UNITED STATES ~~SECURITIES AND EXCHANGE COMMISSION~~

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, ~~2010~~2011

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.

(Exact Name of Registrant as Specified in Its Charter)

Nevada

33-1117834

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

880 Third Avenue, 6th Floor ~~New~~ ~~York, New York 10022 (Address of principal executive offices)(Zip Code)~~

~~(212) 896-1255 (Registrant’s~~New ~~telephone number~~York, ~~including~~New ~~area~~York ~~code)~~10022

(Address of principal executive offices)(Zip Code)

(212) 896-1255

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class:		Name of Each Exchange on which Registered:
Common Stock, $.001 par value		The Nasdaq Stock Market

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o ¨ No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o ¨ No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨ o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o þ No ¨ o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨ o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o¨ Accelerated filer oþ Non-accelerated filer o¨ ~~Smaller Reporting Company þ~~ (Do not check if a smaller reporting company) Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of ~~the~~ the Exchange Act). Yes o ¨ No þ

The aggregate market value of common stock held by non-affiliates of the registrant was approximately $43103.42 million as of December 31, ~~2009~~2010 (the last business day of the registrant’s most recently completed second quarter), assuming solely for the purpose of this calculation that all directors, officers and more than 10% stockholders of the registrant are affiliates. The determination of affiliate status for this purpose is not necessarily conclusive for any other purpose.

As of September 1312, ~~2010~~2011, the registrant had 1819,~~466~~060,~~824~~350 shares of common stock outstanding.

TABLE OF CONTENTS

Part I			1
Item. 1 Business			1
Item 1A. Risk Factors			910
Item 1B. Unresolved Staff Comments			2021
Item 2. Properties			2021
Item 3. Legal Proceedings			2022
Item 4. Removed and Reserved			2022
Part II			2022
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			2022
Item 6. Selected Financial Data			2324
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations			2425
Item 7A. Qualitative and Quantitative Disclosures about Market Risk			3536
Item 8. Financial Statements and Supplementary Data			3637
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure			3637
Item 9A. Controls and Procedures			3637
Item 9B. Other Information			3738
Part III			3738
Item 10. Directors, Executive Officers and Corporate Governance			3738
Item 11. Executive Compensation			4041
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			56
Item 13. Certain Relationships and Related Transactions, and Director Independence			58
Item 14. Principal Accountant Fees and Services			59
Part IV			5960
Item 15. Exhibits and Financial Statement Schedules			5960
SIGNATURES			62
EXHIBIT INDEX
Subsidiaries
Consent of BDO Audit (NSW-VIC) Pty Ltd
302 Certification of Chief Executive Officer
302 Certification of Chief Financial Officer
Section 906 Certifications of CEO and CFO
Press Release
EX-21.1
EX-23.1
EX-31.1
EX-31.2
EX-32.1
EX-99.1
EX-21.1
EX-23.1
EX-31.1
EX-31.2
EX-32.1
EX-99.1

Part I

Item. 1 Business

Our Company and Its Subsidiaries

Global Traffic Network, Inc. (“Global Delaware”) was a Delaware corporation formed on May 16, 2005 to be a holding company. On December 12, 2007, Global Delaware formed a wholly owned subsidiary, Global Traffic Network, Inc., a Nevada corporation (“Global Nevada”), for the purpose of changing Global Delaware’s state of incorporation from Delaware to Nevada. The re-incorporation was completed on February 26, 2008 when Global Delaware merged with and into Global Nevada, with Global Nevada remaining as the surviving corporation. All references in this report to “we”, “us”, “our”, “our company” and “the Company” pertain to Global Delaware for time periods from its formation until the merger and to Global Nevada for time periods following the merger. Our direct and indirect wholly-owned subsidiaries include The Australia Traffic Network Pty Limited, an Australian proprietary company organized on June 20, 1997 and registered under the Corporations Act of Australia, Global Traffic Canada, Inc., a Delaware corporation incorporated on May 20, 2005, Canadian Traffic Network ULC, an Alberta business corporation formed on July 5, 2005, Global Traffic Network (UK) Limited, a private company limited by shares incorporated in England and Wales on October 19, 2006, Global Traffic Network (UK) Commercial Limited, a private company limited by shares incorporated in England and Wales which we acquired effective March 1, 2009 (formerly The Unique Broadcasting Company Limited) and ~~Mobile~~Global ~~Traffic~~Alert Network, Inc., a Nevada corporation incorporated on March 7, 2008. Prior to October 12, 2010, Global Alert Network, Inc. was named Mobile Traffic Network, Inc. We refer to these entities throughout this report as “Australia Traffic Network”, “Global Canada”, “~~Canada~~Canadian Traffic Network”, “UK Traffic Network”, “UK Commercial Traffic Network” and “~~Mobile~~Global ~~Traffic~~Alert Network”, respectively.

Prior to our initial public offering, Australia Traffic Network, our wholly-owned Australian operating subsidiary, was a separate entity controlled by the same shareholder base that controlled us immediately prior to such initial public offering. On March 23, 2006, the effective date of our initial public offering, and pursuant to a Securities Exchange Agreement (the “Securities Exchange Agreement”) dated December 13, 2005 among us, Australia Traffic Network and the holders of all of the outstanding ordinary shares of Australia Traffic Network, we exchanged 4,000,000 shares of our common stock and issued an aggregate of $1.4 million in promissory notes to the shareholders of Australia Traffic Network for all of the outstanding ordinary shares of Australia Traffic Network. We refer to this transaction throughout this report as the “Share Exchange.” As a result of the Share Exchange, Australia Traffic Network became our wholly-owned subsidiary. The promissory notes issued in the Share Exchange (the “Share Exchange Notes”), which were intended to cover the estimated tax consequences to the Australia Traffic Network shareholders of the Share Exchange, were paid in their entirety on March 29, 2006, the closing date of our initial public offering, out of the net proceeds from the initial public offering.

References in this report to time periods prior to the May 16, 2005 establishment of Global Traffic Network, Inc. pertain solely to operations of Australia Traffic Network.

On August 2, 2011, we entered into a definitive agreement (the “Merger Agreement”) to be acquired by an affiliate of GTCR, LLC (“GTCR”). Under the terms of the Merger Agreement, GTCR Gridlock Holdings, Inc., a newly formed entity affiliated with GTCR, commenced a tender offer on August 9, 2011 to acquire all of our outstanding common stock for $14.00 per share in cash (the “Offer”), to be followed by a merger (the “Merger”) to acquire all remaining outstanding shares at the same price paid in the Offer. Under the Merger Agreement, in general, the Company is permitted, under a “go-shop” provision, to solicit, provide information to, and engage in discussions with, third parties with respect to alternative acquisition proposals until September 13, 2011. Subject to certain requirements of the Merger Agreement, the Company may negotiate with parties that submit qualifying competing proposals during the initial solicitation period for a period expiring on October 1, 2011. The Offer is required to remain open until the completion of the solicitation period, and if applicable, the subsequent negotiation period. The completion of the Offer and Merger are subject to certain conditions (including, with respect to the Offer, a “minimum condition” that requires there to be tendered and not withdrawn a number of shares that represents at least a majority of the shares of Company common stock then issued and outstanding, excluding from such calculation shares held by the Company’s executive officers) and termination rights set forth in the Merger Agreement. The transactions contemplated by the Merger Agreement are expected to be completed by the fourth quarter of 2011. See “Item 1A —Risk Factors.” The statements in this Annual Report on Form 10-K are not a solicitation or recommendation of the Company to its shareholders in connection with the proposed Offer, and shareholders should carefully review the Solicitation/Recommendation Statement on Schedule 14D-9 filed by the Company on August 9, 2011 and any amendments thereto before making any decision as to the Offer because such documents contain important information about the Offer, the Merger and other transactions contemplated by the Merger Agreement. The Solicitation/Recommendation Statement on Schedule 14D-9 and the amendments thereto are available, without charge, at the SEC’s internet site (http://www.sec.gov) or by directing a request to Global Traffic Network, Inc., Attention: Investor Relations, Phil Carlson, KCSA Strategic Communications, 880 Third Avenue 6th Floor, New York, NY 10022, pcarlson@kcsa.com, or on the Company’s website at (www.globaltrafficnetwork.com).

Overview of Our Business

We provide traffic and news information reports to radio and television stations in international markets. We are the largest provider of traffic information reports to radio stations in Australia, Canada and the United Kingdom. We also provide television traffic reports in Australia and Canada, radio entertainment news reports in the United Kingdom, ~~news information reports to radio stations in Canada~~ and we believe that we maintain the largest inventory of commercial advertising embedded in radio news reports in Australia. We derive the substantial majority of our revenues from the sale to advertisers of commercial advertising inventory embedded within these information reports. We obtain our advertising inventory from radio and television stations in exchange for providing them with information reports and/or cash compensation. We provide broadcasters in international markets a cost-effective alternative to gathering and delivering their own traffic and news information reports and offer advertisers an efficient, broad-reaching alternative to that offered by traditional radio and television stations. In the United Kingdom, in addition to the sale of commercial advertising inventory, we also ~~generate~~ generated revenue by providing services to the United Kingdom’s Highways Agency under a Traffic Radio Services Contract that is discussed below under “UK Traffic Network.” This agreement terminated August 31, 2011.

	•		Australia Traffic Network. We began providing traffic reports to radio stations in Australia in 1997 and currently deliver traffic reports to radio stations and traffic reports, video and other services to television stations in Australia. In July 2005, we began leveraging our radio traffic reporting services as a platform to launch advertising embedded in news reports on radio stations in Australia.
			According to AC Nielsen, our Australian information reports have a weekly reach of approximately 9.0 million radio listeners (ages ten and over), which represents approximately 100% of the commercial radio listeners, and approximately 7.1 million television viewers (ages 13 and over), which represents over 50% of the commercial television viewers, in each case throughout the five major Australian markets.
			The number of Australian network affiliate stations from which we receive advertising inventory and the number of Australian markets in which we operate are set forth below:

	Number of
Australia	Affiliate Stations		Number of Markets
Radio traffic reports		82		19
Radio news reports		26		7
TV reports		14		7

•

Australia Traffic Network. We began providing traffic reports to radio stations in Australia in 1997 and currently deliver traffic reports to radio stations and traffic reports, video and other services to television stations in Australia. In July 2005, we began leveraging our radio traffic reporting services as a platform to launch advertising embedded in news reports on radio stations in Australia.

			We also provide traffic reports to approximately 74 stations on the ABC radio network, which is the public, non-commercial radio network in Australia. Although we are acknowledged as the source of the traffic reports we provide to the ABC stations, the stations are not included in the table above or any other analysis contained in this report because we receive no advertising inventory from the ABC stations due to the non-commercial nature of their broadcast operations.
			We conduct our Australian business operations through Australia Traffic Network, which became our wholly-owned subsidiary as a result of the Share Exchange.
	•		Canadian Traffic Network. We began delivering traffic reports to radio stations in Canada in December 2005 and we currently deliver traffic and/or news information reports to approximately 84 radio stations and four television stations. Effective April 2, 2007, we acquired substantially all of the assets of Wise Broadcasting Network Inc., after which we commenced providing news, weather, sports and business information reports to radio stations on a limited basis. This information is primarily aggregated from third parties that we compensate. According to BBM Canada, the Canadian industry consortium for audience ratings, our Canadian information reports have a weekly reach of approximately 12.8 million radio listeners (ages 18 and over), which represents approximately 47% of the commercial radio listeners in the markets we serve. BBM has recently replaced the traditional diary method of audience measurement with the portable people meter, an electronic measurement in five of our largest markets. This has caused significant changes in the estimate of audience and thus the current audience estimates for our Canadian operations may not be comparable to previously published estimates. Our TV Network in Canada has a weekly reach of more than 2.6 million television viewers (ages 18 and over), which represents approximately 9% of commercial television viewers in Canada.
			The number of Canadian network affiliate stations from which we receive advertising inventory and the number of Canadian markets in which we operate are set forth below:

According to AC Nielsen, our Australian information reports have a weekly reach of approximately 10 million radio listeners (ages ten and over), which represents almost 100% of the commercial radio listeners throughout the five major Australian markets. According to OzTAM, our TV reports reach approximately 5.3 million television viewers (ages 13 and over), also throughout the five major Australian markets.

	Number of
Canada	Affiliate Stations		Number of Markets
Radio traffic reports		71		8
Radio news, sports, business and weather reports		23		2
TV reports		4		4

The number of Australian network affiliate stations from which we receive advertising inventory and the number of Australian markets in which we operate are set forth below:


Australia	Number of Affiliate Stations		Number of Markets
Radio traffic reports		85		19
Radio news reports		32		7
TV reports		14		7

We also provide traffic reports to approximately 79 stations on the ABC radio network, which is the public, non-commercial radio network in Australia. Although we are acknowledged as the source of the traffic reports we provide to the ABC stations, the stations are not included in the table above or any other analysis contained in this report because we receive no advertising inventory from the ABC stations due to the non-commercial nature of their broadcast operations.

We conduct our Australian business operations through Australia Traffic Network, which became our wholly-owned subsidiary as a result of the Share Exchange.

•

Canadian Traffic Network. We began delivering traffic reports to radio stations in Canada in December 2005 and we currently deliver traffic reports to approximately 81 radio stations and four television stations. We are currently in the process of eliminating our news, weather, sports and business service since the stations that we provided the reports to are not significant to our network. According to BBM Canada, the Canadian industry consortium for audience ratings, our Canadian information reports have a weekly reach of approximately 20.3 million radio listeners (ages 18 and over), which represents approximately 75% of the commercial radio listeners in the markets we serve. BBM has recently replaced the traditional diary method of audience measurement with the portable people meter, an electronic measurement in five of our largest markets. This has caused significant changes in the estimate of audience and thus the current audience estimates for our Canadian operations may not be comparable to previously published estimates. Our TV Network in Canada has a weekly reach of more than 2.6 million television viewers (ages 18 and over), which represents approximately 9% of commercial television viewers in Canada.

The number of Canadian network affiliate stations from which we receive advertising inventory and the number of Canadian markets in which we operate are set forth below:


Canada	Number of Affiliate Stations		Number of Markets
Radio traffic reports		81		8
TV reports		4		4

We intend to add TV reports in our remaining Canadian markets should opportunities present themselves.

We conduct our Canadian business operations through Canadian Traffic Network, our indirect wholly-owned subsidiary.

	•		UK Traffic Network. On March 1, 2009, our wholly owned subsidiary UK Traffic Network acquired all the outstanding share capital of The Unique Broadcasting Company Limited (“Unique”) from UBC Media Group plc (“UBC”), for a total purchase price of approximately £11.2 million (approximately $16.5 million), including amounts paid to satisfy a closing date working capital adjustment and in settlement of contingent cash “earn-out” compensation that UBC would have been entitled based upon the financial performance of the acquired business during the 2009, 2010 and 2011 calendar years. Unique housed UBC’s Commercial Division operations that supplied traffic and travel information and entertainment news information to radio stations in the United Kingdom in exchange for commercial airtime inventory that is then sold to advertisers. The acquisition was accomplished through the purchase of the entire share capital of Unique, which we have subsequently renamed Global Traffic Network (UK) Commercial Limited (“UK Commercial Traffic Network”).
			We currently provide radio traffic reporting services and/or radio entertainment news reports to approximately 273 radio stations in the United Kingdom. According to RAJAR, our information reports have a weekly reach of approximately 24 million commercial radio listeners aged 15 and over, representing approximately 76% of all commercial radio listenership. Currently, we only sell advertising embedded in our traffic and entertainment news reports on a national basis.
			The number of United Kingdom network affiliate stations from which we receive advertising inventory is set forth below:

•

UK Traffic Network. On March 1, 2009, our wholly owned subsidiary, UK Traffic Network, acquired all the outstanding share capital of The Unique Broadcasting Company Limited (“Unique”) from UBC Media Group plc (“UBC”), for a total purchase price of approximately £11.2 million (approximately $16.5 million), including amounts paid to satisfy a closing date working capital adjustment and in settlement of contingent cash “earn-out” compensation that UBC would have been entitled based upon the financial performance of the acquired business during the 2009, 2010 and 2011 calendar years. Unique owned UBC’s Commercial Division operations that supplied traffic and travel information and entertainment news information to radio stations in the United Kingdom in exchange for commercial airtime inventory that is then sold to advertisers. The acquisition was accomplished through the purchase of the entire share capital of Unique, which we have subsequently renamed Global Traffic Network (UK) Commercial Limited (“UK Commercial Traffic Network”).

	Number
United Kingdom	Of Stations
Radio traffic reports		273
Radio entertainment news reports		137

~~Prior~~We tocurrently ~~the~~provide ~~Unique~~radio ~~acquisition,~~traffic ~~substantially~~reporting ~~all~~services ofand/or ~~our~~radio ~~United~~entertainment ~~Kingdom revenue was produced~~news ~~under~~reports ato ~~Traffic~~approximately ~~Radio~~239 ~~service~~radio ~~contract~~stations ~~with~~in the United Kingdom’s Highways Agency, which is an executive agency of the United Kingdom Department for Transport responsible for operating, maintaining and improving the strategic trunk road network in England on behalf of the Secretary of State for Transport. ~~Under~~According ~~the~~to ~~terms of the agreement~~RAJAR, ~~which~~our ~~became~~information ~~effective July 1, 2008, UK Traffic Network provides traffic radio~~ reports ~~via~~have ~~digital audio broadcasting stations throughout England, with~~ a ~~possible~~weekly ~~expansion~~reach of the service to Scotland, Wales and Northern Ireland. The initial contract term is through September 2011, subject to a possible extension by the Highways Agency through the summer of 2012, during which London is scheduled to host the 2012 Summer Olympic Games. The annual revenue associated with the contract at June 30, 2010 is approximately ~~£2.4 million (or approximately $3.6~~26 million atcommercial ~~June 30,~~radio ~~2010~~listeners ~~exchange~~aged ~~rates)~~15 and ~~the maximum revenue associated with the contract~~over, ~~assuming~~representing ~~the~~approximately ~~expansion~~77% of ~~service to~~ all ~~markets for the maximum~~ ~~contract~~commercial ~~period~~radio ~~of 50 months, is approximately £14 million (or approximately $20~~listenership.~~9 million~~ ~~at June 30~~Currently, ~~2010~~we ~~exchange~~only ~~rates).~~sell ~~Although~~advertising ~~similar~~embedded toin our ~~core~~traffic ~~business~~and inentertainment ~~that~~news ~~it involves broadcasting traffic~~ reports ~~over~~on ~~radio stations, our contract with the Highways Agency differs in that it is not advertising supported. Rather we are paid~~ a ~~fee~~national ~~by the Highways Agency to provide our Traffic Radio service~~basis.

~~Our~~The ~~commercial~~number ~~advertising inventory, which is primarily comprised~~ of ten second advertising spots embedded in information reports that are broadcast on radio or television, is generally sold as advertising packages on a local, regional or national network basis. Our commercial advertising inventory in the United Kingdom ~~currently~~network ~~differs~~affiliate instations ~~that~~from it is generally 20 to 60 seconds in length (with 30 seconds and 40 seconds being the most prevalent length) and is only sold on a national basis. We market our advertising packages on a percentage-based rotation. Each advertiser receives its pro rata share of our aggregate advertising inventory, which ~~airs primarily during prime morning and afternoon drive periods. Because~~ we ~~consolidate~~receive ~~our commercial~~ advertising inventory ~~exclusively~~is onset aforth ~~network~~below: basis, rather than station by station, we are able to offer advertisers a cost-effective, broad-based advertising vehicle that reaches mass audiences. Since July 1, 2009, our advertising customers have included nine of the top ten Australian advertisers and 18 of the top 20 global advertisers, each as published by AdvertisingAge.

We formed Mobile Traffic Network to pursue business opportunities related to a mobile phone passive alerting technology. The technology is designed to provide location aware information, for instance traffic reports, that can be disseminated to users based on their proximity to the content of the report (for example, a report may be sent as a subscriber approaches a traffic incident or a sponsor location). Where applicable, information can be disseminated to users in the form of audio files, which are automatically played, obviating the need for users to interact with their mobile phones in any manner. To date, Mobile Traffic Network’s operations have generated insignificant revenue.


United Kingdom	Number Of Stations
Radio traffic reports		239
Radio entertainment news reports		126

The number of our traffic network affiliates in the UK has decreased from the prior period primarily due to a decision by Global Radio Services to consolidate a number of their Heart and Gold branded radio stations by simulcasting their programming over multiple stations that had previously been programmed on a standalone basis. This had the effect of us having fewer network affiliates each with a larger audience. The overall audience delivery was not significantly impacted therefore the consolidation of radio stations had no impact on our revenue potential in the United Kingdom market.

Prior to the Unique acquisition, substantially all of our United Kingdom revenue was produced under a Traffic Radio service contract with the United Kingdom’s Highways Agency, which is an executive agency of the United Kingdom Department for Transport responsible for operating, maintaining and improving the strategic trunk road network in England on behalf of the Secretary of State for Transport. Under the terms of the agreement, which became effective July 1, 2008, UK Traffic Network provided traffic radio reports via digital audio broadcasting stations throughout England. The initial term of the contract expired on August 31, 2011 and was not renewed due to budgetary constraints of the Highways Agency. The annual revenue associated with the contract at June 30, 2011 was approximately £2.5 million (or approximately $4.0 million) and the annual profit attributable to the contract was approximately £0.5 million (or approximately $0.8 million). Although similar to our core business in that it involved broadcasting traffic reports over radio stations, our contract with the Highways Agency differed in that it was not advertising supported. Rather we were paid a fee by the Highways Agency to provide our Traffic Radio service.

Our commercial advertising inventory, which is primarily comprised of ten second advertising spots embedded in information reports that are broadcast on radio or television, is generally sold as advertising packages on a local, regional or national network basis. Our commercial advertising inventory in the United Kingdom currently differs in that it is generally 20 to 60 seconds in length (with 30 seconds and 40 seconds being the most prevalent length) and is only sold on a national basis. We market our advertising packages on a percentage-based rotation. Each advertiser receives its pro rata share of our aggregate advertising inventory, which airs primarily during prime morning and afternoon drive periods. Because we sell our commercial advertising inventory exclusively on a network basis, rather than station by station, we are able to offer advertisers a cost-effective, broad-based advertising vehicle that reaches mass audiences. Since July 1, 2010, our advertising customers have included nine of the top ten Australian advertisers and 18 of the top 20 global advertisers, each as published by AdvertisingAge.

We formed Global Alert Network to pursue business opportunities related to a mobile phone passive alerting technology. The technology is designed to provide location aware information, for instance traffic reports, that can be disseminated to users based on their proximity to the content of the report (for example, a report may be sent as a subscriber approaches a traffic incident). Information is disseminated to users in the form of audio files, which are automatically played, obviating the need for users to interact with their mobile phones in any manner. To date, Global Alert Network’s operations have generated insignificant revenue.

Industry Background and Trends

Radio and television stations generally attempt to attract listeners and viewers by selecting a style of programming that appeal to a target listening or viewing audience. Although there are many programming formats, broadcasters across a variety of formats recognize that traffic and news reports appeal to a wide range of audiences. Because there can be substantial expenses involved in preparing and delivering traffic and news reports, many broadcasters have elected to outsource the preparation and delivery of these reports to third parties that specialize in packaging such information. Outsourcing companies are often able to provide better information in a more cost-effective manner, which allows broadcasters to focus on improving service to its listeners or viewers, reduce costs, and improve profitability.

The media advertising market has experienced many changes and innovations in recent years, particularly the introduction and rising popularity of non-traditional media outlets such as internet, broadband wireless, cable television, satellite television and radio, as well as consumer products, such as portable digital audio players, personal digital video recorders and mobile telephones. Although advertisers continue to seek out radio and television audiences, audiences are more fragmented and traditional broadcasters increasingly compete with these additional media platforms. This trend has resulted in more mature advertising markets with limited or no growth, which increases the pressure on traditional broadcasters to manage their operations and expenses in a cost-effective manner.

The fragmentation of media markets also poses a challenge to advertisers. Although innovations in non-traditional media provide advertisers with additional platforms with which they can reach consumers, the rising number of media platforms creates increasingly segmented audiences that make it difficult for advertisers, especially large companies that rely on national or global brand recognition, to reach the broad-based audiences that they desire. Advertisers are increasingly looking for a return on investment for each advertising dollar spent that is generally measured by the audience reach of their chosen advertising media and the advertisers’ target demographics within those media.

We believe that the advertising markets in the countries in which we operate are up slightly from the previous fiscal year when taken in aggregate. Nonetheless, our advertising revenue for the fiscal year ended June 30, ~~2010~~2011 (when measured in local currencies) exceeded revenue from the fiscal year ended June 30, ~~2009~~2010 in all the markets in which we operate and we believe that our revenue growth rate significantly exceeded that of each of the markets in which we operate.

Our Business Model, Products and Services

We are well positioned to capitalize on the desire of radio and television broadcasters to deliver traffic information to audiences in a cost-effective manner and the desire of advertisers to reach a broad, demographically diverse audience using the traditional media of radio and television.

We believe that our business model addresses the needs of multiple constituencies. We are the largest provider of traffic information reports to radio stations in Australia, Canada and the United Kingdom and we believe that we maintain the largest inventory of commercial advertising embedded in radio news reports in Australia. Our large inventory of network-based advertising allows advertisers to reach a broad, demographically diverse audience using the traditional media of radio and television. For broadcasters, we facilitate the delivery of traffic and news information to audiences in a cost-effective manner.

We embed our advertisements within information reports such that advertisers’ messages are broadcast along with regularly scheduled programming primarily during peak morning and afternoon drive times when a majority of the radio audience is listening. Because the advertisements within the information reports are generally read live by on-air broadcasters (except in the United Kingdom, where they are pre-produced) and the reports are actively sought out by listeners, we believe the advertisements embedded in the information reports are less likely to be avoided by a listener or viewer changing stations or “tuning out” than traditional advertising messages.

The radio stations that receive radio traffic reports and radio news reports become members of our Radio Network. Likewise, the television stations that receive TV reports become members of our TV Network. Collectively, we refer to members of these networks as our network affiliates.

Preparation of Information Reports

We gather traffic data utilizing our information-gathering infrastructure which ~~includes~~ includes helicopters, airplanes, scanners, station listener lines and cellular phones. Traffic information is also gathered through various government-based traffic tracking systems and other services, including remote camera systems positioned at strategically located ground positions. The information is processed, written into broadcast copy and entered into computer systems by local writers and producers. Professional broadcasters then read the customized reports on the air. Our TV reports are compiled using a similar infrastructure, which is supplemented in certain markets by video footage obtained from remote omni-directional camera systems that are positioned on our aircraft. In the United Kingdom, ~~substantially all~~ our radio station traffic network ~~affiliates~~ affiliates receive their information from a third party that we compensate. With the exception of the use of aviation, this third party uses ~~substantially the same~~ information gathering techniques that weare dosimilar to the techniques used by us.

We currently obtain our Australian radio news advertising inventory from our news network affiliates in exchange for cash compensation. References to the provision of news reports in Australia throughout this report refers to our purchase from radio stations of news advertising inventory embedded in news reports that we then make available to our advertisers. We Apurchase ~~substantial portion of~~ our radio entertainment news information in ~~Canada~~the isUnited ~~purchased~~Kingdom from a third party ~~wire~~that ~~service~~provides the information reports directly to radio stations for broadcast in which our advertising commercials are embedded.

WeOur ~~purchase~~information-gathering infrastructure and the flexibility created by our ~~radio~~ability ~~entertainment~~to ~~news~~collect traffic information and thereby provide our services 24 hours per day, seven days per week in ~~the~~certain ~~United~~markets ~~Kingdom~~to ~~from~~our anetwork ~~third~~affiliates ~~party that~~enables ~~provides~~us to respond to changing conditions and enables our network affiliates to provide their listeners with accurate and up-to-the-minute news and traffic information. ~~reports~~For ~~directly~~example, we responded to numerous radio ~~stations~~and ~~for~~television ~~broadcast~~station inrequests ~~which~~by providing to radio and television stations throughout our markets and the world video coverage and reports on the May 2010 M5 tunnel collapse in ~~advertising~~Sydney, ~~commercials~~the ~~are~~March ~~embedded~~2010 Queensland floods, the landslide in Oliver, British Columbia in June 2010 and the royal visit to Canada in the summer of 2011.

Our information-gathering infrastructure and the flexibility created by our ability to collect traffic information and thereby provide our services 24 hours per day, seven days per week in certain markets to our network affiliates enables us to respond to changing conditions and enables our network affiliates to provide their listeners with accurate and up-to-the-minute news and traffic information. For example, responding to numerous radio and television station requests we have provided video coverage and reports on the May 2010 M5 tunnel collapse in Sydney, the March 2010 Queensland floods and the landslide in Oliver, British Columbia in June 2010 to radio and television stations throughout our markets and the world.

As a result of our extensive network of operations and broadcasters, we often report important news stories and provide our network affiliates with live coverage of these stories. We are able to customize and personalize our reports of breaking stories using our network affiliates’ call letters from the scene of news events.

We believe that our aircraft and other information-gathering technology and broadcast equipment enable us to provide high quality programming, ~~and~~which allows us to retain and expand our base of network affiliates. The table below outlines our fleet of owned and leased aircraft.

	United Kingdom				Australia				Canada
	Leased		Owned		Leased		Owned		Leased		Owned
Fixed Wing Aircraft		0		2		0		1		2		0
Helicopters		0		0		0		4		0		7

We currently utilize 13 broadcast studios in Australia, seven broadcast studios throughout Canada and three broadcast studios in the United Kingdom. In addition, our out-source traffic provider in the United Kingdom operates approximately six broadcast studios throughout the United Kingdom.

Delivery of Our Information Reports

We provide daily scheduled customized information reports to network affiliates. Our information reports in Australia and Canada generally utilize our own on-air broadcasters. In the United Kingdom, however, we generally either utilize pre-produced traffic reports voiced by our out-source provider’s broadcasters or our out-source provider furnishes traffic information to our radio network affiliates that use such information to produce their own traffic reports. We customize our information reports to meet each network affiliate’s requirements as to the number of reports broadcast per day, the time of the broadcast, the length and content of the report, including the geographic area covered by the report. We typically work closely with our network affiliates’ program directors, news directors, and general managers to ensure that our information reports meet their specifications and quality standards. Our network affiliates participate in the selection of the on-air broadcasters for their stations to ensure that each broadcaster’s style is appropriate for their stations’ formats. Our broadcasters often become integral “on-air personalities” on our network affiliates’ stations as a result of their on-air presence and interaction with the stations’ on-air personnel. In order to realize operating efficiencies, we endeavor to utilize our professional broadcasters on multiple stations within a particular market. Generally, each of our broadcasters delivers information reports to between two and four of our network affiliates, although we do provide exclusive talent for certain network affiliates or commonly owned network affiliates.


	United Kingdom					Australia				Canada
	Leased		Owned			Leased		Owned		Leased		Owned
Fixed Wing Aircraft		0		1	(1)		1		1		1		1
Helicopters		0		0			0		4		0		6

(1)	Includes fixed wing aircraft owned by UK Traffic Network that is no longer in service and is being held for sale.

We currently utilize 13 broadcast studios in Australia and seven broadcast studios throughout Canada. In addition, our out-source traffic provider in the United Kingdom operates approximately six broadcast studios throughout the United Kingdom.

Delivery of Our Information Reports

Due to the customized nature of our information reports and the fact that we do not require network affiliates to identify us as the supplier of the information reports, each network affiliate may present the information reports we provide as if the network affiliate had generated such information report with its own resources. As a result, multiple network affiliates in a single market may intimate that the helicopters, fixed-wing aircraft and on-air broadcasters are those of the network affiliate.

Significant Network Affiliates

Austereo Pty Limited (“Austereo”). Austereo, one of our Australian network affiliates, is the largest radio broadcaster in Australia and, as of June 30, ~~2010~~2011, provided us with approximately 2018% of our Australian radio commercial advertising inventory. When sold to advertisers, this commercial advertising inventory accounts for a material amount of our Australian revenues. This radio commercial advertising inventory is supplied pursuant to a four year agreement effective July 1, 2008 under which we provide regularly-scheduled radio traffic reports to, and receive radio traffic report and radio news report inventory from, ten Australian radio stations operated by Austereo in Sydney, Melbourne, Brisbane, Adelaide and Perth. In April 2011, Southern Cross Media Group (“Southern Cross”) completed its purchase of Austereo. In addition to the Austereo stations previously discussed, Southern Cross owns eight of our radio network affiliates in Hobart, Sunshine Coast, Gold Coast and Central Coast. These stations comprise approximately 6% of our Australian radio commercial inventory as of June 30, 2011.

Australian Radio Network Pty Limited (“ARN”). ARN, another large radio broadcaster in Australia, provided us approximately 16% of our Australian radio commercial advertising inventory as of June 30, ~~2010~~2011. When sold to advertisers, this commercial advertising inventory accounts for a material amount of our Australian revenues. This inventory is provided ~~under~~pursuant anto a four year agreement effective July 1, 2008 to provide traffic reporting services ~~through June 2012~~ to eleven ARN stations in Sydney, Canberra, Melbourne, Brisbane and Adelaide and aan ~~two year~~ agreement ~~effective~~through ~~February~~May 131, ~~2009~~2012 to acquire news radio commercial advertising inventory from eight ARN stations in Sydney, Melbourne, Brisbane and Adelaide.

In addition, ARN and Austereo operate various joint ventures in Canberra (included above) and Newcastle. Stations under these joint ventures not included above account for approximately an additional 1% of our commercial advertising inventory in Australia.

Corus Entertainment Inc. (“Corus”). Effective January 1, 2009, we entered into a ~~three~~four year agreement with Corus, one of the largest radio broadcasters in Canada, to provide radio traffic reports on 24 radio stations throughout seven Canadian markets. Currently we service 2218 radio stations under this agreement as Corus ceased broadcasting on two of the contracted stations and sold four additional stations, all in the Montreal radio market. Corus’ stations accounted for approximately 4939% of our Canadian advertising inventory (excluding regional suburban stations) as of June 30, ~~2010~~2011. We currently provide traffic reporting services to 23 19 Corus radio stations.

~~GCAP~~Global ~~Media~~Radio Services Limited (“Global”). We provide traffic reporting services and receive radio commercial advertising inventory on 81approximately 53 Global radio stations throughout the United Kingdom pursuant to a ~~two~~three year agreement ~~that~~effective November 1, ~~commenced~~2010. ~~November~~The agreement may be cancelled prior to the end date by either party upon 90 days prior notice during the period commencing August 1731, ~~2008~~2012 and ending October 1, 2012. These Global radio stations accounted for approximately 1713% of our United Kingdom radio traffic advertising inventory as of June 30, ~~2010~~2011 and approximately 2728% of the traffic network’s advertising delivery (“impacts.”). The number of our Global traffic network affiliates in the UK has decreased from the prior period primarily due to a decision by Global to consolidate a number of their Heart and Gold branded radio stations by simulcasting their programming over multiple stations that had previously been programmed on a standalone basis. This had the effect of us having fewer network affiliates each with a larger audience. The overall audience delivery was not significantly impacted therefore the consolidation of the radio stations had no impact on our revenue potential in the United Kingdom market.

Bauer Radio Limited (“Bauer”). We provide traffic reporting services ~~to, and receive radio~~ ~~commercial advertising inventory on, 42 Bauer radio stations throughout the United Kingdom pursuant~~ to ~~the terms of an agreement that expired August 31~~, ~~2010. The Bauer radio stations accounted for approximately 15% of our United Kingdom radio traffic advertising inventory as of June 30, 2010~~ and ~~approximately~~ ~~26% of the traffic network’s impacts. We also provide entertainment news reporting services to, and~~ receive radio commercial advertising inventory on, approximately 42 Bauer radio stations throughout the United Kingdom pursuant to ~~the~~a ~~terms~~28 ofmonth an agreement ~~that~~effective ~~expired August 31~~September 1, 2010. ~~Pending~~ ~~negotiation and execution of a renewal of our agreements with Bauer, we have continued to provide service to and receive inventory from Bauer under the terms of the expired agreements.~~ The Bauer radio stations accounted for approximately 30 19% of our United Kingdom radio ~~entertainment news~~traffic advertising inventory as of June 2030, ~~2010~~2011 and ~~approximately 43% of our entertainment news network’s impacts. Bauer is paid variable compensation based on the sale of impacts corresponding to the Bauer stations.~~

Generating Revenue Through Advertising Sales

In exchange for our information reports and/or, for certain broadcasters, cash compensation, our network affiliates provide us with commercial advertising inventory that we sell to advertisers. Although we also sell our commercial advertising inventory directly to advertisers, a majority of our advertising revenue is placed through advertising agencies engaged by the advertisers. With the exception of standard agency commissions, we do not believe there is a material effect on our business when receiving orders for advertising placed through agencies versus those placed directly by advertisers.

The typical radio advertisement on our Radio Network consists of a ten second commercial message presented as the final segment of a regularly scheduled information report. We package our commercial advertising inventory on a network basis, covering all of our network affiliates in relevant markets, and sell this inventory as advertising packages on a local, regional or national network basis, except in the United Kingdom where advertising packages are sold only on a national basis. In addition, our commercial advertising inventory in the United Kingdom currently differs from our typical radio advertisement in that it is generally 20 to 60 seconds in length, with 30 seconds and 40 seconds being the most prevalent length. We run our advertising packages on a percentage-based rotation such that each advertiser receives its pro rata share of advertisements sold by us for broadcast on all of our network affiliates’ stations throughout the relevant market or markets, primarily during prime morning and afternoon drive periods.

approximately 24% of the traffic network’s impacts. We also provide entertainment news reporting services to, and receive radio commercial advertising inventory on, approximately 42 Bauer radio stations throughout the United Kingdom pursuant to a 28 month agreement effective September 1, 2010. The Bauer radio stations accounted for approximately 34% of our United Kingdom radio entertainment news advertising inventory as of June 20, 2011 and approximately 42% of our entertainment news network’s impacts. Bauer is paid variable compensation based on the sale of impacts corresponding to the Bauer stations.

Generating Revenue Through Advertising Sales

In exchange for our information reports and/or, for certain broadcasters, cash compensation, our network affiliates provide us with commercial advertising inventory that we sell to advertisers. Although we also sell our commercial advertising inventory directly to advertisers, a majority of our advertising revenue is placed through advertising agencies engaged by the advertisers. Although certain agencies leverage the fact they represent multiple clients to negotiate favorable rates, in general, with the exception of standard agency commissions, we do not believe there is a material effect on our business when receiving orders for advertising placed through agencies versus those placed directly by advertisers.

The typical radio advertisement on our Radio Network consists of a ten second commercial message presented as the final segment of a regularly scheduled information report. We package our commercial advertising inventory on a network basis, covering all of our network affiliates in relevant markets, and sell this inventory as advertising packages on a local, regional or national network basis, except in the United Kingdom where advertising packages are sold only on a national basis. In addition, our commercial advertising inventory in the United Kingdom currently differs from our typical radio advertisement in that it is pre-recorded and generally 20 to 60 seconds in length, with 30 seconds and 40 seconds being the most prevalent length (although some spots are ten seconds in length). We run our advertising packages on a percentage-based rotation such that each advertiser receives its pro rata share of advertisements sold by us for broadcast on all of our network affiliates’ stations throughout the relevant market or markets, primarily during prime morning and afternoon drive periods.

Similar to our typical radio advertisements, advertisements on our TV Network generally consist of ten second commercial messages immediately following regularly scheduled information reports. Typically, our TV reports and the commercial messages that follow them are broadcast live by an on-camera announcer wearing a shirt bearing the advertiser’s logo. The advertisers’ logo and/or a pre-submitted visual advertising message also generally appear at the bottom of the television screen throughout the report.

Advertising on a Network Basis. Because we have numerous network affiliates in each of our markets, we believe that our sponsorship package advertisements enable advertisers to reach more listeners, more often, with a higher impact than can be achieved through other advertising media. Due to our large base of network affiliate stations and the audience reach it provides, we offer advertisers the opportunity to reach a broad-based local, regional or national audience through a single purchase of commercial advertising inventory from us. ~~Currently~~However currently in the United Kingdom, our traffic and entertainment news service is sold on a national basis only. Our plan is to sell advertising associated with our United Kingdom operations on a regional basis in the future. However, certain of our contracts with United Kingdom network affiliates prohibit the sale of their advertising inventory on anything other than a national basis and, as a result, we may be unable to do so. Because we sell our radio commercial advertising inventory exclusively on a network basis, rather than station by station, we do not believe our advertising products compete directly with those offered by our local radio station network affiliates.

Our Customer Base of Advertising Clients. Due to the number of our markets, our reach within each of these markets and the range of services that we provide, we have garnered a broad base of advertising clients in a diverse group of industries, which since July 1, ~~2009~~2010 have included nine of the top ten Australian advertisers and 18 of the top 20 global advertisers, each as published by AdvertisingAge. Examples of our larger and higher profile advertising customers in Australia, Canada and United Kingdom include the following companies:

Australia Canada United Kingdom • ~~Holden~~Hyundai ~~Motors Dealers~~ • Canadian Direct Insurance • ~~Carbon~~Compare ~~Trust~~the Market • McDonalds • ~~General~~Expedia.ca ~~Motors~~ • ~~Direct~~Kwik ~~Line~~Fit • RTA • ~~McDonalds~~General Motors • ~~Kwik~~Mercedes ~~Fit~~ • Target Australia • ~~Telus~~RBC ~~Corporation~~Financial Group • ~~Mercedes~~Moneysupermarket.com • Virgin ~~Blue~~Australia Airways • ~~Wal-Mart~~Volkswagen ~~Canada~~Dealers • ~~Skoda~~Seat • Woolworths • Western Canada Lottery • ~~Volkswagen~~Shell

Although many large advertisers utilize our advertising platform, we maintain a broad and ~~diverse~~ diverse customer base. No one advertiser comprises more than 64% of our revenue base and our top ten advertising customers represent only 28approximately 17% of our overall advertising sales. However, three unrelated groups of advertising agencies that each represent a number of ~~the~~our ~~Company’s~~ clients in Australia, United Kingdom and Canada constituted approximately 2628%, 1215% and 119%, respectively, of ~~the Company’s~~our revenues for the year ended June 30, ~~2010~~2011 and approximately 2623%, 1016% and 1011%, respectively, of ~~the~~our ~~Company’s~~ net accounts receivable as of June 30, ~~2010~~2011. Another advertising agency that represents a number of ~~the~~our ~~Company’s~~ clients in Australia ~~only~~ constituted approximately 1211% of ~~the~~our ~~Company’s~~ revenues for the year ended June 30, ~~2010~~2011 and approximately 911% of ~~the~~our ~~Company’s~~ net accounts receivable as of June 30, ~~2010~~2011. In addition to the aforementioned agencies, it is likely other advertising agencies may exceed 10% of our net revenues and/or 10% of our net receivables in the future based on the current billing levels of certain agencies. In the United Kingdom, substantially all our advertising related net revenues ~~come~~are generated from sales placed by five agency groups (including one agency group placing in excess of 50% of our United Kingdom advertising net ~~revenues~~ revenues for the year ended June 30, ~~2010~~2011); therefore our concentration of revenue by agency is greater in the United Kingdom market than for our Company as a whole.

Many of our larger advertising clients market their products by leveraging regional, national or global brands. Because our network-based advertising can reach broad-based, regional or national audiences, our advertising sponsorship packages appeal to these large, recognizable companies that seek a broader demographic reach than the narrow, specific demographic audience that individual radio stations generally deliver. Part of our operating strategy involves replicating our business model in additional international markets that will allow advertisers to reach major population centers around the world. We believe the appeal of our network-based advertising to customers with global brands will continue to increase as we expand the reach of our radio and television networks.

Our Sales Force. We maintain an advertising sales force throughout Australia, Canada and the United Kingdom, located in markets where we have operation centers. Our advertising sales force sells available commercial advertising inventory throughout their national markets in addition to selling such inventory in their local market, which we believe affords our sales representatives an advantage over certain of their competitors. For example, an advertiser can purchase commercial advertising inventory in multiple markets from the sales representative in the locale in which the advertiser is headquartered. Our advertising sales force in Australia is comprised of approximately 22 sales representatives and managers. The number of sales representatives in an individual market ranges up to 10 depending on the size of the market and the number of potential national and regional advertising clients headquartered in the market. Specialized programs and marketing campaigns, which support nationwide sales and other special forms of advertising, are managed from our Australian headquarters in Sydney. In Canada, we currently have a corporate and sales office in Toronto and marketing offices in Montreal, Vancouver, Edmonton and Calgary, as well as U.S. based sales representatives. Our Canadian sales force, including sales management, currently consists of approximately 17 people. We intend to continue to expand our Canadian sales force as our operations expand. Our United Kingdom sales staff, including sales management, currently consists of approximately seven employees located in London and we intend to expand the sales staff further in the future.

Our Sales Force. We maintain an advertising sales force throughout Australia, Canada and the United Kingdom, located in markets where we have operation centers. Our advertising sales force sells available commercial advertising inventory throughout their national markets in addition to selling such inventory in their local market, which we believe affords our sales representatives an advantage over certain of their competitors. For example, an advertiser can purchase commercial advertising inventory in multiple markets from the sales representative in the locale in which the advertiser is headquartered. Our advertising sales force in Australia is comprised of approximately 27 sales representatives and managers. The number of sales representatives in an individual market ranges up to 10 depending on the size of the market and the number of potential national and regional advertising clients headquartered in the market. Specialized programs and marketing campaigns, which support nationwide sales and other special forms of advertising, are managed from our Australian headquarters in Sydney. In Canada, we currently have a corporate and sales office in Toronto and marketing offices in Montreal, Vancouver, Ottawa, Edmonton and Calgary, as well as U.S. based sales representatives. Our Canadian sales force, including sales management, currently consists of approximately 20 people. We intend to continue to expand our Canadian sales force as our operations expand. Our United Kingdom sales staff, including sales management, currently consists of approximately six employees located in London.

Although the majority of our advertising customers execute their purchase of commercial advertising inventory from our sales force through advertising agencies as a matter of course, we have historically focused on maintaining direct relationships with our advertising customers. We believe that maintaining direct relationships with our advertisers helps ensure that our relationships remain intact when advertising agency changes occur.

Our Strategy

Our objective is to become the leading aggregator of premium radio and television advertising inventory in the markets we serve. Key elements of our strategy include:

• Expand the geographic markets we serve. We began our operations in Australia in 1997, commenced operations in Canada in December 2005, began broadcasting in the United Kingdom in October 2007 and completed the Unique acquisition in the United Kingdom in March 2009. We intend to continue to expand the geographic scope of the markets in which we operate, targeting markets that have: (i) large population clusters in tight geographic areas; (ii) a free market advertising culture similar to the United States; and (iii) established information centers for traffic data. We intend to ~~leverage our existing customer base of global marketers to~~ sell our advertising inventory in the new markets that we enter, ~~enabling~~by ~~advertisers~~leveraging ~~to efficiently, effectively and economically reach major population centers. • Increase the number of network affiliates using~~ our ~~radio traffic reports within~~ existing ~~markets.~~customer ~~Although~~base ~~we currently operate in eight~~ of ~~the~~global ~~largest population centers in Canada~~marketers, weenabling ~~believe~~advertisers ~~that there are substantial opportunities for continued growth in our Canadian radio network. We are currently exploring and plan~~ to ~~enter the remaining large markets in Canada that we find to be economically feasible. In addition~~efficiently, ~~because~~effectively our operations in Canada are still at a relatively early stage, there is significant opportunity for growth by adding network affiliates in our existing markets. While we continue to seek opportunities for growth in our other existing markets, our radio network penetration in Australia and ~~United~~economically ~~Kingdom~~reach ~~make~~major itpopulation ~~unlikely that we will add significant additional stations utilizing our traffic reports in those markets~~centers. • Accumulate additional advertising inventory by continuing to expand the scope of our information reports. We intend to leverage our established relationships with broadcasters in the Australian, Canadian and United Kingdom markets by continuing to expand the scope of our information reports.

~~Radio~~• ~~News~~Increase ~~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~~network ~~stations~~affiliates ~~broadcasting~~using our radio ~~news~~traffic reports within ~~our~~existing ~~current~~ markets~~, either by providing the service ourselves or purchasing the radio stations’ embedded news advertising availabilities~~. WeAlthough ~~believe~~we ~~this~~currently ~~will~~operate in ~~turn~~eight ~~increase~~of ~~our~~the ~~commercial~~largest ~~advertising~~population ~~inventory,~~centers ~~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~~Canada, ~~through agreements with various governmental agencies,~~ we ~~have~~believe ~~access~~that tothere ~~over~~are ~~1,500~~substantial ~~static~~opportunities ~~mounted~~for ~~traffic~~continued ~~surveillance~~growth ~~cameras~~ in ~~Australia~~our ~~and~~Canadian ~~approximately~~radio ~~450~~network. ~~static~~Because ~~mounted~~our ~~surveillance~~operations ~~cameras~~ in Canada. Weare ~~use~~still ~~this~~at ~~infrastructure~~a torelatively ~~offer~~early ~~traffic~~stage, ~~and~~there ~~breaking~~is ~~news~~significant ~~reports~~opportunity tofor ~~our~~growth ~~television~~by ~~broadcasters~~adding ~~and~~network ~~currently~~affiliates ~~provide service to 14 television stations~~ in ~~seven~~our ~~Australian~~existing markets. ~~and~~While ~~four~~we ~~television~~continue ~~stations~~to inseek ~~four~~opportunities ~~Canadian~~for ~~markets.~~growth Inin ~~many of~~ our ~~television~~other existing markets, ~~we provide TV reports that include proprietary video coverage from~~ our ~~helicopters~~radio ~~that~~network ~~can~~penetration ~~cover~~in ~~news~~Australia ~~stories~~ and ~~traffic~~United ~~conditions~~Kingdom atmake ~~any~~it ~~time,~~unlikely ~~subject~~that towe ~~weather~~will ~~conditions~~add ~~and~~significant ~~air~~additional ~~traffic~~stations ~~control~~utilizing ~~restrictions. In addition,~~ our ~~access to strategically located fixed-position ground-based camera systems offer allow us to provide our network affiliates coverage of crucial~~ traffic ~~arteries. We intend to expand our TV~~ reports ~~to additional network affiliates~~ in ~~our~~those ~~Australian and Canadian~~ markets~~, which would provide us with additional advertising inventory~~. ~~We may also provide a similar television product to television stations in the United Kingdom although we have not yet explored the feasibility of doing so.~~

	•		Continue to strengthen marketing, sales and inventory management operations. We continue to implement new operating strategies to increase revenue growth and drive profitability. In order to increase the percentage of our commercial advertising inventory sold in Australia and Canada, we have: (i) increased our sales force and acquired extensive research and sales and marketing materials; (ii) hired additional sales managers to better manage the activities of our sales representatives; and (iii) automated our commercial advertising inventory management system to improve inventory control and pricing. We are continuing the process of combining the “best practices” of our Australian and Canadian operations with those of our recently acquired United Kingdom operations.
	•		Grow our business through strategic acquisitions. Historically, our expansion strategy has focused on organic growth. Although we expect that organic growth will continue to be a significant source of expansion, we also intend to explore growth through the acquisition of businesses that have strong relationships with broadcasters which we can leverage. For example, in April 2007, our Canadian operations acquired substantially all the assets of Wise Broadcasting Network Inc. In March 2009, we completed our acquisition of Unique, which provided radio traffic services to approximately 230 radio stations and entertainment news services to approximately 125 radio stations in the United Kingdom.

•

Accumulate additional advertising inventory by continuing to expand the scope of our information reports. We intend to leverage our established relationships with broadcasters in the Australian, Canadian and United Kingdom markets by continuing to expand the scope of our information reports.

Radio News Reports. 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 advertising in radio news reports within our current markets, either by providing the service ourselves or purchasing the radio stations’ embedded news advertising availabilities. We believe this 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 reports to our television broadcasters and currently provide service to 14 television stations in seven Australian markets and four television stations in four 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 allow us to provide our network affiliates coverage of crucial traffic arteries. 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. We may also provide a similar television product to television stations in the United Kingdom although we have not yet explored the feasibility of doing so.

•

Continue to strengthen marketing, sales and inventory management operations. We continue to implement new operating strategies to increase revenue growth and drive profitability. In order to increase the percentage of our commercial advertising inventory sold in Australia and Canada, we have: (i) expanded 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. We are continuing the process of implementing the “best practices” of our Australian and Canadian operations with those of our United Kingdom operations we acquired in March 2009.

•

Grow our business through strategic acquisitions. Historically, our expansion strategy has focused on organic growth. Although we expect that organic growth will continue to be a significant source of expansion, we also intend to explore growth through the acquisition of businesses that have strong relationships with broadcasters which we can leverage. For example, in April 2007, our Canadian operations acquired substantially all the assets of Wise Broadcasting Network Inc. In March 2009, we completed our acquisition of Unique, which provided radio traffic services to approximately 230 radio stations and entertainment news services to approximately 125 radio stations in the United Kingdom.

