
    1,597
    
    
    
    4,276
    
    
    
    14,654
    
    
    
    23,840
    
    
    
    24,288Property and
equipment, net
    
    
    3,610
    
    
    
    3,280
    
    
    
    2,958
    
    
    
    908
    
    
    
    
    
    
    
    
    
    
    
    6,568
    
    
    
    4,188Deferred tax assets, net
    
    
    312
    
    
    
    221
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    312
    
    
    
    221Expenditure for segment assets
    
    
    498
    
    
    
    1,023
    
    
    
    2,616
    
    
    
    965
    
    
    
    
    
    
    
    
    
    
    
    3,114
    
    
    
    1,988
  Traffic
    
    News
    
    Television
    
    TotalYear ended June 30, 2007
    
    $
    24,637
    
    
    $
    4,427
    
    
    $
    2,635
    
    
    $
    31,699Year ended June 30, 2006
    
    $
    16,708
    
    
    $
    2,290
    
    
    $
    504
    
    
    $
    19,502Year ended June 30, 2005
    
    $
    15,380
    
    
    
    
    
    
    
    
    
    
    $
    15,380
 NOTE 15  Asset Disposal Outside the Ordinary Course
   F-18




---



##### Table of Contents



NOTE 16  Quarterly Results of Operations (unaudited)
 Fiscal 2007
 First
    
    Second
    
    Third
    
    Fourth
    
    For theQuarter
    
    Quarter
    
    Quarter
    
    Quarter
    
    YearNet Revenues
    
    $
    6,108
    
    
    $
    8,222
    
    
    $
    7,609
    
    
    $
    9,760
    
    
    $
    31,699Operating (loss) income
    
    
    (855
    )
    
    
    425
    
    
    
    (1,288
    )
    
    
    555
    
    
    
    (1,163
    )Net (loss) income
    
    
    (815
    )
    
    
    44
    
    
    
    (1,309
    )
    
    
    63
    
    
    
    (2,017
    )Net (loss) income per share:Basic and diluted
    
    $
    (0.06
    )
    
    $
    0.00
    
    
    $
    (0.10
    )
    
    $
    0.00
    
    
    $
    (0.16
    )
 Fiscal 2006
 First
    
    Second
    
    Third
    
    Fourth
    
    For theQuarter
    
    Quarter
    
    Quarter
    
    Quarter
    
    YearNet Revenues
    
    $
    4,181
    
    
    $
    5,155
    
    
    $
    4,537
    
    
    $
    5,629
    
    
    $
    19,502Operating (loss) income
    
    
    (673
    )
    
    
    81
    
    
    
    (1,105
    )
    
    
    (1,112
    )
    
    
    (2,809
    )Net loss
    
    
    (600
    )
    
    
    (102
    )
    
    
    (1,108
    )
    
    
    (1,186
    )
    
    
    (2,996
    )Net loss per share:Basic and diluted
    
    $
    (0.07
    )
    
    $
    (0.01
    )
    
    $
    (0.13
    )
    
    $
    (0.09
    )
    
    $
    (0.31
    )
 NOTE 17  Acquisition of Business
  Current assets
    
    $
    56Fixed assets
    
    
    11Intangibles
    
    
    338Assumed liabilities
    
    
    (50
    )Purchase
price
    
    $
    355
 NOTE 18  Subsequent Events
  F-19




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##### Table of Contents



EXHIBIT INDEX
 ExhibitNo.
    
    Description23.1
    
    Consent of BDO Kendalls (NSW) (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 24, 2007.