Corporate Structure

Sales and Marketing. Our sales operations in Australia and Canada have been organized into marketing regions. A region generally has a Regional Sales Manager who oversees a sales staff charged with reaching sales goals. The Regional Sales Manager ~~also~~ is also responsible for the direct selling of commercial advertising inventory to advertisers. A National Director of Sales has oversight responsibility for the Regional Sales Managers and maintains a selective listing of significant advertisers. By requiring the Regional Sales Managers and the National Director of Sales to maintain advertising clients in addition to their management responsibilities, we believe that our managers remain better apprised of advertising conditions. The National Director of Sales reports to the President of Australia Traffic Network, who also serves as our International Director of Sales and Training. In Canada, our Regional Sales Managers report to our ~~National Director~~Senior Vice President of Sales, who in turn reports to our International Director of Sales and Training. Our sales operations in the United Kingdom are located in London, with the sales staff reporting to the Sales ~~Manager~~Director who, in turn, reports to the Chief Operating Officer of UK Commercial Traffic Network.

Operations. Each of our Australian and Canadian markets is overseen by a Director of Operations who is responsible for all aspects of the day-to-day operations in a defined market or markets. Each Director of Operations is responsible for supervising all of the broadcasters, airborne reporters, producers, editors, and writers in such Director’s operation center. Moreover, the Director of Operations is responsible for maintaining day-to-day relations with network ~~affiliates~~ ~~and pursuing relationships with unaffiliated stations~~affiliates. In addition, we employ a National ~~Director~~ Directors of Operations in Australia and Canada who supervise the Directors of Operations in their country and who reports to the President of Australia Traffic Network and the President of the Canadian Traffic Network, respectively. The President of Australia Traffic Network and the President of the Canadian Traffic Network report to our Chief Executive Officer and President. In the United Kingdom, our entertainment news and ~~the majority of our~~ traffic reporting are outsourced to third parties. These third parties report to ~~either~~ the Chief Operating Officer of UK Commercial Traffic ~~Network~~ ~~or the managing director of UK Traffic~~ Network~~, depending on the situation~~. Our Highways Agency operations are managed in a manner similar to our operations in Australia and Canada, with the manager of the contract reporting to senior management of UK Traffic Network. The Chief Operating Officer of UK Commercial Traffic Network and the managing director of UK Traffic Network report to our Chief Executive Officer and President.

Competition

We market our information reports to radio and television stations in Australia, Canada and the United Kingdom, where we face various sources of competition in providing our information ~~reporting~~ reporting services. We believe that single market operators and groups of stations (whether or not under common ownership) that prepare and deliver their own traffic and news reports comprise our primary competition. We also face competition in Canada from Skywords, Inc., a company that provides ~~information~~traffic reporting services in exchange for network-based advertising spots using a business model similar to ours. Consolidation in the radio and television markets may create additional opportunities and economies of scale for large radio and/or television groups to provide their own services, which would pose greater competition for us. In addition to providers of broadcast reports, there are also alternative means of compiling traffic information and delivering such information to the public. Several companies throughout the world generate speed and travel time data through various technologies, including the tracking of cell phones and tracking truck fleet data. In addition, certain governmental agencies, including some state, provincial and local departments of transportation, generate selected traffic flow data through strategically positioned cameras and/or sensors that monitor traffic flow, which could be used by our competitors or accessed by consumers. Most of these traffic systems and cameras, however, were built for purposes ~~such~~ as infrastructure planning, road operation and road safety, and were not designed to provide real-time traffic flow information to consumers and do not provide information reporting services in a manner that engages radio listeners and television viewers. As such, ~~we do not believe such services are directly competitive with the information reporting services we provide. However, others may view these alternative sources of traffic data~~ as ~~competitors, and as demand for traffic information services and technologies increase, we expect that additional new competitors may enter the market in the future.~~

infrastructure planning, road operation and road safety, and were not designed to provide real-time traffic flow information to consumers and do not provide information reporting services in a manner that engages radio listeners and television viewers. As such, we do not believe such services are directly competitive with the information reporting services we provide. However, others may view these alternative sources of traffic data as competitors, and as demand for traffic information services and technologies increase, we expect that additional new competitors may enter the market in the future.

Competitive factors in international markets will vary from market-to-market and may change over time. We believe that most European markets lack competitors that aggregate traffic information for radio and television broadcasters, and we do not believe that any companies currently provide traffic reports in exchange for advertising inventory outside of the United Kingdom. As such, we believe this is an optimal time to explore expansion into certain European markets.

We also face competition in the sale of our commercial advertising inventory. While we compete ~~for~~ for advertising dollars with radio and television stations, including our network affiliates, we do not believe we compete directly with such radio stations because we position our advertisements within the framework of our information reports and sell our radio commercial advertising inventory to our advertisers on a network basis. In the United Kingdom, Independent Radio News Limited operates a model similar to ours, with the primary difference being the advertising messages are attached to newscasts rather than traffic reports. In addition to radio and television stations and networks, we compete for advertising dollars with other media, including local print and other forms of communications media ~~including~~such as newspapers, magazines, outdoor advertising, transit advertising, internet advertising, direct response advertising, yellow page directories, mobile advertising and point-of-sale advertising, among others.

Environmental Regulation

We are not subject to environmental regulations that have a material effect upon our capital expenditures or otherwise.

Intellectual Property

We do not have any material registered trademarks, nor do we believe that intellectual property is important to the success of our existing business. We allow our network affiliates to take credit for all of the information reports that we provide.

~~Mobile~~Global Alert ~~Traffic~~ Network has filed for patent protection for certain location aware passive alerting applications for mobile devices. ~~There~~We ~~has~~are ~~been~~uncertain ~~no indication~~ as to whether we will be successful in our pursuit for patent protection for these applications. To date, Global ~~Mobile~~Alert ~~Traffic~~ Network has operated at a loss.

Employees

As a holding company, Global Traffic Network, Inc. currently employs seven individuals. Australia Traffic Network currently employs approximately 6881 full-time employees, 1927 part-time employees and 16 2 independent contractors. Of these employees and independent contractors, approximately 6567 were engaged in broadcasting and operations, 2528 in sales and marketing and 1315 in general and administrative activities. Canadian Traffic Network currently employs approximately 55 67 individuals on a full-time basis, 2021 on a part-time basis and ~~six~~five independent contractors. Of these employees, approximately 6070 were engaged in broadcasting and operations, 1720 in sales and marketing and ~~four~~three in general and administrative activities. UK Traffic Network, including its wholly owned subsidiary UK Commercial Traffic Network currently employs 29approximately 16 full-time employees~~, two part-time employee and five independent contractors~~. Of these employees, 213 are employed in broadcasting operations, ~~including~~seven ~~Traffic Radio, nine~~ are employed in sales and six are employed in general and administrative activities. ~~Mobile~~Global ~~Traffic~~Alert Network currently employs ~~five~~three individuals on a full time basis and approximately five independent contractors. None of our employees or independent contractors are covered by a collective bargaining arrangement. We consider our relationship, and our subsidiaries’ relationships, with our employees to be satisfactory. We have never had a strike or work stoppage.

In addition, we contract with outside sales agents for the sale of some of our advertising inventory.

Available Information

We are subject to the reporting and information requirements of the Securities Exchange Act of 1934, as amended, and, as a result, we file periodic and current reports, proxy statements, and other information with the SEC. You may read and copy this information at the Public Reference Room of the SEC located at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the Public Reference Room. The SEC maintains an internet site that contains periodic and current reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The address of the SEC’s website is http://www.sec.gov.

The periodic and current reports, proxy statements, and other information that we file with the SEC, and any amendments thereto, filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available free of charge at www.globaltrafficnetwork.com (click on “Investor Relations”, then “Financial Information” and then “SEC Filings”) as soon as reasonably practicable after we file such material with, or furnish it to, the SEC.

Item 1A. Risk Factors

Some of the statements made in this report are forward-looking statements. These forward-looking statements are based upon our current expectations and projections about future events. When used in this report, the words “believe,” “anticipate,” “intend,” “estimate,” “expect” and similar expressions, or the negative of such words and expressions, are intended to identify forward-looking statements, although not all forward-looking statements contain such words or expressions. The forward-looking statements in this report are primarily located in the material set forth under the headings “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” but are found in other locations as well. These forward-looking statements generally relate to our plans, objectives and expectations for future operations and are based upon management’s current estimates and projections of future results or trends. Although we believe that our plans and objectives reflected in or suggested by these forward-looking statements are reasonable, we may not achieve these plans or objectives. You should read this report completely and with the understanding that actual future results may be materially different from what we expect. We will not update forward-looking statements even though our situation may change in the future.

Specific factors that might cause actual results to differ from our expectations or may affect the value of the common stock, include, but are not limited to:

• 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;

9 • our inability to retain members of our executive management or other key employees;

~~Table~~• the termination or impairment of ~~Contents~~our relationships with key network affiliates;

• ~~our~~the ~~inability~~termination toor ~~successfully~~impairment ~~expand into additional international markets; • fluctuations in foreign currency exchange rates and the results~~ of ~~hedging transactions, if any; •~~ our ~~inability~~advertiser ~~to obtain additional debt or equity financing, if required~~relationships; ~~and • unforeseen litigation.~~

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our inability to manage our growth effectively;

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our inability to successfully expand into additional international markets;

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fluctuations in foreign currency exchange rates and the results of hedging transactions, if any;

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our inability to obtain additional debt or equity financing, if required; and

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unforeseen litigation.

Industry data and other statistical information used in this report are based on independent publications, government publications, reports by market research firms or other published independent sources. Some data is also based on our good faith estimates, derived from our review of internal surveys and the independent sources listed above. Although we believe these sources are reliable, we have not independently verified the information.

Other factors that could cause actual results to differ from those implied by the forward-looking statements in this report are more fully described herein.

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.

Our wholly-owned subsidiary, Australia Traffic Network, introduced its services in Australia in 1997. Through our indirect wholly-owned subsidiary, Canadian Traffic Network, we began delivering radio traffic reports to radio stations in Canada in December 2005 and generating revenue from our Canadian operations in January 2006. We formed UK Traffic Network in October 2006 and purchased Unique in March 2009. Although certain members of management have experience with providing traffic information in certain international markets, we have a limited history of providing our services in Canada and the United Kingdom and no experience providing our services in other international markets. See “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.” The success of any previous operations in Australia may not be indicative of the results of our efforts to provide continued or additional services in Australia, or to provide our services in Canada, the United Kingdom and other markets. The successful operation of our business in Australia, Canada, United Kingdom or other international markets, will require a certain level of continued capital expenditures and operating expenditures which we are committed to undertaking. There can be no assurance that we will be able to operate and expand our business as contemplated.

We have incurred operating losses in connection with our expansion of operations into Canada and the United Kingdom and may be unable to operate profitably in those markets.

In connection with our expansion in to Canada, we have incurred net losses of ~~approximately~~ approximately $160,000 for the period from May 16, 2005 (inception) through June 30, 2005, $2.6 million for the year ended June 30, 2006, $3.8 million for the year ended June 30, 2007, $3.1 million ~~for the year~~ ended June 30, 2008, $3.1 million for the year ended June 30, 2009 and $4.4 million for the year ended June 30, 2010. In addition, after five consecutive quarters of reduced net losses (when compared to the previous year period), our net losses in Canada during the last six months of fiscal 2009 and first six months of fiscal 2010 were significantly higher than the previous year period, due to higher costs and decreased revenue. We expect losses from our Canadian operations to continue as we continue to incur significant expenses and capital expenditures in connection with providing our service offerings, building our infrastructure and developing our base of advertisers. As of June 30, 2010, we have invested approximately $23.7 million in our Canadian subsidiary in the form of an intercompany advance. If our Canadian revenue grows more slowly than we anticipate, or if our Canadian operating expenses are higher than we expect, we may not be able to achieve, sustain or increase profitability from our Canadian operations.

Although our delivery of radio traffic reports in Australia has historically been profitable, we may be unable to replicate such profitable operations in Canada and the United Kingdom due to cultural differences, regulatory restrictions, economic conditions, or otherwise. If we continue to operate at a loss in Canada, or we are unable to operate profitably in the United Kingdom, we may be forced to abandon our operations in those countries without recovering the costs incurred in our expansion efforts (including the approximately $16.1 million paid to UBC in connection with our purchase of Unique), which may have a material adverse effect on our consolidated company’s financial condition and results of operations and negatively impact our business prospects. The price of our common stock could decline as a result.

for the year ended June 30, 2008, $3.1 million for the year ended June 30, 2009, $4.4 million for the year ended June 30, 2010 and $1.8 million for the year ended June 30, 2011. While we expect our Canadian operations to become profitable, we will continue to incur significant expenses and capital expenditures in connection with providing our service offerings, building our infrastructure and developing our base of advertisers. There is no guarantee that we will be able to generate revenue in excess of these expenditures. As of June 30, 2011, we have invested approximately $28.6 million in our Canadian subsidiary in the form of an intercompany advance. If our Canadian revenue grows more slowly than we anticipate, or if our Canadian operating expenses are higher than we expect, we may not be able to achieve, sustain or increase profitability from our Canadian operations.

On October 19, 2006, we formed a wholly-owned subsidiary, UK Traffic Network, in anticipation of launching business operations in the United Kingdom. For the fiscal years ended June 30, 2007, 2008 and 2009, UK Traffic Network incurred net losses of approximately $0.8 million, $1.8 million and $1.8 million, respectively. Our acquisition of Unique closed effective March 1, 2009 and our consolidated United Kingdom operations continued to generate losses for the period from closing to June 30, 2009. For the year ended June 30, 2010, our consolidated United Kingdom operations generated a loss of approximately $1.3 million. Although we managed approximately $0.4 million in net income for the year ended June 30, 2011, we may not be able to sustain or increase profitability from our United Kingdom operations. As of June 30, 2011, we have invested approximately $25.8 million in our United Kingdom subsidiary in both the form of equity and an intercompany advance. In addition, business operations in the United Kingdom (and especially the Unique acquisition) require significant management attention and financial resources that could otherwise be devoted to our making our Canadian operations profitable and/or expanding operations in our other existing or new markets.

There is significant risk and uncertainty surrounding our acquisition of The Unique Broadcasting Company Limited from UBC Media Group plc.

There are numerous risks associated with our March 2009 acquisition of Unique, for which we paid total cash consideration of approximately $16.1 million. Among these risks is our lack of experience with acquisitions in general and large acquisitions in particular. Although certain members of management have experience with acquisitions of existing businesses (including traffic reporting services), our company’s only previous acquisition was that of Wise Broadcasting Network Inc., which was not material to our operations. Additional risks associated with the Unique acquisition include issues overlooked or improperly assessed during our due diligence process, loss of key employees, radio stations and/or advertisers following completion of the transaction and additional competition arising after the acquisition. In addition, despite similarities between the radio networks that we purchased in the United Kingdom and our networks in Australia and Canada, the business models are not identical and may require significant transition, which may not prove successful. Some of those differences in the existing business model of the acquired business include the variable nature of station compensation payments, the outsourcing of operations to third parties, the pre-produced and lengthier structure of commercial advertisements, the provision of traffic information to many stations in lieu of anchored reports, the sale of commercial inventory on a national network basis only, the more restrictive nature of sales limitations from the radio stations and the group approach to advertising sales. An inability to transition successfully this business model to a model that is more consistent with our Australian and Canadian operations may result in a retrospective determination that we misjudged the true value of the target company’s business. Further, it is likely that we will not be able to completely transition the acquired business to our existing model, resulting in a hybrid approach of our practices in Australia and Canada and the existing practices in the United Kingdom. In addition, the United Kingdom radio market ~~has~~continues ~~been~~to be in a ~~recent sharp~~ recession. These risks are increased by our relative inexperience in the United Kingdom market. Because we paid a high multiple of ~~operating~~ operating income for Unique, if we do not ~~improve~~continue the improved performance of the acquired business, the amount of capital that we expended may be greater than the ultimate value of the acquired business. All of these potential risks may have a material adverse effect on our company’s consolidated financial condition and results of operations and negatively impact our business prospects. The price of our common stock could decline as a result.

We have incurred operating losses in connection with our formation of ~~Mobile~~Global ~~Traffic~~Alert Network and our expansion of its operations and may be unable to operate ~~Mobile~~Global ~~Traffic~~Alert Network profitably in the United States or elsewhere.

On March 7, 2008, we formed Mobile Traffic Network (subsequently renamed Global Alert Network) as a wholly owned subsidiary to take advantage of the opportunities surrounding passive alerting technology to deliver information and advertising to mobile devices. As an unproven technology and business model, there are significant risks and uncertainties involving this business plan.

Our core business revolves around the provision of radio and television information reports, which is not generally technology oriented. Our initial ~~effort~~efforts to build a product utilizing our passive alerting technology ~~was~~were not successful. We have since licensed a third party’s application for a one-time upfront payment and a royalty on future revenues. WeWhile ~~are~~we ~~currently~~have inrecently ~~the~~brought ~~process~~our ofalerting ~~adapting~~product ~~this application~~ to ~~our needs~~market ~~but~~and ~~may~~have ~~not~~obtained besubscribers ~~successful~~to inour ~~doing so. Even if we are successful in adapting the technology~~service, there is no assurance that the technology will work as planned. ~~Technology~~In addition, technology dependent industries are often characterized by uncertain and conflicting intellectual property claims and frequent intellectual property litigation, especially ~~regarding patent rights. We could be subject to claims~~ of infringement of third party intellectual property rights, which could result in significant expense and could ultimately result in the loss of intellectual property rights. Any litigation to determine the validity of these claims, including claims arising through any contractual obligations that we may have to indemnify business partners, regardless of their merit or resolution, would likely be costly and time consuming and divert the efforts and attention of our management and technical personnel. If any such litigation resulted in an adverse ruling, we could be required, among other things, to pay substantial damages, cease offering our application, or obtain a license under the intellectual property rights of the third party claiming infringement, and such a license may not be available on reasonable terms or at all.

Our intention is to initially offer traffic reports in the United States via arrangements with third parties to deliver the messages, however there is no assurance that we will be able to come to sufficient satisfactory agreements with such third parties. We may incur significant costs demonstrating the product’s functionality prior to determining that we are unable to reach satisfactory agreements. Because we do not produce traffic information in the United States, there is no assurance we will be able to enter into an agreement that will supply us with the data required to offer services. If we come to agreement with parties to deliver the traffic alerts and one or more suppliers of traffic data, those agreements may not be on terms attractive to us. Because we anticipate that our product offering will be mainly advertising supported, there is no assurance that sufficient mobile phone users will “opt in” to make our application an attractive advertising platform. Even if a critical mass of mobile phone users “opt in” to our application, we may not be successful in selling advertising opportunities on the platform to advertisers. In addition, we currently have limited operations in the United States and our experience in selling advertising is limited to commercials broadcast on radio and television, for which there is an established advertising market. Our lack of presence in the United States (including the lack of an established sales staff) will likely increase our costs, as we are unlikely to be able to take advantage of existing infrastructure.

The market for mobile device applications and related software is competitive and reliant on technology developments and adapting to changing market demands and consumer preferences. Even if we are able to develop and commercialize our application, we may face competition from one or more companies that introduce related technologies and applications. These companies may have significantly greater financial, technical and marketing resources than we do and may be able to respond more rapidly than we can to new or emerging technologies or changes in customer demands. They may also devote greater resources to the development, promotion and sale of their products than we do. If we are able to commercialize our application but unable to compete successfully with such companies, results of operations from Mobile Traffic Network, and consequently our Company as a whole, would suffer.

Our level of expenditure on the technology and our product offering may be significant prior to our knowing whether the product has a likelihood of success. For the year ended June 30, 2010 our losses related to Mobile Traffic Network were approximately $0.8 million on $31 thousand of revenue. For the year ended June 30, 2009, we incurred approximately $1.4 million in losses without generating any revenue. To date, our Mobile Traffic Network revenue has been insignificant and unrelated to our current business plan. If we are unable to operate Mobile Traffic Network profitably, we may be forced to abandon our operations without recovering the up-front costs incurred, which may have a material adverse effect on our company’s consolidated financial condition and results of operations and negatively impact our business prospects. The price of our common stock could decline as a result.

regarding patent rights. We could be subject to claims of infringement of third party intellectual property rights, which could result in significant expense and could ultimately result in the loss of intellectual property rights. Any litigation to determine the validity of these claims, including claims arising through any contractual obligations that we may have to indemnify business partners, regardless of their merit or resolution, would likely be costly and time consuming and divert the efforts and attention of our management and technical personnel. If any such litigation resulted in an adverse ruling, we could be required, among other things, to pay substantial damages, cease offering our application, or obtain a license under the intellectual property rights of the third party claiming infringement, and such a license may not be available on reasonable terms or at all.

Because we do not produce traffic or weather information in the United States, we currently offer traffic and weather alerts in the United States via arrangements with third parties to provide the content for our reports, however there is no assurance that we will be able to continue or renew the agreements with such third parties on terms satisfactory to us. We may incur significant costs that we will not be able to recoup should we be unable to reach satisfactory agreements with such third parties. Because our product offering is advertising supported, there is no assurance that sufficient mobile phone users will “opt in” to make our application an attractive advertising platform. Even if a critical mass of mobile phone users “opt in” to our application, we may not be successful in selling advertising opportunities on the platform to advertisers. In addition, we currently have limited operations in the United States and our experience in selling advertising is limited to commercials broadcast on radio and television, for which there is an established advertising market. Our lack of presence in the United States (including the lack of an established sales staff) will likely increase our costs, as we are unlikely to be able to take advantage of existing infrastructure.

The market for mobile device applications and related software is competitive and reliant on technology developments and adapting to changing market demands and consumer preferences. Even if we are able to develop and commercialize our application, we may face competition from one or more companies that introduce related technologies and applications. These companies may have significantly greater financial, technical and marketing resources than we do and may be able to respond more rapidly than we can to new or emerging technologies or changes in customer demands. They may also devote greater resources to the development, promotion and sale of their products than we do. If we are able to commercialize our application but unable to compete successfully with such companies, results of operations from Global Alert Network, and consequently our company as a whole, would suffer.

Our level of expenditure on the technology and our product offering may be significant prior to our knowing whether the product has a likelihood of success. For the year ended June 30, 2011 our losses related to Global Alert Network were approximately $1.2 million on $1 thousand of revenue. For the year ended June 30, 2010 our losses related to Global Alert Network were approximately $0.8 million on $31 thousand of revenue. For the year ended June 30, 2009, we incurred approximately $1.4 million in losses without generating any revenue. If we are unable to operate Global Alert Network profitably, we may be forced to abandon our operations without recovering the up-front costs incurred, which may have a material adverse effect on our company’s consolidated financial condition and results of operations and negatively impact our business prospects. The price of our common stock could decline as a result.

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.

The success of our business is largely dependent on our ability to maintain and acquire contracts with radio and television stations (“Affiliate Contracts”) in Australia, Canada, the United Kingdom and any other market into which we may expand our operations in the future. We face various sources of competition in providing our information reporting services. We believe that single market operators and groups of radio or television stations (whether or not under common ownership) that prepare and deliver their own traffic reports comprise our primary competition. Consolidation in the radio and television markets may create additional opportunities and economies of scale for large radio and/or television groups to provide their own traffic reporting services, which would pose greater competition to us. In addition to providers of broadcast reports, there are also alternative means of compiling traffic information and delivering such information to the public. Certain governmental agencies, including some state and local departments of transportation, generate selected traffic flow data through strategically positioned cameras or sensors that monitor traffic flow, which can be used by our competitors and directly accessed by consumers. Certain private entities generate selected traffic flow data and provide such information directly to consumers. We may also face future competition from providers of information reporting services that utilize new technologies to which we may not have access, both for the gathering and delivery of information. Such new technologies may reduce the demand for our services or render our services obsolete. Our current and potential competitors may offer alternative types of information services and may have substantially greater financial, technical, marketing or other resources than we do. There can be no assurance that our business will not be adversely affected by current or increased competition for acquiring Affiliate Contracts and providing information services in the markets in which we operate.

We obtain our advertising inventory from radio and television stations in exchange for information reports and/or, for certain broadcasters, cash compensation. We may be required to increase the cash compensation that we pay for our commercial advertising inventory in certain cases, including in response to competition from third party information providers or groups of radio and television stations that prepare and deliver their own information reports. If we are required to increase the amount of cash compensation that we pay to certain network affiliates in exchange for our commercial advertising inventory, or to pay cash compensation to additional network affiliates, our financial condition may suffer and our stock price may decline.

Due to the relatively short-term nature of our Affiliate Contracts, which generally range from one to four years, and because we deliver information reports to several of our network affiliates pursuant to unwritten arrangements or expired Affiliate Contracts that may be construed as cancelable at will, we are vulnerable at all times to competition from other providers of ~~information~~ information reporting services and from stations or groups of stations that may elect to prepare and deliver their own information reports. For example, our contracts with our two largest station group network affiliates in the United Kingdom expire during the current fiscal year. Combined, these two network affiliates represented approximately 32% of our United Kingdom radio advertising inventory as of June 30, 2010 and approximately 53% of the United Kingdom traffic network’s impacts. If we are unable to maintain a significant number of our network affiliates, either due to non-renewal of our Affiliate Contracts upon expiration or termination of unwritten arrangements with network affiliates, our commercial advertising inventory would decrease significantly, which would likely lead to significant declines in revenues.

Our financial success depends on our ability to compete successfully in selling commercial advertising inventory to advertisers and we may be unable to sell such inventory.

Our business success is dependent on our ability to sell the commercial advertising inventory that we receive from our network affiliates in exchange for providing our information reporting services and/or, for certain broadcasters, cash compensation. Selling advertising is highly competitive. We compete for advertising sales with radio and television stations, including our network affiliates, as well as with other media, including other forms of communications media such as newspapers, magazines, outdoor advertising, transit advertising, internet advertising, mobile advertising, direct response advertising, yellow page directories and point-of-sale advertising, among others. As a result of the advertising competition we face, we experience and expect to continue to experience increased price competition, which could lower our rates for radio and television advertising and could result in a decline in our revenues for radio and television advertising, which may have a material adverse effect on our financial condition and results of operations and negatively impact our business prospects. The price of our common stock could decline as a result.

In addition, our overall business is subject to competition from existing or future entities that provide information reporting services in exchange for network-based advertising spots using a business model that is similar to ours. We currently compete with such an entity in Canada, Skywords Inc., which primarily operates in the Toronto market, but which also operates in certain other Canadian markets in which we provide our services. In addition, Independent Radio News Limited operates a model similar to ours in the United Kingdom, with the primary difference being the advertising messages are attached to newscasts rather than traffic reports. In the face of such competition, whether in Australia, Canada, the United Kingdom or any other market in which we introduce our services, we may not be able to provide information reporting services that are superior to our competitors’ or competitively priced against the services of our competitors. Even if we provide superior services, the presence of a competing service provider may lead to confusion and increase pricing competition, which may provide advertisers with additional leverage in negotiating the sale terms of our commercial advertising inventory. Such effects of competition may have a material adverse effect on our financial condition and results of operations and negatively impact our business prospects. The price of our stock could decline as a result.

groups of stations that may elect to prepare and deliver their own information reports. For example, our contracts with our two largest station group network affiliates in Australia expire by the end of the current fiscal year. Combined, these two network affiliates represented approximately 35% of our Australian radio advertising inventory as of June 30, 2011. If we are unable to maintain a significant number of our network affiliates, either due to non-renewal of our Affiliate Contracts upon expiration or termination of unwritten arrangements with network affiliates, our commercial advertising inventory would decrease significantly, which would likely lead to significant declines in revenues.

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.

In addition, our overall business is subject to competition from existing or future entities that provide information reporting services in exchange for network-based advertising spots using a business model that is similar to ours. We currently compete with such an entity in Canada, Skywords Inc., which primarily operates in the Toronto market, but which also operates in certain other Canadian markets in which we provide our services. In addition, Independent Radio News Limited operates a model similar to ours in the United Kingdom, with the primary difference being the advertising messages are attached to newscasts rather than traffic reports. In the face of such competition, whether in Australia, Canada, the United Kingdom or any other market in which we introduce our services, we may not be able to provide information reporting services that are superior to our competitors’ or competitively priced against the services of our competitors. Even if we provide superior services, the presence of a competing service provider may lead to confusion and increased pricing competition, which may provide advertisers with additional leverage in negotiating the sale terms of our commercial advertising inventory. Such effects of competition may have a material adverse effect on our financial condition and results of operations and negatively impact our business prospects. The price of our stock could decline as a result.

Consolidation among advertising agencies may negatively impact the price and other terms on which we sell our commercial advertising inventory.

A substantial majority of our advertising revenues in Australia, Canada and the United Kingdom are placed through advertising agencies that represent the ultimate client advertiser. As with many industries, the advertising agency business has seen a consolidation in recent years. The impact of this consolidation is that fewer agencies groups represent a greater number of advertisers. For example, substantially all of our advertising in the United Kingdom comes from five agency groups, including one group that represented over 50% of our United Kingdom revenues for the year ended June 30, 2011. As certain agencies gain more clout, they may be able to extract more favorable pricing and other concessions. In addition, many of these agencies are now international in scope. Given our significant international presence, it is possible that in the future these international agencies will coordinate their purchasing efforts and leverage their worldwide buying power to negotiate sales concessions from us. Should this occur, it is possible our revenues will drop and the price of our stock could decline as a result.

Our ability to sell commercial advertising and generate revenues may be subject to economic and industry fluctuations that are beyond our control.

Because we generate substantially all of our revenues through the sale of ~~commercial~~ commercial advertising, the success of our business is closely linked to the performance of the advertising industry. The advertising industry overall, in turn, tends to be affected by general economic conditions and is sensitive to the overall level of consumers’ disposable income within a given market. If people migrate to markets where we have a smaller or no presence, or if the general population shifts into a less desirable age or geographical demographic from an advertising perspective, advertisers may only be willing to pay lower fees for our commercial advertising inventory. A decline in general economic conditions within a market in which we operate could adversely affect advertising revenues generated from that market and, in turn, have an adverse effect on our profitability, operating results, financial conditions and the price of our common stock. ~~We experienced such a decline in the last two quarters of the year ended June 30, 2009 as well as the first quarter of the year ended June 30, 2010.~~

In addition, our business is dependent upon the performance of the highly competitive radio and television industries. We generate revenue by selling commercial advertising inventory of our network affiliate radio and television stations. Radio and television stations compete for audiences and advertising revenues with other radio and television stations, as well as with other media, such as newspapers, magazines, direct mail, satellite radio, mobile and internet based media, within their respective markets. As a result, radio and television audience ratings and market shares are subject to change, which, if adverse, may result in a reduction of our advertising revenues. Our network affiliates’ competitors may develop services or media that are equal or superior to those our network affiliates provide or that achieve greater market acceptance and brand recognition than our network affiliates achieve. It is possible that new competitors may emerge and rapidly acquire significant market share from our network affiliates. Other variables that could adversely affect our network affiliates’ operations, and therefore potentially adversely affect our operations, include, without limitation:

• unfavorable economic conditions, both general and relative to radio and television broadcasting and all related media industries, which may cause companies to reduce their expenditures on advertising; • unfavorable shifts in population and other demographics which may cause our network affiliates to lose customers, viewers and listeners and possibly terminate operations; • an increased level of competition for advertising dollars, which may lead to lower advertising rates as our network affiliates attempt to retain customers or which may cause our network affiliates to lose customers to their competitors who offer lower rates than our network affiliates are able or willing to match; • technological changes and innovations that our network affiliates are unable to adopt or are late in adopting that offer more attractive advertising, listening or viewing alternatives than what our network affiliates currently offer, which may lead to a loss of advertising customers or to lower advertising rates; and • 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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unfavorable shifts in population and other demographics which may cause our network affiliates to lose customers, viewers and listeners and possibly terminate operations;

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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;

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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

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changes in governmental regulations and policies and actions of federal regulatory bodies which could restrict the advertising media which our network affiliates employ or restrict some or all of our customers that operate in regulated businesses from using certain advertising media, or from advertising at all.

Radio and television stations face increasing competition from new broadcast technologies, such as internet, broadband wireless, cable television and satellite television and radio and mobile phones, and new consumer products, such as portable digital audio players and personal digital video recorders. These new technologies and alternative media platforms increasingly compete with radio and television stations for audience share and advertising revenue, and in the case of some products, allow listeners and viewers to avoid traditional commercial advertisements. We are unable to predict the effect such technologies and related services and products will have on the radio and television broadcasting industry, but the capital expenditures required for us to implement such technologies could be substantial and other companies employing such technologies could compete with our radio and television affiliates.

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 continued financial success of our business is largely dependent upon our ability to maintain Affiliate Contracts with radio and television stations in Australia, Canada, the United Kingdom and any other market into which we may expand our operations in the future. If radio and television stations in the markets in which we operate consolidate, a broadcaster may determine that it is in its best interest to produce a product similar to ours internally and terminate our Affiliate Contract, subsequently eliminating the supply of commercial advertising inventory that we receive from such broadcaster. In addition, consolidation in the industry will result in fewer station owners who may then be able to negotiate with increased leverage for Affiliate Contracts. Further, consolidation may result in our entering into fewer Affiliate Contracts, each comprising a larger number of stations and constituting a greater percentage of our base of contracts. Subsequent to any consolidation, the loss of any one Affiliate Contract may have a much greater impact on the results of our operations. Consolidation in the industry and its potential effects could result in a significant decline in our revenues or increase in our expenses, which may have a material adverse effect on our financial condition and results of operations and negatively impact our business prospects. The price of our common stock could decline as a result.

The loss of Austereo Pty Limited or Australian Radio Network Pty Limited as one of our network affiliates in Australia would significantly decrease the amount of our commercial advertising inventory, which could have an adverse effect on our results of operations and our stock price.

Austereo Pty Limited (“Austereo”), one of our network affiliates, is the largest radio broadcaster in Australia and, as of June 30, ~~2010~~2011, provided us with approximately 2018% of the Australian radio commercial advertising inventory (approximately 2523% of such inventory from stations in our five largest Australian markets). When sold to advertisers, this radio ~~commercial~~ commercial advertising inventory accounts for a material amount of our Australian revenues. Effective July 1, 2008, we entered into a four year agreement under which we ~~which we~~ provide regularly-scheduled radio traffic reports to and receive radio traffic report and radio news report inventory from ten Australian radio stations operated by Austereo in Sydney, Melbourne, Brisbane, Adelaide and Perth. In April 2011, Southern Cross Media Group (“Southern Cross”) completed its purchase of Austereo. In addition to the Austereo stations previously discussed, Southern Cross owns eight of our radio network affiliates in Hobart, Sunshine Coast, Gold Coast and Central Coast. These stations comprise approximately 6% of our Australian radio commercial inventory as of June 30, 2011. Australian Radio Network Pty Limited (“ARN”), a large radio broadcaster in Australia, provided us approximately 16% of our Australian radio commercial advertising inventory (approximately 1819% of of the inventory in our five largest Australian markets) as of June 30, ~~2010~~2011. When sold to advertisers, this radio commercial advertising inventory accounts for a material amount of our Australian revenues. This inventory is provided under a four year agreement effective July 1, 2008 to provide traffic reporting services to eleven ARN stations in Sydney, Canberra, Melbourne, Brisbane and Adelaide and aan ~~two year~~ agreement ~~effective~~through ~~February~~May ~~2009~~31, 2012 to acquire news radio ~~commercial~~ commercial advertising inventory from eight ARN stations in Sydney, Melbourne, Brisbane and Adelaide. In addition, via various joint ventures, Austereo and ARN operate four radio stations in Canberra (included above) and Newcastle that account for approximately an additional 1% of our commercial advertising inventory in Australia. If we are unable to retain Austereo and/or ARN as a network affiliate, the amount of our radio commercial advertising inventory would decrease significantly. As a result, we would likely experience a corresponding or greater decrease in revenues from sales of our radio commercial advertising inventory, which may be compounded by the decrease in value of our Australian advertising network as a whole due to the reduction in our Australian audience reach. This would be particularly damaging because Australia is currently our only profitable subsidiary. Should this occur, it would likely have a material adverse effect on our financial condition and results of operations and negatively impact our business prospects and the price of our common stock could decline as a result.

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.

Corus Entertainment, Inc. (“Corus”), one of our Canadian network affiliates, is one of the largest radio broadcasters in Canada and its radio stations comprise approximately 38% of our affiliate network stations (excluding suburban regional stations) in Canada. Corus currently provides us with approximately 49% of the Canadian radio commercial advertising inventory we receive (excluding suburban regional stations) pursuant to a four year contract effective January 1, 2009 pursuant to which we provide traffic reporting services and receive radio traffic inventory from 22 Corus stations in Vancouver, Edmonton, Calgary, Winnipeg, Toronto, Montreal and Hamilton and an additional contract we have separately with one additional Corus station. If Corus were to not renew our agreement, and we were unable to replace their stations as network affiliates with comparable stations, we would have a significantly reduced presence in terms of amount of commercial advertising inventory and audience delivery in seven of our eight markets. If this were to occur, it would be difficult for us to become profitable in Canada which would likely have a material adverse effect on our financial condition and results of operations and negatively impact our business prospects and the price of our common stock could decline as a result.

The loss of GCAP Media Services Limited or Bauer Radio Limited as one of our network affiliates in the United Kingdom would significantly decrease the amount of our commercial advertising inventory, which could have an adverse effect on our results of operations and our stock price.

We provide traffic reporting services and receive radio commercial advertising inventory on 81 radio stations throughout the United Kingdom pursuant to a two year agreement with GCAP Media Services Limited (“Global”) that commenced November 17, 2008. The Global radio stations accounted for approximately 17% of our United Kingdom radio traffic advertising inventory as of June 30, 2010 and approximately 27% of the traffic network’s impacts. We provide traffic reporting services to, and receive radio commercial advertising inventory on, 42 radio stations throughout the United Kingdom pursuant to the terms of an agreement with Bauer Radio Limited (“Bauer”) that expired August 31, 2010. The Bauer radio stations accounted for approximately 15% of our United Kingdom radio traffic advertising inventory as of June 30, 2010 and approximately 26% of the traffic network’s impacts. We also provide entertainment news reporting services to, and receive radio commercial advertising inventory on, 42 Bauer radio stations throughout the United Kingdom pursuant to the terms of an agreement that expired August 31, 2010. The Bauer radio stations accounted for approximately 30% of our United Kingdom radio entertainment news advertising inventory as of June 30, 2010 and approximately 43% of the entertainment news network’s impacts. Our agreements with Global and Bauer are each up for renewal in 2010. Pending negotiation and execution of a renewal of our agreements with Bauer, which expired August 31, 2010, we have continued to provide service to and receive inventory from Bauer under the terms of the expired agreements. If we are unable to retain Global and/or Bauer as a network affiliate, the amount of our radio commercial advertising inventory would decrease significantly. As a result, we would likely experience a corresponding or greater decrease in revenues from sales of our radio commercial advertising inventory, which may be compounded by the decrease in value of our U.K. advertising network as a whole due to the reduction in our U.K. audience reach. This would also likely lead to an impairment of at least a portion of the intangible assets (including radio station contracts and goodwill) related to our acquisition of Unique, which had a carrying value of $17.1 million as of June 30, 2010. Should this occur, it would likely have a material adverse effect on our financial condition and results of operations and negatively impact our business prospects and the price of our common stock could decline as a result.

amount of our radio commercial advertising inventory would decrease significantly. As a result, we would likely experience a corresponding or greater decrease in revenues from sales of our radio commercial advertising inventory, which may be compounded by the decrease in value of our Australian advertising network as a whole due to the reduction in our Australian audience reach. This would be particularly damaging because Australia is by far our most profitable subsidiary. Should this occur, it would likely have a material adverse effect on our financial condition and results of operations and negatively impact our business prospects and the price of our common stock could decline as a result.

Corus Entertainment, Inc. (“Corus”), one of our Canadian network affiliates, is one of the largest radio broadcasters in Canada and its radio stations comprise approximately 26% of our affiliate network stations (excluding suburban regional stations) in Canada. Corus currently provides us with approximately 39% of the Canadian radio commercial advertising inventory we receive (excluding suburban regional stations) pursuant to a four year contract effective January 1, 2009 pursuant to which we provide traffic reporting services and receive radio traffic inventory from 18 Corus stations in Vancouver, Edmonton, Calgary, Winnipeg, Toronto and Hamilton and an additional contract we have separately with one additional Corus station. If Corus were to not renew our agreement, and we were unable to replace their stations as network affiliates with comparable stations, we would have a significantly reduced presence in terms of amount of commercial advertising inventory and audience delivery in six of our eight markets. If this were to occur, it would be difficult for us to become profitable in Canada which would likely have a material adverse effect on our financial condition and results of operations and negatively impact our business prospects and the price of our common stock could decline as a result.

The loss of Global Radio Services Limited or Bauer Radio Limited as one of our network affiliates in the United Kingdom would significantly decrease the amount of our commercial advertising inventory, which could have an adverse effect on our results of operations and our stock price.

We provide traffic reporting services and receive radio commercial advertising inventory on approximately 53 radio stations throughout the United Kingdom pursuant to a three year agreement effective November 1, 2010 with Global Radio Services Limited (“Global”). The agreement may be cancelled prior to the end date by either party upon 90 days prior notice during the period commencing August 31, 2012 and ending October 1, 2012. The Global radio stations accounted for approximately 13% of our United Kingdom radio traffic advertising inventory as of June 30, 2011 and approximately 28% of the traffic network’s impacts. We provide traffic reporting services to, and receive radio commercial advertising inventory on, approximately 42 radio stations throughout the United Kingdom pursuant to the terms of a 28 month agreement with Bauer Radio Limited (“Bauer”) that commenced effective September 1, 2010. The Bauer radio stations accounted for approximately 19% of our United Kingdom radio traffic advertising inventory as of June 30, 2011 and approximately 24% of the traffic network’s impacts. We also provide entertainment news reporting services to, and receive radio commercial advertising inventory on, approximately 42 Bauer radio stations throughout the United Kingdom pursuant to the terms of a 28 month agreement with Bauer Radio Limited (“Bauer”) that commenced effective September 1, 2010. The Bauer radio stations accounted for approximately 34% of our United Kingdom radio entertainment news advertising inventory as of June 30, 2011 and approximately 42% of the entertainment news network’s impacts. If we are unable to retain Global and/or Bauer as a network affiliate, the amount of our radio commercial advertising inventory in the United Kingdom would decrease significantly. As a result, we would likely experience a corresponding or greater decrease in revenues from sales of our radio commercial advertising inventory, which may be compounded by the decrease in value of our United Kingdom advertising network as a whole due to the reduction in our U.K. audience reach. This would also likely lead to an impairment of at least a portion of the intangible assets (including radio station contracts and goodwill) related to our acquisition of Unique, which had a carrying value of $15.7 million as of June 30, 2011. Should this occur, it would likely have a material adverse effect on our financial condition and results of operations and negatively impact our business prospects and the price of our common stock could decline as a result.

Our business is subject to risks based on our compliance with multiple legal and regulatory regimes due to our international operations.

We conduct business in multiple international markets and, as a result, face added expenses related to the engagement of legal, accounting and other experts in each country in which we currently operate or may operate in the future. In addition, our future results could be materially adversely affected by a variety of uncontrollable and changing factors including, among others, regulatory, social, political, or economic conditions in a specific country or region, trade protection measures and other regulatory requirements, government spending patterns and natural disasters. We are also exposed to risks associated with changes in the laws and policies that govern foreign investments in countries where we have operations as well as, to a lesser extent, changes in United States laws and regulations relating to foreign trade and investment. Such changes in laws, regulations and conditions could result in a significant increase in our expenses for regulatory compliance or require us to alter our operations, which may have a material adverse effect on our financial condition and results of operations and negatively impact our business prospects. The price of our common stock could decline as a result.

Our revenues may be adversely affected by fluctuations in currency exchange rates.

Nearly all of our ~~expenditures are made and nearly all of our~~ revenues are generated outside of the United States. However, we report our financial condition and results of operations in U.S. dollars. As a result, any fluctuation between the U.S. dollar and the currencies of the countries in which we operate will impact the amount of revenues and expenses that we report. If foreign currencies depreciate relative to the U.S. dollar, there will be a negative impact on the revenues we report due to such fluctuation. It is possible that the impact of currency fluctuations will result in a decrease in reported sales even though we have experienced an increase in sales when reported in the applicable foreign currency. Such a decrease in reported U.S. sales occurred in Australia for the year ended June 30, 2009 as our Australian revenues decreased 4% when measured in U.S. dollars but increased 16% when measured in Australian dollars. Foreign currency exchange rates in the markets in which we operate have been subject to substantial fluctuation. For example, the exchange rates to U.S. dollars from Australian dollars applicable to our income statement data for fiscal years 2010, 2009, 2008, 2007, 2006, 2005, 2004 and 2003 are approximately 0.8825, 0.7446, 0.8969, 0.7859, 0.7473, 0.7539, 0.7140, and 0.5850, respectively. Although we have not hedged our exposure to foreign currency exchange rate changes in the past, we may choose to do so in the future. There is no guarantee such hedging, if undertaken, will be successful.

revenues we report due to such fluctuation. It is possible that the impact of currency fluctuations will result in a decrease in reported sales even though we have experienced an increase in sales when reported in the applicable foreign currency. Such a decrease in reported U.S. sales occurred in Australia for the year ended June 30, 2009 as our Australian revenues decreased 4% when measured in U.S. dollars but increased 16% when measured in Australian dollars. Foreign currency exchange rates in the markets in which we operate have been subject to substantial fluctuation. For example, the approximate exchange rates to U.S. dollars from Australian dollars applicable to our income statement data for fiscal years 2011, 2010, 2009, 2008, 2007, 2006, 2005, 2004 and 2003 are as follows:


Fiscal Year	Exchange Rate
2011		0.9907
2010		0.8825
2009		0.7446
2008		0.8969
2007		0.7859
2006		0.7473
2005		0.7539
2004		0.7140
2003		0.5850

Although we have not hedged our exposure to foreign currency exchange rate changes in the past, we may choose to do so in the future. There is no guarantee such hedging, if undertaken, will be successful.

If we fail to expand into new markets, we may be unable to increase our revenue and expand our profits in the future.

Although our current business operations are conducted in Australia, Canada and the United Kingdom, we intend to explore future opportunities to expand our operations into additional international markets as opportunities present themselves and as our financial resources permit. Our continued growth and expansion as a company is dependent, in part, on our ability to establish relationships with radio and television stations in new international markets by developing new operations or acquiring existing operations. We have begun to explore opportunities for expansion into several ~~European~~ markets. To date, however, we have not contracted to provide services to any radio or television stations in any ~~European~~ market other than Australia, Canada and the United Kingdom and we have no ~~commitments~~ commitments or agreements with respect to any stations in these additional markets. Despite our interest and recent activities in exploring expansion into additional international markets, there can be no assurance that we will be able to establish operations in new markets or that we will be able to finance such ~~acquisitions~~expansions ~~or expansion~~ in the future. ~~There can be no assurance that we will be able to integrate successfully any acquired business or realize any operating efficiencies from any acquisition.~~ Further, if we ~~engage~~do inexpand ~~any~~into ~~such~~additional ~~strategic transaction~~markets, we may encounter unforeseen operating challenges and expenses that may require a significant amount of management time ~~that~~ that otherwise would be devoted to running our operations, which may harm the quality of our services and products.

Inexperience in additional international markets increases the risk that international expansion efforts will not be successful.

Expansion into international markets requires significant management attention and financial resources, and our ability to provide radio traffic reports profitably in Australia may not be indicative of our future results in Canada, the United Kingdom or in any other country in which we may attempt to expand. Certain members of our management and ~~Board~~board of ~~Directors~~ directors have experience in operating a business similar to ours in Japan. In 1999, William L. Yde III, our Chairman, President and Chief Executive Officer, and Dale C. Arfman, a member of our ~~Board~~board of ~~Directors~~directors, among others, founded Nihon (Japan) Traffic Network, a Japanese entity unrelated to us, which operated a traffic reporting service in the Japanese market (“Japan Traffic Network”). Japan Traffic Network invested significant funds in starting its Japanese operations and experienced a net loss of ~~approximately~~ approximately $8 million from its inception in 1999 until January 2002, after which Japan Traffic Network ceased its operations. Gary O. Benson, another one of our directors, was a director of Japan Traffic Network. The risks and obstacles Japan Traffic Network faced in introducing operations in Japan are indicative of the types of risks and obstacles we may face generally if and when we expand into additional international markets, including:

• 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;

15 • increased labor costs as a result of the existence or prevalence of collective bargaining arrangements, prevailing compensation structures and other employment-related matters;

• ~~foreign~~legal, ~~exchange~~legislative 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 inregulatory ~~the foreign countries in which we operate~~restrictions; ~~• nationalization or seizure of private assets; and • higher costs associated with doing business internationally.~~

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foreign exchange controls that might prevent us from repatriating cash earned in countries outside the United States;

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longer payment cycles in some countries;

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potentially adverse tax consequences in the United States and in the foreign countries in which we operate;

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nationalization or seizure of private assets; and

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higher costs associated with doing business internationally.

These risks and obstacles may prevent us from operating profitably in any international market into which we attempt to expand our operations. If we attempt to expand into additional international markets but are unable to do so successfully, such a failed attempt could have a material adverse effect on our financial condition and results of operations, negatively impacting our business prospects and the price of our common stock.

If we fail to secure adequate financing in the future, our continued growth and financial performance may suffer.

Our expansion into new Australian, Canadian, United Kingdom and other international ~~markets~~ markets and continued growth of our services in these markets may require significant additional capital resources. These future capital needs are difficult to predict. We may require additional capital in order to implement an expanded business model, to take advantage of certain opportunities, including strategic alliances and potential acquisitions, or to respond to changing business conditions and unanticipated competitive pressures. Moreover, our day-to-day operations require the ~~use~~ use of sophisticated equipment and technology. The maintenance and replacement of such equipment requires significant expenditures. In addition, the development of ~~Mobile~~Global ~~Traffic~~Alert Networks’ mobile phone applications could require significant amounts of capital in order to pursue the opportunity, with no guarantee of future profitability. We used $16.1 million to fund our purchase of Unique in March 2009, including our settlement of the related contingent payment obligations. These ~~payments~~ payments constituted a significant portion of our cash on hand at the time of the closing. Although we believe that our current cash and cash equivalents and the availability of financing under our line of credit will be sufficient to fund our operations for the next 12 months, we may need to seek additional funds either by borrowing money or issuing additional equity in order to handle unforeseen contingencies or take advantage of new opportunities. As the terms and availability of financing depend to a large degree upon general economic conditions and third parties over which we have no control, we can give no assurance that we will obtain the needed financing or that we will obtain such financing on attractive terms. In addition, our ability to obtain financing depends on a number of other factors, many of which are also beyond our control, such as interest rates and national and local business conditions. If the cost of obtaining needed equity or debt financing is too high or the terms of such equity or debt financing are otherwise unacceptable in relation to the strategic opportunity we are presented with, we may be unable to take advantage of new opportunities or take other actions that otherwise might be important to our business or prospects. Additional indebtedness could increase our leverage and make us more vulnerable to economic downturns and may limit our ability to withstand competitive pressures. Additional equity financing could result in dilution to our stockholders and the price of our common stock could decline as a result.

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.

Pursuant to our business plan, we have experienced, and continue to experience, rapid expansion of our business and operations which has placed, and will continue to place, significant demands on our management, operational, technical and financial infrastructure. Since March 2005, we have introduced advertising in radio news reports and expanded our provision of TV reports in Australia, commenced traffic operations in eight Canadian markets and acquired a competitor in Canada. In the United Kingdom, we have commenced operations of a traffic reporting service, ~~begun~~ initiated providing service to the Highways Agency and acquired Unique, the largest traffic and entertainment ~~news~~ news network in the market. Continued growth will require continued investment in personnel, facilities, technology infrastructure, and financial and management systems and controls, especially if we expand our Canadian and ~~Mobile~~Global ~~Traffic~~Alert Network operations as currently contemplated. If we do not effectively manage our growth, the quality of our products and services could suffer, which could negatively affect our Affiliate Contracts and our relationships with network affiliates, ~~potentially~~ potentially resulting in the termination of such Affiliate Contracts and a decrease in our commercial advertising inventory. Furthermore, expansion could result in our expenses increasing faster than our revenue, causing our operating margins to be adversely affected in the short-term and the long-term.

Aircraft operations involve risks that may not be covered by our insurance or may increase our operating costs.

In February 2007, a helicopter owned by Canadian Traffic Network, but operated by a third-party vendor, crashed during a maintenance flight. Although none of our employees and no personnel of our network affiliates were in the helicopter at the time of the accident, and the majority of the replacement cost was covered by the third-party vendor’s insurance, the crash is an example of how the operation of aircraft inherently involves a degree of risk. Hazards such as harsh weather, mechanical failures, pilot error, acts of terrorism, crashes, collisions and emergency safety landings may impact our business and can result in personal injury, loss of life, damage to property and equipment and suspension or reduction of operations, temporarily or indefinitely. In addition, if one of our aircraft were to crash or be involved in an accident, we could be exposed to significant tort liability and substantial unforeseen expenses. Even when such hazards do not lead to injury, loss of life or damage to property and equipment, their occurrence can result in negative publicity regarding us and our industry in the markets in which we operate. Harm to our public image may, in turn, adversely affect our ability to enter into new Affiliate Contracts or renew existing Affiliate Contracts, or to arrange for the sale of our commercial advertising inventory, any of which could negatively affect our results of operations.

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emergency safety landings may impact our business and can result in personal injury, loss of life, damage to property and equipment and suspension or reduction of operations, temporarily or indefinitely. In addition, if one of our aircraft were to crash or be involved in an accident, we could be exposed to significant tort liability and substantial unforeseen expenses. Even when such hazards do not lead to injury, loss of life or damage to property and equipment, their occurrence can result in negative publicity regarding us and our industry in the markets in which we operate. Harm to our public image may, in turn, adversely affect our ability to enter into new Affiliate Contracts or renew existing Affiliate Contracts, or to arrange for the sale of our commercial advertising inventory, any of which could negatively affect our results of operations.

We attempt to protect ourselves against these losses and damage by carrying insurance, including general liability, aviation, workers’ compensation and property and casualty insurance. Our insurance coverage is subject to deductibles and maximum coverage amounts, and we do not carry insurance for all types of losses, including business interruption and terrorism. We cannot assure you that our existing coverage will be sufficient or that in the future we will be able to maintain our existing coverage or that the premiums will not increase substantially. In addition, future events, including, without limitation, terrorist activity, accidents or other events could increase our insurance rates. The loss of our liability insurance coverage or inadequate coverage from our liability insurance could result in our exposure to substantial unforeseen expenses and subsequent reductions in our earnings.

In addition, we are subject to regulations and restrictions with regard to our operation of our aircraft in Australia. Violations of these regulations and restrictions could result in monetary penalties or the revocation of our air operating certificates. Although monetary penalties would have an impact on our results of operations if material in amount, the loss of our air operating certificates could result in temporary or permanent grounding of our aircraft, which would have a material adverse effect on our business operations and could result in a substantial loss of revenues or increase in expenses.

A substantial majority of our expenses are fixed and cannot be reduced in the short term.

With the exception of commissions and bonuses paid to our sales staff and management and variable compensation to certain radio station affiliates in the United Kingdom, the vast majority of our costs are fixed regardless of the level of our revenue. Station compensation, which is our largest cost, is generally contractually obligated for a number of years at any point in time and cannot generally be modified ~~regardless~~even ofif our revenues decline. As a result, a decrease in revenues will likely have a material adverse impact on profitability which could in turn lead to a reduction in the price of our common stock.

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 and Treasurer, or other key employees, or the failure to attract additional key individuals, could materially adversely affect our business.

Our financial success is dependent to a significant degree upon the efforts of our current executive officers and other key employees. We have entered into employment agreements with William L. Yde III and Scott E. Cody. However, there can be no assurance that these individuals will continue to provide services to us. A voluntary or involuntary termination of employment by Messrs. Yde or Cody could have a material adverse effect on our business operations and negatively impact the price of our common stock. At present, we do not maintain key man life insurance policies for any of these individuals.

Our success and viability is also dependent to a significant extent upon our ability to attract and retain qualified personnel in all areas of our business, especially our management, sales professionals and on-air broadcasters who become recognizable personalities for the radio and television stations for whom they deliver information reports. Although our Affiliate Contracts and/or non-competition agreements with our employees generally prevent stations from hiring our employees, there is no assurance that we will be able to retain our most recognizable on-air broadcasters or that such contractual restrictions will be enforceable. Our employee relations and related labor costs may be impacted by collective bargaining arrangements, prevailing compensation structures or other employment-related matters. If we are unable to retain broadcasters or attract replacements for them, our network affiliates may become dissatisfied with our delivery of information reports potentially resulting in the cancellation of Affiliate Contracts, a subsequent reduction in commercial advertising inventory and the loss of advertising revenue.

AOur ~~substantial majority of our~~ operations are out-sourced to third parties in the United Kingdom.

In the United Kingdom, ~~the substantial majority of~~ our traffic reporting services for radio stations and ~~all of~~ our entertainment news reporting services are out-sourced to third parties pursuant to contracts that were in place when we purchased Unique. While we spend considerable time and effort monitoring the performance of these vendors, ultimately their actions are not under our control. Among other things, it is conceivable that one or more of our vendors could cease servicing their contracts with us or go out of business altogether with little or no notice to us. In addition, the agreement governing our receipt of traffic information has a term ~~ending~~ ending December 31, 2012 and has substantial restrictions on our ability to service our traffic network affiliates directly as well as significant hurdles should we attempt to cancel the agreement, even in the case of a breach. Should important affiliates become dissatisfied with the service provided and cancel their affiliation agreements, our radio commercial advertising inventory may decrease significantly. As a result, we would likely experience a corresponding decrease in revenues from sales of our radio commercial advertising inventory, which may be compounded by the decrease in value of our ~~U.K.~~United Kingdom advertising network as a whole due to the reduction in our U.K. audience reach. It is also possible that we would be forced to spend more money than we currently do to satisfy our network affiliates and prevent them from cancelling their contracts with us. Should this occur, it would likely have a material adverse effect on our financial condition and results of operations and negatively impact our business prospects and the price of our common stock could decline as a result.

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Our broadcasts are subject to regulatory bodies whose rules and regulations may adversely affect our business.

The ownership, operation and sale of radio and television stations in Australia, Canada and the United Kingdom, and therefore our network affiliates in those markets, are subject to the jurisdiction, regulations and policies of the of the Australian Communications and Media Authority (the “ACMA”), the Canadian Radio-television and Telecommunications Commission (the “CRTC”) and the United Kingdom’s Office of Communications (“Ofcom”), respectively. Such regulation also extends to the content of the information reports and advertising spots we provide to our network affiliates. Among other things, the ACMA, the CRTC and Ofcom adopt and implement regulations and policies that directly or indirectly affect the ownership, operations and sale of radio and television stations, and have the power to impose penalties for violations of their rules. In addition, our violations of the regulations or policies of the ACMA, the CRTC or Ofcom may be a breach of certain of our network affiliates’ contracts. Such regulations may adversely affect our business. We expect to be subject to similar regulations in other geographic markets we enter.

Because our operating subsidiaries are organized under the laws of foreign jurisdictions and substantially all of our assets are located outside of the United States, you may have difficulties collecting on judgments rendered against us in United States courts.

We are a Nevada corporation with executive officers and directors that reside in the United States. However, Australia Traffic Network, Canadian Traffic Network and UK Traffic Network, our subsidiaries that conduct our current operations, are organized as an Australian proprietary company, an Alberta business corporation, and a private company limited by shares incorporated in England and Wales, respectively. Because substantially all of our assets are owned by these subsidiaries and are located outside of the United States, if stockholders or other third parties obtain judgments against us in United States courts (including judgments based upon the civil liability provisions of the United States federal securities laws), they may be required to seize the equity interests of our foreign subsidiaries in satisfaction of such judgments. Because these subsidiaries are foreign entities, an attempt to seize our equity interests could be frustrated by objections raised in the applicable foreign jurisdiction to the transfer of such interests. Therefore, our stockholders and others may have difficulties in enforcing and collecting upon any potential judgments rendered against us in United States courts.

We have been, and will continue to be, required to implement and maintain additional finance and accounting systems, procedures and controls in order to satisfy requirements under the Sarbanes-Oxley Act of 2002 and the listing requirements of the NASDAQ Global Market, which ~~will~~ increase our costs and divert management’s time and attention.

Laws and regulations affecting public companies, including the provisions of the Sarbanes-Oxley Act of 2002 and the listing requirements for the NASDAQ Global Market, have imposed duties on us and on our executives, directors, attorneys and independent registered public accounting firms. In order to comply with these rules, we have engaged additional outside legal, accounting and advisory services, all of which may continue to increase our operating expenses in the future. In particular, we have incurred additional administrative expenses relating to compliance with provisions of the Sarbanes-Oxley Act of 2002 which require that we implement and maintain an effective system of internal controls over financial reporting and assess the effectiveness of such internal controls in the periodic reports that we file with the Securities and Exchange Commission. Those costs were approximately $0.32 million, $0.3 million and $0.4 3 million for the years ended June 30, ~~2010~~2011, ~~2009~~2010 and ~~2008~~2009, respectively. In addition, ~~to the extent that we qualify~~ as an “accelerated filer” under the Securities Exchange Act of 1934 as of the last day of our fiscal year, our independent registered public accounting firm will be required to attest to our internal controls over financial reporting in our Annual Report on Form 10-K for such fiscal year. As a company with limited accounting resources, a significant amount of management’s time and attention has been diverted from our business to ensure compliance with these regulatory requirements. This diversion of management’s time and attention may have a material adverse effect on our business, financial condition and results of operations.

In the event we identify significant deficiencies or material weaknesses in our internal controls over financial reporting that we cannot remediate in a timely manner, or if we are unable to receive a positive attestation from our independent registered public accounting firm with respect to our internal controls over financial reporting ~~if and when we are required to do so~~, investors and others may lose confidence in the reliability of our financial statements. If this occurs, the trading price of our common stock and ability to obtain any necessary equity or debt financing could suffer. In addition, in the event that our independent registered public accounting firm is unable to rely on our internal controls over financial reporting in connection with its audit of our financial statements, and in the further event that it is unable to devise alternative procedures in order to satisfy itself as to the material accuracy of our financial statements and related disclosures, we may be unable to file our periodic reports with the Securities and Exchange Commission. This would likely have an adverse affect on the trading price of our common stock and our ability to secure any necessary additional equity or debt financing, and could result in the delisting of our common stock from the NASDAQ Global Market, which would severely limit the liquidity of our common stock.

In the absence of an active trading market for shares of our common stock, the price of our common stock may be subject to wide fluctuations and you may find it difficult to resell shares of our common stock.

InSince ~~general, since~~ the effective date of our initial public offering, there ~~has~~have been times of limited trading activity in shares of our common stock. If such limited trading volume ~~continues~~recurs ~~into~~in the future, you may find it difficult to resell shares of our common stock publicly when you choose. Furthermore, small trading volumes generally depress market prices. As a result, you may not always be able to resell shares of our common stock publicly at the time and prices that you feel are fair or appropriate. You may not receive a positive return on your investment when you sell your shares and you may lose the entire amount of your investment.

~~The~~19 market price of our common stock is likely to be volatile and subject to fluctuations in response to various factors, many of which are beyond our control. These factors may include, without limitation:

• variations in our operating results; • addition or loss of significant network affiliates or advertisers;

•The ~~changes~~market inprice ~~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; •has ~~announcements~~been byand usis orlikely ~~our~~to ~~competitors~~continue ofto ~~significant~~be ~~contracts,~~volatile ~~acquisitions, strategic partnerships, joint ventures or capital commitments; • entry into new international markets~~ and subject ~~the~~to ~~costs~~fluctuations ~~associated therewith; • changes~~ in ~~the~~response ~~governmental regulations~~ to ~~which we will be subject in~~ various ~~countries;~~factors, •many ~~announcements by third parties~~ of ~~significant~~which ~~claims~~are orbeyond ~~proceedings against us; • the availability of new media for delivery of traffic and news reporting services; and • future sales of~~ our ~~common~~control. ~~stock~~These orfactors ~~other~~may ~~debt or equity securities~~include, ~~including~~without ~~sales~~limitation: ~~by existing holders.~~

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variations in our operating results;

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addition or loss of significant network affiliates or advertisers;

•

changes in the economies in which we provide our information services;

•

the departure of the Chairman of our board of directors or other key executive officers;

•

the level and quality of securities analysts’ coverage of our common stock;

•

announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments;

•

entry into new international markets and the costs associated therewith;

•

changes in the governmental regulations to which we will be subject in various countries;

•

announcements by third parties of significant claims or proceedings against us;

•

the availability of new media for delivery of traffic and news reporting services; and

•

future sales of our common stock or other debt or equity securities, including sales by existing holders.

In the past, following periods of volatility in the market price of a public company’s securities, securities class action litigation has been instituted against the public company. Regardless of its outcome, should this type of litigation be instituted against us, it could result in substantial costs to us and a likely diversion of our management’s attention from our business operations.

The concentration of our common stock ownership by our current management will limit your ability to influence corporate matters.

As of August 31, ~~2010~~2011, directors and executive officers own or are able to vote in the aggregate approximately 2519.24% of our issued and outstanding common stock. As such, our directors and executive officers, as stockholders, have significant influence to elect any or all of our directors, as well as influence in connection with all corporate activities, including mergers, proxy contests, tender offers or other purchases of our common stock that could give our stockholders the opportunity to realize a premium over the then prevailing market price for their shares of our common stock. This concentrated control will limit your ability to influence corporate matters and, as a result, we may take actions that you do not view as beneficial. In addition, such concentrated control could discourage others from initiating changes of control of us. In such cases, the perception of our prospects in the market may be adversely affected and the market price of our common stock may decline.

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 certificate of incorporation authorizes 10,000,000 shares of “blank check” preferred stock. Our Board ~~of Directors~~ has the power to issue any or all of the shares of such preferred stock, including the authority to establish one or more series and to fix the powers, preferences, rights and limitations of such class or series, without seeking the approval of our common stockholders, subject to certain limitations on this power under the listing requirements of the NASDAQ Global Market and the laws of the state of Nevada. The authority of our Board ~~of Directors~~ to issue “blank check” preferred stock, along with any future anti-takeover measures we may adopt, may, in certain circumstances, delay, deter or prevent takeover attempts and other changes in control of us not approved by our Board ~~of Directors~~. As a result, our stockholders may lose opportunities to dispose of their shares of our common stock at favorable prices generally available in takeover attempts or that may be available under a merger proposal and the market price of our common stock and the voting and other rights of our stockholders may also be affected.

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.

In order to maintain our listing on the NASDAQ Global Market, our common stock must sustain a minimum bid price of at least $1.00 per share and we must satisfy the other requirements for continued listing on the NASDAQ Global Market. In the event our common stock is delisted from the NASDAQ Global Market and we are also unable to maintain a listing on another alternate exchange, trading in our common stock could thereafter be conducted in FINRA’s OTC Bulletin Board or in the over-the-counter markets in the so-called “pink sheets”. In such event, the liquidity of our common stock would likely be impaired, not only in the number of shares which could be bought and sold, but also through delays in the timing of the transactions, and there would likely be a reduction in our coverage by security analysts and the news media, thereby resulting in lower prices for our common stock than might otherwise prevail.

19 20

Our low share price and small market capitalization may preclude certain institutional investors from holding our stock

During the past several years, our common stock has traded for significant periods of time at below $5 per share, which is the minimum share price at which certain institutional investors are willing to own a stock. In addition, in June 2009, we were dropped from the Russell 2000 index due to our market capitalization falling below the cut-off capitalization for the index, which meant that certain mutual funds, pension funds and other institutional investors no longer hold our common stock nor will certain index funds be making purchases of our common stock in the future. A smaller pool of potential investors for our stock may decrease demand for the shares, resulting in a lower prices for our common stock than might otherwise prevail.

Because we do not intend to pay dividends on our common stock, you must rely on stock appreciation for any return on your investment.

We intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future. As a result, you must rely on stock appreciation and a liquid trading market for any return on your investment in our common stock.

Failure to complete the Merger could negatively impact the Company and its future operations.

If the Offer and Merger are not completed for any reason, the Company may be subjected to a number of material risks, including but not limited to:

•

The current market price of our common stock may reflect, among other things, the commencement and anticipated completion of the Offer and Merger. The current market price is higher than the price before the proposed Offer was announced on August 3, 2011. The completion of the Offer and Merger are subject to conditions and termination rights contained in the Merger Agreement. Accordingly, there can be no assurance that the proposed Offer and Merger will be completed. In the event that the Offer and Merger are not completed, our stock price may be materially and adversely affected.

•

The uncertainty associated with a potential change in control of our Company could negatively affect our ability to retain and attract key management, sales, marketing and other personnel which we rely on to operate our business.

•

Our customers, suppliers and marketing partners may delay or defer decisions relating to their ongoing and future relationships with us or terminate their relationships with us, which could negatively affect our revenues, earnings and cash flows.

•

We will incur significant costs, including financial and legal advisory fees, relating to the proposed Offer and Merger even if the proposed transactions are not completed.

•

Under the Merger Agreement, we may be required to pay to GTCR Gridlock Acquisition Sub, Inc. a termination fee of approximately $8.3 million if the Merger Agreement is terminated under certain circumstances.

Litigation and uncertainties associated with the transactions contemplated by the Merger Agreement may have a material adverse effect on our ability to complete the transaction.

A purported shareholder of the Company, on behalf of itself and as putative class action on behalf of the Company’s public shareholders, filed a complaint on August 31, 2011. The complaint names as defendants the Company and members of the Company’s board of directors, among others involved. See Item 3. “Litigation” and Note 16 to our Consolidated Financial Statements for additional information. Litigation relating to the proposed transactions contemplated by the Merger Agreement may require us to expend significant amounts of money, may require significant time from our management, and may result in an adverse settlement, injunction barring or delaying the proposed transactions, or judgments against us or our directors which could have a material adverse effect on our ability to complete such transactions which could be detrimental to our shareholders.

The Merger Agreement contains restrictive covenants that may limit our ability to respond to changes in market conditions or pursue business opportunities.

The Merger Agreement contains restrictive covenants that limit our ability to take certain actions during the period prior to the completion of the proposed Offer and Merger. Although the Merger Agreement provides that an affiliate of GTCR will not unreasonably withhold its consent to us taking otherwise prohibited actions, there can be no assurances that the affiliate will grant such consent. These restrictions include limitations on our ability to, among other things, make certain acquisitions, incur additional indebtedness, terminate, amend or enter into any material contract, make capital expenditures or enter into new lines of business, each of which may materially adversely affect our ability to react to changes in market conditions or take advantage of business opportunities, which could be detrimental to our shareholders in the event the Offer and Merger are not completed.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

We lease operation centers, broadcast studios and marketing and administrative offices in Australia, Canada and the United Kingdom. We lease approximately 11,000 square feet in the aggregate in Australia, approximately 1819,000 square feet in the aggregate in Canada, approximately 4,000 square feet in the aggregate in the United Kingdom pursuant to the terms of various lease agreements. For the year ended June 30, ~~2010~~2011, we incurred approximately $1.23 million in facilities rental expense.

Item 3. Legal Proceedings

From time-to-time, we are involved in various legal actions arising in the ordinary course of business. Currently, there are no legal matters pending the ultimate dispositions of which will, in the opinion of our management, have a material effect on our consolidated financial position and results of operations. In addition, a purported shareholder of the Company, on behalf of itself and as putative class action on behalf of the Company’s public shareholders, filed a complaint on August 31, 2011. The complaint names as defendants the Company and members of the Company’s board of directors, among others involved. See Note 16 to our Consolidated Financial Statements for additional information.

Item 4. Removed and Reserved

Part II

Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters.

As of August 318, ~~2010~~2011, we had 25approximately 20 shareholders of record and an estimated 2,~~280~~000 beneficial shareholders.

The Company’s common stock is traded on NASDAQ Global Market under the stock symbol “GNET”. The following table sets forth the range of high and low sales prices of the Company’s the common stock on NASDAQ for the calendar quarters indicated.

	High		Low
Fiscal 2011
Quarter Ended September 30, 2010	$	5.97	$	4.79
Quarter Ended December 31, 2010	$	9.74	$	4.95
Quarter Ended March 31, 2011	$	13.21	$	9.29
Quarter Ended June 30, 2011	$	13.85	$	9.97
Fiscal 2010
Quarter Ended September 30, 2009	$	5.10	$	3.59
Quarter Ended December 31, 2009	$	5.60	$	3.85
Quarter Ended March 31, 2010	$	5.72	$	4.23
Quarter Ended June 30, 2010	$	6.39	$	4.75
Fiscal 2009
Quarter Ended September 30, 2008	$	10.63	$	8.16
Quarter Ended December 31, 2008	$	9.18	$	4.28
Quarter Ended March 31, 2009	$	6.19	$	3.03
Quarter Ended June 30, 2009	$	5.32	$	2.98

The closing sales price for the Company’s common stock on August 31, ~~2010~~2011 was $514.1200.

~~STOCK~~22 ~~PERFORMANCE GRAPH~~

The Securities and Exchange Commission, requires that we include in this report a line-graph presentation comparing cumulative return to our stockholders (based on appreciation of the market price of our common stock) on an indexed basis with (i) a broad equity market index and (ii) an appropriate published industry or line-of-business index, or peer group index constructed by us. The following presentation compares our common stock price for the period from our first day of trading on March 24, 2006 through June 30, 2010, to the Nasdaq Composite Index and to the Dow Jones Wilshire Microcap Index.

STOCK PERFORMANCE GRAPH

The Securities and Exchange Commission, requires that we include in this report a line-graph presentation comparing cumulative return to our stockholders (based on appreciation of the market price of our common stock) on an indexed basis with (i) a broad equity market index and (ii) an appropriate published industry or line-of-business index, or peer group index constructed by us. The following presentation compares our common stock price for the period from June 30, 2006 through June 30, 2011, to the Nasdaq Composite Index and to the Dow Jones Wilshire Microcap Index.

We have elected to use the Dow Jones Wilshire Microcap Index in compiling our stock performance graph because we believe the Dow Jones Wilshire Microcap Index represents a comparison to companies with similar market capitalization as ours.

The presentation assumes that the value of an investment in each of our common stock, the Nasdaq Composite Index and the Dow Jones Wilshire Microcap Index was $100 on ~~March~~June 2430, 2006, and that any dividends paid were reinvested in the same security.

Comparison of Five Year Cumulative Total Returns

Performance Graph for

Global Traffic Network, Inc.

LOGO

Legend

Symbol	Total Returns Index For:	~~Total Returns Index For:~~6/30/2006		~~3/24/2006~~		6/30/2007		~~6/30/2006~~		6/30/2008		~~6/30/2007~~		6/30/2009		~~6/30/2008~~		6/30/2010		~~6/30/2009~~		6/30/2011		~~6/30/2010~~
		Global Traffic Network Inc.			100.00				110.00				137.80				178.80				75.80				107.60
¿	Global Traffic Network Inc.		100.00				125.27				162.55				68.91				97.82				208.91
		NASDAQ Composite — Total Return			100.00				94.62				114.16				101.47				82.00				95.17
n	NASDAQ Composite – Total Return		100.00				120.71				107.21				86.70				100.61				133.67
		Dow Jones US Wilshire MicroCap			100.00				96.41				108.12				79.64				62.65				76.41
p	Dow Jones US Wilshire MicroCap		100.00				112.15				82.60				64.98				79.25				101.77

Notes:

A. The lines represent monthly index levels derived from compounded daily returns that include all dividends. B. The indexes are reweighted daily, using the market capitalization on the previous trading day. C. If the monthly interval, based on the fiscal year-end, is not a trading day, the preceding trading day is used. D. The index level for all series was set to $100.00 on 3/23/2006.

The indexes are reweighted daily, using the market capitalization on the previous trading day.

If the monthly interval, based on the fiscal year-end, is not a trading day, the preceding trading day is used.

The index level for all series was set to $100.00 on 6/30/2006.

21 23

Dividends

We have not paid any dividends during the fiscal years ended June 30, ~~2009~~2011 and 2010 or during the interim period through the date of this report, and we do not expect to pay additional cash ~~dividends~~ dividends or make any other distributions in the foreseeable future. We expect to retain our future earnings, if any, for use in the operation and expansion of our business. The payment of cash dividends in the future, if any, will be at the discretion of our Board ~~of Directors~~ and will depend upon such factors as earnings levels, capital requirements, our overall financial condition and any other factors deemed relevant by our Board ~~of Directors~~.

Item 6. Selected Financial Data

The selected financial data presented below should be read in conjunction with the consolidated financial statements and notes included elsewhere in this Form 10-K, and in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Form 10-K.

The selected financial data as of June 30, 2011, 2010, 2009, 2008, ~~2007~~ and ~~2006~~2007 and for the fiscal years then ended have been derived from the audited consolidated financial statements of the Company.

In thousands except per share data

	2010			2009			2008			2007			2006
	2011			2010			2009			2008			2007
Income statement data for the year ended June 30:
Revenues	$	93117,~~335~~401		$	6093,~~337~~335		$	5060,~~953~~337		$	3150,~~699~~953		$	1931,~~502~~699
Operating expenses (exclusive of depreciation and amortization expense shown separately below)		6373,~~266~~693			4063,~~937~~266			3040,~~456~~937			2130,~~835~~456			1521,~~309~~835
Selling, general and administrative expenses		2125,~~038~~414			1521,~~615~~038			15,~~214~~615			1015,~~120~~214			610,~~415~~120
Depreciation and amortization		5,~~326~~975			25,~~547~~326			12,~~500~~547			~~907~~1,500			~~587~~907
Net operating income (loss)		312,~~705~~319			13,~~238~~705			31,~~783~~238			(13,~~163~~783	)		(21,~~809~~163	)
Interest expense		15—			3915			9039			~~170~~90			~~319~~170
Other (income)		(935	)		(973	)		(1,604	)		(546	)		(220	)
Other (income) (net)		(1,189	)		(935	)		(973	)		(1,604	)		(546	)
Net income (loss) before taxes		413,~~625~~508			24,~~172~~625			52,~~297~~172			~~(787~~5,297	)		(~~2,908~~787	)
Income tax expense		34,~~998~~565			3,~~257~~998			3,~~565~~257			13,~~230~~565			881,230
Net income (loss)		~~627~~8,943			~~(1,085~~627	)		(1,~~732~~085	)		(21,~~017~~732	)		(2,~~996~~017	)
Income (loss) per common share:
Basic	$	0.0349		$	(0.0603	)	$	(0.1006	)	$	(0.1610	)	$	(0.3116	)
Diluted	$	0.0348		$	(0.0603	)	$	(0.1006	)	$	(0.1610	)	$	(0.3116	)
Cash dividends declared		—			—			—			—			233

In thousands

Balance sheet data at June 30:

2010

2009

2008

2007

2006

2011

2010

2009

2008

2007

Cash and cash equivalents

1941,~~564~~655

2119,~~419~~564

3721,~~541~~419

737,~~278~~541

147,~~649~~278

Total assets

6593,~~088~~275

6965,~~170~~088

6269,~~602~~170

2362,~~840~~602

2423,~~288~~840

Long-term obligations

3,~~096~~877

3,~~785~~096

~~871~~3,785

~~1,161~~871

1,~~508~~161

Total liabilities

1625,~~921~~793

2116,~~866~~921

1321,~~876~~866

913,~~007~~876

89,~~680~~007

Stockholders’ equity

4867,~~167~~482

4748,~~304~~167

4847,~~726~~304

1448,~~833~~726

1514,~~608~~833

22 24

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

EXECUTIVE OVERVIEW

We provide traffic and news information reports to radio and television stations in international markets. We are the largest provider of traffic information reports to radio stations in Australia, Canada and the United Kingdom and we provide traffic information reports to television stations in Australia and Canada. We also provide ~~news information reports to radio stations in Canada,~~ entertainment news reports to radio stations in the United Kingdom and we believe that we maintain the largest inventory of commercial advertising embedded in radio news reports in Australia. We derive a substantial majority of our revenues from the sale to advertisers of commercial advertising inventory associated with these information reports. We obtain this advertising inventory from radio and television stations in exchange for information reports and/or, for certain broadcasters, cash compensation. Although we are a Nevada corporation with principal executive offices located in New York, New York, we do not provide, nor do we intend to provide traffic or news reports to radio or television stations in the United States. However, we do ~~intend to~~ offer our mobile traffic products to radio and television stations in the United States.

Our operations are conducted through the following wholly owned direct and indirect subsidiaries:

• Australia Traffic Network ~~• Canadian Traffic Network • UK Traffic Network & UK Commercial Traffic Network • Mobile Traffic Network~~;

•

Canadian Traffic Network;

•

UK Traffic Network & UK Commercial Traffic Network; and

•

Global Alert Network

Global Traffic Network, Inc. is a holding company and conducts no operations. Unless we indicate otherwise, the discussions below regarding our financial condition and results of operations present information on a consolidated basis and all material inter-company transactions and balances have been eliminated.

The Services We Provide — Radio Traffic Reports, Radio News Reports and TV Reports.

The information reports we provide to radio and television stations are divided into three categories, radio traffic reports, radio news reports and TV reports, based on the content of the report and the medium in which it is delivered. Collectively, we refer to these reports as our “information reports.”

The radio stations that contract to provide us with traffic and news report advertising inventory become members of our “Radio Network.” Likewise, the television stations that contract to receive our TV reports become members of our “TV Network.” Collectively, we refer to the members of these networks as our “network affiliates.” We currently offer radio traffic and television traffic reports and video footage to our network affiliates in Australia, while obtaining radio news report advertising inventory by paying cash compensation to our news network affiliates. We currently provide radio traffic reports and TV reports to our network affiliates in Canada~~, as well as news, weather, business and sports reports to our radio network affiliates on a limited basis~~. In the United Kingdom, we provide radio stations with traffic and entertainment news information and reports that are ~~primarily~~ provided through third party out-source providers that we compensate.

Our Sources of Revenue — Sale of Commercial Airtime Inventory

In exchange for providing our information reports and/or, for certain broadcasters, cash compensation, our network affiliates provide us with commercial advertising inventory. We generate revenues by packaging and selling this commercial advertising inventory for cash to advertisers on a local, regional or national network basis, except in the United Kingdom where it is sold on a national basis only. To date, we have recognized no revenue related to the bartering of goods and services and do not anticipate entering into barter transactions for the sale of our commercial advertising inventory in the future.

The ~~substantial~~ majority of our revenues have been generated from our Australian operations, including approximately $5669.57 million, or 6059%, of our revenues for year ended June 30, ~~2010~~2011. Approximately $4149.76 million, or 4542% of our total revenue for fiscal ~~2010~~2011, has been generated from the sale of commercial advertising inventory related to our Australian radio traffic reports. For the year ended June 30, ~~2009~~2010, approximately $4256.75 million, or 7160% of our revenues, was generated by our Australian operations and approximately $3241.17 million, or 5345%, was generated from the sale of of commercial advertising inventory related to our Australian radio traffic reports. For the year ended June 30, ~~2008~~2009, approximately $4442.37 million, or 8771% of our revenues, was generated by our Australian operations and approximately $3332.91 million, or 6753%, was generated from the sale of commercial advertising inventory related to our Australian radio traffic reports. We expect to accumulate increasing amounts of commercial advertising inventory from our Australian operations as we continue to obtain more news report inventory in Australia. We began generating revenue in Canada in 2006 and currently have operations in eight Canadian cities: Calgary, Toronto, Hamilton, Vancouver, Montreal, Ottawa, Edmonton and Winnipeg. AsWe ~~commercial~~anticipate expanding our radio and television advertising inventory ~~generated from~~primarily ~~our~~by ~~Canadian~~adding ~~operations~~new ~~and~~network ~~our~~affiliates ~~expanded~~in ~~Australian~~our ~~operations~~existing ~~increases~~markets, as we ~~expect~~have not penetrated the Canadian markets to ~~sell~~ the ~~increased~~extent ~~commercial~~that ~~advertising~~we ~~inventory~~have done so in ~~the~~Australia ~~same~~or United ~~manner~~Kingdom. asHowever, we ~~have~~will ~~sold~~continue ~~commercial~~ to explore the expansion of our advertising inventory ~~generated~~by ~~from~~both ~~our~~the ~~provision~~introduction of ~~radio~~new ~~traffic~~products ~~reports~~as inwell ~~Australia~~as entering new Canadian markets. ~~Our experience~~We ~~indicates,~~obtained ~~however,~~the ~~that~~majority ~~there~~of isour ~~generally~~United Kingdom radio advertising inventory as a ~~delay~~result ~~between~~of ~~acquiring~~our ~~commercial advertising~~acquisition ~~inventory~~of ~~from~~The ~~new~~Unique orBroadcasting ~~expanded~~Company ~~operations~~Limited ~~and~~(“Unique”) ~~the~~on ~~realization~~March 1, of2009, ~~increasing~~which ~~revenue from~~we ~~the~~subsequently ~~sale~~renamed ofUK ~~such~~Commercial ~~inventory~~Traffic Network. We ~~experienced~~are ~~such~~actively aseeking ~~delay~~to ~~when~~expand wethe ~~added~~amount ~~Austereo~~of asour ~~a network~~traffic ~~affiliate~~and ofentertainment ~~our~~news ~~Radio~~inventory ~~Network~~from inboth ~~fiscal~~new ~~year~~and ~~2004.~~existing ~~Although~~radio affiliates in the ~~additional~~United Kingdom. As commercial advertising inventory we ~~acquired~~generated from ~~Austereo~~our ~~led~~Australian, toCanadian ~~increased~~and ~~revenues~~United ~~during~~Kingdom ~~fiscal~~operations ~~year 2004~~increase, ~~the~~we ~~full~~expect ~~impact~~to onsell the increased ~~revenues~~commercial ~~from~~advertising inventory in the ~~sale~~same ofmanner ~~such~~as we have sold commercial advertising inventory ~~was~~generated ~~not~~from ~~realized~~our ~~until~~provision ~~fiscal~~of ~~year~~radio ~~2005~~traffic reports in Australia. WeOur ~~also experienced~~experience aindicates, ~~similar~~however, ~~lag~~that ~~when~~there weis ~~began~~generally toa ~~receive~~delay ~~news~~between acquiring ~~report~~commercial advertising inventory from ~~Austereo~~new inor ~~July 2006~~expanded operations and the realization of increasing revenues from the sale of such inventory. We expect to experience ~~similar~~such delays in realizing revenues from the sale of commercial ~~advertising~~ advertising inventory associated with additional radio news reports in Australia, ~~and~~ our provision of ~~additional~~ radio traffic reports in Canada and increases in radio advertising inventory in the United Kingdom.

Our Expenses

Our expenses are primarily comprised of three categories: operating expenses, selling expenses and general and administrative expenses. Operating expenses consist of station compensation and all expenses related to the gathering, producing, and broadcasting of our information reports, ~~including~~ including aviation costs and expenses, salaries and benefits for our on-air personalities who deliver the information reports and payments to third parties that provide information and reporting services. Station compensation consists of the reimbursement of expenses incurred by stations which we would otherwise incur in providing services to the station, as well as any additional cash consideration paid to a network affiliate in exchange for commercial advertising inventory. We may incur increased expenses in the form of station compensation in connection with adding certain broadcasters to our base of network affiliates. As mentioned above, our experience indicates that in such instances there is generally a delay between acquiring ~~commercial~~ commercial advertising inventory from new network affiliates and the realization of increased revenue from the sale of such inventory. Aviation costs relate to the costs of our airborne surveillance, an integral part of our information gathering in Australia and Canada, and consist both of payments to outside vendors to lease aircraft and the operating costs (including fuel, maintenance, and insurance costs) associated with the operation of our fleet of owned aircraft. ~~Our~~A ~~fleet~~table ofoutlining ~~leased and owned~~our ~~aircraft~~fleet ~~currently consists~~ of:

	Australia				Canada				United Kingdom
	Leased		Owned		Leased		Owned		Leased		Owned
Fixed-wing aircraft		0		1		2		0		0		2
Helicopters		0		4		0		7		0		0

SellingTable expenses include salaries and benefits for our sales personnel and commissions paid on sales of our commercial advertising inventory. General and administrative expenses consist of corporate overhead, including administrative salaries, real property lease payments, insurance, salaries and benefits for our corporate executive officers, compensation expense related to stock options and restricted stock and legal and accounting fees. Expenses other than selling expenses are generally incurred evenly over the applicable fiscal year. Contents

owned and leased aircraft is set forth under Item 1- Business – Our Business Model, Products and Services – Preparation of Information Reports. Selling expenses include salaries and benefits for our sales personnel and commissions paid on sales of our commercial advertising inventory. General and administrative expenses consist of corporate overhead, including administrative salaries, real property lease payments, insurance, salaries and benefits for our corporate executive officers, compensation expense related to stock options and restricted stock and legal and accounting fees. Expenses other than selling expenses are generally incurred evenly over the applicable fiscal year.

Basis of Presentation

We derive substantially all of our revenue and incur a substantial majority of our expenses from our Australian, Canadian and United Kingdom operations. However, the financial information contained in this Form 10-K, including the financial statements, report our financial condition and results of operation in United States dollars and unless stated otherwise, all references to monetary amounts refer to United States dollars. Income statement amounts are converted from Australian dollars, Canadian dollars or British pounds to United States dollars based on the average exchange rate for each quarterly period covered. Assets and liabilities are converted based on the exchange rate as of the applicable balance sheet date. Equity is converted based on the exchange rate in place at the time of the applicable investment. Foreign currency translation adjustments occur when the income statement and balance sheet are converted at different exchange rates and are recognized as other comprehensive income or loss in the financial statements. For reference, the exchange rates from Australian dollars, Canadian dollars and British pounds to United States dollars applicable to our income statement data for each of the three month periods ended June 30, ~~2010~~2011, ~~2009~~2010, and ~~2008~~2009, March 31, ~~2010~~2011, ~~2009~~2010 and ~~2008~~2009, December 31, ~~2009~~2010, ~~2008~~2009 and ~~2007~~ 2008 and September 30, ~~2009~~2010, ~~2008~~2009 and ~~2007~~2008 and applicable to our balance sheet data as of June 30, ~~2010~~ 2011 and ~~2009~~2010 are set forth below:

Australia

	Exchange		Balance
Income Statement Period	ExchangeRate		Balance Sheet Date	Exchange Rate
Income Statement Period	Rate		Sheet Date			Exchange Rate
Three month period ended June 30, 2011		1.0629	June 30, 2011		1.0722
Three month period ended June 30, 2010		0.8827	June 30, 2010				0.8408
Three month period ended March 31, 2011		1.0056
Three month period ended March 31, 2010		0.9039
Three month period ended December 31, 2010		0.9887
Three month period ended December 31, 2009		0.9094
Three month period ended September 30, 2010		0.9057
Three month period ended September 30, 2009		0.8340
Three month period ended June 30, 2010		0.8827	June 30, 2010		0.8408
Three month period ended June 30, 2009		0.7611	June 30, 2009				0.8064
Three month period ended March 31, 2010		0.9039
Three month period ended March 31, 2009		0.6645
Three month period ended December 31, 2009		0.9094
Three month period ended December 31, 2008		0.6654
Three month period ended September 30, 2009		0.8340
Three month period ended September 30, 2008		0.8875
Three month period ended June 30, 2009		0.7611
Three month period ended June 30, 2008		0.9444
Three month period ended March 31, 2009		0.6645
Three month period ended March 31, 2008		0.9060
Three month period ended December 31, 2008		0.6654
Three month period ended December 31, 2007		0.8890
Three month period ended September 30, 2008		0.8875
Three month period ended September 30, 2007		0.8483

Canada

	Exchange		Balance
Income Statement Period	ExchangeRate		Balance Sheet Date	Exchange Rate
Income Statement Period	Rate		Sheet Date			Exchange Rate
Three month period ended June 30, 2011		1.0336	June 30, 2011		1.0380
Three month period ended June 30, 2010		0.9719	June 30, 2010				0.9399
Three month period ended March 31, 2011		1.0141
Three month period ended March 31, 2010		0.9606
Three month period ended December 31, 2010		0.9873
Three month period ended December 31, 2009		0.9469
Three month period ended September 30, 2010		0.9623
Three month period ended September 30, 2009		0.9115
Three month period ended June 30, 2010		0.9719	June 30, 2010		0.9399
Three month period ended June 30, 2009		0.8567	June 30, 2009				0.8604
Three month period ended March 31, 2010		0.9606
Three month period ended March 31, 2009		0.8037
Three month period ended December 31, 2009		0.9469
Three month period ended December 31, 2008		0.8259
Three month period ended September 30, 2009		0.9115
Three month period ended September 30, 2008		0.9598
Three month period ended June 30, 2009		0.8567
Three month period ended June 30, 2008		0.9902
Three month period ended March 31, 2009		0.8037
Three month period ended March 31, 2008		0.9954
Three month period ended December 31, 2008		0.8259
Three month period ended December 31, 2007		1.0189
Three month period ended September 30, 2008		0.9598
Three month period ended September 30, 2007		0.9566

~~United~~26 ~~Kingdom~~

	Exchange		Balance
Income Statement Period	Rate		Sheet Date	Exchange Rate
Three month period ended June 30, 2010		1.4917	June 30, 2010		1.4945
Three month period ended March 31, 2010		1.5614
Three month period ended December 31, 2009		1.6344
Three month period ended September 30, 2009		1.6411
Three month period ended June 30, 2009		1.5522	June 30, 2009		1.6458
Three month period ended March 31, 2009		1.4369
Three month period ended December 31, 2008		1.5681
Three month period ended September 30, 2008		1.8921
Three month period ended June 30, 2008		1.9718
Three month period ended March 31, 2008		1.9783
Three month period ended December 31, 2007		2.0438
Three month period ended September 30, 2007		2.0217

As reflected above, the U.S. dollar was generally weaker compared to the currencies of the markets in which we operate during the year ended June 30, 2010, especially in Australia which is our largest and most profitable market. This weakening of the U.S. dollar caused our Australian and Canadian revenues and expenses to be higher than they otherwise would be if the exchange rates were consistent for both periods. The United States dollar was stronger on average throughout the course of the year ended June 30, 2010 compared to the British pound, which resulted in our revenues and expenses being lower than they otherwise would have been had exchange rates remained constant. We estimate that the impact from the currency changes in Australia, Canada and United Kingdom on our operating results for the fiscal years ended June 30, 2010 and 2009 compared to the fiscal years ended June 30, 2009 and 2008, respectively, has been to increase or (decrease) income statement data as follows:

	Year			Year
	ended			ended
	June 30, 2010			June 30, 2009
	(in thousands)			(in thousands)
Australia
Revenues	$	9,221		$	(8,690	)
Operating expenses (exclusive of depreciation and amortization expense)		4,789			(4,711	)
Sales, general & administrative expenses		1,849			(1,752	)
Canada
Revenues		1,040			(1,042	)
Operating expenses (exclusive of depreciation and amortization expense)		893			(1,113	)
Sales, general & administrative expenses		314			(307	)
United Kingdom
Revenues (exclusive of depreciation and amortization expense)		(436	)		(2,969	)
Operating expenses		(401	)		(2,857	)
Sales, general & administrative expenses		(56	)		(322	)
Australia, Canada and United Kingdom combined
Revenues		9,825			(12,701	)
Operating expenses (exclusive of depreciation and amortization expense)		5,281			(8,681	)
Sales, general & administrative expenses		2,107			(2,381	)

~~When~~United ~~discussing~~Kingdom changes in income statement accounts from the year ended June 30, 2009 to the year ended June 30, 2010 and from the year ended June 30, 2008 to the year ended June 30, 2009, the analysis under “Results of Operations” below includes both the impact of currency changes and changes in revenues and expenditures in the local currency.


Income Statement Period	Exchange Rate		Balance Sheet Date	Exchange Rate
Three month period ended June 30, 2011		1.6315	June 30, 2011		1.6053
Three month period ended March 31, 2011		1.6028
Three month period ended December 31, 2010		1.5803
Three month period ended September 30, 2010		1.5510
Three month period ended June 30, 2010		1.4917	June 30, 2010		1.4945
Three month period ended March 31, 2010		1.5614
Three month period ended December 31, 2009		1.6344
Three month period ended September 30, 2009		1.6411
Three month period ended June 30, 2009		1.5522
Three month period ended March 31, 2009		1.4369
Three month period ended December 31, 2008		1.5681
Three month period ended September 30, 2008		1.8921

As reflected above, the U.S. dollar was generally weaker compared to the currencies of the markets in which we operate during the year ended June 30, 2011, especially in Australia, our largest and most profitable market. This weakening of the U.S. dollar caused our Australian and Canadian revenues and expenses to be higher than they otherwise would be if the exchange rates were consistent for both periods. The United States dollar was stronger in the first two quarters of fiscal 2011 and weaker in the last two quarters compared to the fiscal year ended June 30, 2010 in relation to the British pound, which resulted in our revenues and expenses being both lower and higher than they otherwise would have been had exchange rates remained constant. We estimate that the impact from the currency changes in Australia, Canada and United Kingdom on our operating results for the fiscal years ended June 30, 2011, 2010 and 2009 compared to the fiscal years ended June 30, 2010, 2009 and 2008, respectively, has been to increase or (decrease) income statement data as follows:


	Year ended June 30, 2011 (in thousands)		Year ended June 30, 2010 (in thousands)			Year ended June 30, 2009 (in thousands)
Australia
Revenues	$	7,683	$	9,221		$	(8,690	)
Operating expenses (exclusive of depreciation and amortization expense)		4,037		4,789			(4,711	)
Sales, general & administrative expenses		1,548		1,849			(1,752	)
Canada
Revenues		769		1,040			(1,042	)
Operating expenses (exclusive of depreciation and amortization expense)		445		893			(1,113	)
Sales, general & administrative expenses		172		314			(307	)
United Kingdom
Revenues		302		(436	)		(2,969	)
Operating expenses (exclusive of depreciation and amortization expense)		226		(401	)		(2,857	)
Sales, general & administrative expenses		68		(56	)		(322	)
Australia, Canada and United Kingdom combined
Revenues		8,754		9,825			(12,701	)
Operating expenses (exclusive of depreciation and amortization expense)		4,708		5,281			(8,681	)
Sales, general & administrative expenses		1,788		2,107			(2,381	)

When discussing changes in income statement accounts from the year ended June 30, 2010 to the year ended June 30, 2011 and from the year ended June 30, 2009 to the year ended June 30, 2010, the analysis under “Results of Operations” below includes both the impact of currency changes and changes in revenues and expenditures in the local currency.

Seasonality of Business

We believe that advertising revenues in general vary moderately over the calendar year, with the three month period ending December 31 generally resulting in the highest revenues and the three month period ending March 31 generally resulting in the lowest revenues. This industry trend is mainly attributable to increases in the level of advertiser demand, and resulting increases in average advertising spot rates and/or number of spots sold, during the months leading up to the Christmas holiday season and lower advertiser demand following the end of the holiday season which leads to lower average advertising spot rates and/or number of spots sold during that time. We believe that this general trend in advertising revenues is applicable to our business. Over the past five fiscal years however, the financial impact of seasonality has been offset by the rapid revenue growth, and in certain cases, favorable exchange rate movements, as revenues for the quarter ending March 31 have exceeded revenues for the quarter ended September 30 during four of these five fiscal years, with the lone exception being the year ended June 30, 2009. Our revenues during the third fiscal quarter of 2009 were significantly impacted by a stronger U.S. dollar, which lowered our reported revenues in U.S. dollars. For similar reasons as outlined above, our fiscal fourth quarter has generated more revenue than fiscal second quarter for ~~each~~four of the ~~four fiscal~~past ~~years~~five ~~ended June 30, 2009. In~~ fiscal ~~2010~~years, ~~however,~~with ~~revenues for~~ the ~~quarter~~year ended ~~December 31, 2009 exceeded revenues for the quarter ended~~ June 30, 2010. ~~Our~~being ~~expenses other than sales costs are generally spread evenly over~~ the ~~fiscal~~lone ~~year.~~exception Asas arevenues ~~result,~~for ~~we generally experience seasonality in~~ the ~~amount of our net income absent growth due to the addition of new network~~ ~~affiliates.~~

quarter ended December 31, 2009 exceeded revenues for the quarter ended June 30, 2010. Our expenses other than sales costs are generally spread evenly over the fiscal year. As a result, we generally experience seasonality in the amount of our net income absent growth due to the addition of new network affiliates.

Acquisition of The Unique Broadcasting Company Limited

On February 1, 2009, UK Traffic Network entered into a definitive share purchase agreement to acquire The Unique Broadcasting Company Limited (“Unique”) and the acquisition was completed effective March 1, 2009, at which point Unique was renamed Global Traffic Network (UK) Commercial Limited (“UK Commercial Traffic Network”). Consequently, our results for the ~~year~~years ended June 30, 2011 and 2010 include UK Commercial Traffic Network’s operations for the entire year whereas the corresponding year ended June 30, 2009 only includes four months of results for UK Commercial Traffic Network. For the year ended June 30, 2011, our net revenues and net income attributable to UK Commercial Traffic Network were approximately $28.1 million and $0.4 million, respectively. For the year ended June 30, 2010, our net revenues and net loss attributable to UK Commercial Traffic Network ~~were~~ were approximately $23.2 million and $(0.7) million, respectively. For the year ended June 30, 2009, our net revenues and net loss attributable to UK Commercial Traffic Network were approximately $6.6 million and $(0.4) million, respectively.

Results of Operations

Year Ended June 30, ~~2010~~2011 Compared With Year Ended June 30, ~~2009~~ 2010

Revenues. Revenues increased from approximately $6093.3 million for the year ended June 30, ~~2009~~ 2010 to approximately $93117.34 million for the year ended June 30, ~~2010~~2011, an increase of ~~approximately~~ 54approximately 25.78%. The largest portion of the increase in revenues was an increase of approximately $1613.7 2 million (approximately 23.4%) from our ~~United~~Australia ~~Kingdom~~ operations, ~~which~~compared ~~was attributable~~ to anthe ~~increase~~year ofended ~~approximately $16.6~~June ~~million~~30, in2010. ~~revenues~~The ~~associated~~increase ~~with~~pertained ~~the~~solely ~~UK Commercial Traffic Network (formerly Unique)~~to ~~business operations. Because we consummated~~ our ~~acquisition~~radio ofnetwork. ~~Unique~~Approximately ~~on March~~$8.6 1,million ~~2009, only four months~~ of ~~results from~~ the UKincrease ~~Commercial~~in ~~Traffic~~radio ~~Network’s~~network ~~operations~~revenue ~~were~~related ~~included~~to in our ~~results for~~radio ~~the~~traffic ~~comparable~~network ~~2009~~while ~~period.~~our ~~Revenues~~radio ~~from~~news ~~the~~network ~~sale~~revenues ~~of inventory related to our Canadian operations~~ increased approximately $24.6 million. ~~from~~Approximately ~~the previous year period~~$7.7 ~~The~~million ~~higher~~of ~~revenues~~the $13.2 ~~were~~million ~~attributable~~overall toincrease ~~performance~~in ~~during~~Australian ~~the~~revenues ~~third~~pertained ~~and~~to ~~fourth~~currency ~~quarters~~fluctuations ofas ~~fiscal~~the ~~2010,~~Australian indollar ~~which revenues~~strengthened ~~increased~~considerably (approximately ~~$2.7 million~~12%) ~~compared~~against to the ~~year~~U.S. ~~ago~~dollar ~~six~~for ~~month~~the ~~period~~fiscal year). As reflected in Changes in Key Operating Statistics in Local Currencies, ~~Canadian~~Australian revenues increased approximately 2310.71% when measured in ~~Canadian~~local ~~dollars~~currency compared to the year ended June 30, 2010. The Australian revenue increase in local currency was driven by an increase in the number of spots sold ~~(attributable~~compared to ~~more~~the ~~spots~~previous ~~available~~year. ~~for~~The ~~sale and~~increase ~~higher~~in ~~utilization)~~spots ~~and~~sold ~~higher~~was ~~spot~~mainly ~~rates.~~due ~~Australian~~to ~~revenues~~having ~~increased~~more ~~approximately~~advertising ~~$13.8 million~~inventory available for sale compared to the previous year. For the year ended June 30, ~~2009.~~2011, ~~The~~we ~~increase~~had ~~pertained~~approximately ~~solely~~608 thousand spots available for sale compared to ~~our~~approximately ~~radio network,~~552 asthousand ~~revenues~~the onprevious year. Revenues from the sale of inventory related to our TVCanadian ~~network~~operations ~~decreased~~increased approximately $05.35 million ~~for~~(approximately 57.9%) from the previous year period. ~~Approximately~~Canadian ~~$9.1 million~~sales ofin ~~the~~fiscal ~~increase~~2011 incontinued ~~radio~~the ~~network~~momentum ~~revenue~~from ~~related~~the tothird ~~our~~and ~~radio~~fourth ~~traffic network~~quarters ~~while~~of ~~our~~fiscal ~~radio~~2010 ~~news~~(in ~~network~~which revenues increased approximately $52.07 million compared to the year ago six month period). Approximately $0.8 million of the $5.5 million overall increase in Canadian revenues pertained to currency fluctuations. As reflected in Changes in Key Operating Statistics in Local Currencies, ~~Australian~~Canadian revenues increased approximately 1151.21% when measured in ~~local~~Canadian dollars. The Canadian revenue increase in local currency ~~compared~~was todriven by a significant increase in spot rates. In Canadian dollars, the average spot rate increased from approximately $26 for the year ended June 30, ~~2009.~~2010 ~~The~~to ~~Australian~~approximately ~~revenue~~$44 ~~increase~~for inthe ~~local~~year end June ~~currency~~30, ~~was~~2011. ~~driven~~Revenues byfrom anour ~~increase~~UK inoperations ~~the~~increased ~~number~~approximately $5.3 million, or approximately 19.3%. The substantial majority (approximately $4.9 million) of ~~spots~~the ~~sold~~increase ~~and~~related to higher ~~spot~~sales ~~rates~~from ~~compared~~UK toCommercial Traffic Network. Only ~~the~~approximately ~~previous~~$0.3 ~~year~~million of the $5.3 ~~The~~million overall increase in ~~spots~~United ~~sold~~Kingdom ~~was~~revenues ~~due~~pertained ~~both~~ to ~~having~~currency ~~more~~fluctuations. ~~advertising inventory~~As ~~available~~reflected ~~for~~in ~~sale~~Changes asin ~~well~~Key asOperating aStatistics ~~higher~~in ~~percentage~~Local ofCurrencies, ~~available~~UK ~~spots~~revenues ~~being~~increased ~~sold~~approximately ~~compared~~18.4% towhen ~~the~~measured ~~previous~~in ~~year~~British pounds. Approximately $98.8 million ~~(or approximately 30%)~~ of the consolidated revenue increase for the year ended June 30, ~~2010~~2011 was due to currency fluctuations related to the weaker U.S. dollar during the period compared with the previous year. ~~Approximately~~ ~~$9.2 million of the increase pertaining to currency fluctuation was attributable to our Australian operations.~~

26Operating expenses. Operating expenses increased from approximately $63.3 million for the year ended June 30, 2010 to approximately $73.7 million for the year ended June 30, 2011, an increase of approximately 16.4%. Operating expenses related to our Australian, Canadian and United Kingdom operations increased approximately $6.6 million (approximately 22.0%), $0.9 million (approximately 9.3%) and $2.4 million (approximately 10.4%), respectively, each primarily due to an increase in station compensation. Approximately $4.0 million, $0.4 million and $0.2 million of the overall increase in Australian, Canadian and United Kingdom operating expenses, respectively was due to currency movements as the United States dollar was weaker against the local currencies of all our foreign subsidiaries for the fiscal year ended June 30, 2011. As reflected in Changes in Key Operating Statistics in Local Currencies, Australian, Canadian and United Kingdom operating expenses increased approximately 8.4%, 4.2% and 9.8% respectively when measured in local currencies, in each case mainly due to increases in station compensation. In addition, operating expenses for Global Alert Network doubled (an increase of approximately $0.5 million) during the year ended June 30, 2011 as we introduced our mobile phone alerting product during the period and have commenced adding subscribers, both of which have led to an increase in operating expenses. We anticipate that Global Alert Network operating expenses will continue to increase in the future as we continue to attempt to create a profitable business out of our alerting product for mobile phones.

Selling, general and administrative expenses. Selling, general and administrative expenses increased from approximately $21.0 million for the year ended June 30, 2010 to approximately $25.4 million for the year ended June 30, 2011, an increase of approximately 21.0%. Australian selling, general and administrative costs increased approximately $2.4 million (approximately 20.5%) for the year ended June 30, 2011. The main areas of increase included approximately $1.4 million in sales employee remuneration related mainly to the higher revenue for the period, $0.4 million in administrative wages and $0.3 million in other administrative and sales expenses, along with a $0.2 million increase in management fees attributable to currency changes that was offset on by the corresponding increase in management fee revenue on the income statement of Global Traffic Network (unconsolidated parent). Approximately $1.5 million of the overall $2.4 million increase in Australian

~~Operating~~ selling, general and administrative expenses related to currency fluctuations. ~~Operating~~Sales ~~expenses~~expense ~~increased~~as a percentage of revenue in Australia decreased from approximately ~~$40~~14.~~9 million~~0% for the year ~~ended~~ ended June 30, ~~2009~~2010 to approximately ~~$63~~13.~~3 million~~4% for the year ended June 30, ~~2010~~2011. As revenue increases, angenerally ~~increase~~fixed ~~of approximately~~costs ~~54.8%.~~become ~~Approximately~~a ~~$12.5 million~~smaller portion of ~~the~~selling ~~increase~~expenses ~~pertained~~and toresult ~~our~~in ~~United~~sales ~~Kingdom operations,~~expenses becoming a smaller percentage of ~~which~~revenue. Selling, general and administrative expenses in Canada increased approximately $~~13.~~1.4 million ~~pertained~~primarily due to ~~the~~increased UKsales ~~Commercial~~employee ~~Traffic~~costs ~~Network (formerly~~attributable ~~Unique)~~to ~~business~~both ~~operations~~increased ~~that~~staffing weand ~~acquired~~higher oncommission ~~March 1,~~costs ~~2009.~~resulting ~~Expenses~~ from ~~our~~the ~~other United~~increased ~~Kingdom~~billing ~~operations~~for ~~decreased~~the year. ~~approximately~~Approximately $0.62 million ~~compared~~of to the ~~previous~~overall ~~year period~~$1.4 million ~~The~~increase ~~main~~in ~~components~~Canadian ofselling, ~~the~~general ~~reduction~~and inadministrative ~~operating~~ expenses ~~from~~related ~~our~~to ~~pre-existing~~currency ~~UK operations~~fluctuations. ~~were~~United ~~approximately~~Kingdom ~~$0.3 million~~selling, ~~reduction~~general inadministrative ~~communications~~ expenses ~~related~~for tothe ~~our Highways~~year ~~Agency contract~~ended June 30, ~~which~~2011 ~~was~~increased ~~also~~approximately ~~reflected~~$0.7 asmillion acompared ~~reduction~~to ~~of revenue under~~ the ~~contract~~year ~~as well~~ended asJune 30, ~~approximately~~2010. Approximately $0.3 6 million ~~reduction~~of inthe ~~operating~~increase ~~expenses~~in ~~from~~costs ~~our~~related ~~original~~to ~~traffic operations.~~additional ~~Operating~~employee ~~expenses~~compensation primarily related to ~~our~~incentive ~~Australian~~compensation for exceeding sales and ~~Canadian~~profitability ~~operations~~goals ~~increased approximately~~for $7the year.~~4 million~~ ~~and~~In ~~$2.5 million~~addition, ~~respectively,~~Global ~~each~~Traffic ~~primarily~~Network ~~due~~(unconsolidated parent) commenced charging a management fee to anthe ~~increase~~United ~~in station~~Kingdom ~~compensation.~~subsidiaries ~~Approximately~~effective ~~$4.8~~January ~~million~~1, ~~and $0~~2011.~~9 million~~ ofThe ~~the~~cost ~~overall~~of ~~increase~~this inmanagement fee ~~Australian~~from ~~and~~such ~~Canadian~~date ~~operating~~through ~~expenses,~~the ~~respectively~~end of fiscal 2011 was ~~due~~approximately to$0.2 ~~currency~~million. ~~movements~~This asadditional ~~both~~cost was offset by the ~~Australia~~ ~~and~~corresponding ~~Canada~~increase ~~dollar~~in ~~significantly~~management ~~strengthened~~fee ~~against~~revenue on the ~~U.S.~~income ~~dollar~~statement ~~during~~on ~~the~~Global ~~year ended~~Traffic ~~June 30,~~Network ~~2010~~(unconsolidated parent). AsNon-cash compensation ~~reflected~~expense inresulting ~~Changes~~from ingrants ~~Key~~of ~~Operating~~employee ~~Statistics~~and indirector ~~Local~~stock ~~Currencies, Australian~~options and ~~Canadian~~restricted ~~operating~~stock ~~expenses~~was ~~increased~~ approximately 11$1.8%4 million ~~and~~for ~~21.1%~~the ~~respectively when~~year ~~measured~~ended ~~in local currencies~~June 30, ~~mainly~~2011 ~~due~~compared to ~~increases~~approximately in$1.2 ~~station~~million ~~compensation.~~for the year ended June 30, 2010.

~~Selling,~~Depreciation ~~general~~ and ~~administrative~~amortization ~~expenses~~expense. ~~Selling,~~Depreciation ~~general~~ and ~~administrative~~amortization ~~expenses~~ expense increased from approximately $155.63 million for the year ended June 30, ~~2009~~2010 to approximately $216.0 ~~million for the year ended June~~ ~~30, 2010, an increase of approximately 34.6%. Selling, general and administrative expenses increased approximately $2.1~~ million in the United Kingdom due to a $2.2 million increase from the acquired UK Commercial Traffic Network (formerly Unique) business operations. Australian selling, general and administrative costs increased approximately $3.0 million for the year ended June 30, ~~2010~~2011. The ~~main~~majority ~~increases included~~ (approximately $2.0 ~~million in sales employee remuneration, $0~~.36 million in administrative wages, $0.5 million in other administrative and sales expenses and $0.2 million increase in management fees which was due to currency changes and was offset on Global Traffic Network (unconsolidated parent). ~~Approximately $1.8 million~~ of the ~~overall $3.0 million~~ increase ~~in Australian selling, general and administrative expenses~~ related to ~~currency~~shortening ~~fluctuations.~~the ~~Sales~~useful ~~expense~~lives ~~as a percentage~~ of ~~revenue~~the inCanadian Traffic ~~Australia~~Network ~~increased~~helicopters from ~~approximately~~eight ~~13.4%~~years ~~for the year ended June 30, 2009~~ to ~~approximately~~six ~~14.0%~~years ~~for the year ended June 30, 2010. Selling, general~~ and ~~administrative expenses~~reducing inthe ~~Canada~~Canadian ~~increased~~Traffic ~~approximately~~Network ~~$0.8 million~~helicopter ~~primarily~~engine ~~due~~rebuild touseful ~~increased~~lives ~~sales~~from ~~employee costs~~three ~~due~~years ~~both~~ to ~~increased~~two ~~staffing and higher commission costs related to the increased billing for the year~~years. ~~Selling,~~This ~~general~~change ~~and~~in ~~administrative~~estimate ~~expenses~~was ofmade ~~Mobile~~in ~~Traffic~~March ~~Network~~2010 ~~were~~due ~~reduced approximately $0.5 million compared~~ to ~~the year ago period as we actively reduced~~ our ~~staffing~~flying ~~of this~~more ~~subsidiary.~~hours ~~Non-cash compensation expense resulting from grants of employee and director stock~~per ~~options~~year ~~and~~in ~~restricted~~Canada ~~stock~~than ~~was~~originally ~~approximately $1~~anticipated.~~2 million~~ ~~for both the year ended June 30, 2010 and 2009.~~

~~Depreciation~~Interest ~~and amortization~~ expense. ~~Depreciation~~Interest ~~and amortization~~ expense ~~increased~~decreased from approximately $~~2.5 million~~ 15,000 for the year ended June 30, ~~2009~~2010 to ~~approximately~~ $~~5.3 million~~0 for the year ended June 30, ~~2010~~2011. ~~The~~All ~~majority~~ of ~~the~~our ~~increase~~outstanding ~~pertains~~debt tobalances ~~amortization~~were ofrepaid ~~the~~during ~~intangibles associated with~~ the ~~acquisition~~year ofended ~~UK Commercial Traffic Network (formerly Unique). Approximately $0.2~~June ~~million~~30, of2010 ~~the increase related to shortening the useful lives of the Canadian Traffic Network helicopters from eight years to six years~~ and ~~reducing~~we ~~the~~had ~~Canadian~~no ~~Traffic~~outstanding ~~Network~~long ~~helicopter engine~~term ~~rebuild~~debt ~~useful~~as ~~lives~~of ~~from~~June 30, ~~three years to two years~~2011. ~~This change in estimate was made due to~~ ~~our flying more hours per year in Canada than originally anticipated.~~

~~Interest~~Other expense(income). ~~Interest~~Other ~~expense~~income ~~decreased~~(net) increased from approximately $~~39,000~~0.9 million for the year ended June 30, ~~2009~~2010 to approximately $~~15,000~~1.2 million for the year ended June 30, ~~2010~~2011. ~~All~~Other income (net) consists primarily of approximately $1.3 million of interest income on our cash balances and the ~~outstanding~~increase in interest income is ~~debt~~attributable ~~balances~~mainly ~~were~~to ~~repaid~~higher interest rates in Australia during the current period and wesignificantly ~~had~~increased nocash ~~outstanding~~balances ~~long~~primarily ~~term~~due ~~debt~~to asour ofstrong operating performance during the year ended June 30, ~~2010~~ 2011.

~~Other~~Income ~~income~~tax expense. ~~Other~~Income ~~income~~tax ~~decreased~~expense increased from approximately $14.0 million for the year ended June 30, ~~2009~~2010 to approximately $04.96 million for the year ended June 30, ~~2010~~2011. ~~Other~~The ~~income~~increase ~~consists~~ was primarily ofdue ~~interest~~to ~~income~~higher onnet ~~our~~profit ~~cash~~in ~~balances~~Australia ~~and~~which led to an approximately $1.4 million increase in income tax expense for the ~~reduction~~year isended ~~attributable~~June 30, ~~mainly~~2011 compared to ~~lower interest~~the ~~rates~~year ~~during~~ended ~~the~~June 30, ~~current~~2010. ~~period~~The ~~and~~effective ~~our~~tax ~~reduced~~rate ~~cash~~in ~~balances~~Australia ~~due~~was 30.1% for the years ended June 30, 2011 and 2010 compared to the ~~purchase~~statutory federal rate of UK30.0%. Net tax benefit for the United States was approximately ~~Commercial~~$1.1 ~~Traffic~~million, ~~Network~~which ~~(formerly~~consisted ~~Unique)~~of approximately $2.0 ~~The~~million ~~reduction~~tax inbenefit ~~other~~from the currency fluctuations impact on GTN’s deferred tax liability related to the Australia income recognized in the United States, which was partially ~~mitigated~~ offset by approximately ~~foreign~~$0.4 ~~currency~~million ~~translation~~of ~~income~~deferred oftax expense and approximately $0.1 5 million ~~for~~tax ~~the~~accrual ~~year~~related ~~ended~~to ~~June 30, 2010~~an ~~compared~~uncertain totax noposition. ~~foreign~~With ~~currency~~the ~~translation~~exception of some immaterial state income ortaxes, ~~loss~~all ~~during~~of the ~~2009~~United ~~period.~~States ~~The~~tax ~~foreign~~expense and benefit were ~~currency~~non-cash. ~~translation~~There was no income ~~resulted~~tax ~~from~~benefit ~~the~~for ~~repayment~~Canada ofas ~~balances~~a ~~due~~valuation toallowance has been created for 100% of the Company’s bynet ~~Australia Traffic~~deferred ~~Network~~tax assets in that country. ~~Intercompany~~In ~~balances~~addition, ~~between~~tax ~~the~~expense ~~Company~~related ~~and~~to ~~its~~our ~~subsidiaries~~United ~~are~~Kingdom ~~translated~~operations ~~from~~increased ~~the~~approximately ~~local~~$0.3 million ~~currencies~~due to Uincreased profits from UK Commercial Traffic Network.S. ~~dollars~~The atUK ~~each~~Traffic ~~balance~~Network ~~sheet~~realized ~~date~~approximately $0.7 Tomillion tax benefit due primarily to the ~~extent~~unwinding ~~these~~of ~~balances~~the ~~are~~deferred tax liability created by the Unique ~~intended~~acquisition. toThe beUK ~~ongoing,~~Traffic ~~that~~Network ~~is,~~tax ~~settlement~~benefit iswas ~~neither~~offset ~~planned~~by ~~nor~~approximately ~~anticipated,~~$0.8 million ~~the~~of ~~translation adjustments~~tax expense related to ~~balance~~the ~~intercompany~~utilization ~~are~~of ~~reflected~~UK asCommercial aTraffic ~~component~~Network’s ofnet ~~other~~operating ~~comprehensive~~loss ~~income~~carry-forwards. The UK Traffic Network also recognized ~~repayment~~an additional approximately $0.2 million in tax benefit due to the impact of the ~~Australia~~reduction in tax rates in the United Kingdom from 28% to 26%. UK Commercial Traffic Network’s ~~intercompany~~tax ~~balance~~benefit ~~triggered~~and atax ~~realized~~expense ~~foreign~~are both non-cash items due to the ~~exchange~~deferred ~~income~~tax ~~during~~liability created as part of the ~~period~~acquisition and the net operating losses of Unique that we acquired.

~~Income tax expense~~Net income. ~~Income~~Net ~~tax expense~~ income increased from approximately $30.36 million for the year ended June 30, ~~2009~~2010 to approximately $48.09 million for the year ended June 30, ~~2010~~2011. ~~The~~Our increase ~~was~~ in net income is primarily ~~due~~attributable to an increase of approximately $13.0 4 million in Australia ~~from~~Traffic ~~the~~Network ~~higher~~ net income, ina ~~the~~decrease ~~current~~of ~~period partially offset by~~ approximately $02.36 million ~~increase~~ in ~~the deferred~~Canadian ~~tax~~Traffic ~~benefit~~Network innet ~~the~~loss ~~United~~due ~~Kingdom.~~to ~~The~~significantly ~~effective~~increased ~~tax~~revenues, ~~rate~~approximately ~~in Australia was 30.~~$1~~% and 30~~.~~0% for~~7 ~~the~~million ~~year~~increase ~~ended~~in ~~June 30,~~our consolidated ~~2010~~UK ~~and~~operations ~~2009,~~that ~~respectively,~~grew ~~compared~~from toa ~~the~~net ~~statutory~~loss ~~federal~~of ~~rate~~approximately ~~of 30~~$1.~~0%.~~3 ~~There~~million ~~was~~to nonet income ~~tax~~of ~~benefit~~approximately ~~for~~$0.4 ~~the~~million ~~United~~and ~~States~~an orapproximate ~~Canada~~$1.0 asmillion adecrease ~~valuation~~in ~~allowance has been created for 100% of~~ the ~~Company’s~~ net ~~deferred~~loss ~~tax~~of ~~assets~~GTN in(unconsolidated ~~those~~parent) ~~countries.~~that ~~The~~was UKprimarily ~~Traffic Network realized approximately $0.7 million tax benefit~~ due to the increase ~~reduction~~in ofincome ~~the deferred~~ tax ~~liability~~ ~~created~~benefit byin the ~~acquisition~~period. ofThese UKincreases ~~Commercial~~in ~~Traffic~~net ~~Network~~income ~~(formerly~~were ~~Unique), which was~~ partially offset by ~~the~~an ~~taxable~~increase ~~income~~in ~~generated~~the bynet UKloss ~~Commercial~~of ~~Traffic~~Global ~~Network~~Alert ~~during the period. UK Commercial Traffic~~ Network’s ~~tax~~of ~~expense~~approximately ~~and~~$0.4 ~~benefit~~million ~~are~~resulting ~~non-cash~~from ~~items~~increased ~~due~~expenditures ~~to the deferred tax liability created~~ as ~~part~~we ofattempt ~~the~~to ~~acquisition~~create ~~and~~a profitable ~~the~~business ~~significant~~from ~~net~~our ~~operating~~alerting ~~losses of~~product ~~Unique~~for ~~that~~mobile ~~we acquired~~phones.

Net income (loss). Net income (loss) increased from approximately $1.1 million of net loss for the year ended June 30, 2009 to net income of approximately $0.6 million for the year ended June 30, 2010. Our increase in net income is primarily attributable to an increase of approximately $2.2 million in Australia Traffic Network net income, a decrease of approximately $0.6 million in Mobile Traffic Network net loss due to expense reductions and approximately $0.5 reduction of the net loss of our consolidated UK operations. These increases in net income were partially offset by an increase in the net loss of the parent holding company that was primarily due to lower interest income in the current year and an increase in Canadian Traffic Network net loss of approximately $1.3 million. The increase in Canadian Traffic Network net loss pertained to business operations in the first half of fiscal 2010, as Canadian Traffic Network’s operations during the second half of fiscal 2010 showed a reduction in net loss of approximately $0.4 million compared to the prior year period.

The table below sets forth changes in certain of our key operating statistics for our Australian operations for the comparable periods presented without taking into account foreign currency exchange rates. Amounts are expressed in Australian dollars. The exchange rates from Australian dollars to United States dollars for each of the applicable periods is set forth in the Executive Overview section of Management Discussion and Analysis of Financial Condition and Results of Operations under the heading “Basis of Presentation”.

Changes in Key Operating Statistics in Local Currencies

Australian Operations:

	Year			Year
Key operating statistic	YearEndedJune 30,2011			YearEndedJune 30,2010			PercentageIncrease(Decrease)
	Ended			Ended			Percentage
	June 30,			June 30,			Increase
Key operating statistic	2010			2009			(Decrease)
	(In thousands)			(In thousands)
Revenues	$	6370,~~841~~278		$	5763,~~396~~841			1110.21	%
Operating expenses (exclusive of depreciation and amortization expense shown separately below)		3336,~~986~~851			3033,~~390~~986			~~11.~~8.4	%
Selling, general and administrative expenses		1314,~~231~~212			1113,~~706~~231			137.04	%
Depreciation and amortization expense		1,~~113~~083			~~994~~1,113			12(2.07	)%
Interest expense		17—			5217			(67100.30	)%
Other (income)		(825	)		(878	)		(6.0	)%
Other (income) (net)		(1,311	)		(825	)		58.9	%
Income tax expense		45,~~914~~852			4,~~542~~914			819.21	%
Net income		1113,~~405~~591			1011,~~590~~405			719.72	%

The table below sets forth changes in certain of our key operating statistics for our Canadian operations for the comparable periods presented without taking into account foreign currency exchange rates. Amounts are expressed in Canadian dollars. The exchange rates from Canadian dollars to United States dollars for each of the applicable periods is set forth in the Executive Overview section of Management Discussion and Analysis of Financial Condition and Results of Operations under the heading “Basis of Presentation”.

Canadian Operations:

	Year			Year
Key operating statistic	YearEndedJune 30,2011			YearEndedJune 30,2010			PercentageIncrease(Decrease)
	Ended			Ended			Percentage
	June 30,			June 30,			Increase
Key operating statistic	2010			2009			(Decrease)
	(In thousands)			(In thousands)
Revenues	$	914,~~927~~999		$	89,~~023~~927			2351.71	%
Operating expenses (exclusive of depreciation and amortization expense shown separately below)		10,~~205~~637			810,~~425~~205			214.12	%
Selling, general and administrative expenses		24,~~977~~178			2,~~348~~977			2640.83	%
Depreciation and amortization expense		1,~~455~~965			~~881~~1,455			6535.21	%
Interest expense		—			—			—
Other (income)		(4	)		(30	)		(86.7	)%
Other expense (income) (net)		34			(4	)		NM
Income tax expense		—			—			—
Net loss		(41,~~706~~815	)		(34,~~601~~706	)		30(61.74	)%

The table below sets forth changes in certain of our key operating statistics for our United Kingdom operations for the comparable periods presented without taking into account foreign currency exchange rates. Amounts are expressed in British pounds. The exchange rates from British pounds to United States dollars for each of the applicable periods is set forth in the Executive Overview section of Management Discussion and Analysis of Financial Condition and Results of Operations under the heading “Basis of Presentation”.

United Kingdom Operations:

	Year			Year
Key operating statistic	YearEndedJune 30,2011			YearEndedJune 30,2010			PercentageIncrease(Decrease)
	Ended			Ended			Percentage
	June 30,			June 30,			Increase
Key operating statistic	2010			2009			(Decrease)
	(In thousands)			(In thousands)
Revenues	£	1720,~~301~~493		£	617,~~892~~301			~~151~~18.04	%
Operating expenses (exclusive of depreciation and amortization expense shown separately below)		1415,~~544~~965			614,~~706~~544			~~116.~~9.8	%
Selling, general and administrative expenses		2,~~067~~493			~~751~~2,067			~~175~~20.26	%
Depreciation and amortization expense		1,~~804~~846			~~661~~1,804			~~172~~2.93	%
Interest expense		—			—			—
Other (income)		(80	)		(7	)		1,042.9	%
Other (income) (net)		(9	)		(80	)		(88.8	)%
Income tax (benefit)		(~~247~~70	)		(87247	)		~~183~~(71.97	)%
Net loss		(787	)		(1,132	)		(30.5	)%
Net income (loss)		268			(787	)		NM

~~Year Ended June~~ 30, ~~2009 Compared With Year Ended June 30, 2008~~

Revenues. Revenues increased from approximately $51.0 million for year ended June 30, 2008 to approximately $60.3 million for the year ended June 30, 2009, an increase of approximately 18.2%. Revenues from our Australian operations in fiscal 2009 decreased approximately $1.6 million from the prior year period, with revenues from our Australian radio network decreasing approximately $0.2 million and revenues from our TV network decreasing approximately $1.3 million. The decrease in revenues from our Australian radio networks reflects a decrease of approximately $1.0 million from our traffic network that was partially offset by an approximate $0.8 million increase from our news radio network. Revenues from the sale of inventory related to our Canadian operations in fiscal 2009 increased approximately $0.2 million over the prior year period, to approximately $6.9 million. Revenues for our 2009 United Kingdom operations were approximately $10.7 million compared to $0 for the year ended June 30, 2008. Approximately $6.6 million of our UK revenues was attributable to the Unique business operations that we acquired on March 1, 2009.

As reflected in Basis of Presentation, revenues were negatively impacted by unfavorable exchange rate movements in Australia and Canada during the year ended June 30, 2009. When measured in local currencies, Australian revenue increased approximately 16.4% and our Canadian revenue increased approximately 19.7%. The most significant portion of the revenues increase in Canada (when measured in local currency) was due to the sale of more spots albeit at a lower rate. The increase in the number of spots sold was primarily due to increased utilization of existing spot inventory. The most significant factors in the increase in revenues in Australia (when measured in local currency) was an increase in the average rate per advertising spot and the number of spots sold. The increase in advertising spots sold was primarily driven by obtaining additional inventory compared to the prior year period.

Operating expenses. Operating expenses increased from approximately $30.5 million for the year ended June 30, 2008 to approximately $40.9 million for the year ended June 30, 2009, an increase of approximately 34.1%. Approximately $0.3 million of the increase pertained to our Australian operations, which was mainly attributable to higher news station compensation. As reflected in Changes in Key Operating Statistics in Local Currencies, Australian operating expenses increased approximately 22.2% when measured in local currency. Canadian operating expenses during fiscal 2009 increased approximately $0.4 million over the fiscal 2008 period, due primarily to an approximately $1.3 million increase in station compensation that was partially offset by reductions of approximately $0.2 million in employee costs and approximately $0.6 million in aviation expenses. As reflected in Changes in Key Operating Statistics in Local Currencies, the percentage increase in Canadian operating expenses was greater when measured in local currency. Canadian operating expenses increased approximately 22.5% when measured in local currency. Approximately $9.2 million of the increase in operating expenses resulted from costs incurred by UK Traffic Network, the majority of which was related to the cost of providing service under our contract with the United Kingdom’s Highways Agency, which commenced July 1, 2008, and our operation of the Unique business, which we acquired on March 1, 2009. Operating costs related to the Unique business were approximately $5.6 million. The increase in our operating expenses for Mobile Traffic Network was approximately $0.7 million for the year ended June 30, 2009. Mobile Traffic Network was formed March 8, 2008 and therefore was not in existence for a substantial portion of the year ended June 30, 2008.

Selling, general and administrative expenses. Selling, general and administrative expenses increased from approximately $15.2 million for the year ended June 30, 2008 to approximately $15.6 million for the year ended June 30, 2009, an increase of approximately 2.6%. Approximately $0.4 million of the increase pertains to corporate overhead, including an increase of approximately $0.4 million related to the granting of stock options and restricted stock. Non-cash compensation expense from the granting of employee and director stock options and restricted stock was approximately $1.2 million for the year ended June 30, 2009 and $0.8 million for the year ended June 30, 2008. Selling, general and administrative expenses in Australia decreased by approximately $1.1 million mainly due to reductions of approximately $0.5 million in general and administrative costs, approximately $0.3 million in the management fee due Global Traffic Network and approximately $0.3 million in selling costs primarily associated with sales staff compensation. The decrease in management fees resulted entirely from changes in currency exchange rates, was offset by a comparable increase on the unconsolidated income statement of Global Traffic Network and was eliminated in consolidation. As reflected in Changes in Key Operating Statistics in Local Currencies, Australian selling, general and administrative expenses increased approximately 6.8% in local currency. Selling, general and administrative expenses in Canada decreased approximately $0.3 million, primarily due to decreases of approximately $0.2 million in sales employee compensation and approximately $0.1 million in general and administrative expenses. As reflected in Changes in Key Operating Statistics in Local Currencies, Canadian selling, general and administrative expenses increased approximately 3.0% when measured in local currency. Our selling, general and administrative expenses for the year ended June 30, 2009 for Mobile Traffic Network increased approximately $0.5 million. Mobile Traffic Network was formed March 8, 2008 and therefore was not in existence for a substantial portion of the year ended June 30, 2008. UK Traffic Network selling, general and administrative expenses increased approximately $0.8 million, of which approximately $0.7 million was associated with the newly acquired Unique business operations. Sales expense as a percentage of revenue in Australia decreased from approximately 13.7% for the year ended June 30, 2008 to approximately 13.4% for the year ended June 30, 2009.

~~Depreciation~~Year ~~and~~Ended ~~amortization expense. Depreciation and amortization expense increased from approximately $1.5 million for the year ended~~ June 30, ~~2008~~2010 toCompared ~~approximately~~With ~~$2.5 million~~Year ~~for~~Ended ~~the year ended~~ June 30, 2009. Approximately $1.0 million of the increase pertains UK Traffic Network including approximately $0.8 million of amortization of intangibles acquired in the Unique purchase. As reflected in Changes in Key Operating Statistics in Local Currencies, Australian and Canadian depreciation and amortization expense increased in local currencies and was largely offset due to changes in exchange rates.

~~Interest expense~~Revenues. ~~Interest~~Revenues ~~expense~~increased ~~decreased~~ from approximately $~~90,000~~60.3 million for the year ended June 30, 2009 to approximately $93.3 million for the year ended June 30, ~~2008~~2010, an increase of approximately 54.7%. The largest portion of the increase in revenues was an increase of approximately $16.7 million from our United Kingdom operations, which was attributable to an increase of approximately $3916.6 million in revenues associated with the UK Commercial Traffic Network (formerly Unique) business operations. Because we consummated our acquisition of Unique on March 1,~~000~~ 2009, only four months of results from the UK Commercial Traffic Network’s operations were included in our results for the comparable 2009 period. Revenues from the sale of inventory related to our Canadian operations increased approximately $2.6 million from the previous year period. The higher revenues were attributable to performance during the third and fourth quarters of fiscal 2010, in which revenues increased approximately $2.7 million compared to the year ago six month period. As reflected in Changes in Key Operating Statistics in Local Currencies, Canadian revenues increased approximately 23.7% when measured in Canadian dollars. The revenue increase in local currency was driven by an increase in the number of spots sold (attributable to more spots available for sale and higher utilization) and higher spot rates. Australian revenues increased approximately $13.8 million compared to the year ended June 30, 2009. The ~~decrease~~increase ~~was~~pertained ~~mainly~~solely to our radio ~~due~~network, as revenues on our TV network decreased approximately $0.3 million for the year. Approximately $9.1 million of the increase in radio network revenue related to ~~lower~~our ~~amounts~~radio traffic network while our radio news network revenues increased approximately $5.0 million. As reflected in Changes in Key Operating Statistics in Local Currencies, Australian revenues increased approximately 11.2% when measured in local currency compared to the year ended June 30, 2009. The Australian revenue increase in local currency was driven by an increase in the number of ~~debt~~spots ~~outstanding~~sold and higher spot rates compared to the previous year. The increase in ~~Australia~~spots ~~primarily~~sold was due both to having more advertising inventory available for sale as well as a ~~result~~higher percentage of ~~regularly~~available ~~scheduled principal~~spots ~~amortization~~being sold compared to the previous year. Approximately $9.8 million (or approximately 30%) of the consolidated revenue increase for the year ended June 30, 2010 was due to currency fluctuations related to the weaker U.S. dollar during the period compared with the previous year. Approximately $9.2 million of the increase pertaining to currency fluctuation was attributable to our Australian operations.

~~Other~~Operating ~~income~~expenses. ~~Other~~Operating ~~income~~expenses ~~decreased~~increased from approximately $140.69 million for the year ended June 30, ~~2008~~2009 to approximately $163.03 million for the year ended June 30, ~~2009~~2010, an increase of approximately 54.8%. ~~Other~~Approximately ~~income~~$12.5 million ~~consists primarily~~of the increase pertained to our United Kingdom operations, of ~~interest~~which ~~income~~approximately $13.1 million pertained to the UK Commercial Traffic Network (formerly Unique) business operations that we acquired on March 1, 2009. Expenses from our ~~cash~~other ~~balances~~United ~~and~~Kingdom operations decreased approximately $0.6 million compared to the previous year period. The main components of the reduction in operating expenses from our pre-existing UK operations were approximately $0.3 million reduction in communications expenses related to our Highways Agency contract, which was also reflected as a reduction of revenue under the contract as well as approximately $0.3 million reduction in operating expenses from our original traffic operations. Operating expenses related to our Australian and Canadian operations increased approximately $7.4 million and $2.5 million, respectively, each primarily due to ~~lower interest~~an ~~rates~~increase in station compensation. Approximately $4.8 million and $0.9 million of the ~~current~~overall ~~period~~increase in Australian and Canadian operating expenses, respectively ~~unfavorable~~was ~~movement~~due into currency movements as both the Australia and Canada dollar/ significantly strengthened against the U.S. dollar ~~exchange rates~~during ~~and~~the ayear ~~reduction~~ended inJune 30, ~~cash~~2010. ~~balances~~As ~~due~~reflected toin ~~purchasing~~Changes ~~Unique~~in ~~for~~Key anOperating ~~initial~~Statistics ~~payment~~in ofLocal Currencies, Australian and Canadian operating expenses increased approximately ~~$12~~11.~~9 million~~8% and 21. 1% respectively when measured in local currencies, mainly due to increases in station compensation.

~~Income~~Selling, ~~tax~~general ~~expense~~and administrative expenses. ~~Income~~Selling, ~~tax~~general ~~expense~~and ~~decreased~~administrative expenses increased from approximately $315.6 million for the year ended June 30, ~~2008~~2009 to approximately $321.3 0 million for the year ended June 30, ~~2009~~2010, an increase of approximately 34.6%. ~~The~~Selling, ~~decrease~~general and administrative expenses increased approximately $2.1 million ~~was~~in ~~primarily~~the United Kingdom due to a $2.2 million increase from the ~~decreased~~acquired ~~net~~UK ~~profit~~Commercial inTraffic ~~Australia~~Network in(formerly UUnique) business operations.S. ~~dollars~~Australian ~~for~~selling, ~~the~~general ~~year~~and ~~ended~~administrative ~~June 30,~~costs ~~2009~~increased ~~compared~~approximately to$3.0 million for the year ended June 30, ~~2008~~2010. ~~due~~The tomain ~~the~~increases ~~changes~~included inapproximately ~~currency~~$2.0 million ~~exchange~~in ~~rates~~sales ~~as well~~employee asremuneration, ~~the~~$0.3 million ~~income~~in ~~tax~~administrative ~~benefit~~wages, $0.5 million in ~~the~~other ~~United~~administrative ~~Kingdom~~and ~~discussed~~sales ~~below.~~expenses Asand ~~reflected~~$0.2 million inincrease ~~Changes~~ in ~~Key~~management ~~Operating~~fees ~~Statistics~~which inwas ~~Local~~due ~~Currencies~~to ~~income~~currency ~~tax~~changes ~~expense~~and ~~from~~was ~~our~~offset ~~Australian~~on ~~operations~~Global ~~in local~~Traffic ~~currency~~Network ~~increased~~(unconsolidated ~~approximately 15~~parent).~~5%.~~ ~~The~~Approximately ~~effective~~$1.8 million ~~tax~~of ~~rate~~the inoverall ~~Australia was 30~~$3.0% million ~~and 30.2%~~increase ~~for~~in ~~the~~Australian ~~years ended June 30~~selling, ~~2009~~general and ~~2008,~~administrative ~~respectively,~~expenses related ~~compared~~ to ~~the~~currency ~~statutory~~fluctuations. ~~federal rate~~Sales ofexpense ~~30.0%.~~as ~~There~~a ~~was~~percentage noof ~~income~~revenue ~~tax~~in ~~benefit~~Australia ~~for~~increased ~~the~~from ~~United~~approximately ~~States~~13.4% orfor ~~Canada~~the asyear aended ~~valuation allowance~~June 30, ~~has~~2009 ~~been~~to ~~created~~approximately ~~for 100~~14.0% offor the ~~Company’s~~year ~~tax~~ended ~~loss~~June 30, ~~carry~~2010. ~~forwards~~Selling, ingeneral ~~those countries.~~and ~~The~~administrative UKexpenses ~~Commercial~~in ~~Traffic~~Canada ~~Network~~increased ~~realized~~ approximately $0.18 million inprimarily ~~tax~~due ~~benefit~~to increased sales employee costs due both to ~~approximately~~ ~~$0.2 million~~increased staffing and higher commission costs related to the ~~amortization~~increased ofbilling for the ~~deferred~~year. ~~tax~~Selling, ~~liability~~general and ~~created~~administrative byexpenses ~~the Unique~~of ~~acquisition~~Global ~~offset~~Alert byNetwork were reduced approximately $0.15 million ~~tax~~compared ~~expense related~~ to UKthe ~~Commercial Traffic~~year ~~Network~~ago ~~taxable~~period ~~income~~as ~~for~~we ~~the~~actively ~~period~~reduced ~~March 1,~~our ~~2009~~staffing ~~through~~of ~~June 30,~~this ~~2009~~subsidiary. ~~The~~Non-cash ~~tax~~compensation expense ~~was~~ aresulting ~~non-cash~~from ~~item~~grants of employee and ~~was~~director ~~offset~~stock ~~against~~options ~~the~~and ~~deferred~~restricted ~~tax~~stock ~~asset~~was ~~acquired~~approximately as$1.2 million ~~part~~for ofboth the ~~Unique acquisition~~year ended June 30, 2010 and 2009.

~~Net~~Depreciation ~~income~~and ~~(loss)~~amortization expense. ~~Net~~Depreciation ~~income~~and ~~(loss) decreased~~amortization ~~from~~expense ~~net~~increased ~~income~~from of approximately $12.75 million for the year ended June 30, ~~2008~~2009 to ~~net loss of~~ approximately $15.13 million for the year ended June 30, ~~2009~~2010. ~~Our~~The ~~decrease~~majority inof ~~net~~the ~~income~~increase ispertains ~~primarily~~to ~~attributable~~amortization toof ~~higher~~the ~~non-cash~~intangibles ~~equity compensation~~associated ~~and~~with ~~reduced~~the ~~interest~~acquisition ~~income~~of atUK ~~Global~~Commercial Traffic Network (~~parent~~formerly Unique) in. ~~2009,~~Approximately ~~leading~~$0.2 million ~~to an increase in net loss~~ of ~~Global Traffic Network (~~the ~~parent)~~increase related ~~compared~~ to shortening the ~~fiscal~~useful ~~2008~~lives ~~period,~~of ~~as well~~the asCanadian ~~start-up losses from Mobile~~ Traffic Network, ~~which~~helicopters ~~had~~from ~~only~~eight ~~commenced~~years ~~operations~~to ~~for~~six ~~a small~~years ~~part~~and ofreducing the ~~previous~~Canadian ~~year. In addition, the net income attributable to Australia~~ Traffic Network’s ~~operations~~helicopter ~~decreased~~engine ~~approximately~~rebuild ~~$0.3 million~~useful ~~for~~lives ~~the~~from ~~year~~three ~~ended~~years ~~June 30, 2009 when reported in U.S. dollars compared~~ to ~~the~~two ~~year ended June 30, 2008~~years. ~~Although~~This ~~fiscal~~change ~~2009 Australian net income increased approximately 16.5%~~ in ~~Australian dollars over the fiscal 2008 period (see~~estimate ~~Changes~~was inmade ~~Key~~due ~~Operating~~to ~~Statistics~~our inflying ~~Local Currencies below), the increase was~~ more ~~than~~hours ~~offset by~~per ~~the~~year ~~negative effect of changes~~ in ~~foreign~~Canada ~~currency~~than ~~exchange~~originally ~~rates~~anticipated.

~~Changes~~Interest inexpense. ~~Key~~Interest expense ~~Operating~~decreased ~~Statistics~~from inapproximately ~~Local~~$39,000 ~~Currencies~~for the year ended June 30, 2009 to approximately $15,000 for the year ended June 30, 2010. All of the outstanding debt balances were repaid during the period and we had no outstanding long term debt as of June 30, 2010.

Other income (net). Other income (net) decreased from approximately $1.0 million for the year ended June 30, 2009 to approximately $0.9 million for the year ended June 30, 2010. Other income consists primarily of interest income on our cash balances and the reduction is attributable mainly to lower interest rates during the fiscal 2010 period and our reduced cash balances due to the purchase of UK Commercial Traffic Network (formerly Unique). The reduction in other income was partially mitigated by foreign currency translation income of approximately $0.1 million for the year ended June 30, 2010 compared to no foreign currency translation income or loss during the 2009 period. The foreign currency translation income resulted from the repayment of balances due to the Company by Australia Traffic Network. Intercompany balances between the Company and its subsidiaries are translated from the local currencies to U.S. dollars at each balance sheet date. To the extent these balances are intended to be ongoing, that is, settlement is neither planned nor anticipated, the translation adjustments to balance intercompany are reflected as a component of other comprehensive income. The repayment of the Australia Traffic Network intercompany balance triggered a realized foreign exchange income during the period.

Income tax expense. Income tax expense increased from approximately $3.3 million for the year ended June 30, 2009 to approximately $4.0 million for the year ended June 30, 2010. The increase was primarily due to an increase of $1.0 million in Australia from the higher net income in the current period partially offset by approximately $0.3 million increase in the deferred tax benefit in the United Kingdom. The effective tax rate in Australia was 30.1% and 30.0% for the year ended June 30, 2010 and 2009, respectively, compared to the statutory federal rate of 30.0%. There was no income tax benefit for the United States or Canada as a valuation allowance has been created for 100% of the Company’s net deferred tax assets in those countries. The UK Traffic Network realized approximately $0.7 million tax benefit due to the reduction of the deferred tax liability created by the acquisition of UK Commercial Traffic Network (formerly Unique), which was partially offset by the taxable income generated by UK Commercial Traffic Network during the period. UK Commercial Traffic Network’s tax expense and benefit are non-cash items due to the deferred tax liability created as part of the acquisition and the significant net operating losses of Unique that we acquired.

Net income (loss). Net income (loss) increased from approximately $1.1 million of net loss for the year ended June 30, 2009 to net income of approximately $0.6 million for the year ended June 30, 2010. Our increase in net income is primarily attributable to an increase of approximately $2.2 million in Australia Traffic Network net income, a decrease of approximately $0.6 million in Global Alert Network net loss due to expense reductions and approximately $0.5 reduction of the net loss of our consolidated UK operations. These increases in net income were partially offset by an increase in the net loss of the parent holding company that was primarily due to lower interest income in the current year and an increase in Canadian Traffic Network net loss of approximately $1.3 million. The increase in Canadian Traffic Network net loss pertained to business operations in the first half of fiscal 2010, as Canadian Traffic Network’s operations during the second half of fiscal 2010 showed a reduction in net loss of approximately $0.4 million compared to the prior year period.

Changes in Key Operating Statistics in Local Currencies

Australian Operations:

	Year			Year
Key operating statistic	YearEndedJune 30,2010			YearEndedJune 30,2009			PercentageIncrease(Decrease)
	Ended			Ended			Percentage
	June 30,			June 30,			Increase
Key operating statistic	2009			2008			(Decrease)
	(In thousands)			(In thousands)
Revenues	$	5763,~~396~~841		$	4957,~~323~~396			1611.42	%
Operating expenses (exclusive of depreciation and amortization expense shown separately below)		3033,~~390~~986			2430,~~871~~390			2211.28	%
Selling, general and administrative expenses		1113,~~706~~231			1011,~~964~~706			613.80	%
Depreciation and amortization expense		~~994~~1,113			~~903~~994			1012.10	%
Interest expense		5217			~~101~~52			(4867.53	)%
Other (income)		(878	)		(539	)		62.9	%
Other (income) (net)		(825	)		(878	)		(6.0	)%
Income tax expense		4,~~542~~914			34,~~932~~542			158.52	%
Net income		1011,~~590~~405			910,~~091~~590			167.57	%

Canadian Operations:

	Year			Year
Key operating statistic	YearEndedJune 30,2010			YearEndedJune 30,2009			PercentageIncrease(Decrease)
	Ended			Ended			Percentage
	June 30,			June 30,			Increase
Key operating statistic	2009			2008			(Decrease)
	(In thousands)			(In thousands)
Revenues	$	89,~~023~~927		$	68,~~701~~023			1923.7	%
Operating expenses (exclusive of depreciation and amortization expense shown separately below)		810,~~425~~205			68,~~880~~425			2221.51	%
Selling, general and administrative expenses		2,~~348~~977			2,~~279~~348			326.08	%
Depreciation and amortization expense		~~881~~1,455			~~674~~881			3065.72	%
Interest expense		—			—			—
Other (income)		(30	)		(18	)		66.7	%
Other (income) (net)		(4	)		(30	)		(86.7	)%
Income tax expense		—			—			—
Net loss		(34,~~601~~706	)		(3,~~114~~601	)		1530.67	%

United Kingdom Operations:

	Year			Year
Key operating statistic	YearEndedJune 30,2010			YearEndedJune 30,2009			PercentageIncrease(Decrease)
	Ended			Ended			Percentage
	June 30,			June 30,			Increase
Key operating statistic	2009			2008			(Decrease)
	(In thousands)			(In thousands)
Revenues	£	617,~~892~~301		£	—6,892			~~N/A~~151.0	%
Operating expenses (exclusive of depreciation and amortization expense shown separately below)		614,~~706~~544			~~667~~6,706			~~905~~116.49	%
Selling, general and administrative expenses		~~751~~2,067			~~201~~751			~~273~~175.62	%
Depreciation and amortization expense		~~661~~1,804			10661			~~6,510~~172.09	%
Interest expense		—			—			—
Other (income) expense		(7	)		3			(333.3	)%
Other (income) (net)		(80	)		(7	)		1,042.9	%
Income tax (benefit) expense		(87	)		—			N/A
Income tax (benefit)		(247	)		(87	)		183.9	%
Net loss		(~~1,132~~787	)		(~~881~~1,132	)		28(30.5	)%

Liquidity and Capital Resources

At June 30, ~~2010~~2011, our primary source of liquidity was cash and cash equivalents of approximately $1941.67 million. In addition, we also had approximately $12.71 million available under ~~our~~ our unused overdraft credit line at June 30, ~~2010~~2011. The overdraft credit line is denominated in Australian dollars and has been translated into U.S. dollars for purposes of this report. Our excess cash has been mainly invested in short term bonds, short term agencies, short term commercial paper and money market accounts, all of which have maturities of 90 days or less.

Operating activities. Cash provided by operating activities was approximately $318.12 million for the year ended June 30, ~~2010~~2011, due mainly to positive cash generation from operations (after ~~net~~ net income was adjusted for non-cash expenses) that was ~~partially~~further ~~offset~~increased by ~~negative~~approximately ~~changes in working capital~~$1.5 ~~The~~million ~~largest use of working capital was an~~ increase in ~~accounts~~working ~~receivable of approximately $2~~capital.~~7 million~~ ~~associated with the increased revenue for the year.~~

Investing activities. Cash used in investing activities was approximately $41.76 million for the year ended June 30, ~~2010~~2011. The cash used for investing activities consisted ~~primarily~~ of ~~the early settlement of the potential contingent payment obligation and settlement of the purchase price adjustment related to working~~ capital ~~from the Unique acquisition, and to a lesser extent capital~~ expenditures, the majority of which was for the regularly recurring rebuilding of helicopter engines in Canada and Australia.

31Financing activities. Cash provided by financing activities was approximately $1.8 million for the year ended June 30, 2011, substantially all of which consisted of proceeds from the exercise of warrants issued to the underwriter of our March 2006 initial public offering.

Effect of exchange rate changes. Cash increased approximately $3.7 million for the year ended June 30, 2011 due to changes in exchange rates. This increase was primarily due to the strengthening of the Australia dollar compared against the U.S. dollar as a significant majority of our cash is denominated in Australia dollars.

~~Financing~~Through ~~activities.~~Australia ~~Cash~~Traffic ~~used~~Network, inwe ~~financing~~have ~~activities~~in ~~was~~place ~~approximately~~a $02.41 million ~~for~~bank ~~the~~overdraft line ~~year~~of ~~ended~~credit facility. Interest on amounts outstanding under the facility is variable at the ANZ Mortgage Index rate plus 0.83% (9.95% at June 30, ~~2010,~~2011) ~~which~~and ~~consisted~~is secured by all assets of ~~regularly~~Australia ~~scheduled~~Traffic ~~principal~~Network. ~~amortization~~The asfacility ~~well~~contains ascovenants ~~prepayment~~relating to dividends, liens, indebtedness, capital expenditures and interest coverage and leverage ratios. At June 30, 2011, the balance of the ~~remaining~~bank ~~outstanding~~overdraft ~~debt~~was ~~balance~~$0 inand ~~December~~the entire $2.1 ~~2009~~million was available to us. The facility is denominated in Australian dollars ($2.0 million Australian dollars) and the dollar amounts above have been translated into United States dollars.

~~Effect~~The Company believes its cash and cash equivalents on hand and its overdraft line of ~~exchange~~credit ~~rate~~provide ~~changes.~~adequate ~~Cash~~resources ~~increased~~to ~~approximately~~fund ~~$0.2 million~~ongoing ~~for~~operations, ~~the~~including ~~year~~any ~~ended~~net losses generated by Canadian Traffic ~~June 30~~Network, ~~2010~~Global ~~due~~Alert toNetwork ~~changes~~and incorporate ~~exchange~~overhead ~~rates~~for at least the next twelve months.

OnIncome ~~July 26,~~Taxes. ~~2007~~We weoperate ~~entered~~as a ~~into~~United anStates ~~underwriting~~corporation ~~agreement~~with towholly-owned ~~sell~~direct 4and indirect operating subsidiaries in Australia,~~500,000~~ ~~shares~~Canada ofand ~~stock (plus~~the anUnited ~~underwriters’~~Kingdom. ~~over-allotment~~We ~~option~~will ~~for~~pay anincome ~~additional~~taxes ~~675,000~~in ~~shares)~~those atcountries aas ~~price~~well ofas $6in the United States.25 The current federal statutory tax rate ~~per~~is ~~share~~30% ~~less~~in aAustralia 6while the estimated effective combined federal and provincial tax rate was approximately 28.5% ~~underwriters’~~in ~~discount~~Canada (which has dropped to approximately 26.75% Onfor ~~July 31,~~the ~~2007~~current fiscal year), the ~~underwriters~~estimated ~~exercised~~effective ~~their over-allotment~~corporate ~~option~~tax rate in ~~full~~the United ~~and~~Kingdom wewas ~~closed~~approximately on28% (which has dropped to 26% for the ~~follow~~current onfiscal ~~offering~~year) ofand ~~our~~the ~~common~~estimated ~~stock.~~federal ~~The~~and ~~net proceeds~~state ~~after~~tax ~~expenses~~rate ~~were~~in the United States is approximately ~~$29~~37%.~~7 million.~~

OnPurchase ~~March 23, 2006, the SEC declared effective a registration statement~~ of the Company ~~that registered~~by ~~the~~GTCR ~~offer~~Gridlock ~~and sale of up to 3~~Holdings,~~800,000~~ ~~shares of the Company’s common stock, at $5~~Inc.00 per share, in the Company’s initial public offering and an additional 570,000 shares of the Company’s common stock eligible for sale if the underwriter for our initial public offering exercised its over-allotment option. The Company’s common stock was approved for trading on the Nasdaq Global Market and began trading on March 24, 2006. The initial closing of our initial public offering, at which the Company sold 3,800,000 shares of common stock, occurred on March 29, 2006, with the Company receiving proceeds of approximately $16.5 million, net of offering expenses and underwriting discounts and commissions. On April 28, 2006, the underwriter for our initial public offering exercised its over-allotment option to acquire an additional 570,000 shares of the Company’s common stock for a purchase price of $4.65 per share (representing the public offering price less underwriting discounts and commissions). On May 4, 2006, the purchase of these shares was completed, resulting in additional net proceeds to the Company of approximately $2.6 million after deducting offering expenses. The aggregate net proceeds of our initial public offering, inclusive of amounts obtained in connection with the over-allotment exercise, were approximately $19.1 million, after deducting underwriting discounts and commissions and offering expenses.

~~Through~~On ~~Australia~~August 2, 2011, ~~Traffic~~we ~~Network,~~entered into the Merger Agreement pursuant to which we have inagreed ~~place~~to $1be acquired by an affiliate of GTCR.~~7 million~~ ~~bank~~Under ~~overdraft~~the ~~line~~terms of ~~credit facility~~the Merger Agreement, GTCR Gridlock Holdings, Inc., ~~Interest~~a newly formed entity affiliated with GTCR, commenced the Offer on ~~amounts~~August 9, 2011 to acquire all of our outstanding ~~under~~common stock for $14.00 per share in cash, to be followed by the ~~facility~~Merger isto ~~variable~~acquire all remaining outstanding shares at the ~~ANZ~~same ~~Mortgage~~price ~~Index rate~~paid ~~plus~~in ~~0.83%~~the (9Offer.~~95%~~ atThe ~~June~~Offer is required to remain open until the completion of a “go-shop” solicitation period until September 3013, ~~2010)~~2011, and isif ~~secured~~applicable, bya ~~all~~subsequent ~~assets~~negotiation ofperiod ~~Australia~~until ~~Traffic~~October 1, ~~Network~~2011. The ~~facility~~Merger Agreement contains ~~covenants~~certain ~~relating~~termination torights ~~dividends~~by us and GTCR’s affiliate including, ~~liens~~with respect to us, ~~indebtedness~~in the event that we receive a Superior Proposal (as defined in the Merger Agreement). In connection with the termination of the Merger Agreement under specified circumstances, ~~capital~~including ~~expenditures~~with ~~and~~respect ~~interest~~to ~~coverage~~the ~~and~~acceptance ~~leverage~~of ~~ratios.~~a AtSuperior ~~June 30~~Proposal by us, ~~2010~~we may be required to pay a termination fee of $8,286,910, which fee would be reduced to $4,143,455 with respect to the ~~balance~~termination of the ~~bank~~Merger ~~overdraft~~Agreement ~~was~~prior to October 1, 2011 if a $0transaction ~~and~~is entered into with a party that makes a qualifying proposal during the ~~entire~~“go-shop” $1period.~~7 million~~ ~~was~~The ~~available~~completion of the Offer and Merger are subject to uscertain conditions and termination rights set forth in the Merger Agreement. See “Item 1A —Risk Factors.” The ~~facility~~statements isin ~~denominated~~this Annual Report on Form 10-K are not a solicitation or recommendation of the Company to its shareholders in ~~Australian~~connection with the proposed Offer, and shareholders should carefully ~~dollars~~review ~~($2.0~~the Solicitation/Recommendation Statement on Schedule 14D-9 filed by the Company on August ~~million~~9, ~~Australian~~2011 ~~dollars)~~and any amendments thereto before making any decision as to the Offer because such documents contain important information about the Offer, the Merger and other transactions contemplated by the ~~dollar~~Merger ~~amounts~~Agreement. ~~above~~The ~~have~~Solicitation/Recommendation ~~been~~Statement ~~translated~~on ~~into~~Schedule 14D-9 and the amendments thereto are available, without charge, at the SEC’s internet site (http://www.sec.gov) ~~United~~or ~~States~~by ~~dollars~~directing a request to Global Traffic Network, Inc., Attention: Investor Relations, Phil Carlson, KCSA Strategic Communications, 880 Third Avenue 6th Floor, New York, NY 10022, pcarlson@kcsa.com, or on the Company’s website at (www.globaltrafficnetwork.com).

We34 used the bank overdraft line of credit to finance the purchase of two additional helicopters in April 2005. In September 2005, we refinanced these helicopters under bank term loans in the original principal amount of $1.4 million. The outstanding principal amount of these term loans accrue interest at a fixed annual rate of 6.97%, and we were required to make monthly principal and interest payments under the loans of approximately $29,000. The loans, which matured on September 6, 2010, were secured by the two helicopters. We repaid the loan in full on December 31, 2009.

In November 2003, we financed the purchase of a helicopter under a bank term loan in the original principal amount of approximately $0.5 million. The outstanding principal amount of this term loan accrued interest at a fixed annual rate of 8.43%, and we were required to make monthly principal and interest payments under the loan of approximately $15,000. The loan was repaid on November 6, 2008.

We had a financing lease in place under which we financed the purchase of an automobile. The financing lease accrued interest at 7.67% per year and we were required to make monthly principal and interest payment of approximately $2,000. The financing lease was repaid on August 27, 2008.

The Company believes its cash and cash equivalents on hand and its overdraft line of credit provide adequate resources to fund ongoing operations, including any net losses generated by Canadian Traffic Network, UK Traffic Network, Mobile Traffic Network and corporate overhead for at least the next twelve months.

Income Taxes. Prior to the consummation of the Share Exchange, Australia Traffic Network operated as an Australian corporation and paid federal income taxes in Australia. The United States shareholders of Australia Traffic Network recorded their share of Australia Traffic Network’s income on their personal income tax returns and received deduction on their United States federal income tax returns for the Australian taxes paid. Because Australian income taxes are generally lower than United States income taxes, a tax liability was passed on to each United States shareholder. Australia Traffic Network’s then existing shareholders became liable for the tax triggered by the Share Exchange. Prior to the effective time of the initial public offering, we issued the Share Exchange Notes, in an aggregate amount of $1.4 million, to the Australia Traffic Network shareholders. The Share Exchange Notes were intended to cover the estimated tax consequences to such shareholders of the Share Exchange. Upon the closing of the initial public offering, we repaid the Share Exchange Notes in full.

We operate as a United States corporation with wholly-owned direct and indirect operating subsidiaries in Australia, Canada and United Kingdom. We will pay income taxes in those countries as well as in the United States. The current federal statutory tax rate is 30% in Australia while the estimated effective combined federal and provincial tax rate is approximately 28% in Canada, the estimated effective corporate tax rate in the United Kingdom is approximately 28% and the estimated federal and state tax rate in the United States is approximately 35%.

Contractual Commitments

The table below sets forth our contractual obligations as of June 30, ~~2010~~2011:

Payments due by period

Less

Contractual Obligations

Total

LessThan1 Year

1-3Years

4-5Years

MoreThan5 Years

than

1-3

4-5

Than

Contractual Obligations

Total

1 Year

Years

5 Years

(in thousands)

Operating Lease Obligations

2,~~360~~330

~~782~~892

1,040

~~435~~278

~~103~~120

Outsource Provider Obligations

74,~~285~~786

23,~~914~~221

41,~~371~~565

—

Station Obligations

6268,~~899~~900

3044,~~916~~282

3024,~~870~~279

~~1,113~~339

—

Total

7276,~~544~~016

3448,~~612~~395

3626,~~281~~884

~~1,548~~617

~~103~~120

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures. We evaluate these estimates on an on-going basis. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We consider the following accounting policies to be those most important to the portrayal of our results of operations and financial condition:

Revenue recognition. Revenues are earned and recognized at the time commercial advertisements are broadcast. Payments received in advance or amounts invoiced in advance are deferred until earned and such payments and amounts are included as a component of deferred revenue in the accompanying balance sheets. All revenues pertain to cash sales. We determine that ~~commercial~~ commercial advertisements are broadcast based on the announcers’ written or electronic verification on the broadcast log or written or electronic verification from our network affiliates for advertisements they broadcast. The broadcast log is a schedule of station, time and advertiser for each report that an announcer broadcasts. The broadcast logs are generated by our scheduling department through our automated scheduling system, based on advertising sales orders and our network affiliate stations’ scheduled report times. Revenues are reported net of commissions given to third party advertising agencies that represent a majority of our advertisers. Sales taxes, goods and services taxes, value added taxes and similar charges collected by our operating subsidiaries on behalf of government authorities are not included as a component of revenue.

Accounts receivable. Accounts receivable are recorded at the invoice amount and are not interest bearing. We perform credit evaluations of new customers and generally require no collateral. Whether an accounts receivable is past due is determined in a subjective manner based primarily on how long it has been outstanding, but taking into consideration factors such as client size, payment history and country to which the receivable relates. Goods and services tax, sales tax and value added tax, which is invoiced and collected by operating subsidiaries in Australia, Canada and United Kingdom, are included in accounts receivable. Fees related to credit card payments are expensed when payment for the receivable is received and have historically not been material. The Company provides for losses from uncollectible accounts based on analyzing historical data and current trends and such losses have historically been insignificant in relation to revenue. Past due amounts are written off against the allowance for doubtful accounts when collection is deemed unlikely and all collection efforts have ceased. An allowance for doubtful accounts of $69191,000, $~~150~~69,000, and $~~292~~150,000 has been established for the years ended June 30, ~~2010~~2011, ~~2009~~2010 and ~~2008~~2009, respectively.

Income taxes. We have adopted the Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes” (“SFAS 109”). Effective July 1, 2009, SFAS 109 was incorporated in the Codification under FASB ASC 740. Under the asset and liability method of FASB ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to net operating loss carry-forwards and to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under FASB ASC 740, the effect of a change in tax rates on deferred tax assets or liabilities is recognized in the statement of income in the period that included the enactment. A valuation allowance is established for deferred tax assets unless their realization is considered more likely than not. Currently, 100% of the Canadian tax loss carry-forwards generated by us are allowed for since it is not yet reasonably certain that our operations in Canada will be profitable in the future to utilize these tax loss carry-forwards. In addition, we have made a 100% allowance for the losses of UK Traffic Network (but not UK-Commercial Traffic Network) since we are currently unable to offset these losses against the expected future profits of UK-Commercial Traffic Network, which is the subsidiary that was formerly Unique.

In June 2006, FASB issued FASB Interpretation No. 48 (“FIN 48”), “Accounting for Uncertainty in Income Taxes”, which is an interpretation of SFAS 109. Effective July 1, 2009, FIN 48 was incorporated in the Codification under FASB ASC 740. FASB ASC 740 clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The evaluation of a tax position is a two step process. First step is recognition, in which the company determines whether it is more likely than not that a tax position will be sustained upon examination based on the merits of the position. The second step is measurement in which a tax position which meets the more likely than not threshold of the first step is measured to determine the amount of benefit to recognize in its financial statements.

33 35

Prior to July 1, 2009, the Company considered all earnings of ATN to be indefinitely reinvested abroad and therefore did not recognize a deferred tax liability with regards to the undistributed earnings of ATN. As a result of the change in permanent investment status, GTN has recognized deferred tax liabilities for undistributed earnings and profits of ATN to date which are offset by foreign tax credit deferred tax assets.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Recent Accounting Pronouncements

In ~~June~~December ~~2009~~2010, ~~“The~~the ~~FASB~~ Financial Accounting Standards ~~Codification~~Board ~~and~~(“FASB”) ~~the~~issued ~~Hierarchy of Generally Accepted~~ Accounting ~~Principles~~Standards —Update ~~A Replacement of FASB Statement~~ No. ~~162”~~2010-28, ~~was~~“When ~~issued~~to ~~which established~~Perform ~~the~~Step ~~“FASB~~2 ~~Accounting~~of ~~Standards~~the ~~Codification”~~Goodwill ~~(“Codification”)~~Impairment asTest ~~the~~for ~~single~~Reporting ~~source authoritative~~Units ~~non-governmental~~with ~~United~~Zero ~~States~~or ~~generally~~Negative ~~accepted~~Carrying ~~accounting~~Amounts” ~~principles~~ (“~~U.S. GAAP~~ASU 2010-28”) as ofwhich ~~July 1,~~amends ~~2009.~~FASB ~~The~~ASC ~~Codification~~Topic ~~does~~350 ~~not~~(Intangibles ~~change~~— ~~current~~Goodwill ~~U.S.~~and ~~GAAP,~~Other) ~~but~~to ismodify ~~intended~~Step to1 ~~simplify user~~of ~~access~~the togoodwill ~~all~~impairment ~~authoritative~~test ~~U.S.~~for ~~GAAP~~reporting byunits ~~providing~~with ~~all~~zero ~~the~~or ~~authoritative~~negative ~~literature~~carrying ~~related~~amounts to a ~~particular~~require ~~topic~~performing inStep ~~one~~2 ~~location.~~of ~~All~~the ~~existing~~goodwill impairment ~~accounting~~test ~~standard~~if ~~documents~~it ~~are~~is ~~superseded~~more ~~by Codification~~likely ~~and~~than ~~all other accounting literature~~ not ~~included~~that ina ~~the~~goodwill ~~Codification~~impairment ~~is considered non-authoritative~~exists. ~~The~~ASU ~~Codification~~2010-28 is effective for ~~interim~~fiscal years and ~~annual~~the interim periods ~~ending~~within ~~after September 15,~~those ~~2009.~~years ~~The~~beginning ~~Company~~after ~~adopted Codification on July~~December 115, ~~2009~~2010. ~~The~~Early adoption ofis ~~Codification did~~ not ~~have~~permitted. aThe Company ~~material~~intends ~~impact~~to onadopt the ~~Company’s~~provisions ~~consolidated~~of ~~financial~~ASU ~~position~~2010-28 oreffective ~~results~~July 1, ~~of operations.~~2011 ~~Pursuant~~and todoes ~~the~~not ~~provisions~~expect ~~of Codification,~~ the ~~Company~~adoption ~~has~~to ~~updated~~have ~~references~~a tomaterial ~~U.S. GAAP~~impact inon its consolidated financial ~~statements~~position ~~and~~or ~~this~~results ~~report~~of ~~10-K issued for the year ended June 30, 2010~~operations.

In ~~September 2006~~June 2011, ~~the~~FASB ~~Financial~~issued Accounting Standards ~~Board~~update No. 2011-05, “Presentation of Comprehensive Income” (“~~FASB~~ASU 2011-05”) ~~issued~~which ~~SFAS~~amends ~~No. 157, “Fair~~FASB ~~Value~~ASC ~~Measurements”.~~Topic ~~Effective~~220 ~~July 1,~~(Comprehensive ~~2009~~Income) ~~this~~to ~~accounting~~eliminate ~~pronouncement~~the ~~has~~option ~~been incorporated~~to inpresent ~~Codification~~the components of comprehensive income as ~~FASB~~part ~~ASC~~of ~~820.~~the ~~FASB~~statement ~~ASC~~of ~~820~~changes ~~establishes~~in astockholders’ ~~common~~equity. ~~definition~~The ~~for~~Company currently presents the ~~fair~~components ~~value~~of tocomprehensive beincome ~~applied~~as topart Uof the statement of changes in stockholders’ equity.S. ~~GAAP~~The ~~guidance~~amendment ~~requiring~~requires ~~use~~all ofnon-owner ~~fair~~changes ~~value,~~in ~~establishes~~stockholders equity be presented either a ~~framework~~single continuous statement of comprehensive income or in ~~for~~two ~~measuring~~separate ~~fair~~but ~~value~~consecutive statements. In the two statement approach, the first statement presents total net income and ~~expands~~its ~~disclosure~~components ~~about~~followed ~~such~~consecutively ~~fair~~by ~~value~~a ~~measurements~~second ~~and~~statement ~~is effective~~that ~~for~~presents ~~fiscal~~the ~~years~~total ~~beginning~~other ~~after~~comprehensive ~~November 15~~income, ~~2007.~~the Incomponents of ~~February 2008,~~other comprehensive income and the ~~FASB~~total ~~deferred~~ of comprehensive income. ASU 2011-05 does not change the ~~effective~~items ~~date~~that must be reported in other comprehensive income or when an item of ~~fair~~other ~~value~~comprehensive ~~measurement~~income ~~requirements~~must ~~until~~be ~~fiscal~~reclassified ~~years~~to ~~beginning~~net ~~after~~income. ASU ~~November 15,~~2011-05 ~~2008~~is effective for ~~all~~fiscal ~~non-financial~~years ~~assets~~ and ~~non-financial~~the ~~liabilities,~~interim ~~except~~periods within those ~~that~~years ~~are recognized~~beginning orafter ~~disclosed~~December 15, at2011. ~~fair~~Early ~~value~~adoption inis ~~the~~permitted ~~financial~~as ~~statements~~the onprovisions aof ~~recurring~~ASU ~~basis~~2011-05 ~~(at~~are ~~least annually)~~already permitted. The Company ~~adopted~~intends ~~the~~to ~~remaining~~adopt ~~requirements~~the provisions of ~~FASB~~ASU ~~ASC~~2011-05 ~~820~~effective on July 1, ~~2009~~2012 and ~~the adoption~~does ofnot expect the ~~remaining~~adoption ~~provisions~~to ~~did not~~ have a material impact on its consolidated financial position or results of operations.

In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations” to create greater consistency in the accounting and financial reporting of business combinations. Effective July 1, 2009 this accounting pronouncement has been incorporated in Codification as FASB ASC 805. FASB ASC 805 requires a company to recognize the assets acquired, the liabilities assumed and any non-controlling interest in the acquired entity to be measured at their fair values as of the acquisition date. FASB ASC 805 also requires companies to recognize and measure goodwill acquired in a business combination or a gain from a bargain purchase and directs how to evaluate the nature and financial effects of the business combination. FASB ASC 805 applies to fiscal years beginning after December 15, 2008 and is adopted prospectively. Earlier adoption is prohibited. The Company adopted FASB ASC 805 on July 1, 2009 and the adoption did not have a material impact on its consolidated financial position or results of operations. The Company’s acquisition of The Unique Broadcasting Company Limited (“Unique”) occurred prior to the adoption of FASB ASC 805.

In April 2008, the FASB issued FASB Staff Position SFAS No. 142-3, “Determination of the Useful Life of Intangible Assets”. Effective July 1, 2009 this staff position has been incorporated in the Codification primarily under FASB ASC 275 and FASB ASC 350. Determination of the Useful Life of Intangible Assets amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognizable intangible asset under FASB ASC 350 Intangibles-Goodwill and Other. The intent of Determination of the Useful Life of Intangible Assets is to improve the consistency between the useful life of a recognized intangible asset under FASB ASC 275 and FASB ASC 350 and the period of expected cash flows used to measure the fair value of the asset under FASB ASC 805 as well as other U.S. GAAP. Determination of the Useful Life of Intangible Assets applies to fiscal years beginning after December 15, 2008 and is adopted prospectively. Earlier adoption is prohibited. The Company adopted FASB ASC 275 and FASB ASC 350 on July 1, 2009 and the adoption did not have a material impact on its consolidated financial position or results of operations.

In January 2010, the FASB issued Accounting Standards Update No. 2010-01, “Accounting for Distributions to Shareholders with Components of Stock and Cash” (“ASU 2010-01”) which amends FASB ASC 505 (Equity) of the Codification in order to clarify that the stock portion of a distribution to shareholders that allows the shareholder to elect to receive cash or stock with a potential limitation on the total amount of cash that all shareholders can elect to receive in the aggregate is considered a share issuance that is reflected in earnings per share prospectively and is not a stock dividend for purposes of applying FASB ASC 505 (Equity) and FASB ASC 260 (Earnings Per Share). ASU 2010-01 is effective for interim or annual periods ending on or after December 15, 2009 and is adopted retrospectively. The Company adopted ASU 2010-01 effective October 1, 2009 and the adoption did not have a material impact on its consolidated financial position or results of operations.

Item 7A. Qualitative and Quantitative Disclosures about Market Risk

We are exposed to market risks. Market risk is the potential loss arising from adverse changes in interest rates and foreign currency exchange rates. We do not enter into derivative or other financial instruments for speculative purposes.

Interest Rate Risk

We are subject to market risk exposure related to changes in interest rates. Our financial instruments include cash and cash equivalents ~~and long-term debt~~. We consider all highly liquid instruments purchased with a maturity of less than three months to be cash equivalents. Our cash and cash equivalents are not subject to significant interest rate risk due to the short maturities of these instruments. However, due to the large cash and cash equivalents balances, a one percent decrease in the interest rates we earn on these balances would reduce interest income approximately $0.24 million on an annual basis based on the balances at June 30, ~~2010~~2011. We have no derivative financial instruments or auction rate securities in our cash and cash equivalents. We had no outstanding long-term debt at June 30, ~~2010~~2011. We had an unutilized bank overdraft line of credit of approximately $12.71 million that bears interest at a variable rate. We do not ~~see~~consider the variable interest rate long-term debt as a significant interest rate risk ~~since~~because we have no current plans to borrow money, including under the bank overdraft line of credit.

Foreign Currency Exchange Risk

We have significant foreign subsidiaries located in Australia, Canada and the United Kingdom. The assets and liabilities of these subsidiaries are denominated in Australian dollars, Canadian dollars and British pounds, respectively, and as such are translated into United States dollars. Income statement amounts are translated from Australian dollars, Canadian dollars, or British pounds to United States dollars based on the average exchange rate for each quarterly period. Assets and liabilities are translated based on the exchange rate as of the applicable balance sheet date. Equity ~~contribution~~contributions are translated based on the exchange rate at the time of the applicable investment. Foreign currency translation adjustments occur when the income statement and balance sheet are converted at different exchange rates and are recognized as other comprehensive income or loss in the financial statements. We do not currently hedge for currency fluctuations with our foreign subsidiaries.

Accounts Receivable

The Company’s accounts receivable do not represent a significant concentration of credit risk due to the large number of customers and the fact that no one customer represents more than 64% of our annual revenue. However, one group of advertising agencies that represents a number of ~~the Company’s~~our clients in Australia, United Kingdom and Canada constituted approximately 26% of the Company’s revenues for the year ended June 30, 2010 and approximately 26% of the Company’s net accounts receivable as of June 30, 2010. Another group of advertising ~~agencies~~customers ~~that represents a number of the Company’s clients~~ in Australia, United Kingdom and Canada constituted approximately ~~12%~~ ~~of the Company’s revenues for the year ended June 30, 2010 and approximately 10~~28% ~~of the~~ ~~Company’s net accounts receivable as~~ of ~~June 30,~~our ~~2010. An advertising agency that represents a number of the Company’s clients in Australia constituted approximately 12% of the Company’s~~ revenues for the year ended June 30, ~~2010~~2011 and approximately 923% of the Company’s net accounts receivable as of June 30, ~~2010~~2011. Another group of advertising agencies that represents a number of the Company’s clients in Australia, United Kingdom and Canada constituted approximately 11% of the Company’s revenues for the year ended June 30, 2010 and approximately 10% of the Company’s net accounts receivable as of June 30, 2010. In addition to the aforementioned agencies, it is likely other advertising agencies may exceed 10% of our net revenues and/or 10% of our net receivables in the future based on the current billing levels of certain agencies. In the United Kingdom, substantially all our advertising related net revenues come from five agency groups (including one agency group placing approximately 54% of our United Kingdom advertising revenues for the year ending June 30, 2010); therefore our concentration of revenue by agency is greater in the UK market than for our Company as a whole.

that represents a number of our advertising customers in Australia, United Kingdom and Canada constituted approximately 15% of our revenues for the year ended June 30, 2011 and approximately 16% of the Company’s net accounts receivable as of June 30, 2011. An advertising agency that represents a number of our clients in Australia constituted approximately 11% of our revenues for the year ended June 30, 2011 and approximately 11% of our net accounts receivable as of June 30, 2011. Another group of advertising agencies that represents a number of our clients in Australia, United Kingdom and Canada constituted approximately 9% of our revenues for the year ended June 30, 2011 and approximately 11% of the Company’s net accounts receivable as of June 30, 2011. In addition to the aforementioned agencies, it is likely other advertising agencies may exceed 10% of our net revenues and/or 10% of our net receivables in the future based on the current billing levels of certain agencies. In the United Kingdom, substantially all our advertising related net revenues come from five agency groups (including one agency group placing approximately 52% of our United Kingdom advertising revenues for the year ending June 30, 2011); therefore our concentration of revenue by agency is greater in the UK market than for our Company as a whole.

Item 8. Financial Statements and Supplementary Data

The consolidated financial statements and the related notes were prepared by and are the responsibility of management. The financial statements and related notes were prepared in conformity with generally accepted accounting principles and include amounts based on management’s best estimates and judgments. All financial information in this annual report is consistent with the consolidated financial statements.

The Company maintains internal accounting control systems and related policies and procedures designed to provide reasonable assurance that assets are safeguarded, that transactions are executed in accordance with management’s authorization and properly recorded, and that the accounting records may be relied on for the preparation of the consolidated financial statements and other financial information. The design, monitoring, and revision of internal accounting control systems involve, among other things, management’s judgment with regard to the relative cost and expected benefit of specific control measures.

The consolidated financial statements and the related notes thereto of the Company are indexed on page F-1 through F-25 herein.

Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

~~Disclosure~~Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) or 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of June 30, 2011. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) or 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of June 30, 2010. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective.

Internal control over financial reporting

Management’s Annual Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting for our Company. This system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

Our internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures are being made only in accordance with authorizations of management and the Board of Directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable assurance and may not prevent or detect all misstatements. Further, because of changes in conditions, effectiveness of internal control over financial reporting may vary over time.

Management assessed the effectiveness, as of June 30, 2011, of the system of internal control over financial reporting based on the framework in Internal Control-Integrated Framework issued by the ~~Committee~~ Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management determined that our system of internal control over financial reporting was effective as of June 30, ~~2010~~2011.

BDO Audit (NSW-VIC) Pty Ltd, the independent registered certified public accounting firm that audited our financial statements included in this annual report on Form 10-K, also audited the effectiveness of our internal control over financial reporting and has issued an attestation report on our internal control over financial reporting, which is included herein.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or 15d-15 promulgated under the Exchange Act that occurred during the fourth fiscal quarter ended June 30, ~~2010~~2011 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

Results of Operations and Financial Condition.

The information in this Item 9B is furnished to, but not filed with, the Securities and Exchange Commission in lieu of furnishing such information pursuant to a separate Form 8-K, Item 2.02 “Results of Operations and Financial Condition.”

On September 1513, ~~2010~~2011, Global Traffic Network, Inc. issued a press release reporting the financial results for the three and twelve month periods ended June 30, ~~2010~~2011. A copy of the press release is furnished as Exhibit 99.1 to this report and is incorporated herein by reference.

Part III

Item 10. Directors, Executive Officers and Corporate Governance

The following table sets forth the name, age and positions of each of our directors, executive officers and other significant employees as of August 31, ~~2010~~2011:

					Independent
Name	Age		Position	IndependentDirector
Name	Age			Position	Director
Directors and Executive Officers
Directors and Executive Officers
William L. Yde III	58		Chairman, Chief Executive Officer and President	No
William L. Yde III		57		Chairman, Chief Executive Officer and President	No
Scott E. Cody	45		Chief Operating Officer, Chief Financial Officer and Treasurer	—
Scott E. Cody		44		Chief Operating Officer, Chief Financial Officer and Treasurer	—
B. William Pezzimenti	61		President and Director of Australia Traffic Network, International Director of Sales and Training	—
B. William Pezzimenti		60		President and Director of Australia Traffic Network, International Director of Sales and Training	—
Gary L. Worobow	46		Executive Vice President, Business and Legal Affairs and Secretary	—
Gary L. Worobow		45		Executive Vice President, Business and Legal Affairs and Secretary	—
Dale C. Arfman	58		Director	No
Dale C. Arfman		57		Director	No
Gary O. Benson	67		Director	Yes
Gary O. Benson		66		Director	Yes
Shane E. Coppola	45		Director	Yes
Shane E. Coppola		44		Director	Yes
William M. Mower	53		Director	Yes
William M. Mower		52		Director	Yes
Stuart R. Romenesko	48		Director	Yes
Stuart R. Romenesko		47		Director	Yes
Other Significant Employees
Other Significant Employees
John Quinn	54		Chief Operating Officer and Director of Global Traffic Network (UK) Commercial Limited	—
John Quinn		53		Chief Operating Officer and Director of Global Traffic Network (UK) Commercial Limited	—
Ivan N. Shulman	49		Senior Vice President Sales, President and Director of Canadian Traffic Network ULC	—
Ivan N. Shulman		48		Senior Vice President Sales, President and Director of Canadian Traffic Network ULC	—

36Information with respect to the business experience and affiliations of our directors, executive officers and other significant employees as of August 31, 2011 is set forth below.

Information with respect to the business experience and affiliations of our directors, executive officers and other significant employees as of August 31, 2010 is set forth below.

Directors and Executive Officers

William L. Yde III was one of our co-founders and has served as our Chairman, Chief Executive Officer and President since our inception in May 2005. Mr. Yde founded The Australia Traffic Network Pty Limited in June 1997 and has served as its Chairman and Chief Executive Officer since its inception. Prior to forming The Australia Traffic Network Pty Limited, Mr. Yde founded Wisconsin Information Systems, Inc. dba Milwaukee Traffic Network in 1994, and expanded its operations to create traffic networks in Milwaukee, Oklahoma City, Omaha and Albuquerque before selling all of its assets in 1996 to Metro Networks, Inc., now a wholly-owned subsidiary of ~~Westwood~~ ~~One~~Clear Channel Communications, Inc. In 1999, Mr. Yde co-founded (Nihon) Japan Traffic Network, and served as its Chief Executive Officer and as a director from 1999 to January 2002, at which time the company suspended operations. Mr. Yde, as founder of the Company and its Chief Executive Officer and President, is invaluable to the Company’s strategic development and growth, as well as its everyday operations, and the ~~our~~ Board of Directors believes that he is uniquely qualified to serve as Chairman of the Board given his position as the Company’s principal executive officer since he founded the Company. In addition, Mr. Yde’s significant ownership position in the Company provides the Board with a strategic focus on maximizing shareholder value in addition to his representing management’s interests on the Board of Directors.

~~Scott~~38 E. Cody joined us in June 2005 and was appointed Chief Financial Officer and Chief Operating Officer by the Board of Directors in September 2005. Prior to joining us, Mr. Cody held various positions with Metro Networks, Inc., serving as Vice President of Finance from 1997 to June 2002 and Senior Vice President of Business Development from July 2002 to June 2005. Prior to joining Metro Networks, Inc., Mr. Cody was Vice President of Finance for Tele-Media Broadcasting Company.

B. William Pezzimenti currently serves as the President and a member of the Board of Directors of The Australia Traffic Network Pty Limited, having served as a sales representative since February 1998 and as sales director since March 2000. Prior to joining Australia Traffic Network, Mr. Pezzimenti was the manager of retail development for the CBS television affiliate in Buffalo, New York.

Gary L. Worobow has served as the Company’s Executive Vice President, Business and Legal Affairs since March 2009, and served as a member of our Board of Directors from December 2006 through February 2009. Mr. Worobow served as Executive Vice President and General Counsel of Five S Capital Management, Inc from January 2006 to February 2009. Previously, Mr. Worobow was with Westwood One, Inc. where he served as Executive Vice President, Business Affairs and Business Development from 2003 through 2006, and as Senior Vice President and General Counsel from 1999 through 2002. Mr. Worobow was a founder and General Counsel of Columbus Capital Partners, LLC from 2002 through 2003. In addition, Mr. Worobow held the positions of Senior Vice President, General Counsel and Board Member for Metro Networks, Inc. from 1995 to 1999.

Dale C. Arfman, a director of our Company since May 2005, was one of our co-founders and served as our Treasurer and Secretary from September 2005 to July 2009. Mr. Arfman had been with The Australia Traffic Network Pty Limited since 1999. In 1999, Mr. Arfman was a co-founder of (Nihon) Japan Traffic Network and served as its Chief Financial Officer and as a member of its Board of Directors from 1999 to January 2002, at which time the company suspended operations. From 1996 to 1999, Mr. Arfman contributed to the development of traffic networks in Oklahoma City, Albuquerque and Omaha as an officer of Wisconsin Information Systems, Inc. dba Milwaukee Traffic Network. Prior to his involvement in the traffic business, Mr. Arfman was a loan officer with Bank One Indianapolis. Our Board of Directors believes that Mr. Arfman, as a co-founder and former executive officer of the Company, is qualified to serve as a director based on his knowledge of the Company’s business operations, his involvement in the development and growth of the Company’s business in Australia, as well as his finance experience. In addition, Mr. Arfman’s percentage ownership in the Company provides him with a vested interest in its success and, consequently, a focus on maximizing shareholder value.

Gary O. Benson has been a member of our Board of Directors since September 2005. Mr. Benson currently serves as President, Treasurer and Broker of Twin Town Realty, Inc., a real estate brokerage firm, where he has been employed since 1964. He has also served as the General Partner of Goben Enterprises LP, a general investment firm, since 1995, and as Chief Executive Officer and President of Transcontinental Acceptance Corporation, which currently engages in exercise equipment leasing, since 1995. Mr. Benson is qualified to serve as a director of the Company based on the business acumen garnered by him through his real estate development and general investment experience. Mr. Benson also acquired knowledge and experience in the Company’s business serving as a director of (Nihon) Japan Traffic Network from 1999 to 2002.

Scott E. Cody joined the Company in June 2005 and was appointed Chief Financial Officer and Chief Operating Officer by the Board in September 2005. Prior to joining the Company, Mr. Cody held various positions with Metro Networks, Inc., serving as Vice President of Finance from 1997 to June 2002 and Senior Vice President of Business Development from July 2002 to June 2005. Prior to joining Metro Networks, Inc., Mr. Cody was Vice President of Finance for Tele-Media Broadcasting Company.

B. William Pezzimenti currently serves as the President and a member of the board of directors of The Australia Traffic Network Pty Limited, having served as a sales representative since February 1998 and as sales director since March 2000. Prior to joining Australia Traffic Network, Mr. Pezzimenti was the manager of retail development for the CBS television affiliate in Buffalo, New York.

Gary L. Worobow has served as the Company’s Executive Vice President, Business and Legal Affairs since March 2009, and served as a member of the Board from December 2006 through February 2009. Mr. Worobow served as Executive Vice President and General Counsel of Five S Capital Management, Inc. from January 2006 to February 2009. Previously, Mr. Worobow was with Westwood One, Inc. where he served as Executive Vice President, Business Affairs and Business Development from 2003 through 2006, and as Senior Vice President and General Counsel from 1999 through 2002. Mr. Worobow was a founder and General Counsel of Columbus Capital Partners, LLC from 2002 through 2003. In addition, Mr. Worobow held the positions of Senior Vice President, General Counsel and Board Member for Metro Networks, Inc. from 1995 to 1999.

Dale C. Arfman, a director of our Company since May 2005, was one of our co-founders and served as our Treasurer and Secretary from September 2005 to July 2009. Mr. Arfman had been a director of The Australia Traffic Network Pty Limited since 1999. In 1999, Mr. Arfman was a co-founder of (Nihon) Japan Traffic Network and served as its Chief Financial Officer and as a member of its Board of Directors from 1999 to January 2002, at which time the company suspended operations. Previously, Mr. Arfman contributed to the development of traffic networks in Oklahoma City, Albuquerque and Omaha as an officer of Wisconsin Information Systems, Inc. dba Milwaukee Traffic Network before that company sold all of its assets in 1996 to Metro Networks, Inc., now a wholly-owned subsidiary of Clear Channel Communications, Inc. Prior to his involvement in the traffic business, Mr. Arfman was a loan officer with Bank One Indianapolis. Our Board of Directors believes that Mr. Arfman, as a co-founder and former executive officer of the Company, is qualified to serve as a director based on his knowledge of the Company’s business operations, his involvement in the development and growth of the Company’s business in Australia, as well as his finance experience. In addition, Mr. Arfman’s percentage ownership in the Company provides him with a vested interest in its success and, consequently, a focus on maximizing shareholder value.

Gary O. Benson has been a member of our Board of Directors since September 2005. Mr. Benson currently serves as President, Treasurer and Broker of Twin Town Realty, Inc., a real estate brokerage firm, where he has been employed since 1964. He has also served as the General Partner of Goben Enterprises LP, a general investment firm, since 1995, and as Chief Executive Officer and President of Transcontinental Acceptance Corporation, which currently engages in exercise equipment leasing, since 1995. Mr. Benson is qualified to serve as a director of the Company based on the business acumen garnered by him through his real estate development and general investment experience. Mr. Benson also acquired knowledge and experience in the Company’s business serving as a director of (Nihon) Japan Traffic Network from 1999 to 2002.

Shane E. Coppola has been a member of our Board of Directors since June 2006. Mr. Coppola is the Chairman and Chief Executive Officer of American Skating Entertainment Centers, LLC, a company that owns and operates ice skating facilities. Mr. Coppola served as President and Chief Executive Officer of Westwood One, Inc. from May 2003 until December 2005, and served as a director of Westwood One, Inc. from October 2003 until December 2005. From May 2002 to May 2003, Mr. Coppola was the Managing Partner of Columbus Capital Partners, LLC, of which he was a founder. From September 1999 to May 2002, Mr. Coppola served as Executive Vice President of Westwood One’s Metro and Shadow Broadcasting operations. From 1992 to September 1999, Mr. Coppola was a director and Executive Vice President of Metro Networks, Inc. Mr. Coppola’s previous tenure as President, Chief Executive Officer and a director of Westwood One, Inc. and as a director and an executive officer of Metro Networks, Inc. make him uniquely qualified to serve on our Board of Directors, particularly in light of the similarities between the business operations of those companies and our own.

William M. Mower has been a member of our Board of Directors since March ~~11,~~ 2009. Mr. Mower has been engaged in the private practice of law since 1982, practicing primarily in the areas of corporate, securities and real estate law, with the Minneapolis, Minnesota law firm of Maslon Edelman Borman & Brand, LLP, which has rendered and is continuing to render legal services to the Company. Mr. Mower’s experience as a public company business and securities lawyer, including his expertise in corporate governance matters, and prior tenures serving on boards of public reporting companies, make Mr. Mower qualified to serve as a director of the Company.

Stuart R. Romenesko has been a member of our Board of Directors since February 2007. Mr. Romenesko is currently ~~owns~~Chief Financial Officer and Treasurer of KGP Telecommunications, Inc., a leading diversity provider of supply chain services, equipment and integrated solutions to the telecommunications industry. From October 2006 until October 2010, Mr. Romenesko owned his own financial and management consulting firm focused in the areas of finance, operations and strategy. Mr. Romenesko served as an executive toof Petters Group Worldwide, LLC from October 2002 until October 2006. From January 2000 to October 2002, Mr. Romenesko was Executive Vice President, Chief Financial Officer, co-Founder and Director of Magnum Technologies Inc. From January 1994 to June 1999, he served as Senior Vice President Finance, Chief Financial Officer, Treasurer and Assistant Secretary for ValueVision International, Inc., also known as ShopNBC. Mr. Romenesko, a Certified Public Accountant, has held various positions at both regional ~~and~~ and international accounting firms. Mr. Romenesko was a director of Enable Holdings, Inc. (ENAB.OBPK) from January 2006 to March 2007. In addition, Mr. Romenesko has completed the Director Training & Certification Program offered by the UCLA Anderson School of Management. Being a Certified Public Accountant and his previous experience serving as the principal financial and accounting officer for ValueVision International, Inc., a public reporting company, qualifies Mr. Romenesko to serve on the Company’s Board of Directors and its Audit Committee as an “audit committee financial expert.” In light of his education, background and experience, ~~his~~he is qualified to assist the Board of Directors in overseeing the Company’s financial and accounting functions and evaluating the Company’s internal controls over financial reporting.

Other Significant Employees

John Quinn has served as Chief Operating Officer and a member of the ~~Board~~ board of ~~Directors~~directors of Global Traffic Network (UK) Commercial Limited since ~~March~~ March 1, 2009. From 2008 to February 2009, Mr. Quinn served as Chief Operating Officer of UBC Media plc, the prior owner of Global Traffic Network (UK) Commercial Limited. From 1997 to 2008, Mr. Quinn served as Commercial Director and as a board member of UBC Media plc. From 1996 to 1997, Mr. Quinn was the sales director of UBC Media plc.

Ivan N. Shulman commenced his employment with usthe Company and was appointed Senior Vice President of Sales in May 2006 after serving as a member of ~~our~~the Board ~~of Directors~~ from September 2005 through May 2006. Mr. Shulman ~~also~~ serves as president of Canadian Traffic Network ULC, ~~our~~the Company’s Canadian subsidiary and is also responsible for sales of our Global Alert Network subsidiary. Mr. Shulman was the owner of The Sports House from March 2003 to August 2007, prior to which time he held various positions with Metro Networks, Inc., serving most recently as the Senior Vice President of Marketing from 1997 to January 2003, Vice President of Marketing from 1995 to 1997 and Vice President of Merchandising from 1994 to 1995.

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the ~~Securities~~ Exchange Act ~~of 1934~~, as amended, requires the Company’s officers and directors, and persons who own more than ten percent of a registered class of the Company’s equity securities, to file reports of ownership and changes in ownership of such securities with the ~~Securities~~SEC and ~~Exchange Commission and~~ NASDAQ. Officers, directors and greater than ten percent shareholders are required by SEC regulations to furnish the Company with copies of ~~all~~ all Section 16(a) forms they file. ~~With~~Based respect to transactions during the fiscal year ended June 30, 2010, Gary Benson, a director of the Company, filed a Form 4 on March 8, 2010 reporting receipt of restricted stock (exempt under Rule 16b-3) granted by the Company on March 3, 2010. In addition, Mr. Benson filed a Form 5 on September 13, 2010 reporting the August 3, 2009 sale of 52,000 shares to a trust for the benefit of Mr. Benson’s spouse and the subsequent October 6, 2009 gift of such shares, through a series of related transfers, to a limited liability company of which the sole member is a separate trust for the benefit of Mr. Benson’s spouse. Except for these transactions, and based solely on review of the copies of the Forms 3, 4 and 5 (and amendments thereto) ~~furnished~~that towe ~~the~~received ~~Company~~ with respect to transactions during the fiscal year ended June 30, ~~2010~~2011, orwe ~~written~~believe ~~representations~~ that ~~no Forms 5 were required,~~ the Company’s ~~believes that its~~ officers, directors and greater -than -ten -percent ~~shareholders~~beneficial owners complied with all applicable Section 16(a) filing requirements, ~~during~~except ~~the~~as ~~fiscal~~listed ~~year~~in ~~ended~~the ~~June 30,~~table ~~2010~~below.


Name of Filer	Description of Transaction	Transaction Date(s)	Filing Date
Gary O. Benson	• Transfer of 52,000 shares held by Goben Enterprises, LP, a family limited partnership of which Mr. Benson is a general partner, to DM Benson Irrevocable Trust, a trust for the benefit of Mr. Benson’s spouse	August 3, 2009	September 13, 2010

	• Series of gifting transactions	October 6, 2009	September 13, 2010

William L. Yde III	• Sales by Mr. Yde’s former spouse of an aggregate of 22,600 shares of stock over which Mr. Yde had retained voting rights	March 2 and 3, 2011	March 9, 2011

B. William Pezzimenti	• Sales of an aggregate of 40,200 shares	May 17, 18 and 19, 2011	May 27, 2011

Corporate Governance, Ethics and Business Conduct

The Company’s Board of Directors firmly believes that the commitment to sound corporate governance practices is essential to obtaining and retaining the trust of investors, employees and suppliers. The Company’s corporate governance practices reflect the requirements of applicable securities laws, including the Sarbanes-Oxley Act of 2002, the Nasdaq Stock Market listing requirements and the Company’s own vision of good governance practices.

The Company is committed to conducting business lawfully and ethically. All of its employees, including its Chief Executive Officer and senior financial officers, are required to act at all times with honesty and integrity. The Company’s Code of Business Conduct and Ethics covers areas of professional conduct, including workplace behavior, conflicts of interest, fair dealing with competitors and vendors, the protection of Company assets, trading in Company securities and confidentiality, among others. The Code of Business Conduct and Ethics requires strict adherence to all laws and regulations applicable to our business and also describes the means by which any employee can provide an anonymous report of an actual or apparent violation of our Code of Business Conduct and Ethics. In addition to the Code of Business Conduct and Ethics, the Company has adopted a separate Code of Ethics specifically applicable to the Company’s Chief Executive Officer and senior financial officer(s), including the Chief Financial Officer and principal accounting officer (if different from the Chief Financial Officer).

The full text of the Code of Business Conduct and Ethics and the Code of Ethics specifically applicable to the Company’s Chief Executive Officer and senior financial officers are each available online at www.globaltrafficnetwork.com (click on “Investor Relations,” “Corporate Governance” ~~“Committees~~ and ~~Charters” and~~ “Code of Business Conduct and Ethics”).

Audit Committee of the Board of Directors

The Company has established a three member audit committee within its Board ~~of Directors~~ that currently consists of Chairman Stuart R. Romenesko, and Messrs. Shane E. Coppola and Gary O. Benson. The audit committee held five meetings during fiscal 2011. The audit committee operates under a written charter adopted by the Board ~~of Directors~~, a current copy of which is available on the Company’s Internet website at www.globaltrafficnetwork.com (click on “Investor Relations,” ~~and~~then “Corporate Governance” ~~“Committees~~ and ~~Charters~~“Audit Committee Charter”). As set forth in the charter, the primary responsibilities of the ~~Audit Committee~~audit committee include: (i) serving as an independent and objective party to oversee the Company’s financial reporting process and internal control system; (ii) reviewing and appraising the audit performed by the Company’s independent accountants; and (iii) providing an open avenue of communication among the independent accountants, financial and senior management and the Board ~~of Directors~~. The charter also requires that the audit committee, among other things, review and pre-approve ~~the~~ the performance of all audit and non-audit accounting services to be performed by the Company’s independent accountants, other than certain de minimus exceptions permitted by Section 202 of the Sarbanes-Oxley Act of 2002. The Board ~~of Directors~~ has determined that at least one member of the audit committee, Stuart R. Romenesko, is an “audit committee financial expert” as that term is defined in Item 407(d)(5)(ii) of Regulation S-K promulgated under the ~~Securities~~ Exchange Act ~~of 1934~~, as amended. In addition, each member of the audit committee (including Mr. Romenesko) is an “independent director,” as such term is defined in ~~NASDAQ Stock Market’s Marketplace~~ Rule 5605(a)(2) of NASDAQ Marketplace Rules, and meets the criteria for independence set forth in Rule 10A-3(b)(1) under the ~~Securities~~ Exchange Act ~~of 1934~~, as amended. The Board ~~of Directors~~ has also determined that each of the audit committee members is able to read and understand fundamental financial statements and that at least one member of the audit committee has past employment experience in finance or accounting.

Item 11. Executive Compensation

Compensation Discussion and Analysis

This section contains a discussion of the material elements of compensation awarded to, earned by or paid to our principal executive officer, our principal financial officer and ~~our~~the ~~three~~ two other ~~most highly compensated~~ individuals who were serving as executive officers of our Company as of June 30, ~~2010~~ 2011. These individuals are referred to in this report as the “named executive officers.”

Overview of Compensation Program

The primary goals of our executive compensation structure are to provide competitive levels of compensation that integrate pay with our annual company objectives and long-term goals, reward above-average company performance, recognize individual initiative and achievements, and assist us in attracting and retaining qualified executives. Executive compensation is set at levels that the compensation committee believes to be consistent with ~~others~~companies inof ~~our~~similar ~~industry~~size and performance. To meet these goals, our compensation committee has determined that the total compensation program for executive officers should generally consist of some or all of the following ~~four~~three components, the amount of each component to be based upon a combination of individual and company performance:

• Base salary; ~~• Annual cash incentive compensation (bonus); • Non-equity incentive plan compensation (sales commissions); and • Stock options and/or restricted stock.~~

~~Each~~• individual component of compensation meets some or all of our compensation goals. Base salary is designed to provide the competitive annual cash compensation required to attract and retain qualified executives. Annual bonus and nonNon-equity incentive plan compensation are performance based awards designed to reward employees for achieving objectives on an individual and/or company wide basis. Stock options and restricted stock are intended to reward employees for long-term company performance and to align employees’ interests with the interests of our stockholders. Our compensation committee establishes objective criteria for the awarding of (cash ~~bonuses,~~ ~~while reserving the right to grant additional discretionary~~ bonuses); ~~in situations it deems appropriate. The award of stock options~~ and~~/or restricted stock is subjective and qualitative by nature and entirely within the discretion of our compensation committee.~~

39 • Stock options and/or restricted stock.

~~Table~~Each individual component of ~~Contents~~compensation meets some or all of our compensation goals. Base salary is designed to provide the competitive annual cash compensation required to attract and retain qualified executives. Non-equity incentive plan compensation in the form of cash bonuses are performance based awards designed to reward employees for achieving objectives on an individual and/or company wide basis. Stock options and restricted stock are intended to reward employees for long-term company performance and to align employees’ interests with the interests of our stockholders. Our compensation committee establishes objective criteria for the awarding of non-equity incentive plan compensation (cash bonuses), while reserving the right to grant additional discretionary bonuses in situations it deems appropriate. The award of stock options and/or restricted stock is subjective and qualitative by nature and entirely within the discretion of our compensation committee.

~~With~~Although ~~respect~~our toCompany ~~stock~~pays ~~options~~Mr. B. ~~and~~William ~~restricted stock~~Pezzimenti, ~~our~~who ~~compensation~~serves ~~committee~~as ~~has~~President ~~taken~~and ~~into~~Director ~~consideration~~of ~~the~~Australia ~~existing~~Traffic ~~stock~~Network, ~~ownership~~in ofAustralian ~~our~~dollars, ~~named~~Mr. Pezzimenti’s ~~executive~~compensation ~~officers~~ in anthis ~~effort to~~Annual ~~tailor~~Report ~~the~~on ~~application~~Form of10-K ~~our~~is ~~equity~~reported ~~incentive~~in ~~compensation~~U. ~~policies~~S. ~~Specifically~~dollars. When making compensation determinations regarding Mr. Pezzimenti, our compensation committee ~~recognizes~~performs ~~that~~its ~~our~~analysis ~~President~~in the local currency only and ~~Chief~~does ~~Executive~~not ~~Officer~~take ~~had~~into ~~substantial stock~~account ~~ownership~~portions of compensation increases (or decreases) that, when reported in ~~our~~U.S. ~~company~~dollars, atare the ~~time~~result of ~~our~~currency ~~March 2006~~fluctuations. ~~initial~~From ~~public~~the ~~offering~~year ended ~~and~~June 30, ~~continues~~ 2008 to ~~hold~~the ~~substantial~~year ~~amounts~~ended ofJune 30, ~~our~~2009, ~~stock~~the Australian dollar weakened significantly against the U.S. Asdollar, leading to a ~~result~~decrease in Mr. Pezzimenti’s base salary from $430,520 ~~the~~in ~~compensation~~fiscal ~~committee~~2008 ~~determined~~to ~~that~~$390,954 in fiscal ~~grants~~2009. Although this represented a decrease of ~~long-term~~9% ~~incentives~~in toU.S. ~~our~~dollars, ~~President~~Mr. Pezzimenti’s ~~and~~base ~~Chief~~salary ~~Executive~~actually ~~Officer~~increased by 9% when measured in Australian dollars. Conversely, the ~~form~~Australia ofdollar ~~stock~~strengthened considerably against the U.S. dollar ~~options~~during ~~and/or~~fiscal ~~restricted~~2010 ~~stock~~and ~~are~~fiscal ~~not~~2011. ~~currently~~Although ~~necessary~~this contributed to ~~align~~a ~~his~~27% ~~interests~~increase ~~with~~in ~~those~~Mr. Pezzimenti’s ~~of our~~base ~~stockholders~~compensation ~~and~~for tofiscal ~~incentivize~~2010, ~~him~~the toincrease ~~execute~~represented ~~our~~only ~~Company~~a 7% increase in base compensation when measured in Australian dollars. For fiscal 2011, Mr. Pezzimenti’s ~~long-term~~base ~~objectives~~compensation increased 13% when measured in U. S. dollars but only increased by 1% when measured in Australian dollars.

Mr. B. William Pezzimenti, who serves as President and Director of Australia Traffic Network, was the only named executive officer that received non-equity incentive plan compensation in the form of monthly sales-based commissions prior to fiscal 2008. Due to the relatively mature nature of our Australian operations, the financial results of these operations were, and continue to be, highly dependant on continued sales of our commercial advertising inventory. Therefore, we believe that providing a component of incentive compensation tied directly to sales of advertising inventory is appropriate for Mr. Pezzimenti. Prior to fiscal 2008, the focus of our earlier stage Canadian operations was more varied. In addition to increasing sales production, our Canadian operations also focused on, among other things, building our infrastructure in multiple Canadian markets and developing relationships with Canadian network affiliates. As a result, we did not elect to provide commission-based non-equity incentive compensation tied to sales of advertising inventory prior to fiscal 2008. Commencing in fiscal 2008, however, we determined that the nature of our Canadian operations had matured to a level at which we wanted to encourage greater focus on our sales production. In order to do so, we established a commission-based compensation plan for Mr. Ivan Shulman, who serves as our Senior Vice President and President of Canadian Traffic Network, which is based on the performance of our Canadian operations.

Although the Company pays Mr. Pezzimenti in Australian dollars, Mr. Pezzimenti’s compensation in this Annual Report on Form 10-K is reported in U. S. dollars. When making compensation determinations regarding Mr. Pezzimenti, our compensation committee performs its analysis in the local currency only and does not take into account portions of compensation increases (or decreases) that, when reported in U.S. dollars, are the result of currency fluctuations. From the year ended June 30, 2008 to the year ended June 30, 2009, the Australian dollar weakened significantly against the U.S. dollar, so that the decrease in Mr. Pezzimenti’s base salary from $430,520 in fiscal 2008 to $390,954 in fiscal 2009, while representing a decrease of 9% in U.S. dollars, represented an increase of 9% when measured in Australian dollars. Conversely, the Australia dollar strengthened considerably against the U.S. dollar during fiscal 2010, so that while Mr. Pezzimenti showed an increase in his base compensation of 27%, his base compensation increased only 7% when measured in Australian dollars.

Role of our Compensation Committee

The primary objectives of our compensation committee with respect to executive compensation are to attract, retain and motivate the best possible executive talent by providing appropriate levels of risk and reward for executive employees and in proportion to individual contribution and performance. To achieve these objectives, the compensation committee establishes appropriate incentives for the executive officers to further our long term strategic plan and avoid undue emphasis on short-term market value.

The charter of our compensation committee authorizes the committee to approve compensation for our Chief Executive Officer, to develop policies and programs governing the compensation of all company executives that support corporate objectives and the long-term interests of stockholders, and to administer our equity compensation plans. Because our compensation committee is expected to evaluate the performance of our executives in achieving our Company’s long-term goals and stated objectives, the compensation committee charter establishes an expectation that our compensation committee meet at least once annually and more frequently if circumstances dictate. Although our compensation committee has typically met with our Chief Executive Officer, when appropriate, such as when the compensation committee is discussing or evaluating compensation for our Chief Executive Officer, the compensation committee meets in executive session without management. Although our compensation committee is solely responsible for establishing compensation for our Chief Executive Officer, our Chief Executive Officer plays a significant role in establishing compensation received by the other named executive officers by providing periodic reports and recommendations to our compensation committee concerning the performance and compensation of these other named executive officers. In some instances, primarily in connection with the non-equity incentive plan compensation determinations, our Chief Executive Officer has established compensation and subsequently reported to the compensation committee. With the exception of our Chief Executive Officer, the named executive officers do not currently have any role in determining or recommending the form or amount of compensation that they receive.

The compensation committee generally receives and reviews materials in advance of each meeting. These materials include information that the chair of our compensation committee believes will be helpful to the compensation committee as a whole, such as benchmark information, historical compensation data, performance metrics and criteria and, if applicable, the Board of Director’s assessment of our Company’s performance against its goals. When establishing non-equity incentive plan compensation plans, the committee also reviews sales budgets for applicable markets that are internally prepared by management. Upon request by our compensation committee, our Chief Financial Officer and other named executive officers may provide other financial and other information to assist the compensation committee in determining appropriate compensation levels.

Our compensation committee has the authority to retain (with funding provided by us) experts in the field of executive compensation. The compensation committee has the sole authority to retain and terminate these experts, and to approve their fees and other retention terms. In addition, our compensation committee has the authority to obtain advice and assistance from internal or external legal, accounting, human resource or other advisers. To date, our compensation committee has not retained a compensation consultant to conduct a comprehensive review of our policies and procedures with respect to executive compensation. However, the compensation committee does conduct an annual review of the total compensation of each of our executive officers.

Elements of 2010 Executive Compensation

Base Salary. The base salaries for the named executive officers were initially established pursuant to employment agreements or arrangements entered into at the commencement of the executives’ employment with our Company, which agreements have been amended to reflect extensions of the executives’ terms of employment and changes in base compensation. The base salaries for our executives are established based on the scope of their responsibilities, the level of their experience and the urgency of our need for the executive’s particular skill set, taking into account competitive market data on compensation for similar positions within public companies having a similar market capitalization as ours. Where applicable, compensation committee also takes into account the geographic scope of an executive’s responsibilities in light of the global nature of our consolidated operations. Our compensation committee reviews the base salaries of our executives on an annual basis. Subject to existing contractual obligations, salaries may be adjusted as appropriate to realign salaries with market levels after taking into account individual responsibilities, performance and experience. Increases are considered in the context of the general trends in compensation practices, our overall annual budget and in the context of the overall compensation payable to an individual. If our compensation committee believes that increased compensation is warranted based on responsibilities and performance levels that recur from year to year (rather than individual or Company performance over the past year), the increase will generally take the form of an increase in base salary rather than a one-time bonus award. We have entered into written employment agreements with each of Messrs. William L. Yde, our Chief Executive Officer and President, Scott E. Cody, our Chief Operating Officer, Chief Financial Officer and Treasurer and Gary L. Worobow, our Executive Vice President, Business and Legal Affairs and Secretary. Compensation for Messrs. Pezzimenti and Shulman are governed by unwritten employment arrangements. These agreements and arrangements are described in this report under “Description of Employment Agreements and Arrangements, Salary, and Bonus Amounts.”

Mr. Yde’s base salary during fiscal 2008 was $400,000. Mr. Yde’s agreement provides for a $50,000 annual increase in his base salary upon reaching certain objectives for the preceding fiscal year that is determined annually by the compensation committee or the board of directors at or near the beginning of that fiscal year. These objectives were obtained for fiscal 2008 and, accordingly, we increased his base salary from $400,000 to $450,000 effective July 1, 2008. Although Mr. Yde did not meet the applicable performance objectives for fiscal 2009, the compensation committee elected to increase Mr. Yde’s base salary effective July 1, 2009 by $25,000, from $450,000 to $475,000, primarily due to the increased operational and oversight responsibilities that resulted from the Company’s March 1, 2009 acquisition of London-based The Unique Broadcasting Company Limited (now named Global Traffic Network (UK) Commercial Limited) and the corresponding expansion of our United Kingdom business operations. Effective July 1, 2010, we increased the base salary or Mr. Yde from $475,000 to $525,000 upon reaching the objectives for the 2010 fiscal year. The objectives for Mr. Yde during fiscal 2008, fiscal 2009 and fiscal 2010 were consistent with his annual bonus objectives for those years, which are discussed below.

Pursuant to his employment agreement, Mr. Cody’s base salary during fiscal 2008 was $300,000. Mr. Cody’s employment agreement provides for an automatic 5% increase in his base salary annually. In accordance with his agreement, Mr. Cody’s base salary was increased to $315,000 effective July 1, 2008, $330,750 effective July 1, 2009 and $347,288 effective July 1, 2010.

Effective March 1, 2009, Mr. Worobow commenced employment at a base compensation level of $250,000. Due to Mr. Worobow’s previous position as a member of our Board of Directors and our compensation committee, a special committee of disinterested directors approved the terms of Mr. Worobow’s employment agreement, including the level of his base compensation. Mr. Worobow’s base compensation increased from $250,000 to $262,500 effective February 1, 2010 in accordance with the terms of his employment agreement. Mr. Worobow’s employment agreement calls for an automatic 5% increase in his base salary annually on February 1.

Mr. Pezzimenti’s base compensation increased from $360,000 AUD to $480,000 AUD for fiscal 2008. As previously discussed, Mr. Pezzimenti is compensated in Australian dollars and all compensation decisions are based in his local currency without taking into account fluctuations in exchange rates. Mr. Pezzimenti’s increase for fiscal 2008 was approved by our Chief Executive Officer and President. Effective for fiscal 2009, changes in Mr. Pezzimenti’s base compensation have been approved by our compensation committee. For fiscal 2009, Mr. Pezzimenti’s base compensation was increased to $525,000 AUD. Effective July 1, 2009, Mr. Pezzimenti’s base compensation was increased to $561,000 AUD. Effective July 1, 2010, Mr. Pezzimenti’s base compensation was increased to $565,000 AUD. In each of these years, the increase in Mr. Pezzimenti’s base compensation was in recognition of his continued and consistent success in increasing Australia Traffic Networks sales from period to period.

Pursuant to our employment arrangement with Mr. Shulman, he received base compensation of $250,000 commencing May 8, 2006, and was entitled to $50,000 annual increases on both the first and second anniversary of his employment. In accordance with this arrangement, we increased Mr. Shulman’s base salary to $300,000 and $350,000 effective May 8, 2007 and May 8, 2008, respectively. In October 2009, our compensation committee approved modifications to the terms of Mr. Shulman’s employment arrangement that involved reducing his annual base salary from $350,000 to $250,000 in conjunction with providing him with the potential to earn an increased amount of sales based incentive compensation. These modifications became effective January 1, 2010. In approving the modifications, the compensation committee believed that a greater focus on sales generated by our Canadian subsidiary was appropriate given the status of its Canadian operations and felt that shifting compensation potential from base salary to non-equity incentive compensation was therefore warranted.

~~Non-Equity~~Role ~~Incentive Plan Compensation- Annual Bonus. Our compensation committee establishes objective criteria for the awarding~~ of cash bonuses by making bonus payments contingent on the Company satisfying certain consolidated operating profit goals for each fiscal year that are determined by the compensation committee at or near the beginning of the applicable fiscal year. Effective July 1, 2008, we amended our ~~employment~~Compensation ~~agreements~~Committee with each of Messrs. Yde and Cody to reflect this bonus structure, with Mr. Yde eligible to receive an annual bonus of up to 50% of his base salary and Mr. Cody eligible to receive an annual bonus of up to $100,000. Mr. Worobow also participates in this bonus plan pursuant to the terms of his employment agreement with us and he is eligible to receive an annual bonus of up to one third of his base salary. Because Mr. Worobow’s employment commenced in March 2009, he was first eligible to earn a bonus under the plan during fiscal 2010. However, pursuant to his employment agreement, we paid Mr. Worobow a signing bonus of $20,833. We have chosen operating profits (EBITDA) as the metric on which to base cash bonus plans for eligible executives because we believe it is a key metric on which our performance is measured by investors and other third parties. Further, we have elected to tie cash bonuses under these plans to operating profits (EBITDA) on a consolidated basis, rather than market by market, because we believe it will incentivize eligible executives to focus on the results of our operations as a whole. The compensation committee has determined that annual incentive compensation for Messrs. Pezzimenti and Shulman should take the form of commission-based bonuses and bonuses related to their respective areas of authority, rather than based on the results of our consolidated operations. Consequently, they are not eligible to participate in this bonus program.

~~During~~The ~~fiscal~~primary ~~2008,~~objectives of our compensation committee ~~awarded~~with ~~cash~~respect ~~bonuses~~ to ~~Messrs. Yde~~executive ~~and~~compensation ~~Cody~~are ~~of $200,000~~to ~~and $100~~attract,~~000,~~ ~~respectively~~retain ~~based~~and onmotivate the ~~Company exceeding the fiscal 2008 EBITDA goal of~~best ~~$5.1 million,~~possible ~~which~~executive ~~was~~talent ~~set~~ by ~~the~~providing ~~Board~~appropriate levels of ~~Directors~~risk atand ~~the~~reward ~~beginning~~for ofexecutive ~~the~~employees ~~fiscal~~in ~~year~~proportion ~~when approving~~to ~~the~~individual ~~Company’s~~contribution ~~fiscal~~and ~~2008 budget~~performance. AsTo aachieve ~~point~~these ~~of reference~~objectives, the ~~Company’s~~compensation ~~fiscal~~committee ~~2007 EBITDA~~establishes ~~was~~appropriate ~~approximately~~incentives for ~~$(0.3) million. For purposes of~~ the ~~bonus~~executive ~~calculation,~~officers ~~EBITDA~~to isfurther ~~defined as~~our ~~operating~~long ~~income~~term ~~plus~~strategic ~~depreciation~~plan and ~~amortization,~~avoid ~~excluding~~undue ~~the~~emphasis ~~impact~~on ofshort-term ~~other~~market ~~income and expense~~value.

The charter of our compensation committee ~~set~~authorizes the ~~target~~committee ~~EBITDA~~to ~~objective~~approve compensation for ~~fiscal~~our ~~2009~~Chief atExecutive ~~$10.3 million.~~Officer, to develop policies and programs governing the compensation of all company executives that support corporate objectives and the ~~Because~~long-term itinterests ~~was~~of ~~unclear~~stockholders, asand to ~~when~~administer orour ifequity ~~our~~compensation ~~acquisition~~plans. ofBecause ~~Unique~~our ~~would~~compensation ~~occur,~~committee ~~the~~is ~~target~~expected ~~was adopted~~to ~~based~~evaluate onthe aperformance ~~budget~~of ~~that~~our ~~did~~executives ~~not~~in ~~take~~achieving ~~Unique~~our Company’s ~~operations~~long-term ~~into~~goals ~~account.~~and ~~Consequently,~~stated ~~the~~objectives, ~~actual~~the ~~EBITDA~~compensation ~~for~~committee ~~purposes~~charter ofestablishes ~~the~~an ~~bonus~~expectation ~~determination~~that ~~was~~our tocompensation becommittee ~~calculated~~meet ~~net~~at ofleast ~~any~~once ~~impact~~annually ~~on EBITDA~~and ~~resulting~~more ~~from~~frequently ~~Unique~~if ~~operations~~circumstances dictate. ~~Excluding~~Although ~~the~~our ~~Unique~~compensation ~~operations,~~committee ~~actual~~has ~~fiscal~~typically ~~2009~~met ~~EBITDA was~~with ~~approximately~~our ~~$3.5 million~~Chief ~~and~~Executive Officer, ~~based~~when onappropriate, ~~these~~such ~~results,~~as ~~Messrs. Yde~~when ~~and~~the ~~Cody~~compensation ~~did~~committee ~~not~~is ~~receive performance-based~~discussing ~~bonuses~~or evaluating compensation for ~~fiscal~~our ~~2009.~~Chief ~~However~~Executive Officer, the compensation committee ~~elected~~meets toin ~~award Messrs~~executive session without management. ~~Yde~~ ~~and~~Although ~~Cody~~our ~~discretionary~~compensation committee ~~bonuses~~is ofsolely ~~$112,500~~responsible ~~and~~for ~~$50,000,~~establishing ~~respectively~~compensation for our Chief Executive Officer, ~~based~~our ~~primarily upon~~Chief ~~the~~Executive ~~substantial~~Officer ~~efforts~~plays ~~expended~~a significant role in establishing compensation received by ~~each~~the ofother ~~them~~named inexecutive ~~negotiating~~officers ~~and~~by ~~consummating~~providing ~~our~~periodic ~~acquisition~~reports ofand ~~Unique.~~recommendations Toto aour ~~lesser~~compensation ~~extent,~~committee concerning the performance and compensation ~~committee~~of ~~awarded~~these ~~such~~other ~~bonuses~~named ~~in recognition~~executive ofofficers. ~~revenue~~With ~~growth~~the inexception of our ~~local~~Chief ~~markets~~Executive ~~despite~~Officer, ~~economic~~the ~~conditions~~named ~~that~~executive ~~resulted~~officers ~~in declines~~do innot ~~revenue~~currently have any role in ~~such~~determining ~~markets~~or ~~over~~recommending the ~~broader~~form ~~advertising~~or ~~industry~~amount of compensation that they receive.

~~During~~The ~~fiscal~~compensation ~~2010,~~committee generally receives and reviews materials in advance of each meeting. These materials include information that the chair of our compensation committee ~~awarded~~believes ~~cash~~will ~~bonuses~~be helpful to ~~Messrs. Yde~~the compensation committee as a whole, ~~Cody~~such ~~and Worobow~~as ofbenchmark ~~$237~~information,~~500,~~ historical ~~$100~~compensation data,~~000~~ performance metrics and ~~$85~~criteria and,~~417~~ if applicable, ~~respectively~~the ~~based~~Board onof ~~the~~Director’s assessment of our Company’s ~~exceeding~~performance ~~the~~against ~~fiscal~~its goals. When establishing non-equity incentive plan compensation plans, the ~~2010~~committee ~~EBITDA~~also ~~goal~~reviews ofsales $5budgets for applicable markets that are internally prepared by management.~~1 million~~ Upon request by our compensation committee, ~~which~~our ~~was~~Chief ~~set~~Financial byOfficer ~~the~~and ~~Board~~other ofnamed ~~Directors~~executive atofficers ~~the~~may ~~beginning~~provide offinancial ~~the~~and other ~~fiscal~~information ~~year~~to ~~when~~assist ~~approving~~ the ~~Company’s~~compensation ~~fiscal~~committee ~~2010~~in ~~budget~~determining appropriate compensation levels.

AOur ~~table~~compensation ~~summarizing~~committee has the ~~Company~~authority ~~performance~~to ~~against~~retain ~~historical~~(with ~~EBITDA~~funding ~~targets~~provided isby ~~set~~us) ~~forth~~experts in the field of executive compensation. The compensation committee has the sole authority to retain and terminate these experts, and to approve their fees and other retention terms. ~~below:~~In addition, our compensation committee has the authority to obtain advice and assistance from internal or external legal, accounting, human resource or other advisors. To date, our compensation committee has not retained a compensation consultant to conduct a comprehensive review of our policies and procedures with respect to executive compensation. However, the compensation committee does conduct an annual review of the total compensation of each of our executive officers.

Fiscal Year	EBITDA Target	Actual EBITDA
2008	$5.1 million	$5.3 million
2009	$10.3 million	$3.5 million	*
2010	$5.1 million	$9.1 million	**

Elements of 2011 Executive Compensation

*		Excludes the impact of the Company’s acquisition of Unique
**		Excludes impairment charge to fixed assets of $66 thousand

Base Salary. The base salaries for the named executive officers were initially established pursuant to employment agreements or arrangements entered into at the commencement of the executives’ employment with our Company, which agreements have been amended to reflect extensions of the executives’ terms of employment and changes in base compensation. The base salaries for our executives are established based on the scope of their responsibilities, the level of their experience and the urgency of our need for the executive’s particular skill set, taking into account competitive market data on compensation for similar positions within public companies having a similar market capitalization and performance as ours. Where applicable, our compensation committee also takes into account the geographic scope of an executive’s responsibilities in light of the global nature of our consolidated operations. Our compensation committee reviews the base salaries of our executives on an annual basis. Subject to existing contractual obligations, salaries may be adjusted as appropriate to realign salaries with market levels after taking into account individual responsibilities, performance and experience. Increases are considered in the context of the general trends in compensation practices, our overall annual budget and in the context of the overall compensation payable to an individual. If our compensation committee believes that increased compensation is warranted based on responsibilities and performance levels that recur from year to year (rather than individual or Company performance over the past year), the increase will generally take the form of an increase in base salary rather than a one-time bonus award. We have entered into written employment agreements with each of Messrs. William L. Yde III, our Chief Executive Officer and President, Scott E. Cody, our Chief Operating Officer, Chief Financial Officer and Treasurer and Gary L. Worobow, our Executive Vice President, Business and Legal Affairs and Secretary. Compensation for Mr. Pezzimenti is governed by unwritten employment arrangements. These agreements and arrangements are described in this report under “Description of Employment Agreements and Arrangements, Salary, and Bonus Amounts.”

~~For~~Mr. Yde’s base salary during fiscal ~~2011~~2009 was $450,000. ~~Messrs~~Mr. Yde,’s ~~Cody~~agreement ~~and~~provided ~~Worobow~~for ~~have~~a ~~potential bonuses of~~ $~~262~~50,~~500, $100,~~000 ~~and~~ ~~$89,322,~~annual ~~respectively.~~increase ~~The~~in ~~bonuses~~his ~~are~~base ~~based~~salary onupon ~~attaining~~reaching ~~the~~certain ~~following~~Company ~~percentages~~objectives offor the ~~Company’s~~preceding ~~EBITDA~~fiscal ~~target~~year asthat ~~established~~is determined annually by the compensation committee or the Board at or near the beginning of ~~Directors~~that fiscal year. ~~Messrs~~Although Mr. Yde, ~~Cody~~did ~~and~~not ~~Worobow will~~meet bethe ~~entitled~~applicable toperformance ~~receive~~objectives ~~10%~~for offiscal ~~their~~2009, ~~target bonus if~~ the ~~Company~~compensation committee ~~achieves~~elected ~~85%~~to ofincrease ~~the Company~~Mr. Yde’s ~~EBITDA~~ ~~target~~base salary effective July 1, ~~and~~2009 ifby ~~actual~~$25,000, ~~EBITDA~~from is$450,000 ~~greater~~to ~~than~~$475,000, ~~85%~~primarily ofdue to the ~~target amount,~~increased ~~each~~operational ofand ~~Messrs. Yde, Cody~~oversight ~~and~~responsibilities ~~Worobow~~that ~~will~~resulted befrom ~~entitled~~the toCompany’s March 1, ~~receive~~2009 ~~such~~acquisition ~~10%,~~of ~~plus~~London-based anThe ~~additional~~Unique ~~percentage~~Broadcasting ~~equal~~Company toLimited ~~six times~~(now ~~the~~named ~~amount~~Global byTraffic ~~which~~Network ~~actual~~(UK) Commercial ~~EBITDA~~Limited)(“Unique”) asand athe ~~percentage~~corresponding expansion of ~~the~~our ~~target~~United Kingdom business operations. ~~amount~~Effective ~~exceeds~~July 1, ~~85%~~2010, upwe ~~to 100%~~increased ofthe ~~their~~base ~~respective~~salary ~~bonus~~of Mr. Yde ~~Furthermore~~from $475,000 ~~for~~to ~~purposes~~$525,000 ofupon reaching the ~~bonus~~objectives ~~calculation,~~for ~~EBITDA~~the ~~shall be~~2010 ~~calculated~~fiscal ~~based~~year. onThe ~~actual~~objectives ~~results~~for inMr. Yde ~~local~~during ~~currencies~~fiscal ~~translated~~2009 atand ~~the~~fiscal ~~exchange~~2010 ~~rates~~were ~~utilized for~~consistent ~~the~~with ~~target~~his annual ~~EBITDA~~bonus ~~approved~~objectives byfor ~~the~~those ~~Board of Directors~~years, ~~irrespective~~which ofare ~~the~~discussed ~~actual~~below. ~~currency~~Effective ~~rates utilized~~February 9, in2011, ~~preparation~~we ofentered ~~the~~into ~~Company’s~~a ~~financial~~new ~~statements.~~

Non-Equity Incentive Plan Compensation — Sales Commissions and Bonuses. As referenced above, Mr. Pezzimenti receives non-equity incentive plan compensation in the form of monthly sales-based bonuses. Our Chief Executive Officer established monthly sales targets for Australia Traffic Network for the fiscal year ended June 30, 2008 and we provided monthly incentives of either approximately $11,000 or $16,000 (based on the average exchange rate for fiscal 2008) based on achieving roughly 95% and 100%, respectively, of Australia Traffic Network’s sales budget for fiscal year 2008. During fiscal 2008, Mr. Pezzimenti achieved 100% of his higher monthly sales target for all twelve months of the year. In the aggregate, Australia Traffic Network achieved approximately 108% of its cumulative monthly sales targets for fiscal 2008 and Mr. Pezzimenti received aggregate sales bonuses of approximately $188,353. The Australia Traffic Network annual target for fiscal 2008 was approximately $46.4 million AUD, which was an increase of approximately 29% over fiscal 2007 sales performance.

~~For~~ employment ~~fiscal~~agreement ~~2009,~~with Mr. ~~Pezzimenti~~Yde ~~continued~~which toincreased ~~receive~~Mr. Yde’s ~~monthly~~base ~~sales-based~~salary ~~bonuses~~to ~~of approximately~~ $9595,000 ~~or $13,000 (based on the average exchange rate for fiscal 2009) for achieving sales targets set by our Chief Executive Officer~~ and ~~approved~~provides bythat ~~our~~he ~~compensation~~is ~~committee.~~eligible ~~The targets~~ for ~~2009 approximated 100% and 104% of Australia Traffic Network fiscal 2009 monthly sales budgets. Australia Traffic Network’s annual sales budget was approximately A~~$~~58.9 million. For fiscal 2009~~25,000 ~~Mr. Pezzimenti~~annual ~~achieved~~discretionary ~~the~~increases ~~higher target~~in ~~level~~his ~~four~~base ~~times, the lower target four times and no sales bonus four times, and achieved~~salary ~~approximately~~upon ~~98% of his annual sales target over~~ the ~~course~~Company ofachieving the ~~entire~~pre-determined ~~fiscal~~Company ~~year.~~objectives ~~For~~determined ~~fiscal 2009,~~by ~~Mr. Pezzimenti~~our ~~received~~compensation ~~monthly sales-based bonuses totaling $92,175~~committee.

~~For~~Pursuant ~~fiscal~~to ~~2010, our compensation committee approved three “tiers” of annual Australian~~his ~~revenue~~employment ~~targets for fiscal 2010~~agreement, ~~each~~Mr. Cody’s ofbase ~~which~~salary ~~corresponds~~during ~~with a specified percentage increase in annual revenue from the Australian operations over the~~ fiscal 2009 ~~period~~was $315,000. Mr. ~~Pezzimenti was entitled to receive monthly cash bonuses upon the Company~~Cody’s ~~Australian~~employment ~~operations~~agreement ~~achieving~~provided ~~monthly portions~~for ofan ~~the~~automatic ~~targeted~~5% ~~revenue~~increase ~~amounts.~~in ~~Depending~~his onbase ~~the~~salary ~~monthly~~annually. ~~revenue~~In ~~target~~accordance ~~tier~~with ~~achieved~~his agreement, Mr. ~~Pezzimenti~~Cody’s base salary was ~~entitled~~increased to ~~monthly~~$330,750 ~~cash~~effective ~~bonuses~~July 1, of2009 ~~approximately~~and $7347,~~000,~~288 ~~$15,000~~effective ~~or $20~~July 1,~~000 (based~~ ~~on the average exchange rate for fiscal~~ 2010). ~~Mr.~~Effective February ~~Pezzimenti~~9, ~~was not entitled to receive bonus amounts for any month in which the Company’s Australian operations fail to achieve revenues corresponding to the lowest revenue target tier. However~~2011, Mr. ~~Pezzimenti~~Cody ~~had~~entered ~~the~~into ~~opportunity~~a ~~to “recapture”~~new ~~any~~employment ~~missed~~contract ~~monthly~~with ~~cash~~us ~~bonuses~~which bydid ~~achieving~~not ~~the~~change ~~cumulative~~his base ~~revenue~~compensation ~~target~~ for the ~~quarter~~ inyear ~~which~~ended ~~the~~June 30, ~~monthly~~2011 ~~sales~~but ~~bonus~~provides ~~was~~that ~~not~~his ~~achieved.~~base ~~Australia~~salary ~~Traffic~~will ~~Network’s~~be ~~annual~~increased ~~sales budget~~to ~~was approximately~~ $~~61.1 million~~395,000 ~~AUD.~~effective ~~Mr.~~July ~~Pezzimenti achieved the highest of the three targets six times and the middle target the remaining six months~~1, ~~and~~2011. ~~achieved~~This ~~approximately~~new ~~104% of~~agreement ~~his~~does ~~annual~~not ~~sales~~provide ~~budget~~for ~~over~~further ~~the~~automatic ~~course~~increases ofin ~~the~~base ~~entire fiscal year~~salary. ~~For fiscal 2010, Mr. Pezzimenti received monthly sales-based bonuses totaling $212,436.~~

~~For~~Effective ~~fiscal 2011~~March 1, ~~our compensation committee approved three “tiers” of annual Australian revenue targets for fiscal 2011~~2009, ~~each~~Mr. Worobow ofcommenced ~~which~~employment ~~corresponds~~at ~~with~~ a ~~specified~~base ~~percentage~~compensation level of ~~annual revenue budget~~$250,000. OnDue ~~an annual basis, the tiers correspond~~ to ~~approximately 98% of budget, budget~~ ~~and 104% of budget.~~ Mr. ~~Pezzimenti will be entitled to receive monthly cash bonuses upon the Company~~Worobow’s ~~Australian~~previous ~~operations~~position ~~achieving~~as ~~monthly~~a ~~portions~~member of ~~the~~our ~~targeted~~Board ~~revenue~~and ~~amounts. Depending~~our oncompensation ~~the monthly revenue target tier achieved~~committee, ~~Mr. Pezzimenti~~a ~~will~~special becommittee ~~entitled to monthly cash bonuses~~ of ~~approximately~~disinterested ~~$6,000,~~directors ~~$15,000~~approved ~~or $25,000 (based on~~ the ~~exchange~~terms ~~rate~~of ~~at June 30, 2010).~~ Mr. ~~Pezzimenti is not entitled to receive bonus amounts for any month in which the Company~~Worobow’s ~~Australian~~ ~~operations~~employment ~~fail to achieve revenues corresponding to the lowest revenue target tier. However~~agreement, ~~Mr. Pezzimenti~~including ~~has~~ the ~~opportunity~~level toof ~~“recapture”~~his ~~any missed monthly cash bonuses by~~base ~~achieving the cumulative revenue target for the quarter in which the monthly sales bonus was not achieved~~compensation. Mr. ~~Pezzimenti~~Worobow’s isbase ~~paid~~compensation inincreased ~~Australian~~from ~~dollars and the dollar amounts reflected above have been converted~~ to ~~United~~$262,500 ~~States~~effective ~~dollars utilizing the exchange rate as of June~~February 301, 2010. ~~Due~~and to$275,625 ~~the fixed~~effective ~~cost nature of our business~~February 1, it2011 ~~is anticipated that an increase~~ in ~~revenues~~accordance ~~will~~with ~~yield significant additional operating income and earnings. The compensation committee evaluates~~ the terms of ~~the~~his ~~non-equity~~employment ~~incentive~~agreement ~~plan~~which ~~applicable~~provided tofor ~~Mr. Pezzimenti on an~~ annual ~~basis and revises~~ ~~the~~automatic ~~terms~~5% ofincreases ~~this~~in ~~plan~~his ~~based~~base ~~on their review~~salary. InEffective ~~addition~~July 1, ~~the compensation committee has approved two additional bonus plans for Mr. Pezzimenti. First~~2011, Mr. ~~Pezzimenti~~Worobow isentered ~~entitled~~into toa ~~receive approximately~~new ~~$21,000~~employment ~~(based~~contract onthat ~~the~~provides ~~exchange rate at June 30, 2010)~~ for ~~each~~an ~~quarter~~initial ~~during~~annual ~~which Australia~~base ~~Traffic~~salary ~~Network~~of ~~achieves its EBITDA target. In addition~~$290,000 inthat ~~light~~will ofbe ~~his~~ increased ~~responsibilities~~ ~~for~~automatically ~~overseeing~~by ~~sales~~5% ~~for~~on ~~our Canadian operations, Mr.~~July ~~Pezzimenti~~1 ~~is entitled to receive 15%~~ of ~~the amount which revenue exceeds an annual target established by our Chief Executive~~ ~~Officer~~each ~~and~~year ~~approved~~commencing byJuly 1, ~~the compensation committee~~2012. ~~This target is in excess of the annual Canadian sales budget.~~

For the fiscal year ending June 30, 2008, we established a commission-based non-equity compensation plan for Ivan Shulman, Senior Vice President of Sales that was based on the performance of our Canadian operations. Under this plan, Mr. ~~Shulman was entitled to receive monthly cash commissions equal to a percentage of Canada Traffic Network~~Pezzimenti’s ~~monthly~~base ~~net revenues~~compensation ~~provided~~increased ~~that~~from ~~such net revenues exceed certain thresholds. The applicable commission percentage was 1% if net revenues for the month exceeded~~ $~~400~~480,000 ~~CAD,~~AUD 2%to ~~if net revenues for the month exceeded~~ $~~500~~525,000 ~~CAD, 3% if net revenues for the month~~ ~~exceeded~~AUD ~~$600,000 CAD, or 4% if net revenues~~ for ~~the~~fiscal ~~month~~2009. ~~exceeded~~As ~~$700~~previously discussed,~~000~~ ~~CAD~~Mr. Pezzimenti ~~The~~is ~~thresholds~~compensated ~~were all measured~~ in ~~Canadian~~Australian dollars~~, which~~ isand ~~the~~all ~~functional~~compensation ~~currency~~decisions ofare ~~Canadian~~based ~~Traffic~~in ~~Network~~his ~~and~~local ~~the~~currency ~~commissions~~without ~~earned~~taking ~~were then converted~~ into ~~U.S.~~account ~~dollars~~fluctuations ~~for~~in ~~payment~~exchange ~~to Mr~~rates. ~~Shulman.~~ InFor ~~addition,~~fiscal 2010, Mr. ~~Shulman~~Pezzimenti’s base compensation was ~~entitled~~increased to ~~receive~~ ~~separate~~ $~~100~~561,000 ~~cash~~AUD. ~~bonus~~Effective ~~payments~~July 1, if2010, ~~Canada~~Mr. Pezzimenti’s ~~Traffic~~base ~~Network~~compensation ~~achieved~~was ~~positive~~increased ~~EBITDA and positive net income prior~~ to ~~the allocation of corporate overhead (if any)~~$566,400 ~~respectively~~AUD. In ~~recognition~~ ofeach ~~Canadian Traffic Network achieving net revenues in excess~~ of ~~$800,000~~these ~~CAD for the month of June 2008~~years, at the ~~request~~increase ofin ~~our Chief Executive Officer, the compensation committee agreed to revise the plan to pay 4.5% commission if net revenues exceeded $800,000 CAD.~~ Mr. ~~Shulman reached at~~Pezzimenti’s ~~least~~base ~~the~~compensation ~~minimum~~was ~~threshold~~in ~~nine~~recognition ~~times and received aggregate commissions~~ of ~~$175,596~~his ~~under~~continued ~~the non-equity~~and ~~incentive~~consistent ~~plan~~success ~~for~~in ~~fiscal~~increasing ~~2008.~~Australia ~~EBITDA of Canada~~ Traffic ~~Network~~Networks ~~for~~sales ~~the~~from ~~2008~~period ~~fiscal year~~to ~~was $(2~~period.~~4) million.~~

~~For~~Non-Equity ~~fiscal~~Incentive ~~2009,~~Plan ~~Mr. Shulman~~Compensation was similarly entitled to receive monthly cash commissions equal to a percentage of Canada Traffic Network’s monthly net revenues provided that such net revenues exceeded certain thresholds. The applicable commission percentage was 1% if net revenues for the month exceeded $700,000 CAD, 2% if net revenues for the month exceeded $800,000 CAD, 3% if net revenues for the month exceeded $900,000 CAD, or 4% if net revenues for the month exceeded $1,000,000 CAD. Again, the thresholds were all measured in Canadian dollars, which is the functional currency of Canadian Traffic Network and the commissions earned were then converted into U.S. dollars for payment to Mr. Shulman. In addition, Mr. Shulman was entitled to receive an additional $100,000 cash bonus payment if Canada Traffic Network achieved positive EBITDA after payments to Mr. Shulman (~~including~~Cash ~~his non-equity incentive compensation~~Bonuses). EBITDA of Canada Traffic Network less Mr. Shulman’s cash compensation for the 2009 fiscal year was $(2.8) million. For fiscal 2009, Mr. Shulman reached at least the minimum threshold five times and earned aggregate sales-based bonuses of $83,973.

Our compensation committee establishes objective criteria for the awarding of non-equity incentive plan compensation in the form of cash bonuses. For Messrs. William L. Yde III, our President and Chief Executive Officer, Scott E Cody our Chief Financial Officer, Chief Operating Officer and Treasurer, and Gary L. Worobow, our Executive Vice President, Business and Legal Affairs, the bonus payments are contingent on the Company satisfying certain consolidated operating profit goals for each fiscal year that are determined by the compensation committee at or near the beginning of the applicable fiscal year. Pursuant to their employment agreements, Mr. Yde is eligible to receive an annual cash bonus of up to 50% of his base salary, Mr. Cody is eligible to receive an annual cash bonus of up to $100,000 and Mr. Worobow is eligible to receive an annual cash bonus of up to one-third of his base salary. In February 2011, we entered into a new employment agreement, the terms of which provide Mr. Cody an annual cash bonus potential equal to 40% of his base salary commencing for fiscal 2012. Because Mr. Worobow’s employment commenced in March 2009, he was first eligible to earn a bonus under the plan during fiscal 2010. However, pursuant to his employment agreement, we paid Mr. Worobow a signing bonus of $20,833. We have chosen operating profits (EBITDA) as the metric on which to base cash bonus plans for eligible executives because we believe it is a key metric on which our performance is measured by investors and other third parties. Further, we have elected to tie cash bonuses under these plans to operating profits (EBITDA) on a consolidated basis, rather than market by market, because we believe it will incentivize eligible executives to focus on the results of our operations as a whole.

The compensation committee set the target EBITDA objective for fiscal 2009 at $10.3 million. As a point of reference, the Company’s fiscal 2008 EBITDA was approximately $5.3 million. For purposes of the bonus calculation, EBITDA is defined as operating income plus depreciation and amortization, excluding the impact of other income and expense. Because it was unclear as to when or if our acquisition of Unique would occur, the target was adopted based on a budget that did not take Unique’s operations into account. Consequently, the actual EBITDA for purposes of the bonus determination was to be calculated net of any impact on EBITDA resulting from Unique operations. Excluding the Unique operations, actual fiscal 2009 EBITDA was approximately $3.5 million and, based on these results, Messrs. Yde and Cody did not receive performance-based bonuses for fiscal 2009. However, the compensation committee elected to award Messrs. Yde and Cody discretionary bonuses of $112,500 and $50,000, respectively, based primarily upon the substantial efforts expended by each of them in negotiating and consummating our acquisition of Unique. To a lesser extent, the compensation committee awarded such bonuses in recognition of revenue growth in our local markets despite economic conditions that resulted in declines in revenue in such markets over the broader advertising industry.

During fiscal 2010, our compensation committee awarded cash bonuses to Messrs. Yde, Cody and Worobow of $237,500, $100,000 and $85,417, respectively based on the Company exceeding the fiscal 2010 EBITDA goal of $5.1 million, which was set by the Board of Directors at the beginning of the fiscal year when approving the Company’s fiscal 2010 budget.

During fiscal 2011, our compensation committee awarded cash bonuses to Messrs. Yde, Cody and Worobow of $297,500, $100,000 and $89,324, respectively based on the Company exceeding the fiscal 2011 EBITDA goal of $12.0 million, which was set by the Board of Directors at the beginning of the fiscal year when approving the Company’s fiscal 2011 budget. In order to negate the impact of currency fluctuations over the course of fiscal 2011, over which the Company’s executive officers have no control, the fiscal 2011 EBITDA achieved was calculated assuming that the exchange rates of Australian, Canadian and United Kingdom currency remained constant throughout the fiscal year.

~~For~~A ~~fiscal~~table ~~2010,~~summarizing ~~our Chief Executive Officer established quarterly sales targets for~~ the ~~Company’s~~ Canadian operations for fiscal 2010 that were approved by the compensation committee. Under this 2010 plan, Mr. Shulman was entitled to quarterly cash bonuses of $15,000, $30,000 or $45,000 based upon on the Company’s ~~Canadian~~performance ~~operations~~against ~~achieving~~historical ~~95%,~~EBITDA ~~100%~~targets ~~or 105% of the applicable quarterly sales target. Mr. Shulman~~ is ~~not~~set ~~entitled to receive bonus amounts for any~~forth ~~quarter~~below: in which the Canadian operations fail to achieve at least 95% of the applicable sales target. As discussed under “Elements of 2010 Executive Compensation — Base Salary” above, in conjunction with a reduction in base salary that was effective January 1, 2010, Mr. Shulman was also entitled to receive cash “override” commissions equal to 2% of the increase in net quarterly sales of the Company’s Canadian operations over the net quarterly sales in the prior year’s corresponding quarter. In addition, Mr. Shulman was eligible to receive a 10% sales commission on certain pre-approved customer accounts. Canada’s sales budget for fiscal 2010 was approximately C$11.3 million and Mr. Shulman achieved approximately 87% of the annual budget. For fiscal year 2010, Mr. Shulman achieved 95% of applicable his quarterly sales target for two quarters, received no bonus for two quarters and received aggregate non-equity incentive compensation of $74,607. The components of Mr. Shulman’s non-equity incentive were $30,000 for reaching 95% of applicable quarterly sales targets and $44,607 in “override” commissions.

For each of Messrs. Pezzimenti and Shulman, the sales targets established for a particular fiscal year have been determined using the sales budgets prepared by Company management as a baseline. The compensation committee reviews these budgets with management prior to their adoption and believes that they represent levels that, if achieved, will translate into operating success and increased shareholder value. To provide for meaningful incentives, the compensation committee strives to put in place sales goals that are both challenging yet achievable, and it believes that the Company’s budgets provide a baseline consistent with this approach


Fiscal Year	EBITDA Target	Actual EBITDA
2009	$10.3 million	$3.5 million*
2010	$5.1 million	$9.1 million**
2011	$12.0 million	$16.7 million***

~~Long~~* ~~Term~~Excludes ~~Incentive Program. We believe that long term performance is achieved through an ownership culture that encourages long-term performance by our executive officers through~~ the ~~use of~~impact ~~stock-based awards and, to date, our long-term compensation has consisted~~ of ~~stock options and restricted stock. Our stock compensation plans have been established to provide key employees, including our executive officers, with incentives to help align~~ the ~~employees~~Company’s ~~interests~~acquisition ~~with those~~ of our stockholders, enabling our executive officers to participate in the long-term appreciation of our stockholder value, while personally experiencing the impact of any business setbacks, whether Company specific or industry based. Additionally, we include stock options and restricted stock in our compensation program as a means of promoting retention of key executives, which is achieved by subjecting such options and restricted stock grants to service-based vesting schedules. Options and restricted stock vest in annual installments over periods that range from three to five years, with vesting dates generally matching the anniversaries of the grant dates. Our initial grants of long-term equity-based incentive compensation following our initial public offering in March 2006, took the form of stock options. Commencing in fiscal 2008, we began granting shares of restricted stock in part to mitigate the level of dilution resulting from equity based incentives, as the equivalent level of intrinsic value may be realized through granting fewer restricted shares than the amount of shares underlying stock options. Our compensation committee determines the form that an equity-based compensation award will take on an individual basis at the time of grant. Unique

~~The~~** ~~initial~~Excludes ~~stock~~impairment ~~option~~charge ~~grant made~~ to anfixed ~~executive~~assets ~~officer upon joining us is primarily based on competitive conditions applicable to the named executive officer’s specific position. In addition, our compensation committee considers the number~~ of ~~options~~$66 owned by other executive officers in comparable positions within our Company, as well as at public companies with comparable market capitalizations. Subsequent grants to executive officers are generally considered and awarded in connection with the annual company-wide compensation review or at other times deemed appropriate. Such subsequent grants serve to maintain a competitive position for our Company relative to new opportunities that may become available to our executive officers. thousand

~~Awards~~*** toTarget anand ~~executive~~“actual” ~~officer~~EBITDA ~~are~~ based ~~upon~~on ~~his~~fixed orexchange ~~her~~rates ~~sustained~~of ~~performance~~Australia ~~over~~dollar ~~time, ability~~@ to.8750 ~~impact results that drive our stockholder value~~USD, ~~level~~Canadian ofdollar ~~responsibility~~@ ~~within~~.95 ~~the Company,~~USD ~~potential~~& toBritish ~~take~~pound on@ ~~roles~~1.50 ~~of increasing responsibility in our Company and competitive equity award levels for similar positions and responsibilities in public companies with comparable market capitalizations~~USD. AsExcludes ~~mentioned~~impact ~~above, the award~~ of ~~stock-based~~loss ~~compensation has remained subjective and qualitative by nature, and equity awards are not granted automatically to our executive officers~~ on andisposal ~~annual~~of ~~basis.~~assets With respect to our President and Chief Executive Officer, we have recognized his substantial stock ownership positions in our Company and have determined that options grants are not currently necessary to align his interests with those of ~~our stockholders~~$94 ~~and~~thousand. toUnadjusted ~~incentivize~~actual ~~him~~EBITDA tofor ~~execute~~fiscal onyear ~~our~~2011 ~~Company’s~~was ~~long-term~~approximately ~~objectives~~$18. 4 million.

~~During~~For ~~the~~ fiscal ~~year ended June 30~~2012, ~~2008, we granted Mr~~Messrs. ~~Cody 15~~Yde,~~000~~ ~~shares~~Cody ~~of restricted stock~~ and ~~stock~~Worobow ~~options~~have topotential ~~purchase~~bonuses upof to$297,500, 50$158,000 ~~shares~~and of$96,667, ~~our common stock~~respectively. The ~~grant~~bonuses toare ~~Mr. Cody was~~based ~~made~~on inattaining ~~conjunction with~~ the ~~board~~following ~~meeting~~percentages ~~roughly corresponding to the anniversary~~ of ~~his~~the ~~employment agreement with our~~ Company’s ~~and~~EBITDA ~~was~~target ~~deemed~~as ~~appropriate~~established inby ~~light~~the ofBoard. ~~his~~Messrs. Yde, ~~potential~~Cody ~~to impact our operating~~ and ~~financial~~Worobow ~~results~~will ~~that~~be ~~drive~~entitled ~~the~~to ~~value~~receive of10% ~~our stock. Mr. Shulman received 15,000 shares~~ of ~~restricted~~their ~~stock,~~target ~~which~~bonus ~~was~~if ~~made~~the ~~pursuant~~Company toachieves ~~his~~85% ~~employment~~of ~~arrangement~~the ~~with our~~ Company~~. Mr. Shulman~~’s ~~employment~~EBITDA ~~arrangement~~target, ~~which~~and ~~was~~if ~~determined~~actual atEBITDA ~~the~~is ~~time~~greater hethan 85% ~~joined~~of ~~our Company,~~the ~~provided~~target ~~for~~amount, ~~grants~~each of 50Messrs. Yde,~~000~~ ~~share~~Cody ~~stock~~and ~~options~~Worobow atwill ~~the~~be ~~commencement~~entitled ofto ~~his~~receive ~~employment and~~such on10%, ~~the~~plus ~~first~~an ~~and~~additional ~~second~~percentage ~~anniversaries~~equal ~~thereof.~~to ~~Mr. Shulman~~six ~~agreed~~times tothe ~~receive~~amount ~~the~~by ~~15,000~~which ~~share restricted~~actual ~~stock~~EBITDA ~~grant~~as ina ~~lieu~~percentage of the ~~50,000~~target ~~stock~~amount ~~options~~exceeds ~~initially~~85%, ~~contemplated.~~up ~~We granted Mr.~~to ~~Pezzimenti~~100% ~~stock~~of ~~options~~their torespective ~~purchase~~potential abonus ~~total~~amounts. ~~of 110~~Furthermore,~~000~~ ~~shares~~for purposes of ~~our~~the ~~common~~bonus ~~stock~~calculation, ~~during~~EBITDA ~~fiscal 2008~~will ~~pursuant~~be tocalculated ~~two~~based ~~separate~~on ~~grants.~~actual ~~Each~~results ofin ~~these~~local ~~grants~~currencies ~~was~~translated ~~discretionary~~at inthe ~~nature~~exchange ~~and~~rates ~~designed to~~utilized ~~reward Mr. Pezzimenti~~ for the ~~outstanding~~target ~~performance~~EBITDA ofapproved by the ~~Australia~~Board, ~~Traffic~~irrespective ~~Network in light~~ of the ~~importance~~actual ofcurrency ~~the~~rates ~~Company’s~~utilized ~~Australian~~in ~~operations~~preparation toof the Company’s ~~overall~~financial ~~performance, and to incentivize continued performance of Australia Traffic Network~~statements.

WeDue to ~~granted~~the norelatively ~~equity~~mature ~~stock~~nature ~~based~~of ~~awards~~our Australian operations, the financial results of these operations were, and continue to ~~our~~be, ~~executive~~highly ~~officers~~dependent ~~during~~on ~~fiscal~~continued ~~2009~~sales of our commercial advertising inventory. Therefore, ~~although~~our compensation committee has Mrdetermined that annual incentive compensation for B. ~~Worobow~~ ~~received~~William 20Pezzimenti,~~000~~ ~~shares~~who serves as President and Director of ~~restricted~~Australia ~~stock~~Traffic Network, should take the form of commission-based bonuses and bonuses related to his ~~service~~respective areas of authority, rather than based on the results of our consolidated operations. Ivan Shulman and John Quinn, whom our Board ~~of Directors~~has ~~prior~~identified toas ~~the~~key ~~commencement~~employees, also have components of ~~his~~incentive ~~employment~~compensation ~~with~~tied directly to the ~~Company~~sales of advertising inventory.

For fiscal 2009, Mr. Pezzimenti received monthly sales-based bonuses of approximately $9,000 or $13,000 (based on the average exchange rate for fiscal 2009) for achieving sales targets set by our Chief Executive Officer and approved by our compensation committee. The targets for 2009 approximated 100% and 104% of Australia Traffic Network fiscal 2009 monthly sales budgets. Australia Traffic Network’s annual sales budget was approximately $58.9 million AUD. For fiscal 2009, Mr. Pezzimenti achieved the higher target level four times, the lower target four times and no sales bonus four times, and achieved approximately 98% of his annual sales target over the course of the entire fiscal year. For fiscal 2009, Mr. Pezzimenti received monthly sales-based bonuses totaling $92,175.

For fiscal 2010, our compensation committee approved three “tiers” of annual Australian revenue targets for fiscal 2010, each of which corresponds with a specified percentage increase in annual revenue from the Australian operations over the fiscal 2009 period. Mr. Pezzimenti was entitled to receive monthly cash bonuses upon the Company’s Australian operations achieving monthly portions of the targeted revenue amounts. Depending on the monthly revenue target tier achieved, Mr. Pezzimenti was entitled to monthly cash bonuses of approximately $7,000, $15,000 or $20,000 (based on the average exchange rate for fiscal 2010). Mr. Pezzimenti was not entitled to receive bonus amounts for any month in which the Company’s Australian operations failed to achieve revenues corresponding to the lowest revenue target tier. However, Mr. Pezzimenti had the opportunity to “recapture” any missed monthly cash bonuses by achieving the cumulative revenue target for the quarter in which the monthly sales bonus was not achieved. Australia Traffic Network’s annual sales budget was approximately $61.1 million AUD. Mr. Pezzimenti achieved the highest of the three targets six times and the middle target the remaining six months, and achieved approximately 104% of his annual sales budget over the course of the entire fiscal year. For fiscal 2010, Mr. Pezzimenti received monthly sales-based bonuses totaling $212,436.

For fiscal 2011, our compensation committee approved three “tiers” of annual Australian revenue targets for fiscal 2011, each of which corresponds with a specified percentage of budgeted annual revenue from the Australian operations. Mr. Pezzimenti was entitled to receive monthly cash bonuses upon the Company’s Australian operations achieving monthly portions of the targeted revenue amounts. Depending on the monthly revenue target tier achieved, Mr. Pezzimenti was entitled to monthly cash bonuses of approximately $7,400, $17,300 or $29,700 (based on the average exchange rate for fiscal 2011). Mr. Pezzimenti was not entitled to receive bonus amounts for any month in which the Company’s Australian operations fail to achieve revenues corresponding to the lowest revenue target tier. However, Mr. Pezzimenti had the opportunity to “recapture” any missed monthly cash bonuses by achieving the cumulative revenue target for the quarter in which the monthly sales bonus was not achieved. Australia Traffic Network’s annual sales budget was approximately $68.5 million AUD. Mr. Pezzimenti achieved the highest of the three targets five times, the middle target four times, the lowest target one time, missed two targets and achieved approximately 102% of his annual sales budget over the course of the entire fiscal year. For fiscal 2011, Mr. Pezzimenti received monthly sales-based bonuses totaling $224,481. In addition, for fiscal 2011, the compensation committee approved an additional bonus for Mr. Pezzimenti based on achieving the quarterly EBITDA goals of Australia Traffic Network. Mr. Pezzimenti was eligible for $25,000 AUD for each quarter in which Australia reached its EBITDA goal. Mr. Pezzimenti reached his EBITDA goal for two quarters and received EBITDA based bonuses of $50,000. The annual EBITDA budget for Australia (excluding management fees paid to Global Traffic Network) was approximately $21.2 million AUD. The EBITDA based bonus was instituted in order to focus and reward Mr. Pezzimenti on the overall

In performance ~~July 2009,~~of weour ~~granted~~Australian ~~Mr. Shulman 20~~operations,~~000~~ ~~shares~~rather ofthan ~~restricted~~just ~~stock,~~sales ~~and granted Messrs~~performance. ~~Worobow~~ ~~and~~Finally, ~~Cody~~in ~~options~~recognition toof ~~purchase~~his ~~20,000~~efforts ~~shares~~in ~~and~~turning ~~100,000~~around ~~shares of~~ our ~~common~~Canadian ~~stock, respectively.~~sales ~~As with previous grants~~efforts, ~~these~~the ~~grants~~compensation ~~were intended to more closely align our~~committee ~~executives’~~authorized ~~interests~~an ~~with~~additional ~~those~~bonus ofto ~~our~~be ~~shareholders~~equal ~~and~~to ~~they~~15% ~~were deemed appropriate in light~~ of ~~each~~ ~~executive’s~~the ~~potential~~amount toby ~~impact~~which our ~~company’s~~Canadian ~~operations~~sales ~~over~~exceeded ~~the life of the awards. In November 2009~~$15, ~~we granted Mr. Pezzimenti 25,~~000 ~~shares of restricted stock and an option to purchase 25~~,000 ~~shares~~CAD. ofCanadian ~~our~~sales ~~common~~for ~~stock.~~fiscal ~~Mr. Pezzimenti’s~~2011 ~~grants~~ were ~~delayed~~approximately so$14.9 ~~that~~million ~~we could fully understand the impact of newly enacted Australian legislation that changed the manner in which stock options~~ and ~~restricted~~, ~~stock recipients are taxed and diminished the attractiveness of stock options or restricted stock~~ as ~~a form of long term incentive compensation. As with prior grants to Mr. Pezzimenti~~such, ~~these grants were designed to reward~~ Mr. Pezzimenti ~~for~~received ~~the~~no ~~outstanding~~bonus ~~performance~~with ~~of the~~regards ~~Australia Traffic Network in light of the importance of the Company’s Australian operations~~ to ~~the Company’s overall performance, as well as to acknowledge his increased involvement in our~~ Canadian ~~operations~~sales.

InFor ~~August 2010~~fiscal 2012, weour ~~granted~~compensation committee approved two “tiers” of annual Australian revenue targets for fiscal 2012, each of which corresponds with a specified percentage of the annual revenue budget. On an annual basis, the tiers correspond to budget and 104% of budget. Mr. ~~Cody~~Pezzimenti ~~options~~will be entitled to ~~purchase~~receive ~~100,000~~monthly ~~shares~~cash bonuses upon the Company’s Australian operations achieving monthly portions of ~~our~~the ~~common~~targeted ~~stock~~revenue amounts. Depending on the monthly revenue target tier achieved, Mr. Pezzimenti ~~35,000~~will ~~shares~~be entitled to monthly cash bonuses of ~~restricted~~approximately ~~stock~~$16,100 ~~and~~or $32,200 (based on the exchange rate at June 30, 2011). Mr. ~~Worobow~~Pezzimenti ~~options~~is not entitled to ~~purchase~~receive ~~20,000~~bonus ~~shares of~~amounts ~~our~~for ~~common~~any ~~stock~~month ~~and~~in 20which the Company’s Australian operations fail to achieve revenues corresponding to the lowest revenue target tier. However,~~000~~ ~~shares~~Mr. Pezzimenti ofhas ~~restricted~~the ~~stock~~opportunity to “recapture” any missed monthly cash bonuses by achieving the cumulative revenue target for the quarter in which the monthly sales bonus was not achieved. ~~These~~In ~~grants~~addition, ~~were~~Mr. Pezzimenti ~~intended~~is entitled to ~~more~~receive ~~closely~~approximately ~~align~~$16,100 ~~our~~(based ~~executives’~~on ~~interests~~the ~~with~~exchange ~~those~~rate ofat June 30, 2011) for each quarter our ~~shareholders~~Canadian operations reach their revenue budget. Mr. Pezzimenti is paid in Australian dollars and the dollar ~~they~~amounts ~~were~~reflected ~~deemed~~above ~~appropriate~~have inbeen ~~light~~converted to United States dollars utilizing the exchange rate as of ~~each~~June 30, ~~executive’s~~2011. ~~potential~~Due to ~~impact~~the fixed cost nature of our ~~company’s~~business, it is anticipated that an increase in revenues will yield significant additional ~~operations~~operating ~~over~~income and earnings. The compensation committee evaluates the ~~life~~terms of the ~~awards~~non-equity incentive plan applicable to Mr. Pezzimenti ~~Our~~on an annual basis and revises the terms of this plan based on their review. In addition, the compensation committee ~~will~~has ~~continue~~approved an additional bonus plan for Mr. Pezzimenti based on Australian operating profits. Mr. Pezzimenti is entitled to ~~analyze~~receive approximately $26,800 (based on the exchange rate at June 30, 2011) for each ~~facts~~quarter ~~and~~during ~~circumstances~~which ~~surrounding~~Australia ~~these~~Traffic ~~and~~Network ~~other~~achieves ~~executives~~its ~~when~~EBITDA ~~making~~target ~~equity~~and an additional approximately $107,200 (based ~~compensation~~ ~~grant~~on ~~determinations~~the exchange rate at June 30, 2011) if Australia Traffic Network achieves its annual EBITDA target.

For Mr. Pezzimenti, the sales targets established for a particular fiscal year have been determined using the sales budgets prepared by Company management as a baseline. The compensation committee reviews these budgets with management prior to their adoption and believes that they represent levels that, if achieved, will translate into operating success and increased shareholder value. To provide for meaningful incentives, the compensation committee strives to put in place sales goals that are both challenging yet achievable, and it believes that the Company’s budgets provide a baseline consistent with this approach

Long Term Incentive Program. We believe that long term performance is achieved through an ownership culture that encourages long-term performance by our executive officers through the use of stock-based awards and, to date, our long-term compensation has consisted of stock options and restricted stock. Our stock compensation plans have been established to provide key employees, including our executive officers, with incentives to help align the employees’ interests with those of our stockholders, enabling our executive officers to participate in the long-term appreciation of our stockholder value, while personally experiencing the impact of any business setbacks, whether Company specific or industry based. Additionally, we include stock options and restricted stock in our compensation program as a means of promoting retention of key executives, which is achieved by subjecting such options and restricted stock grants to service-based vesting schedules. Options and restricted stock vest in annual installments over periods that range from three to five years, with vesting dates generally matching the anniversaries of the grant dates. Our initial grants of long-term equity-based incentive compensation following our initial public offering in March 2006, took the form of stock options. Commencing in fiscal 2008, we began also granting shares of restricted stock in part to mitigate the level of dilution resulting from equity based incentives, as the equivalent level of intrinsic value may be realized through granting fewer restricted shares than the amount of shares underlying stock options. Our compensation committee determines the form that an equity-based compensation award will take on an individual basis at the time of grant.

The initial stock option grant made to an executive officer upon joining us is primarily based on competitive conditions applicable to the named executive officer’s specific position. In addition, our compensation committee considers the number of options owned by other executive officers in comparable positions within our Company, as well as at public companies with comparable market capitalizations. Subsequent grants to executive officers are generally considered and awarded in connection with the annual company-wide compensation review or at other times deemed appropriate. Such subsequent grants serve to maintain a competitive position for our Company relative to new opportunities that may become available to our executive officers.

Awards to an executive officer are based upon his or her sustained performance over time, ability to impact results that drive our stockholder value, level of responsibility within the Company, potential to take on roles of increasing responsibility in our Company and competitive equity award levels for similar positions and responsibilities in public companies with comparable market capitalizations and performance. As mentioned above, the award of stock-based compensation has remained subjective and qualitative by nature, and equity awards are not granted automatically to our executive officers on an annual basis.

During the fiscal year ended June 30, 2009, we granted no equity based awards to our executive officers, although Mr. Worobow received 20,000 shares of restricted stock related to his service on our Board prior to the commencement of his employment with the Company.

In July 2009, we granted Messrs. Worobow and Cody options to purchase 20,000 shares and 100,000 shares of our common stock, respectively. As with previous grants, these grants were intended to more closely align our executives’ interests with those of our shareholders and they were deemed appropriate in light of each executive’s potential to impact our company’s operations over the life of the awards. In

November 2009, we granted Mr. Pezzimenti 25,000 shares of restricted stock and an option to purchase 25,000 shares of our common stock. Mr. Pezzimenti’s grants were delayed so that we could fully understand the impact of newly enacted Australian legislation that changed the manner in which stock options and restricted stock recipients are taxed and diminished the attractiveness of stock options or restricted stock as a form of long term incentive compensation. As with prior grants to Mr. Pezzimenti, these grants were designed to reward Mr. Pezzimenti for the outstanding performance of the Australia Traffic Network in light of the importance of the Company’s Australian operations to the Company’s overall performance, as well as to acknowledge his increased involvement in our Canadian operations.

In August 2010, we granted Mr. Cody options to purchase 100,000 shares of our common stock, Mr. Pezzimenti 35,000 shares of restricted stock and Mr. Worobow options to purchase 20,000 shares of our common stock and 20,000 shares of restricted stock. These grants were intended to more closely align our executives’ interests with those of our shareholders and they were deemed appropriate in light of each executive’s potential to impact our company’s operations over the life of the awards. In February 2011, in conjunction with their entering new employment agreements with the Company, we granted Messrs. Yde and Cody 50,000 and 22,725 shares of restricted stock, respectively.

In July 2011, we granted Mr. Worobow 10,000 stock options and 10,000 shares of restricted stock and granted Mr. Pezzimenti 30,000 stock options.

Our compensation committee will continue to analyze the facts and circumstances surrounding these and other executives when making equity based compensation grant determinations.

We have not established any stock ownership guidelines for our executives but we believe that a meaningful equity stake in our Company by our executive officers fosters alignment between the interests of our executive officers and those of our stockholders.

Severance and Other Benefits Upon Termination of Employment

In order to achieve our compensation objective of attracting, retaining and motivating qualified executives, we believe that we need to provide our executive officers with severance protections that are consistent with the severance protections offered by public companies with similar market capitalizations. Thus, the current employment agreements with Messrs. Yde, Cody, and Worobow provide for severance benefits in the event of a termination of employment by the Company without cause or by the executive in the event of a material breach by the Company of the executive’s employment agreement. Our compensation committee has determined that it is appropriate to provide these executives with severance benefits under these circumstances in light of their positions with our Company and as part of their overall compensation package. The severance benefits for these executives consist of continued salary (including contractual increases where applicable) for a period of 18 months for Mr. Yde, and ~~continued~~ ~~salary~~12 ~~(including~~months ~~contractual~~for ~~increases) through the end of the term of Mr~~Messrs. Cody and ~~Mr.~~ Worobow~~’s employment agreements~~.

WeIn ~~believe~~addition, ~~these~~in ~~severance~~the ~~benefits~~event ~~are~~of ~~consistent~~an ~~with~~acquisition ~~severance~~of ~~arrangements~~the ofCompany ~~public companies~~through ~~with~~the ~~similar~~sale ~~market~~of ~~capitalizations~~substantially ~~and~~all ~~provide~~of ~~these~~the ~~executive~~Company’s ~~officers~~assets ~~with~~or ~~financial~~through ~~and~~a ~~personal~~merger, ~~security~~exchange, ~~during~~reorganization aor ~~period~~liquidation of ~~time~~the ~~when~~Company ~~they~~or ~~are~~a ~~likely~~similar toevent beas ~~unemployed.~~determined ~~See~~by ~~“Potential Payments~~our ~~Upon~~Board ~~Termination~~ or ~~Change~~compensation incommittee, ~~Control”~~all ~~below~~unvested ~~for~~equity-based aincentives ~~description~~awarded ~~of the potential payments that may be made~~ to ~~the~~Messrs. ~~named~~Yde, ~~executive~~Cody ~~officers~~and inWorobow ~~connection~~will ~~with~~immediately ~~their~~vest ~~termination~~upon ~~of employment~~the orclosing aof ~~change~~such ~~in control~~transaction.

OnWe ~~July 25,~~believe ~~2009,~~these ~~Mr. Dale~~severance C.benefits ~~Arfman,~~are ~~who~~consistent atwith ~~that~~severance ~~time~~arrangements ~~was~~of ~~our Treasurer and Secretary and a~~public ~~member~~companies ofwith ~~its~~similar ~~Board~~market ofcapitalizations ~~Directors, resigned as an employee~~ and anprovide ~~officer~~these ~~effective~~executive ~~June 30,~~officers ~~2009. In conjunction~~ with ~~his~~financial ~~resignation,~~and wepersonal ~~entered~~security ~~into~~during a ~~letter~~period ~~agreement~~of ~~with~~time ~~Mr. Arfman~~when ~~pursuant~~they ~~to which~~are welikely ~~agreed~~ to ~~pay~~be Mrunemployed. ~~Arfman~~ aSee ~~one-time~~“Potential ~~$6,000~~Payments ~~payment~~Upon ~~and~~Termination ~~additional~~or ~~monthly~~Change ~~payments of~~in ~~$10,416.67~~Control” ~~until~~below ~~June 30,~~for ~~2010,~~a ~~during~~description ~~which~~of ~~time~~the ~~Mr. Arfman~~potential ~~has~~payments ~~agreed~~that tomay ~~provide~~be ~~services~~made to the ~~Company~~ innamed aexecutive ~~consulting~~officers ~~capacity.~~in ~~The~~connection ~~letter~~with ~~agreement,~~their ~~which~~termination ~~also provided for a customary release~~ of ~~claims~~employment byor ~~Mr. Arfman,~~upon ~~became~~a ~~effective~~change ~~August 1,~~in ~~2009~~control.

Tax Deductibility of Compensation

Section 162(m) of the Internal Revenue Code of 1986, as amended, places a limit of $1,000,000 on the amount of compensation that we may deduct in any one year with respect to each of our five ~~most~~ most highly paid executive officers. There is an exception to the $1,000,000 limit, however, for performance-based compensation meeting certain requirements. Stock option awards ~~and awards of restricted stock~~ generally are performance-based compensation meeting those requirements and, as as such, are fully deductible.

Compensation Committee Report

The compensation committee of the Company has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K of the Exchange Act with management and, based on such review and discussions, the compensation committee recommended to the Board that the Compensation Discussion and Analysis be included in this Annual Report Form 10-K.

The Compensation Committee:

Shane E. Coppola

William M. Mower

Summary Compensation Table

The following summary compensation table reflects cash and non-cash compensation for the fiscal years ended June 30, 2010, 2009 and 2008 awarded to or earned by the named executive officers.

	Fiscal										Non- Equity
Name and	Year					Stock			Option		Incentive Plan
Principal	Ended					Awards			Awards		Compensation			All Other
Position	June 30	Salary ($)		Bonus ($)		($)(1)			($)(1)		($)			Compensation ($)			Total ($)
William L. Yde III	2010	$	475,000	$	—	$	—		$	—	$	237,500	(16)	$	12,000	(10)	$	724,500
Chairman, President and Chief	2009	$	450,000	$	112,500	$	—		$	—	$	—		$	12,000	(10)	$	574,500
Executive Officer	2008	$	400,000	$	—	$	—		$	—	$	200,000	(14)	$	12,000	(10)	$	612,000
Scott E. Cody	2010	$	330,750	$	—	$	—		$	253,000	$	100,000	(17)	$	12,000	(10)	$	695,750
Chief Financial Officer, Chief Operating	2009	$	315,000	$	50,000	$	—		$	—	$	—		$	12,000	(10)	$	377,000
Officer and Treasurer	2008	$	300,000	$	—	$	102,000		$	189,500	$	100,000	(15)	$	12,000	(10)	$	703,500
B. William Pezzimenti (3)	2010	$	495,111	$	—	$	103,250		$	68,175	$	212,436	(4)	$	—		$	878,972
President and Director of Australia Traffic	2009	$	390,954	$	—	$	—		$	—	$	92,175	(12)	$	52,786	(5)	$	535,915
Network, International Director of Sales and Training	2008	$	430,520	$	—	$	—		$	430,350	$	188,353	(6)	$	24,608	(5)	$	1,073,831
Ivan N. Shulman	2010	$	300,000	$	—	$	75,200		$	—	$	74,607	(2)	$	12,000	(10)	$	461,807
Senior Vice President — Sales, President and	2009	$	350,000	$	—	$	—		$	—	$	83,973	(11)	$	12,000	(10)	$	445,973
Director of Canadian Traffic Network	2008	$	307,765	$	—	$	102,000		$	—	$	175,596	(7)	$	12,000	(10)	$	597,361
Gary Worobow (8)	2010	$	255,208	$	—	$	—		$	50,600	$	85,417	(9)	$	12,000	(10)	$	403,225
Executive Vice President,	2009	$	83,333	$	20,833	$	92,000	(13)	$	—	$	—		$	4,000	(10)	$	200,166
Business and Legal Affairs	2008	$	—	$	—	$	184,800	(13)	$	—	$	—		$	—		$	184,800

(1)		Amounts shown reflect the fair value dollar amount of grants received during period as calculated in accordance with FASB ASC 718. Such amounts are recognized for financial statement reporting purposes on a pro rated basis over the vesting period. The amounts previously reported for grants received in fiscal 2009 and 2008 reflected the expense for financial statement purposes and have been restated for purposes of this report to reflect the full fair value dollar amount of such grants. Assumptions used in calculating the fair value dollar amount of grants is included in Note 11 to our audited financial statements for the fiscal year ended June 30, 2010, which are included elsewhere in this report.
(2)		For fiscal 2010, our Chief Executive Officer established quarterly sales targets for the Company’s Canadian operations for fiscal 2010 that were approved by the compensation committee. Under this 2010 plan, Mr. Shulman was entitled to quarterly cash bonuses of $15,000, $30,000 or $45,000 based upon on the Company’s Canadian operations achieving 95%, 100% or 105% of the applicable quarterly sales target. Mr. Shulman was not entitled to receive bonus amounts for any quarter in which the Canadian operations fail to achieve at least 95% of the applicable sales target. As discussed under “Elements of 2010 Executive Compensation — Base Salary” above, in conjunction with a reduction in base salary that was effective January 1, 2010, Mr. Shulman was also entitled to receive cash “override” commissions equal to 2% of the increase in net quarterly sales of the Company’s Canadian operations over the net quarterly sales in the prior year’s corresponding quarter. In addition, Mr. Shulman was eligible to receive a 10% sales commission on certain pre-approved customer accounts.
(3)		Mr. Pezzimenti is paid in Australian dollars. For the purposes of this table, his salary, bonus, non-equity incentive plan compensation and all other compensation have been converted to United States dollars utilizing the average monthly exchange rate for the fiscal years ended June 30, 2010, 2009 and June 30, 2008, as applicable.

(4)		Represents non-equity incentive plan compensation in the form of monthly sales-based commissions. Our compensation committee approved three “tiers” of annual Australian revenue targets for fiscal 2010, each of which corresponds with a specified percentage increase in annual revenue from the Australian operations over the fiscal 2009 period. Mr. Pezzimenti was entitled to receive monthly cash bonuses upon the Company’s Australian operations achieving monthly portions of the targeted revenue amounts. Depending on the monthly revenue target tier achieved, Mr. Pezzimenti was entitled to monthly cash bonuses of approximately $7,000, $15,000 or $20,000 (based on the average exchange rate for fiscal 2010). Mr. Pezzimenti was not entitled to receive bonus amounts for any month in which the Company’s Australian operations fail to achieve revenues corresponding to the lowest revenue target tier. However, we agreed to “true-up” bonus payments on a quarterly basis such that Mr. Pezzimenti was entitled to receive the monthly bonus payments for any month within the quarter which he missed the monthly tier but achieved the quarterly tier on a cumulative basis.
(5)		Consists of automobile related costs incurred for the benefit of the employee. At the beginning of fiscal 2009 we transferred ownership to Mr. Pezzimenti of the Company’s owned automobile used by him in lieu of providing him with a company paid automobile. The compensation for fiscal 2009 represents the book value of the automobile at the time of transfer, which we believe approximated the fair value of the automobile.
(6)		Represents non-equity incentive plan compensation in the form of monthly sales bonuses. Our Chief Executive Officer established monthly sales targets for Australia Traffic Network for the fiscal year ended June 30, 2008 and provided monthly incentives of approximately $11,000 or $16,000 based on achieving these sales targets.
(7)		Represents non-equity incentive plan compensation in the form of monthly sales commissions. Mr. Shulman was entitled to receive monthly cash commissions equal to a percentage of Canada Traffic Network’s fiscal 2008 monthly net revenues provided that such net revenues exceed certain thresholds. The applicable commission percentage is 1% if net revenues for the month exceed $400,000 CAD, 2% if net revenues for the month exceed $500,000 CAD, 3% if net revenues for the month exceed $600,000 CAD, 4% if net revenues for the month exceed $700,000 CAD or 4.5% if net revenues exceed $800,000 CAD. The thresholds are all measured in Canadian dollars, which is the functional currency of Canadian Traffic Network and the commissions earned are then converted into U.S. dollars for payment to Mr. Shulman.
(8)		Mr. Worobow served on our Board of Directors from December 8, 2006 until March 1, 2009. Effective March 1, 2009, Mr. Worobow resigned as a director and commenced employment with the Company as its Executive Vice President, Business and Legal Affairs. Compensation for periods prior to March 1, 2009 pertains to his service on our Board of Directors.
(9)		Represents a bonus equal to one third of Mr. Worobow’s fiscal 2010 base salary paid upon the Company exceeding a fiscal 2010 EBITDA goal of $5.1 million. For purposes of the bonus calculation, EBITDA is defined as operating income plus depreciation and amortization, excluding the impact of other income and expense. Actual 2010 EBITDA was approximately $9.1 million.
(10)		Consists of an additional $1,000 per month paid to executive in lieu of the Company providing medical insurance.
(11)		Represents non-equity incentive plan compensation in the form of monthly sales commissions. Mr. Shulman was entitled to receive monthly cash commissions equal to a percentage of Canada Traffic Network’s fiscal 2009 monthly net revenues provided that such net revenues exceed certain thresholds. The applicable commission percentage was 1% if net revenues for the month exceeded $700,000 CAD, 2% if net revenues for the month exceeded $800,000 CAD, 3% if net revenues for the month exceeded $900,000 CAD, or 4% if net revenues for the month exceeded $1,000,000 CAD. The thresholds were all measured in Canadian dollars, which is the functional currency of Canadian Traffic Network and the commissions earned were then converted into U.S. dollars for payment to Mr. Shulman.
(12)		Represents non-equity incentive plan compensation in the form of monthly sales bonuses. Mr. Pezzimenti received monthly sales-based bonuses of approximately $9,000 or $13,000 (based on the average exchange rate for fiscal 2009) in fiscal year 2009 for achieving sales targets set by our Chief Executive Officer. The targets for 2009 approximated 100% and 104% of Australia Traffic Network’s fiscal 2009 monthly sales budgets.

Summary Compensation Table

The following summary compensation table reflects cash and non-cash compensation for the fiscal years ended June 30, 2011, 2010 and 2009 awarded to or earned by the named executive officers.


Name and Principal Position	Fiscal Year Ended June 30		Salary ($)		Bonus ($)		Stock Awards ($)(1)			Option Awards ($)(1)		Non- Equity Incentive Plan Compensation ($)			All Other Compensation ($)			Total ($)
William L. Yde III		2011	$	552,596	$	—	$	551,500		$	—	$	297,500	(2)	$	12,000	(4)	$	1,413,596
Chairman, President and Chief		2010	$	475,000	$	—	$	—		$	—	$	237,500	(3)	$	12,000	(4)	$	724,500
Executive Officer		2009	$	450,000	$	112,500	$	—		$	—	$	—		$	12,000	(4)	$	574,500
Scott E. Cody		2011	$	347,288	$	—	$	250,657		$	350,700	$	100,000	(2)	$	12,000	(4)	$	1,060,645
Chief Financial Officer, Chief Operating		2010	$	330,750	$	—	$	—		$	253,000	$	100,000	(3)	$	12,000	(4)	$	695,750
Officer and Treasurer		2009	$	315,000	$	50,000	$	—		$	—	$	—		$	12,000	(4)	$	377,000
B. William Pezzimenti (5)		2011	$	561,156	$	—	$	192,850		$	—	$	274,481	(6)	$	—		$	1,028,487
President and Director of Australia Traffic		2010	$	495,111	$	—	$	103,250		$	68,175	$	212,436	(7)	$	—		$	878,972
Network, International Director of Sales and Training		2009	$	390,954	$	—	$	—		$	—	$	92,175	(8)	$	52,786	(9)	$	535,915
Gary Worobow (10)		2011	$	267,969	$	—	$	110,200		$	70,140	$	89,324	(2)	$	12,000	(4)	$	549,633
Executive Vice President,		2010	$	255,208	$	—	$	—		$	50,600	$	85,417	(3)	$	12,000	(4)	$	403,225
Business and Legal Affairs		2009	$	83,333	$	20,833	$	92,000	(11)	$	—	$	—		$	4,000	(4)	$	200,166

(1)

Amounts shown reflect the fair value dollar amount of grants received during period as calculated in accordance with FASB ASC 718. Such amounts are recognized for financial statement reporting purposes on a pro rated basis over the vesting period. The amounts previously reported for grants received in fiscal 2009 reflected the expense for financial statement purposes and have been restated for purposes of this report to reflect the full fair value dollar amount of such grants. Assumptions used in calculating the fair value dollar amount of grants is included in Note 9 to our audited financial statements for the fiscal year ended June 30, 2011, which are included elsewhere in this report.

(2)

Represents cash bonus amounts paid upon the Company exceeding a fiscal 2011 EBITDA goal of $12.0 million. For purposes of the bonus calculation, EBITDA is defined as operating income plus depreciation and amortization, excluding the impact of other income and expense. The recipient was entitled to receive 10% of his target bonus amount if the Company achieved 85% of the EBITDA target, and if actual EBITDA was greater than 85% of the target amount, the recipient was entitled to receive such 10%, plus an additional percentage equal to six times the amount by which actual EBITDA as a percentage of the target amount exceeded 85%, up to 100% of the potential bonus amount. In addition, for purposes of the bonus, EBITDA was calculated assuming that currency exchange rates remained constant throughout the performance period as follows: Australia 0.8750, Canada 0.9500 and UK 1.500 regardless of the actual exchange rates for the period. EBITDA calculated consistent with these criteria was approximately $16.7 million and actual 2011 EBITDA was approximately $18.4 million.

(3)

Represents cash bonus amounts paid upon the Company exceeding a fiscal 2010 EBITDA goal of $5.1 million. For purposes of the bonus calculation, EBITDA is defined as operating income plus depreciation and amortization, excluding the impact of other income and expense. Actual 2010 EBITDA was approximately $9.1 million.

(4)	Consists of an additional $1,000 per month paid to executive in lieu of the Company providing medical insurance.

(13)		Reflects the fair value dollar amount of grants of restricted stock in accordance to FASB ASC 718 associated with Mr. Worobow’s service as a director of the Company.
(14)		Represents a bonus equal to 50% of Mr. Yde’s base salary paid upon the Company exceeding a fiscal 2008 EBITDA goal of $5.1 million. For purposes of the bonus calculation, EBITDA is defined as operating income plus depreciation and amortization, excluding the impact of other income and expense. Actual 2008 EBITDA was approximately $5.3 million.
(15)		Represents a bonus of $100,000 paid upon the Company exceeding a fiscal 2008 EBITDA goal of $5.1 million. For purposes of the bonus calculation, EBITDA is defined as operating income plus depreciation and amortization, excluding the impact of other income and expense. Actual 2008 EBITDA was approximately $5.3 million.
(16)		Represents a bonus equal to 50% of Mr. Yde’s base salary paid upon the Company exceeding a fiscal 2010 EBITDA goal of $5.1 million. For purposes of the bonus calculation, EBITDA is defined as operating income plus depreciation and amortization, excluding the impact of other income and expense. Actual 2010 EBITDA was approximately $9.1 million.
(17)		Represents a bonus of $100,000 paid based upon the Company exceeding a fiscal 2010 EBITDA goal of $5.1 million. For purposes of the bonus calculation, EBITDA is defined as operating income plus depreciation and amortization, excluding the impact of other income and expense. Actual 2008 EBITDA was approximately $9.1 million.

(5)

Mr. Pezzimenti is paid in Australian dollars. For the purposes of this table, his salary, bonus, non-equity incentive plan compensation and all other compensation have been converted to United States dollars utilizing the average monthly exchange rate for the fiscal years ended June 30, 2011, 2010 and 2009, as applicable.

(6)

Represents non-equity incentive plan compensation in the form of monthly sales-based commissions and quarterly EBITDA bonuses. Our compensation committee approved three “tiers” of annual Australian revenue targets for fiscal 2011, corresponding to 98% of budget, budget and 104% of budget. Mr. Pezzimenti was entitled to receive monthly cash bonuses upon the Company’s Australian operations achieving monthly portions of the targeted revenue amounts. Depending on the monthly revenue target tier achieved, Mr. Pezzimenti was entitled to monthly cash bonuses of approximately $7,400, $17,300 or $29,700 (based on the average exchange rate for fiscal 2011). Mr. Pezzimenti was not entitled to receive bonus amounts for any month in which the Company’s Australian operations fail to achieve revenues corresponding to the lowest revenue target tier. However, we agreed to “true-up” bonus payments on a quarterly basis such that Mr. Pezzimenti was entitled to receive the monthly bonus payments for any month within the quarter which he missed the monthly tier but achieved the quarterly tier on a cumulative basis. Mr. Pezzimenti received $224,481 in non-equity incentive plan compensation in the form of monthly sales-based commissions for fiscal 2011. In addition, Mr. Pezzimenti was entitled to bonuses of approximately $25,000 for each quarter the Australian operations reached their EBITDA goal. Mr. Pezzimenti received $50,000 in non-equity incentive plan compensation in the form of quarterly EBITDA bonuses for fiscal 2011.

(7)

Represents non-equity incentive plan compensation in the form of monthly sales-based commissions. Our compensation committee approved three “tiers” of annual Australian revenue targets for fiscal 2010, each of which corresponds with a specified percentage increase in annual revenue from the Australian operations over the fiscal 2009 period. Mr. Pezzimenti was entitled to receive monthly cash bonuses upon the Company’s Australian operations achieving monthly portions of the targeted revenue amounts. Depending on the monthly revenue target tier achieved, Mr. Pezzimenti was entitled to monthly cash bonuses of approximately $7,000, $15,000 or $20,000 (based on the average exchange rate for fiscal 2010). Mr. Pezzimenti was not entitled to receive bonus amounts for any month in which the Company’s Australian operations fail to achieve revenues corresponding to the lowest revenue target tier. However, we agreed to “true-up” bonus payments on a quarterly basis such that Mr. Pezzimenti was entitled to receive the monthly bonus payments for any month within the quarter which he missed the monthly tier but achieved the quarterly tier on a cumulative basis. Mr. Pezzimenti received $212,436 in non-equity incentive plan compensation in the form of monthly sales-based commissions for fiscal 2010.

(8)

Represents non-equity incentive plan compensation in the form of monthly sales bonuses. Mr. Pezzimenti received monthly sales-based bonuses of approximately $9,000 or $13,000 (based on the average exchange rate for fiscal 2009) in fiscal year 2009 for achieving sales targets set by our Chief Executive Officer. The targets for 2009 approximated 100% and 104% of Australia Traffic Network’s fiscal 2009 monthly sales budgets. Mr. Pezzimenti received $92,175 in non-equity incentive plan compensation in the form of monthly sales-based commissions for fiscal 2009.

(9)

Consists of automobile related costs incurred for the benefit of the employee. At the beginning of fiscal 2009 we transferred ownership to Mr. Pezzimenti of the Company’s owned automobile used by him in lieu of providing him with a company paid automobile. The compensation for fiscal 2009 represents the book value of the automobile at the time of transfer, which we believe approximated the fair value of the automobile.

(10)

Mr. Worobow served on our Board of Directors from December 8, 2006 until March 1, 2009. Effective March 1, 2009, Mr. Worobow resigned as a director and commenced employment with the Company as its Executive Vice President, Business and Legal Affairs. Compensation for periods prior to March 1, 2009 pertains to his service on our Board of Directors.

(11)	Reflects the fair value dollar amount of grants of restricted stock in accordance to FASB ASC 718 associated with Mr. Worobow’s service as a director of the Company.

Compensation of Named Executive Officers

The Summary Compensation Table above quantifies the value of the different forms of compensation earned by or awarded to our named executive officers in fiscal years ~~2010~~2011, ~~2009~~2010 and ~~2008~~ 2009. The primary elements of the named executive officers’ total compensation reported in the table are base salary, discretionary cash bonus, ~~long~~non-~~term~~ equity incentive ~~consisting~~plan ofcompensation ~~stock~~in ~~options~~the ~~and/or~~form ~~restricted~~of ~~stock~~performance based cash bonuses and ~~non~~long-term equity incentive ~~plan~~consisting ~~compensation~~of instock ~~the~~options ~~form~~and/or ofrestricted ~~sales-based commissions~~stock. Our named executive officers also earned or were paid the other benefits listed in column entitled “All Other Compensation” of the Summary Compensation Table, as further described in the footnotes to the table.

The Summary Compensation Table should be read in conjunction with the tables and narrative descriptions that follow. A description of the material terms of each named executive officer’s employment agreement, base salary and bonus is provided immediately following this paragraph. The Grants of Plan-Based Awards in Fiscal 2010 table, and the description of the material terms of the stock options and restricted stock granted in fiscal 2010 that follows it, provide information regarding the long-term equity incentives awarded to named executive officers in fiscal 2010. The Outstanding Equity Awards at Fiscal 2010 Year-End table provides further information on the named executive officers’ potential realizable value with respect to their equity awards. The discussion of the potential payments due upon a termination of employment or change in control that follows is intended to further explain the potential future payments that are, or may become, payable to our named executive officers under certain circumstances.

Description of Employment Agreements and Arrangements, Salary, and Bonus Amounts

Employment Agreement with William L. Yde III

Salary and Bonus. On November 18, 2005, we entered into an employment agreement with William L. Yde III, our Chief Executive Officer and President, that has a term of five years and became effective on March 29, 2006, the closing date of our initial public offering. Pursuant to this agreement, as amended to date, Mr. Yde currently receives a base salary of $525,000 per year and is entitled to $50,000 increases in his base salary on July 1 of each year provided that the Company achieves certain profit levels to be determined by the Board for the preceding fiscal year. Mr. Yde is also entitled to receive an annual performance-based bonus of up to 50% of his annual base salary for each fiscal year during the agreement’s term. The amount of each year’s bonus, if any, will be determined and paid based upon satisfaction of certain operating profit goals to be determined by our compensation committee for the applicable fiscal year and is contingent upon Mr. Yde remaining an active employee of the Company through the end of the applicable fiscal year. Mr. Yde’s employment agreement provides that unless and until the Company elects to provide its United States based employees with medical insurance, the Company will pay Mr. Yde $1,000 per month in lieu providing him with medical insurance. The agreement requires Mr. Yde to devote substantially all of his working time to our Company. Also pursuant to the agreement, our Board of Directors, in its sole discretion, may grant Mr. Yde up to 500,000 shares of our common stock (as adjusted for stock splits, stock combinations, reorganizations or similar events) if our stock has traded at an average closing sales price of $30.00 per share for 20 consecutive trading days during the term of the agreement, as reported on the NASDAQ Global Market (or such other market or exchange if our common stock is then quoted or listed on a market or exchange other than the NASDAQ Global Market).

~~Confidentiality,~~The ~~Non-competition~~Summary ~~and~~Compensation ~~Non-solicitation.~~Table ~~The~~should ~~agreement~~be ~~contains~~read ~~standard provisions~~in ~~regarding~~conjunction ~~protection~~with ofthe ~~our~~tables ~~confidential~~and narrative ~~information~~descriptions ~~(as~~that ~~defined~~follow. inA description of the material terms of each named executive officer’s employment agreement), base salary and ~~prohibits~~bonus Mris provided immediately following this paragraph. ~~Yde~~ ~~from~~The ~~directly~~Grants ~~or indirectly~~of ~~engaging~~Plan-Based Awards in ~~the~~Fiscal ~~following~~2011 ~~actions~~table, and ~~during~~the description of the ~~period~~material heterms isof ~~employed~~the bystock usoptions and ~~continuing~~restricted stock granted in fiscal 2011 that follows it, provide information regarding the long-term equity incentives awarded to named executive officers in fiscal 2011. The ~~for~~Outstanding ~~one~~Equity ~~year~~Awards ~~following~~at Fiscal 2011 Year-End table provides further information on the named executive officers’ potential realizable value with respect to their equity awards. The discussion of the potential payments due upon a termination of employment or change in control that follows is intended to further explain the ~~agreement~~potential future payments that are, ~~without~~or may become, payable to our ~~prior~~named ~~express~~executive ~~written~~officers ~~consent:~~ under certain circumstances.

•Description ~~Providing services to any~~ of ~~our~~Employment ~~competitors~~Agreements ~~anywhere~~and ~~outside of the United States similar to those provided to us during his employment; • soliciting or attempting to induce any of our customers~~Arrangements, ~~suppliers~~Salary, ~~licensees,~~and ~~licensors~~Bonus orAmounts 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~~William EL. ~~Cody~~ Yde III

Salary and Bonus. On ~~February~~November 1418, ~~2006~~2005, we entered into an employment agreement with ~~Scott~~William EL. ~~Cody~~ Yde III, our Chief ~~Operating~~Executive Officer and ~~Chief~~President, ~~Financial~~that ~~Officer.~~had Asa ~~amended~~term toof ~~date,~~five ~~the~~years ~~agreement~~and became ~~has~~effective aon ~~term~~March 29, ~~that~~2006, ~~expires~~the onclosing ~~June 30,~~date ~~2011~~of our initial public offering. Pursuant to ~~the~~this ~~amended~~ agreement, Mr. ~~Cody~~Yde isinitially ~~currently entitled~~received ~~to receive~~ a base salary of $~~347~~350,~~288~~000 per year and ~~will~~was beentitled ~~subject~~ to 5%$50,000 increases in his base salary on July 1 of each year ~~during~~provided that the ~~term~~Company achieved certain profit levels to be determined by the Board for the preceding fiscal year. Mr. Yde received base salaries of $450,000 and $475,000 per year for fiscal 2009 and 2010, respectively, and he received an annualized base salary of $525,000 during fiscal 2011 through the effective date of his new employment agreement discussed below. Under the initial agreement, as amended, Mr. ~~Cody~~Yde iswas also entitled to receive an annual performance-based bonus of up to ~~$100,000~~50% of his annual base salary for each fiscal year during the agreement’s term. The amount of each year’s bonus, if any, ~~will~~was be determined and paid based upon satisfaction of certain operating profit goals to be determined by ~~the~~our compensation committee for the applicable fiscal year and iswas contingent upon Mr. ~~Cody~~Yde remaining an active employee of the Company through the end of the applicable fiscal year. In addition to reimbursing Mr. ~~Cody’s~~Yde for reasonable expenses incurred in performing his duties, the employment agreement ~~provides~~provided that unless and until the Company ~~elects~~elected to provide its United States based employees with medical insurance, the Company ~~will~~ would pay Mr. ~~Cody~~Yde $1,000 per month in lieu providing him with medical insurance. ~~The~~Effective February 9, 2011, we entered into a new employment agreement with Mr. Yde that has a term that runs through June 30, 2014. Pursuant to this new agreement, Mr. Yde currently receives a base salary of $595,000 per year and is eligible for $25,000 discretionary increases in his base salary on July 1 of each year (starting July 1, 2012) provided that the Company achieves certain profit levels to be determined by the Board for the preceding fiscal year. As with his prior employment agreement, asMr. Yde ~~amended~~is entitled to receive an annual performance-based bonus of up to 50% of his annual base salary for each fiscal year during the agreement’s term with the amount of each year’s bonus, if any, to be determined and paid based upon satisfaction of certain operating profit goals to be determined by our compensation committee for the applicable fiscal year and is contingent upon Mr. Yde remaining an active employee of the Company through the end of the applicable fiscal year. Also consistent with his prior employment agreement, Mr. Yde’s new employment agreement provides for the reimbursement of reasonable expenses incurred in performing his duties and for the payment of $1,000 per month unless and until the Company elects to provide its United States based employees with medical insurance. The agreement requires Mr. ~~Cody~~Yde to devote substantially all of his working time to our Company.

Equity-based Incentives. In connection with Mr. Yde entering into ~~the~~his new employment agreement, our Board of ~~Directors~~ approved a grant ~~to Mr. Cody~~ of ~~an option to purchase 100~~50,000 restricted shares of ~~our~~Company common stock. ~~This option, which was granted~~ on ~~March~~February 239, ~~2006~~2011, (the effective date of ~~our~~the ~~initial~~agreement. ~~public offering),~~The ~~has~~restricted anstock ~~exercise~~grant ~~price~~is ~~equal~~subject to ~~$5.00~~transfer ~~(the~~and forfeiture ~~initial~~restrictions ~~public~~that ~~offering~~lapse ~~price)~~in ~~and vested over~~ three ~~years~~annual ~~with~~installments 33of 16,~~334~~666 shares ~~vesting~~each on ~~March~~February 239, ~~2007~~2012 and 332013 and 16,~~333~~668 shares ~~vesting~~ on ~~each of March 23, 2008 and March~~February 239, ~~2009~~2014. In ~~addition,~~the onevent ~~March 29,~~of ~~2007,~~an ~~upon~~acquisition ~~approval~~of by the ~~compensation committee~~Company ofthrough the ~~Board~~sale of ~~Directors,~~substantially ~~we granted Mr. Cody stock options to purchase an additional~~all ~~100,000 shares~~ of ~~our~~the ~~common~~Company’s ~~stock~~assets ator anthrough ~~exercise~~a ~~price~~merger, ~~equal to $5.25 per share. The option vested over three years with 33~~exchange,~~333~~ ~~shares~~reorganization ~~vesting~~or onliquidation ~~each~~ of ~~March 29,~~the ~~2008~~Company ~~and~~or ~~2009,~~a ~~and~~similar ~~33,334~~event ~~shares vesting~~as ondetermined ~~March 29,~~by ~~2010. On March 12, 2008, upon approval of~~ the ~~compensation~~Board ~~committee~~or of the ~~Board~~ ofCompensation ~~Directors,~~Committee ~~we granted Mr. Cody 15~~thereof,~~000~~ ~~restricted~~all ~~shares~~unvested ~~of our common stock and stock~~ options to purchase anCompany ~~additional 50,000 shares of our common~~ stock ator another equity-based ~~exercise~~incentives ~~price equal~~awarded to $6Mr.~~80 per share. The option vests over three years with 16,666 shares vesting on March~~ ~~12, 2009,~~Yde ~~and~~will ~~16,667~~immediately ~~shares~~vest ~~vesting~~upon onthe ~~each~~closing of ~~March 12,~~such ~~2010 and 2011~~transaction. ~~The~~Also ~~restricted~~pursuant ~~stock grant is subject~~ to ~~transfer~~the ~~and forfeiture restrictions that lapse in three equal annual installments of 5~~agreement,~~000~~ ~~shares~~our ~~each on March 12~~Board, ~~2009,~~in ~~2010~~its ~~and~~sole ~~2011. On July 9~~discretion, ~~2009,~~may ~~upon~~grant ~~approval by the compensation committee of the Board of Directors, we granted~~ Mr. ~~Cody~~Yde ~~stock~~up ~~options~~ to ~~purchase an additional 100~~500,000 shares of our common stock at(as adjusted anfor ~~exercise~~stock ~~price~~splits, ~~equal~~stock tocombinations, ~~$3.76~~reorganizations ~~per~~or ~~share.~~similar ~~The option~~events) ~~vests~~if ~~over~~our ~~three~~stock ~~years~~has ~~with~~traded ~~33,333~~at ~~shares~~an ~~vesting~~average onclosing ~~each~~sales price of ~~July 9,~~$30.00 ~~2010~~per ~~and~~share ~~2011~~for ~~and 33,334~~20 ~~shares~~consecutive ~~vesting~~trading ondays ~~July 9,~~during ~~2012. On August 12, 2010, upon approval by~~ the ~~compensation committee~~term of the ~~Board of Directors~~agreement, weas ~~granted~~reported ~~Mr. Cody~~on ~~stock~~NASDAQ (or ~~options~~such toother ~~purchase~~market anor ~~additional 100,000~~exchange ~~shares~~if of our common stock atis anthen ~~exercise~~quoted ~~price~~or ~~equal~~listed ~~to $5.51 per share. The option vests over three years with 33,333 shares vesting~~ on ~~each~~a ofmarket ~~August 12,~~or ~~2011~~exchange ~~and~~other ~~2010~~than ~~and 33,334 shares vesting on August 12, 2013~~NASDAQ).

Confidentiality, Non-competition and Non-solicitation. The Company’s employment agreement with Mr. Yde contains ~~standard~~ standard provisions regarding protection of our confidential information (as defined in the employment agreement) and prohibits Mr. ~~Cody~~Yde from directly or indirectly engaging in the following actions during the period he is employed by us and continuing for one year following the termination of the ~~employment~~ agreement, without our prior express written consent:

• ~~providing~~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~~soliciting ~~with~~or ~~Ivan~~attempting N.to ~~Shulman~~ induce any of our customers, suppliers, licensees, licensors or other business relations to cease doing business with us; or

Salary and Bonus. On May 3, 2006, we entered into an unwritten employment arrangement with Ivan N. Shulman that became effective on May 8, 2006, pursuant to which Mr. Shulman serves as Senior Vice President — Sales. Under his employment arrangement, we agreed to pay Mr. Shulman an initial annualized base salary of $250,000 during his first year of employment, with a $50,000 increase in base salary in each of the following two years. Effective January 1, 2010, Mr. Shulman’s base salary was reduced to $250,000 in conjunction with providing the potential for an increased amount of sales based incentive compensation. Mr. Shulman is also eligible to receive bonus compensation from time to time as determined by our Board of Directors.

~~Equity-based~~• ~~Incentives.~~soliciting ~~Pursuant~~or toattempting ~~Mr. Shulman’s employment arrangement, we granted Mr. Shulman an option~~ to ~~purchase~~induce ~~50,000~~any ~~shares~~ of our ~~common~~employees ~~stock at an exercise price of $6.28 per share on May 8, 2006, the date on which he commenced his employment with us. We also agreed~~ to ~~grant~~ ~~Mr. Shulman~~leave ~~similar options to purchase an additional 50,000 shares of~~ our ~~common stock on each of May 8~~employ, ~~2007~~or and May 8, 2008, provided that he remained an employee of ours on such dates (the May 8, 2007 option was granted at an exercise price of $7.05 per share). On March 12, 2008, in lieu of the 50,000 options to bework ~~granted on May 8~~for, ~~2008,~~render ~~Mr. Shulman~~services ~~elected~~or toprovide ~~receive~~advice ~~a 15,000 share restricted stock grant. The restricted stock grant is subject~~ to ~~transfer~~or ~~and~~supply forfeiture restrictions that lapse in three equal annual installments of 5,000 shares each on March 12, 2009, 2010 and 2011. In addition, Mr. Shulman was granted an additional option to purchase 50,000 shares of our ~~common~~confidential ~~stock~~business oninformation ~~December 8,~~or ~~2006~~trade atsecrets ~~an exercise price of $4.66 per share. The exercise price of all of these options are equal~~ to ~~the~~any ~~fair~~third ~~market~~person ~~value of our common stock on the date of grant and vest~~ or ~~will vest in three annual installments commencing on the one-year anniversary of the date of grant~~entity. On July 9, 2009, upon approval of the compensation committee of the Board of Directors, we granted Mr. Shulman 20,000 shares of restricted stock. The restricted stock grant is subject to transfer and forfeiture restrictions that lapse in three annual installments of 6,667 shares each on July 9, 2010 and 2010 and 6,666 shares on July 9, 2011.

~~Confidentiality,~~Employment ~~Non-competition~~Agreement with ~~and~~Scott ~~Non-solicitation~~E. ~~Although~~Cody Mr. Shulman’s employment is not governed by a written employment agreement and has no definite term, he is subject to an agreement which provides for confidentiality, non-competition and non-solicitation covenants that will remain in effect during the period in which he is employed by us and continuing for one year following the termination of such employment.

Salary and Bonus. On February 14, 2006, we entered into an employment agreement with Scott E. Cody, our Chief Operating Officer and Chief Financial Officer. The agreement became effective on March 29, 2006 closing date of our initial public offering and, as amended in 2007 and 2008, the agreement had a term scheduled to expire on June 30, 2011. Under this agreement, as amended, Mr. Cody received a base salary of $300,000 per year in fiscal 2008, and his base salary was subject to 5% increases on July 1 of each year during the term of the agreement. Mr. Cody received base salaries of $315,000, $330,750 and $347,288 per year for fiscal 2009, 2010 and 2011, respectively. Mr. Cody was also entitled to receive an annual performance-based bonus of up to $100,000 for each fiscal year during the agreement’s term. The amount of each year’s bonus, if any, was determined and paid based upon satisfaction of certain operating profit goals to be determined by the compensation committee for the applicable fiscal year and was contingent upon Mr. Cody remaining an active employee of the Company through the end of the applicable fiscal year. In addition to reimbursing Mr. Cody for reasonable expenses incurred in performing his duties, the employment agreement provided that unless and until the Company elected to provide its United States based employees with medical insurance, the Company would pay Mr. Cody $1,000 per month in lieu providing him with medical insurance. Effective February 9, 2011, we entered into a new employment agreement with Mr. Cody for an indeterminate term. Under the new agreement, Mr. Cody was entitled to receive a base salary of $347,288 through June 30, 2011 and is entitled to receive a base salary of $395,000 per year thereafter. Mr. Cody is also entitled to receive an annual performance-based bonus of up to $100,000 for fiscal 2011 and up to 40% of his base salary for each future fiscal year during the agreement’s term. As with his prior employment agreement, the amount of each year’s bonus, if any, will be determined and paid based upon satisfaction of certain operating profit goals to be determined by the compensation committee for the applicable fiscal year and is contingent upon Mr. Cody remaining an active employee of the Company through the end of the applicable fiscal year. Also consistent with his prior employment agreement, Mr. Cody’s new employment agreement provides for the reimbursement of reasonable expenses incurred in performing his duties and for the payment of $1,000 per month unless and until the Company elects to provide its United States based employees with medical insurance. The employment agreement requires Mr. Cody to devote substantially all of his working time to our Company.

Equity-based Incentives. During the fiscal years covered by the Summary Compensation Table above, the Company made various grants of equity based awards to Mr. Cody. On July 9, 2009, we granted Mr. Cody stock options to purchase 100,000 shares of our common stock at an exercise price equal to $3.76 per share, which vests over three years with 33,333 shares vesting on each of July 9, 2010 and 2011 and 33,334 shares vesting on July 9, 2012. On August 12, 2010, we granted Mr. Cody stock options to purchase an additional 100,000 shares of our common stock at an exercise price equal to $5.51 per share, which vests over three years with 33,333 shares vesting on each of August 12, 2011 and 2012 and 33,334 shares vesting on August 12, 2013. In conjunction with entering his new employment agreement with the Company, on February 9, 2011 we granted Mr. Cody 22,725 restricted shares of our common stock. The restricted stock grant is subject to transfer and forfeiture restrictions that lapse in three equal annual installments of 7,575 shares each on February 9, 2012, 2013 and 2014. The exercise prices of all stock options are equal to the fair market value of our common stock on the date of grant. In the event of an acquisition of the Company through the sale of substantially all of the Company’s assets or through a merger, exchange, reorganization or liquidation of the Company or a similar event as determined by our Board or compensation committee, all unvested equity-based incentives awarded to Mr. Cody immediately vest upon the closing of such transaction.

Confidentiality, Non-competition and Non-solicitation. The Company’s employment agreement with Mr. Cody contains standard provisions regarding protection of our confidential information (as defined in the employment agreement) and prohibits Mr. Cody from directly or indirectly engaging in the following actions during the period he is employed by us and continuing for one year following the termination of the employment agreement, without our prior express written consent:

•

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 B. William Pezzimenti

Salary and Bonus. B. William Pezzimenti is employed by Australia Traffic Network pursuant to an an unwritten arrangement that has no definite term. His base salary, cash bonus and/or cash-based incentive compensation plan is determined for each fiscal year by our Chief Executive Officer in consultation with our compensation committee. Effective July 1, 2010 his base salary is $566,400 AUD. In each of fiscal 2009, 2010 and 2011, Mr. Pezzimenti has been entitled to receive non-equity incentive compensation in the form of cash bonuses for our Australian operations achieving pre-determined revenue targets. For fiscal 2011, Mr. Pezzimenti was also eligible to receive additional cash bonuses based on our Australian operations achieving pre-determined quarterly EBITDA goals and also based on the amount, if any, by which revenues of our Canadian operations exceeded a pre-determined target. Mr. Pezzimenti’s non-equity incentive compensation plans for fiscal 2009, 2010 and 2011, as well as the plan in place for fiscal 2012, are described in detail under “Compensation Discussion and Analysis” above.

Equity-based Incentives. Mr. Pezzimenti’s equity-based compensation grants are made by our compensation committee, generally at the suggestion of our Chief Executive Officer, from time to time as deemed appropriate. At the time of our initial public offering, our Board of Directors approved a grant to Mr. Pezzimenti of an option to purchase 50,000 shares of our common stock. This option, which was granted on March 23, 2006 (the effective date of our initial public offering), has an exercise price equal to $5.00 (the initial public offering price) and vested in annual installments over three years. In addition, on October 24, 2007 and March 12, 2008, upon approval by the compensation committee, we granted Mr. Pezzimenti stock options to purchase 10,000 and 100,000 shares of our common stock at exercises price equal to $6.68 per share and $6.80 per share, respectively. The October 24, 2007 options vests in annual installments over three years. The March 12, 2008 options vest in annual installments over five years. On November 9, 2009, upon approval of the compensation committee, we granted Mr. Pezzimenti 25,000 restricted shares of our common stock and stock options to purchase an additional 25,000 shares of our common stock at an exercise price equal to $4.13 per share. The option vests over three years with 8,334 shares vesting on November 9, 2010, and 8,333 shares vesting on each of November 9, 2010 and 2011. The restricted stock grant is subject to transfer and forfeiture restrictions that lapse in three annual installments of 8,334 shares on November 9, 2010 and 8,333 shares each on November 9, 2011 and 2012. The exercise prices of all of these options are equal to the fair market value of our common stock on the date of grant.

Confidentiality, Non-competition and Non-solicitation. We have entered into an agreement with Mr. Pezzimenti which provides for confidentiality, non-competition and non-solicitation covenants that will remain in effect for a period of one year following termination of Mr. Pezzimenti’s employment.

Employment Agreement with Gary L. Worobow

Salary and Bonus. On March 11, 2009, we entered into an employment agreement with Gary L. Worobow, our Executive Vice President, Business and Legal Affairs, that runs through June 30, 2012. Pursuant to the agreement, Mr. Worobow is entitled to receive an annualized base salary of $250,000 through January 2010, which will be subject to 5% annual increases commencing February 1, 2010. In addition, Mr. Worobow received a one-time bonus equal to one month’s salary upon commencing employment. Mr. Worobow is also entitled to receive an annual performance-based bonus of up to one-third of his base salary for each of fiscal 2010, 2011 and 2012. The amount of each year’s bonus, if any, will be determined and paid based upon satisfaction of certain operating profit goals to be determined by the compensation committee for the applicable fiscal year and is contingent upon Mr. Worobow remaining an active employee of the Company through the end of the applicable fiscal year. In addition to reimbursing Mr. Worobow for reasonable expenses incurred in performing his duties, including maintaining bar association membership and satisfying continuing legal education requirements, the employment agreement provides that unless and until the Company elects to provide its United States based employees with medical insurance, we will pay Mr. Worobow $1,000 per month in lieu providing him with medical insurance. The employment agreement requires Mr. Worobow to devote substantially all of his working time to our Company.

Equity-based ~~Based~~ Incentives. ~~On July~~Mr. 9,Pezzimenti’s ~~2009,~~equity-based ~~upon~~compensation ~~approval~~grants are made by ~~the~~our compensation committee, generally at the suggestion of our Chief Executive Officer, from time to time as deemed appropriate. During the ~~Board~~ fiscal years covered by the Summary Compensation Table above, the Company made various grants of equity ~~Directors~~based awards to Mr. Pezzimenti. On November 5, 2009, we granted Mr. ~~Worobow~~Pezzimenti 25,000 restricted shares of our common stock and stock options to purchase an additional 2025,000 shares of our common stock at an exercise price equal to $34.7613 per share. The option vests over three years with 68,~~667~~334 shares vesting on November 5, 2010, and 8,333 shares vesting on each of ~~July~~November 95, ~~2010~~2011 and ~~2011~~2012. The restricted stock grant is subject to transfer and 6forfeiture restrictions that lapse in three annual installments of 8,~~666~~334 shares ~~vesting~~on November 5, 2010 and 8,333 shares each on ~~July~~November 95, 2011 and 2012. On August 12, 2010, ~~upon approval by~~ the compensation committee granted Mr. Pezzimenti 35,000 restricted shares of ~~the~~our ~~Board~~common stock. The restricted stock grant is subject to transfer and forfeiture restrictions that lapse in three annual installments of ~~Directors~~11,667 weshares each on August 12, 2011 and 2012 and 11,666 shares on August 12, 2013. On July 6, 2011, the compensation committee granted Mr. ~~Worobow~~ Pezzimenti stock options to purchase an additional 2030,000 shares of our common stock at an exercise price equal to $511.5190 per share ~~and 20,000 shares of restricted stock~~. The option ~~and~~vests ~~restricted shares both vest~~ over three years with 610,~~667~~000 shares vesting ofon ~~each~~July 6, ~~vesting~~2012, on2013 ~~each~~and 2014. The exercise prices of ~~August 12,~~all ~~2011~~of ~~and 2010~~these ~~and~~options ~~6,666~~are ~~shares~~equal to the fair market value of ~~each~~our ~~vesting~~common stock on ~~August 12,~~the ~~2013~~date of grant.

~~In addition~~Confidentiality, ~~Mr. Worobow~~Non-competition ~~has~~and ~~received the following equity based incentives in regard to his previous service on our Board of Directors~~Non-solicitation. OnWe ~~December 8,~~have ~~2006,~~entered weinto ~~granted Mr. Worobow stock options to purchase 50,000 shares of our common stock at~~ an ~~exercise~~agreement ~~price of $4.66 per share. These options vested over three years~~ with ~~16,667 shares vesting on each of December 6, 2007 and 2008 and 16,666 shares vesting on December 6, 2009~~Mr. ~~On April~~ 9,Pezzimenti ~~2008~~which weprovides ~~granted~~for ~~Mr. Worobow 20~~confidentiality,~~000 shares~~ ofnon-competition ~~restricted stock. The restricted stock grant is subject to transfer~~ and ~~forfeiture restrictions~~non-solicitation covenants that ~~lapse~~will remain in ~~three~~effect ~~installments~~for ofa ~~6,667~~period ~~shares~~of ~~each~~one onyear ~~February 20,~~following ~~2009~~termination ~~and~~of ~~2010 and 6,666 shares on February 20, 2012. On February 26, 2009, we granted~~ Mr. ~~Worobow~~Pezzimenti’s ~~20,000 shares of restricted stock~~employment. The restricted stock grant is subject to transfer and forfeiture restrictions that lapse in three annual installments of 6,667 shares each on February 26, 2010 and 2011 and 6,666 shares on February 26, 2012.

~~Confidentiality,~~Employment ~~Non-competition and Non-solicitation. The agreement contains standard~~Agreement ~~provisions~~with ~~regarding~~Gary ~~protection of our confidential information (as defined in the employment agreement) and prohibits Mr~~L. Worobow from directly or indirectly engaging in the following actions during the period he is employed by us and continuing for one year following the termination of the agreement, without our prior express written consent:

•Salary ~~Providing~~and ~~services~~Bonus. On March 11, 2009, we entered into an employment agreement (effective March 1, 2009) with Gary L. Worobow, our Executive Vice President, Business and Legal Affairs, that was scheduled to run through June 30, 2012. Pursuant to the agreement, Mr. Worobow was entitled to receive an annualized base salary of $250,000 through January 2010, which was subject to 5% annual increases commencing February 1, 2010. In addition, Mr. Worobow received a one-time bonus equal to one month’s salary upon commencing employment. Mr. Worobow was also entitled to receive an annual performance-based bonus of up to one-third of his base salary for each of fiscal 2010, 2011 and 2012. The amount of each year’s bonus, if any, was to be determined and paid based upon satisfaction of ~~our~~certain operating ~~competitors~~profit ~~anywhere~~goals ~~outside~~to be determined by the compensation committee for the applicable fiscal year and was contingent upon Mr. Worobow remaining an active employee of the ~~United~~Company ~~States~~through ~~similar~~the toend ~~those~~of ~~provided~~the applicable fiscal year. In addition to reimbursing usMr. Worobow ~~during~~for reasonable expenses incurred in performing his duties, including maintaining bar association membership and satisfying continuing legal education requirements, the employment; •agreement ~~soliciting~~provided orthat ~~attempting~~unless and until the Company elects to ~~induce~~provide ~~any~~its United States based employees with medical insurance, we would pay Mr. Worobow $1,000 per month in lieu of providing him with medical insurance. The employment agreement required Mr. Worobow to devote substantially all of his working time to our ~~customers~~Company. Effective July 1, ~~suppliers~~2011, ~~licensees~~we entered a new employment agreement with Mr. Worobow for an indefinite term. Under the new agreement, ~~licensors~~Mr. Worobow oris ~~other~~entitled ~~business~~to ~~relations~~receive an annualized base salary to ~~cease~~$290,000, ~~doing~~which ~~business~~is ~~with~~subject ~~us;~~to oran •annual ~~soliciting~~5% orincreases ~~attempting~~commencing July 1, 2012, and is also entitled to ~~induce~~receive an annual performance-based bonus of up to one-third of his base salary. As with his prior employment agreement, the amount of each year’s bonus, if any, will be determined and paid based upon satisfaction of ~~our~~certain ~~employees~~operating profit goals to ~~leave~~be ~~our~~determined ~~employ~~by the compensation committee for the applicable fiscal year and is contingent upon Mr. Worobow remaining an active employee of the Company through the end of the applicable fiscal year. Also consistent with his prior employment agreement, orMr. Worobow’s tonew ~~work~~agreement provides for the reimbursement of reasonable expenses incurred in performing his duties (including maintaining bar association membership and satisfying continuing legal education requirements) and for the payment of $1,000 ~~render~~per ~~services~~month orunless ~~provide~~and ~~advice~~until the Company elects to orprovide ~~supply~~its ~~our~~United ~~confidential~~States ~~business~~based ~~information~~employees with ormedical ~~trade~~insurance ~~secrets~~and requires Mr. Worobow to ~~any~~devote ~~third~~substantially ~~person~~all orof ~~entity~~his working time to our Company.

~~Grants~~Equity Based Incentives. During the fiscal years covered by the Summary Compensation Table above, the Company made various grants of ~~Plan-Based~~equity ~~Awards~~based inawards ~~Fiscal~~to Mr. Worobow. On July 9, 2009, we granted Mr. Worobow stock options to purchase 20,000 shares of our common stock at an exercise price equal to $3.76 per share. The option vests over three years with 6,667 shares vesting on each of July 9, 2010 and 2011 and 6,666 shares vesting on July 9, 2012. On August 12, 2010, we granted Mr. Worobow stock options to purchase an additional 20,000 shares of our common stock at an exercise price equal to $5.51 per share and 20,000 shares of restricted stock. The option and restricted shares both vest over three years with 6,667 shares of each vesting on each of August 12, 2011 and 2010 and 6,666 shares of each vesting on August 12, 2013. On July 6, 2011, the compensation committee granted Mr. Worobow stock options to purchase an additional 10,000 stock options at an exercise price of $11.90 per share and 10,000 shares of restricted stock. The option and restricted shares both vest over three years with 3,334 shares of each vesting on July 6, 2012 and 3,333 shares of each vesting on each of July 6, 2013 and 2014. The exercise prices of all of these stock options are equal to the fair market value of our common stock on the date of grant. In the event of an acquisition of the Company through the sale of substantially all of the Company’s assets or through a merger, exchange, reorganization or liquidation of the Company or a similar event as determined by the Board or the Compensation Committee thereof, all unvested options to purchase Company stock or other equity-based incentives awarded to Mr. Worobow immediately vest upon the closing of such transaction.

The following table sets forth information with respect to stock options and restricted stock granted to the named executive officers during the fiscal year ended June 30, 2010. All stock options and restricted stock identified in the following table were granted under the 2005 Plan, the material terms of which are described below.

					Option Awards:
			Stock Awards:		Number of		Exercise or
			Number of		Securities		Base		Grant Date
			Shares of		Underlying		Price of		Fair Value of
			Stock		Options		Option		Stock and Option
Name	Grant Date		(#)		(#)		Awards ($/Share)		Awards (1)
William L. Yde III		—		—		—		—		—
Scott E. Cody	July 9, 2009			—		100,000	$	3.76	$	253,000
Gary L. Worobow	July 9, 2009			—		20,000	$	3.76	$	50,600
Ivan N. Shulman	July 9, 2009			20,000		—		—	$	75,200
B. William Pezzimenti	November 5, 2009			25,000		25,000	$	4.13	$	171,425

(1) Amounts shown reflect the dollar amount recognized for financial statement reporting purposes in accordance with FASB ASC 718 that will be expensed over the vesting period. Assumptions used in calculating this amount are included in Note 11 to our audited financial statements for the fiscal year ended June 30, 2010, which are included elsewhere in this report.

~~Global~~Confidentiality, ~~Traffic~~Non-competition ~~Network,~~and ~~Inc~~Non-solicitation. ~~2005~~The ~~Stock~~Company’s ~~Incentive~~employment agreement ~~Plan~~with Mr. Worobow contains standard provisions regarding protection of our confidential information (as defined in the employment agreement) and prohibits Mr. Worobow from directly or indirectly engaging in the following actions during the period he is employed by us and continuing for one year following the termination of the agreement, without our prior express written consent:

We• ~~maintain~~Providing ~~the~~services ~~2005 Plan that, as amended and restated~~ to ~~date,~~any ~~authorizes the granting~~ of ~~stock~~ ~~based awards to purchase up to 1,800,000 shares of~~ our ~~common~~competitors ~~stock,~~anywhere ofoutside ~~which a total~~ of ~~1,396,730~~ ~~shares were subject to outstanding option and restricted stock grants at June 30, 2010. Under~~ the ~~2005~~United ~~Plan,~~States ~~our~~similar ~~Board of Directors or a committee of two or more non-employee directors designated by our board administers the 2005 Plan. As such, the board or compensation committee, as applicable, has the power~~ to ~~grant~~those ~~awards,~~provided to ~~determine~~us ~~when~~during ~~and~~his to whom awards will be granted, the form of each award, the amount of each award, and any other terms or conditions of each award consistent with the terms of the 2005 Plan. Awards may be made to our employees, directors and consultants. The types of awards that may be granted under the 2005 Plan include incentive and non-qualified stock options, restricted and unrestricted stock, stock appreciation rights, performance shares and other stock-based awards. Each award agreement will specify the number and type of award, together with any other terms and conditions as determined by the Board of Directors or committee thereof in its sole discretion. employment;

In• ~~the~~soliciting ~~event~~or ofattempting ato ~~sale~~induce orany ~~merger~~ of ~~the~~our ~~company~~customers, ~~the Board of Directors or applicable committee may take any action with respect to outstanding awards that it deems equitable~~suppliers, ~~including providing for the assumption or substitution of outstanding awards~~licensees, orlicensors ~~the acceleration~~ or ~~termination~~ ofother ~~unvested~~business ~~awards.~~relations ~~The~~to ~~Board~~cease ofdoing ~~Directors~~business ~~may amend or discontinue the 2005 Plan at any time, except as would impair the rights~~ with ~~respect~~us; ~~to any awards outstanding under the 2005 Plan.~~ or

~~Outstanding~~• ~~Equity~~soliciting ~~Awards~~or atattempting ~~2010~~to ~~Fiscal~~induce ~~Year-End~~ 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.

~~The~~Grants ~~following table includes certain information as~~ of ~~June 30,~~Plan-Based ~~2010~~Awards ~~with respect to the value of all unexercised stock options and restricted shares previously awarded to the named executive officers. All stock options and restricted stock identified~~ in ~~the following table were granted~~Fiscal ~~under~~2011 ~~the 2005 Plan.~~

	Option Awards									Stock Awards
	Number of		Number of
	Securities		Securities
	Underlying		Underlying										Market Value
	Unexercised		Unexercised							Number of Shares			of Shares
	Options		Options			Option		Option		of Stock that have			of Stock that
	(#)		(#)			Exercise		Expiration		not Vested			have not Vested
Name	Exercisable		Not exercisable			Price ($)		Date		(#)			($)(14)
William L. Yde III		—		—			—		—		—			—
Scott E. Cody		100,000		—		$	5.00	March 23, 2016			—			—
Scott E. Cody		100,000		—		$	5.25	March 29, 2017			—			—
Scott E. Cody		33,333		16,667	(1)	$	6.80	March 12, 2018			—			—
Scott E. Cody		—		100,000	(2)	$	3.76	July 9, 2019			—			—
Scott E. Cody		—		—			—		—		5,000	(3)	$	26,900
B. William Pezzimenti		50,000		0		$	5.00	March 23, 2016			—			—
B. William Pezzimenti		6,667		3,333	(4)	$	6.68	October 24, 2017			—			—
B. William Pezzimenti		40,000		60,000	(5)	$	6.80	March 12, 2018			—			—
B. William Pezzimenti		—		25,000	(6)	$	4.13	November 5, 2019			—			—
B. William Pezzimenti		—		—			—		—		25,000	(7)	$	134,500
Ivan N. Shulman		50,000		—		$	6.28	May 8, 2016			—			—
Ivan N. Shulman		33,400		—		$	4.66	December 8, 2016			—			—
Ivan N. Shulman		50,000		—		$	7.05	May 8, 2017			—			—
Ivan N. Shulman		—		—			—		—		5,000	(8)	$	26,900
Ivan N. Shulman		—		—			—		—		20,000	(9)	$	107,600
Gary L. Worobow		50,000		—		$	4.66	March 11, 2019			—			—
Gary L. Worobow		—		—			—		—		6,666	(10)(11)	$	35,863
Gary L. Worobow		—		—			—		—		13,333	(12)(11)	$	71,732
Gary L. Worobow		—		20,000	(13)	$	3.76	July 9, 2019			—			—

The following table sets forth information with respect to stock options and restricted stock granted to the named executive officers during the fiscal year ended June 30, 2011. All stock options and restricted stock identified in the following table were granted under the Company’s 2005 Stock Incentive Plan, as amended, the material terms of which are described below.


													Option Awards:
											Stock Awards:		Number of		Exercise or		Grant Date
											Number of		Securities		Base		Fair Value of
	Estimated Future Payouts Under Non-Equity Incentive Plan Awards										Shares of Stock		Underlying Options		Price of Option		Stock and Option
Name	Threshold ($)			Target ($)			Maximum ($)			Grant Date	(#)		(#)		Awards ($/Share)		Awards (1)
William L. Yde III		29,750	(2)		—			297,500	(3)	July 21, 2010		—		—		—		—
William L. Yde III		—			—			—		February 9, 2011		50,000		—		—	$	551,500

Scott E Cody		10,000	(2)		—			100,000	(3)	July 21, 2010		—		—		—		—
Scott E. Cody		—			—			—		August 12, 2010		—		100,000	$	5.51	$	350,700
Scott E. Cody		—			—			—		February 9, 2011		22,725		—		—	$	250,657

Gary L. Worobow		8,932	(2)		—			89,324	(3)	July 21, 2010		—		—		—		—
Gary L. Worobow		—			—			—		August 12, 2010		—		20,000	$	5.51	$	70,140
Gary L. Worobow		—			—			—		August 12, 2010		20,000		—		—	$	110,200

B. William Pezzimenti		88,800	(4)(5)		207,600	(5)(6)		356,400	(5)(7)	July 21, 2010		—		—		—		—

B. William Pezzimenti		24,800	(5)(8)		—			99,200	(5)(9)	July 21, 2010		—		—		—		—
B. William Pezzimenti		—			—			—		August 12, 2010		35,000		—		—	$	192,850

(1)

Amounts shown reflect the dollar amount recognized for financial statement reporting purposes in accordance with FASB ASC 718 that will be expensed over the vesting period. Assumptions used in calculating this amount are included in Note 9 to our audited financial statements for the fiscal year ended June 30, 2011, which are included elsewhere in this report.

(2)	Represents the amount of cash incentive compensation that the recipient was entitled to receive if the Company achieved 85% of the fiscal 2011 EBITDA goal of $12.0 million.

(3)	Represents the amount of cash incentive compensation that the recipient was entitled to receive if the Company met or exceeded 100% the fiscal 2011 EBITDA goal of $12.0 million.

(4)	Represents the amount of cash incentive compensation that the recipient was entitled to receive if the Company’s Australian operations generated revenues in excess of 98% budgeted amounts, but less than 100% of budgets amounts, during each month of fiscal 2011.

(5)	Mr. Pezzimenti is paid in Australian dollars. Amount reflected above have been translated to United States dollars based on the average exchange rate for fiscal 2011.

(6)	Represents the amount of cash incentive compensation that the recipient was entitled to receive if the Company’s Australian operations generated revenues in excess of 100% budgeted amounts, but less than 104% of budgets amounts, during each month of fiscal 2011.

(7)	Represents the amount of cash incentive compensation that the recipient was entitled to receive if the Company’s Australian operations generated revenues in excess of 104% of budgeted amounts during each month of fiscal 2011.

(8)

The recipient was entitled to receive $24,800 (based on the average exchange rates for the year) for each quarter of fiscal 2011 during which the Company’s Australian operations achieved a pre-determined EBITDA goal. Represents the amount of cash incentive compensation that the recipient was entitled to receive if the Company’s Australian operations achieved such goal for one quarter during fiscal 2011.

(1)		Vests with respect to 16,667 shares on March 12, 2011.
(2)		Vests with respect to 33,333 shares on each of July 9, 2010 and July 9, 2011 and 33,334 shares on July 9, 2012.
(3)		Vests with respect to 5,000 shares on March 12, 2011.
(4)		Vests with respect to 3,333 shares on October 24, 2010.
(5)		Vests with respect to 20,000 shares on each on March 12, 2011, March 12, 2012 and March 12, 2013.
(6)		Vests with respect to 8,334 shares on November 5, 2010 and 8,333 shares on each of November 5, 2011 and November 5, 2012.
(7)		Vests with respect to 8,334 shares on November 5, 2010 and 8,333 shares on each of November 5, 2011 and November 5, 2012.
(8)		Vests with respect to 5,000 shares on March 12, 2011.
(9)		Vests with respect to 6,667 shares on each of July 9, 2010 and July 9, 2011 and 6,666 shares on July 9, 2012.
(10)		Vests with respect to 6,666 shares on February 20, 2011.
(11)		Granted in connection with service as non-employee director prior to commencement of employment with the Company.
(12)		Vests with respect to 6,667 shares on February 26, 2011 and 6,666 shares on February 26, 2012.
(13)		Vests with respect to 6,667 shares on July 9, 2010 and 6,666 shares on each of July 9, 2011 and July 9, 2012.
(14)		Market value is based on $5.38 per share, which was the closing price on June 30, 2010, the last day of our fiscal year.

(9)

~~Option~~Global ~~Exercises~~Traffic ~~and~~Network, Inc. 2005 Stock ~~Vested~~ Incentive Plan

~~The~~We ~~following~~maintain ~~table~~the ~~sets~~2005 ~~forth~~Stock ~~information~~Incentive ~~concerning~~Plan ~~each~~that, ~~exercise~~as ofamended ~~stock~~and ~~options~~restated ~~and~~to ~~each~~date (the “2005 Plan”), authorizes the granting of ~~vesting~~stock based awards to purchase up to 2,400,000 shares of our common stock, ~~including~~of ~~Performance~~which ~~Shares~~a total of 1,341,383 ~~during~~shares ~~the~~were ~~fiscal~~subject ~~year~~to ~~ended~~outstanding option and restricted stock grants at June 30, ~~2010~~2011. ~~for~~Under the 2005 Plan, our Board or a committee of two or more non-employee directors designated by our Board administers the 2005 Plan. As such, the Board or compensation committee, as applicable, has the power to grant awards, to determine when and to whom awards will be granted, the form of each ~~Named~~award, ~~Executive~~the ~~Officer:~~amount of each award, and any other terms or conditions of each award consistent with the terms of the 2005 Plan. Awards may be made to our employees, directors and consultants. The types of awards that may be granted under the 2005 Plan include incentive and non-qualified stock options, restricted and unrestricted stock, stock appreciation rights, performance shares and other stock-based awards. Each award agreement will specify the number and type of award, together with any other terms and conditions as determined by the Board or committee thereof in its sole discretion.

	Option Awards				Stock Awards
	Number of Shares				Number of Shares
	Acquired on		Value Realized		Acquired on		Value Realized
	Exercise		on Exercise		Vesting		on Vesting
Name	(#)		($)		(#)		($)
William L. Yde III		—	$	—		—	$	—
Scott E Cody		—	$	—		5,000	$	26,800
Gary L. Worobow		—	$	—		13,334	$	70,537
Ivan N. Shulman		—	$	—		5,000	$	26,800
B. William Pezzimenti		—	$	—		—	$	—

In the event of a sale or merger of the company, the Board of Directors or applicable committee may take any action with respect to outstanding awards that it deems equitable, including providing for the assumption or substitution of outstanding awards, or the acceleration or termination of unvested awards. The Board of Directors may amend or discontinue the 2005 Plan at any time, except as would impair the rights with respect to any awards outstanding under the 2005 Plan.

Outstanding Equity Awards at 2011 Fiscal Year-End

The following table includes certain information as of June 30, 2011 with respect to the value of all unexercised stock options and restricted shares previously awarded to the named executive officers. All stock options and restricted stock identified in the following table were granted under the 2005 Plan.


	Option Awards								Stock Awards
Name	Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Not exercisable			Option Exercise Price ($)		Option Expiration Date	Number of Shares of Stock that have not Vested (#)			Market Value of Shares of Stock that have not Vested ($)(14)
William L. Yde III		—		—			—	—		50,000	(1)	$	574,500
Scott E. Cody		100,000		—		$	5.00	March 23, 2016		—			—
Scott E. Cody		100,000		—		$	5.25	March 29, 2017		—			—
Scott E. Cody		50,000		—		$	6.80	March 12, 2018		—			—
Scott E. Cody		33,333		66,667	(2)	$	3.76	July 9, 2019		—			—
Scott E. Cody		—		100,000	(4)	$	5.51	August 12, 2020		—			—
Scott E. Cody		—		—			—	—		22,725	(3)	$	261,110
B. William Pezzimenti		—		40,000	(5)	$	6.80	March 12, 2018		—			—
B. William Pezzimenti		—		16,666	(6)	$	4.13	November 5, 2019		—			—
B. William Pezzimenti		—		—			—	—		16,666	(7)	$	191,492
B. William Pezzimenti		—		—			—	—		35,000	(8)	$	402,150
Gary L. Worobow		50,000		—		$	4.66	December 8, 2016		—			—
Gary L. Worobow		—		—			—	—		6,666	(12)(11)	$	76,592
Gary L. Worobow		6,667		13,333	(13)	$	3.76	July 9, 2019		—			—
Gary L. Worobow		—		20,000	(9)	$	5.51	August 12, 2020		—			—
Gary L. Worobow		—		—			—	—		20,000	(10)	$	229,800

(1)	Vests with respect to 16,666 shares on each of February 9, 2012 and February 9, 2013 and 16,668 shares on February 9, 2014.

(2)	Vests with respect to 33,333 shares on July 9, 2011 and 33,334 shares on July 9, 2012.

(3)	Vests with respect to 7,575 shares on each of February 9, 2012, February 9, 2013 and February 9, 2014.

(4)	Vests with respect to 33,333 shares on each of August 12, 2011 and August 12, 2012 and 33,334 shares on August 12, 2013.

(5)	Vests with respect to 20,000 shares on each on March 12, 2012 and March 12, 2013.

(6)	Vests with respect to 8,333 shares on each of November 5, 2011 and November 5, 2012.

(7)	Vests with respect to 8,333 shares on each of November 5, 2011 and November 5, 2012.

(8)	Vests with respect to 11,667 shares on each of August 12, 2011 and August 12, 2012 and 11,666 shares on August 12, 2013.

(9)	Vests with respect to 6,667 shares on each of August 12, 2011 and August 12, 2012 and 6,666 shares on August 12, 2013.

(10)	Vests with respect to 6,667 shares on each of August 12, 2011 and August 12, 2012 and 6,666 shares on August 12, 2013.

(11)	Granted in connection with service as non-employee director prior to commencement of employment with the Company.

(12)	Vests with respect to 6,666 shares on February 26, 2012.

(13)	Vests with respect to 6,667 shares on July 9, 2011 and 6,666 shares on July 9, 2012.

(14)	Market value is based on $11.49 per share, which was the closing price on June 30, 2011, the last day of our fiscal year.

Option Exercises and Stock Vested

The following table sets forth information concerning each exercise of stock options and each vesting of stock, including performance shares, during the fiscal year ended June 30, 2011 for each named executive officer:


	Option Awards				Stock Awards
Name	Number of Shares Acquired on Exercise (#)		Value Realized on Exercise ($)		Number of Shares Acquired on Vesting (#)		Value Realized on Vesting ($)
William L. Yde III		—	$	—		—	$	—
Scott E Cody		—	$	—		5,000	$	58,000
Gary L. Worobow		—	$	—		13,333	$	162,863
B. William Pezzimenti		128,334	$	786,855		8,334	$	57,225

Potential Payments Upon Termination or Change-in-Control

InIf ~~the event we terminate~~ Mr. Yde’s employment ~~for~~agreement ~~“cause,”~~is ~~Mr. Yde~~terminated ~~will~~voluntarily ~~only~~by ~~be entitled to compensation and benefits accrued through the effective date of termination. In the event that we terminate~~ Mr. Yde’s ~~employment without “cause”~~ or ifupon ~~Mr. Yde terminates~~ his ~~employment~~ asdeath aor ~~result~~disability, ofor ~~our~~if ~~material~~we ~~breach of~~ terminate the employment agreement for “cause,” Mr. Yde will ~~also~~only be entitled to ~~severance~~ incompensation ~~the~~and ~~form~~benefits ofaccrued ~~continuation~~through ~~of his base salary (as adjusted for any increase earned) for 18 months following~~ the effective date of termination. ~~The~~If ~~term~~we ~~“cause”~~terminate ~~under Mr. Yde’s employment agreement includes~~ the ~~following events: (i) Mr. Yde’s conviction of a felony; (ii) Mr. Yde’s material breach of the~~ employment agreement; (iii) Mr. Yde’s material violation of a company policy that has a materially adverse effect on our company; (iv) Mr. Yde’s failure to perform his duties as our company’s President and Chief Executive Officer as required by the employment agreement, which failure has not been cured following ten days after written notice is given; or (v) Mr. Yde’s habitual intoxication, drug use or chemical substance abuse by any intoxicating or chemical substance. If Mr. Yde’s employment had been terminated without “cause” asor ofif ~~June 30, 2010 (our most recent fiscal year end), we would have been required to make $712,500 of aggregate severance payments to~~ Mr. Yde~~, which would have been payable in installments over 18 months in accordance~~ ~~with~~terminates ~~our normal payroll business practices but subject to compliance with~~ the ~~requirements of Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”). Based on the increase in Mr. Yde’s base salary pursuant the terms of his~~ employment agreement ~~effective~~as ~~July 1, 2010,~~a weresult ~~would be required to make $787,500~~ of ~~aggregate~~a ~~severance~~material ~~payments~~breach toby ~~Mr. Yde,~~us ~~which would have been payable in installments over 18 months in accordance with our normal payroll business practices, again subject to compliance with the requirements of Section 409A.~~

In the event we terminate Mr. Cody’s employment for “cause,” Mr. Cody will only be entitled to compensation and benefits accrued through the effective date of termination. In the event that we terminate Mr. Cody’s employment without “cause” or if Mr. Cody terminates his employment as a result of our material breach of the employment agreement or our requiring him to report directly to anyone other than our Chief Executive Officer, President or our Board of Directors, Mr. Cody will also be entitled to severance in the form of continuation of his base salary (as adjusted for any increase earned) for the remaining term of the employment agreement. If we determine not to renew Mr. Cody’s employment agreement, we are required to provide Mr. Cody with notice of such determination six months prior to the expiration of the agreement or to continue to pay Mr. Cody his then current annualized salary for a period of six months following such expiration. The term “cause” under Mr. Cody’s employment agreement includes the following events: (i) Mr. Cody’s conviction of a felony; (ii) Mr. Cody’s material breach of the employment agreement; (iii) Mr. Cody’s material violation of a company policy that has a materially adverse effect on our company; (iv) Mr. Cody’s failure to perform his duties as our company’s Chief Financial Officer and Chief Operating Officer as required by the employment agreement, which failure has not been cured following ten days after written notice is given; or (v) Mr. Cody’s habitual intoxication, drug use or chemical substance abuse by any intoxicating or chemical substance. If Mr. Cody’s employment had been terminated without “cause” as of June 30, 2010 (our most recent fiscal year end), we would have been required to make $347,288 of aggregate severance payments to Mr. Cody, which would have been payable in installments through June 30, 2011 in accordance with our normal payroll business practices but subject to compliance with the requirements of Section 409A.

In the event we terminate Mr. Worobow’s employment for “cause,” Mr. Worobow will only be entitled to compensation and benefits accrued through the effective date of termination. In the event that we terminate Mr. Worobow’s employment without “cause” or if Mr. Worobow terminates his employment as a result of our material breach of the employment agreement or our requiring him to report directly to anyone other than our Chief Executive Officer, President or our Board of Directors, Mr. Worobow will also be entitled to severance in the form of continuation of his base salary (as adjusted for any increase earned) for the remaining term of the employment agreement. If we determine not to renew Mr. Worobow’s employment agreement, we are required to provide Mr. Worobow with notice of such determination four months prior to the expiration of the agreement or to continue to pay Mr. Worobow his then current annualized salary for a period of four months following such expiration. The term “cause” under Mr. Worobow’s employment agreement includes the following events: (i) Mr. Worobow’s conviction of a felony; (ii) Mr. Worobow’s material breach of his employment agreement which breach has not been cured following fifteen (15) days after written notice is given; or (iii) Mr. Worobow’s habitual intoxication, drug use or chemical substance abuse by any intoxicating or chemical substance. If Mr. Worobow’s employment had been terminated without “cause” as of June 30, 2010 (our most recent fiscal year end), we would have been required to make $549,336 of aggregate severance payments to Mr. Worobow, which would have been payable in installments through June 30, 2012 in accordance with our normal payroll business practices but subject to compliance with the requirements of Section 409A.

Director Compensation — Fiscal 2010

	Fees
	Earned or		Stock		Option		All Other
	Paid in		Awards		Awards		All Other
Name	Cash ($)		($)(1)		($)(1)		($)		Total ($)
Gary O. Benson(2)	$	—	$	114,400	$	—		—	$	114,400
Shane E. Coppola(2)	$	—	$	114,400	$	—		—	$	114,400
William M. Mower (2)	$	—	$	114,400	$	—		—	$	114,400
Stuart R. Romenesko(2)	$	—	$	114,400	$	—		—	$	114,400
Dale C. Arfman(2)	$	—	$	114,400	$	—		—	$	114,400

(1)		Amounts shown reflect the fair value dollar amount of grants received during period as calculated in accordance with FASB ASC 718. Such amounts are recognized for financial statement reporting purposes on a pro rated basis over the vesting period. Assumptions used in calculating this amount are included in Note 11 to our audited financial statements for the fiscal year ended June 30, 2010, which are included elsewhere in this report.
(2)		Based on $5.72 per share, which was the closing price on March 3, 2010, the date of the grant. Vests with respect to 6,667 shares each on March 3, 2011 and March 3, 2012 and 6,666 shares on March 3, 2013.

We or dohis ~~not~~being ~~currently~~required ~~pay~~to ~~cash~~report ~~fees~~directly ~~and/~~to anyone other than our Board (or ~~retainers~~a committee thereof), Mr. Yde will also be entitled to ~~directors~~severance in ~~connection~~the ~~with~~form ~~attendance~~of continuation of his base salary ~~at,~~for or18 ~~participation~~months following the effective date of termination in accordance with our normal payroll business practices but subject to compliance with the requirements of Section 409A of the Internal Revenue Code of 1986, ~~board~~as amended (“Section 409A”). In the event that severance payments and/or ~~committee~~accelerated ~~meetings~~vesting of equity awards would result in Mr. Yde ~~Instead,~~receiving we“excess ~~make~~parachute ~~annual~~payments” ~~grants~~within the meaning of ~~restricted~~ ~~stock~~Section 280G toof ~~each~~the Internal Revenue Code of ~~our~~1986, as ~~non-employee~~amended ~~directors~~(“Section in280G”), ~~amounts~~the ~~determined~~severance ~~from~~payments ~~time~~will be reduced to ~~time~~the ~~by our~~extent ~~compensation~~that ~~committee~~the reduction would result in Mr. Yde ~~For~~receiving ~~director~~a ~~terms~~greater ~~commencing~~net-after-tax atamount. The term “cause” under the ~~March 3,~~employment ~~2010~~agreement ~~stockholders’~~includes ~~meeting,~~the ~~each~~following ~~non-employee~~events: ~~director~~(i) Mr. Yde’s ~~was~~conviction ~~granted~~of ~~20,000~~a ~~shares~~felony; (ii) Mr. Yde’s material breach of ~~restricted~~the ~~stock~~employment agreement; (iii) Mr. Yde’s ~~The~~material ~~transfer~~violation of a Company policy that has a materially adverse ~~and~~effect ~~forfeiture~~on ~~restrictions~~the ~~are~~Company; ~~scheduled~~(iv) Mr. Yde’s failure to ~~lapse~~perform ~~with~~his ~~respect~~duties toas 6our President and Chief Executive Officer as required by the employment agreement,~~667~~ ofwhich ~~such~~failure ~~shares~~has onnot ~~each~~been ofcured following ten days after written notice is ~~March~~given; or (v) 3Mr. Yde’s habitual intoxication, ~~2011~~drug ~~and~~use ~~March~~or chemical substance abuse by any intoxicating or chemical substance. If Mr. 3Yde’s employment had been terminated without “cause” as of June 30, ~~2012~~2011 (our most recent fiscal year end), ~~and~~we ~~with~~would ~~respect~~have been required to 6make $892,~~666~~500 of ~~such~~aggregate ~~shares~~severance onpayments ~~March~~to Mr. 3Yde, ~~2013. Director~~which ~~compensation~~would ~~will~~have bebeen ~~subject~~payable toin ~~review~~installments ~~and~~over ~~adjustment~~18 months ~~from~~in ~~time~~accordance towith ~~time~~our atnormal ~~the~~payroll ~~discretion~~business ofpractices ~~our~~but ~~Board~~subject to compliance with the requirements of ~~Directors~~Section 409A.

If Mr. Cody’s employment agreement is terminated voluntarily by Mr. Cody or upon his death or disability, or if we terminate the employment agreement for “cause,” Mr. Cody will only be entitled to compensation and benefits accrued through the effective date of termination. If we terminate the employment agreement without “cause” or if Mr. Cody terminates the employment agreement as a result of a material breach by us or his being required to report directly to anyone other than our Chief Executive Officer, President or Board (or a committee thereof), Mr. Cody will also be entitled to severance in the form of continuation of his base salary for 12 months following the effective date of termination in accordance with our normal payroll business practices but subject to compliance with the requirements of Section 409A. In the event that severance payments and/or accelerated vesting of equity awards would result in Mr. Cody receiving “excess parachute payments” within the meaning of Section 280G, the severance payments will be reduced to the extent that the reduction would result in Mr. Cody receiving a greater net-after-tax amount. The term “cause” under the employment agreement includes the following events: (i) Mr. Cody’s conviction of a felony; (ii) Mr. Cody’s material breach of the employment agreement; (iii) Mr. Cody’s material violation of a Company policy that has a materially adverse effect on the Company; (iv) Mr. Cody’s failure to perform his duties as the our Chief Financial Officer and Chief Operating Officer as required by the employment agreement, which failure has not been cured following ten days after written notice is given; or (v) Mr. Cody’s habitual intoxication, drug use or chemical substance abuse by any intoxicating or chemical substance. If Mr. Cody’s employment had been terminated without “cause” as of June 30, 2011 (our most recent fiscal year end), we would have been required to make $395,000 of aggregate severance payments to Mr. Cody, which would have been payable in installments through June 30, 2012 in accordance with our normal payroll business practices but subject to compliance with the requirements of Section 409A.

If Mr. Worobow’s employment agreement is terminated voluntarily by Mr. Worobow or upon his death or disability, or if we terminate the employment agreement for “cause,” Mr. Worobow will only be entitled to compensation and benefits accrued through the effective date of termination. If we terminate the employment agreement without “cause” or if Mr. Worobow terminates the employment agreement as a result of a material breach by us or his being required to report directly to anyone other than our Chief Executive Officer, President or Board (or a committee thereof), Mr. Worobow will also be entitled to severance in the form of continuation of his base salary and payment in lieu of medical benefits for 12 months following the effective date of termination in accordance with our normal payroll business practices but subject to compliance with the requirements of Section 409A. In the event that severance payments and/or accelerated vesting of equity awards would result in Mr. Worobow receiving “excess parachute payments” within the meaning of Section 280G, the severance payments will be reduced to the extent that the reduction would result in Mr. Worobow receiving a greater net-after-tax amount. The term “cause” under the employment agreement includes the following events: (i) Mr. Worobow’s conviction of a felony; (ii) Mr. Worobow’s material breach of the employment agreement; (iii) Mr. Worobow’s material violation of a Company policy that has a materially adverse effect on the Company; (iv) Mr. Worobow’s failure to perform his duties as our Executive Vice President, Business and Legal Affairs as required by the employment agreement, which failure has not been cured following ten days after written notice is given; or (v) Mr. Worobow’s habitual intoxication, drug use or chemical substance abuse by any intoxicating or chemical substance. If Mr. Worobow’s employment had been terminated without “cause” as of June 30, 2011 (our most recent fiscal year end), we would have been required to make $302,000 of aggregate severance payments to Mr. Worobow, which would have been payable in installments through June 30, 2012 in accordance with our normal payroll business practices but subject to compliance with the requirements of Section 409A.

Director Compensation — Fiscal 2011


Name	Fees Earned or Paid in Cash ($)		Stock Awards ($)(1)			Option Awards ($)(1)		All Other ($)		Total ($)
Gary O. Benson	$	12,500	$	122,200	(2)	$	—	$	—	$	134,700
Shane E. Coppola	$	12,500	$	122,200	(2)	$	—	$	—	$	134,700
William M. Mower	$	12,500	$	122,200	(2)	$	—	$	—	$	134,700
Stuart R. Romenesko	$	12,500	$	122,200	(2)	$	—	$	—	$	134,700
Dale C. Arfman	$	12,500	$	122,200	(2)	$	—	$	—	$	134,700

(1)

(2)	Based on $12.22 per share, which was the closing price on March 1, 2011, the date of the grant. Vests with respect to 3,334 shares on March 1, 2012 and 3,333 shares each on March 1, 2013 and 2014.

We currently pay semi-annual cash fees of $12,500 to non-employee directors in connection with serving on the Board and no additional fees for attendance at, or participation in, Board and/or committee meetings. In addition, we make annual grants of 10,000 shares of restricted stock to each of our non-employee directors. Such amounts are subject to revision from time to time by our compensation committee. For director terms commencing at the December 15, 2010 stockholders’ meeting, each non-employee director was granted 10,000 shares of restricted stock. The transfer and forfeiture restrictions are scheduled to lapse with respect to 3,334 shares on March 1, 2012, and with respect to 3,333 shares on each of March 1, 2013 and 2014. Director compensation will be subject to review and adjustment from time to time at the discretion of our Board.

Compensation Committee Interlocks and Insider Participation

During the fiscal year ended June 30, ~~2010~~2011, the compensation committee of our Board ~~of Directors~~ was comprised of Messrs. Coppola and Mower. There are no relationships among these individuals, the members of the Board ~~of Directors~~ or executive officers of ours that require disclosure under Item 407(e)(4) of Regulation S-K promulgated under the ~~Securities~~ Exchange Act ~~of 1934~~.

Limitation of Liability and Indemnification of Officers and Directors; Commission Position on Indemnification for Securities Act Liabilities

Under our ~~certificate~~articles of incorporation, we are required to indemnify and hold harmless, to the fullest extent permitted by law, each person (a “Covered Person”) who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of ours or, while a director or officer of ours, is or was serving at our request as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees) reasonably incurred by such Covered Person. Notwithstanding the preceding sentence, except as otherwise provided in the ~~certificate~~ articles of incorporation, we are required to indemnify a Covered Person in connection with a Proceeding (or part thereof) commenced by such Covered Person only if the commencement of such Proceeding (or part thereof) by the Covered Person was authorized by our Board of Directors.

In addition, ~~as permitted by~~ Nevada law provides that, unless our ~~certificate~~articles of incorporation ~~provides~~are ~~that~~amended noto provide for greater individual liability, our ~~director~~directors ~~will~~and beofficers are not individually liable to us or to our stockholders or creditors for ~~monetary~~any damages ~~for~~as ~~breach~~a result of ~~certain fiduciary~~any ~~duties~~act or failure to act in their capacity as a director. ~~The effect~~ of ~~this~~officer ~~provision~~unless it is proven that (a) the director’s or officer’s act or failure to ~~restrict~~act ~~our~~constituted ~~rights~~a breach of his or her fiduciary duties as a director or officer, and (b) the ~~rights~~ breach of ~~its~~those ~~stockholders~~duties ininvolved ~~derivative~~intentional ~~suits~~misconduct, tofraud ~~recover~~or ~~monetary~~a ~~damages~~knowing ~~against~~violation aof ~~director~~law. ~~for~~Insofar as ~~breach~~indemnification for liabilities arising under the Securities Act of ~~certain~~1933 ~~fiduciary~~(the ~~duties~~“Securities asAct”) amay ~~director~~be permitted to our directors, ~~except~~officers and controlling persons, we have been advised that ain ~~director~~the ~~will~~opinion beof ~~personally~~the ~~liable~~SEC such indemnification ~~for:~~ is against public policy as expressed in the Securities Act and is therefore unenforceable.

• 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 Nevada law; or • any transaction from which the director derived an improper personal benefit.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Securities Authorized for Issuance under Equity Compensation Plans

On September 30, 2005, the Company adopted the Global Traffic Network, Inc. 2005 Stock Incentive Plan (the “2005 Plan”), which was initially approved to grant up to an aggregate of 1,200,000 shares of common stock. The purpose of the 2005 Plan, which was approved by the Company’s stockholders on September 30, 2005, is to increase stockholder value and to advance the interests of the Company by furnishing a variety of economic incentives designed to attract, retain and motivate employees (including officers), certain key consultants and directors of ~~the~~ the Company. At its annual stockholders’ meeting held February 26, 2009, the Company’s stockholders approved the Company’s adoption of an Amended and Restated 2005 Stock Incentive Plan (the “2005 Plan”) that ~~includes~~included, among other things, an additional 600,000 shares reserved for issuance under the 2005 Plan, increasing the total shares authorized for issuance under the 2005 Plan to 1,800,000. At its annual stockholders’ meeting held December 15, 2010, the Company’s stockholders approved the Company’s adoption of an Amended and Restated 2005 Stock Incentive Plan (the “2005 Plan”) that included, among other things, an additional 600,000 shares reserved for issuance under the 2005 Plan, increasing the total shares authorized for issuance under the 2005 Plan to 2,400,000.

55 56

The following table sets forth certain information as of June 30, ~~2010~~2011 with respect to ~~the~~ the 2005 Plan.

Number of

Plan category

Number ofSecurities to beIssued UponExercise ofOutstandingOptions

WeightedAverageExercise PriceofOutstandingOptions

Number ofSecuritiesRemainingAvailablefor FutureIssuanceUnder EquityCompensationPlans

Securities

Remaining

Number of

Available

Securities to be

Weighted

for Future

Issued Upon

Average

Issuance

Exercise of

Exercise Price

Under Equity

Outstanding

of Outstanding

Compensation

Plan category

Options

Plans

Equity compensation plans approved by security holders:

Amended and Restated 2005 Stock Incentive Plan

1,~~148~~033,~~401~~664

5.1417

~~271~~570,~~665~~607

Total:

1,~~148~~033,~~401~~664

5.1417

~~271~~570,~~665~~607

Equity compensation plans not approved by stockholders:

None

—

Total

—

Beneficial Ownership Table

The following table sets forth certain information, as of August 31, 2011, with respect to each of our directors, each of our named executive officers, all of our directors and executive officers as a group and all persons known by us to be the beneficial owners of more than 5% of our outstanding shares. To our knowledge, the persons named in the table below have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, except as indicated by footnote and subject to community property laws where applicable. Percentage ownership is based on 1819,~~466~~060,~~824~~350 shares outstanding as of August 31, ~~2010~~2011. Beneficial ownership is determined in accordance with the rules of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to options held by that person that are exercisable as of August 31, ~~2010~~2011, or will become exercisable within 60 days thereafter, are deemed outstanding, while such shares are not deemed outstanding for purposes of computing percentage ownership of any other person. Unless otherwise indicated, the address of each of the following persons is 880 Third Avenue, 6th Floor, New York, New York 10022.

	Shares			Percentage of
Name and Address of Beneficial Owner	SharesBeneficiallyOwned			PercentageofTotal
Name and Address of Beneficial Owner	Beneficially Owned			Total
William L. Yde III		1,301,747	(1)		6.83	%
William L. Yde III		2,222,739	(1)		12.04	%
Scott E. Cody		387,724	(2)		2.00	%
Scott E. Cody		281,666	(2)		1.50	%
B. William Pezzimenti		65,221	(3)		*
B. William Pezzimenti		160,000	(3)			*
Gary L. Worobow		140,001	(4)		*
Ivan N. Shulman		175,246	(4)			*
Dale C. Arfman		1,924,009	(5)		10.09	%
Gary L. Worobow		116,667	(5)			*
Gary O. Benson		172,000	(6)		*
Dale C. Arfman		1,986,009	(6)		10.75	%
Shane E. Coppola		120,000	(7)		*
Gary O. Benson		162,000	(7)			*
Stuart R. Romenesko		120,000	(7)		*
Shane E. Coppola		110,000	(8)			*
William M. Mower		43,333	(8)		*
Stuart R. Romenesko		110,000	(8)			*
All Directors and Named Executive Officers as a group (9 people)		4,274,035	(9)		21.77	%
William M. Mower		89,000	(9)			*
Gruber & McBaine Capital Management LLC (10) 50 Osgood Place Penthouse Suite San Francisco, CA 94133-4644		957,000			5.02	%
All Directors and Named Executive Officers as a group (10 people)		5,363,327	(10)		27.97	%
T. Rowe Price Associates, Inc. (10) (11) 100 East Pratt Street 10th Floor Baltimore, MD 21202-1009		1,595,420			8.37	%
Gruber & McBaine Capital Management LLC (11)(12) 50 Osgood Place Penthouse Suite San Francisco, CA 94133		1,478,500			8.01	%
Wall Street Associates LLC (10) 1200 Prospect Street Suite 100, La Jolla, CA 92037-3608		1,096,300			5.75	%
T. Rowe Price Associates, Inc. (11)(13) 100 East Pratt Street 10th Floor Baltimore, MD 21202-1009		2,761,247			14.95	%
Harvest Capital Strategies LLC (10) 600 Montgomery Street Suite 2000, San Francisco, CA 94111-2722		1,575,000			8.26	%

*		Less than 1%
(1)		Includes 1,326,747 shares that have been pledged as security for a loan. Also includes an aggregate of 895,992 shares held by third parties which Mr. Yde has the power to vote under separate voting agreements.
(2)		Includes 5,000 shares that remain subject to transfer and forfeiture restrictions and 266,666 shares issuable upon the exercise of options that are currently exercisable or will become exercisable within the next 60 days.

(3)		Includes 60,000 shares that remain subject to transfer and forfeiture restrictions and 100,000 shares issuable upon exercise of options that are currently exercisable or will become exercisable within the next 60 days.
(4)		Includes 18,333 shares that remain subject to transfer and forfeiture restrictions and 133,400 shares issuable upon the exercise of options are that are currently exercisable or will become exercisable within the next 60 days.
(5)		Includes 39,999 shares that remain subject to transfer and forfeiture restrictions and 56,667 shares issuable upon the exercise of options that are currently exercisable or will become exercisable within the next 60 days.
(6)		Includes 20,000 shares that remain subject to transfer and forfeiture restrictions. Also includes 19,346 shares held by spouse and 37,257 shares held in various trusts of which Mr. Arfman’s spouse is trustee.
(7)		Includes 39,999 shares that remain subject to transfer and forfeiture restrictions and 50,000 shares issuable upon the exercise of options that are currently exercisable or will become exercisable within the next 60 days. Also includes 52,000 shares held by DMB 2009, LLC, a limited liability company of which the sole member is a trust for the benefit of Mr. Benson’s spouse.
(8)		Includes 39,999 shares that remain subject to transfer and forfeiture restrictions and 50,000 shares issuable upon the exercise of options that are currently exercisable or will become exercisable within the next 60 days.
(9)		Includes 33,333 shares that remain subject to transfer and forfeiture restrictions. Also includes 50,000 shares that Mr. Mower is trustee of certain trusts established for the benefit of children of Mr. Yde.
(10)		Includes 296,662 shares that remain subject to transfer and forfeiture restrictions and 706,733 shares issuable upon the exercise of options are that are currently exercisable or will become exercisable within the next 60 days.
(11)		Based on the most recent report filed pursuant to Section 16 of the Securities Exchange Act of 1934, as amended, or the most recent Schedule 13D, 13F or 13G filed with the securities and Exchange Commission, as applicable.
(12)		Gruber & McBaine Capital Management, LLC (GMCM) is a registered investment advisor whose clients have the right to receive or the power to direct the receipt of dividends from, or the proceeds for the sale of shares held by GMCM. Jon D. Gruber and J. Patterson McBaine are Managers, controlling persons and portfolio managers of GMCM. The shares reflected include 1,000,580 shares held by GMCM, 442,995 shares held by Jon D. Gruber and 34,925 shares held by J. Patterson McBaine.
(15)		These securities are owned by various individual and institutional investors, including T. Rowe Price New Horizons Fund, Inc. and the T. Rowe Price Media & Telecommunications Fund, Inc., which T. Rowe Price Associates, Inc. (Price Associates) serves as investment advisor with power to direct investments and/or sole power to vote the securities. For purposes of the reporting requirements of the Securities Exchange Act of 1934, Price Associates is deemed to be a beneficial owner of such securities; however, Price Associates expressly disclaims that it is, in fact, the beneficial owner of such securities.

*	Less than 1%

(1)	Includes 450,000 shares that have been pledged as security for a loan. Also includes 50,000 shares that remain subject to transfer and forfeiture restrictions.

(2)	Includes 22,725 shares that remain subject to transfer and forfeiture restrictions and 349,999 shares issuable upon the exercise of options that are currently exercisable or will become exercisable within the next 60 days.

(3)	Includes 39,999 shares that remain subject to transfer and forfeiture restrictions.

(4)	Includes 29,999 shares that remain subject to transfer and forfeiture restrictions and 70,001 shares issuable upon the exercise of options are that are currently exercisable or will become exercisable within the next 60 days.

(5)	Includes 23,333 shares that remain subject to transfer and forfeiture restrictions. Also includes 15,425 shares held by spouse and 51,823 shares held in various trusts of which Mr. Arfman’s spouse is trustee.

(6)

Includes 29,999 shares that remain subject to transfer and forfeiture restrictions and 50,000 shares issuable upon the exercise of options that are currently exercisable or will become exercisable within the next 60 days. Also includes 52,000 shares held by DMB 2009, LLC, a limited liability company of which the sole member is a trust for the benefit of Mr. Benson’s spouse.

(7)	Includes 29,999 shares that remain subject to transfer and forfeiture restrictions and 50,000 shares issuable upon the exercise of options that are currently exercisable or will become exercisable within the next 60 days.

(8)	Includes 29,999 shares that remain subject to transfer and forfeiture restrictions.

(9)	Includes 286,052 shares that remain subject to transfer and forfeiture restrictions and 570,000 shares issuable upon the exercise of options are that are currently exercisable or will become exercisable within the next 60 days.

(10)	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.

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Filing Compare · GLOBAL TRAFFIC NETWORK, INC.