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Marketable Securities – Restricted

6 Months Ended

Dec. 31, 2011

At December 31, 2011, the Company had Marketable Securities - Restricted in the amount of $5,117,700 representing the December 31, 2011 market value ($2.99 per share) of 1,828,321 ORBCOMM Common Shares (NASDAQ: ORBC) received as partial consideration in the May 16, 2011 sale of StarTrak, less an estimated 116,628 shares to be returned to ORBCOMM for settlement of obligations under the escrow agreements more fully discussed in our Form 10-K filed for the fiscal year ended June 30, 2011. The net cost basis of these shares at December 31, 2011 and June 30, 2011 is $2.91 per share.

The ORBCOMM common shares are registered under a currently effective ORBCOMM Form S-3 registration statement, however under the terms of the Agreement, the Company is limited to selling up to 279,600 shares (12 ½% of the shares received) monthly. The Company has classified these securities as available-for-sale at December 31, 2011. The fair value measurement at December 31, 2011 is based upon quoted prices from similar assets in active markets and thus represents a Level 2 measurement. The restriction discussed above is why ORBCOMM’s Stock trading price is deemed a Level 2 input. However, management does not believe the restriction will interfere with any plans to market their stock holdings. As such, the trading price is used as fair value with no further adjustment.

The shares held are revalued at the end of each reporting period with per share market value fluctuations reported as Comprehensive Income (Loss) for the period. Based upon the change in market value of $3.13 per share at June 30, 2011 to $2.99 per share at December 31, 2011, the Company recorded an unrealized loss on marketable securities (presented in the Condensed Consolidated Statements of Comprehensive Income (Loss)), of ($239,600), an unrealized loss on marketable securities sold of ($51,200) offset by the gain included in Net Loss of $38,700. At December 31, 2011, the Accumulated Unrealized Gain on Marketable Securities, net of tax, of $137,000 was presented in the Shareholders’ Equity section of the Condensed Consolidated Balance Sheet.

The Company’s Marketable Securities at both December 31, 2011 and June 30, 2011 consist of investments in common stock of ORBCOMM, Inc. (NASDAQ: “ORBC”) acquired in May 2011 as partial consideration in the sale of the Company’s Wireless Asset Management business segment. The Company reviews its marketable equity holdings in ORBCOMM on a regular basis to determine if its investment has experienced an other-than-temporary decline in fair value. The Company considers ORBCOMM’s cash position, earnings and revenue outlook, stock price performance, liquidity and management ownership, among other factors, in its review. If it is determined that an other-than- temporary decline exists, the Company writes down the investment to its market value and records the related write-down as an investment loss in its Statement of Operations. As of close of market on February 10, 2012, the per share value of the ORBCOMM Common Stock was $3.47, $.56 per share above the cost basis of $2.91 per share and above the December 31, 2011 valuation of $2.99 per share as presented on the attached balance sheet.

During the quarter ended December 31, 2011, the Company sold a total of 374,520 shares of ORBCOMM, Inc. Common Stock for a total of $1,128,600, an average selling price of approximately $3.01 per share, resulting in a net gain of $38,700. Of the shares sold, 294,881 shares were sold at an average price of approximately $3.07 resulting in a gain of $46,700 and 79,639 shares were sold at an average price of approximately $2.81 resulting in a loss of ($8,000). In addition, the Company transferred 34,270 shares, valued at $100,000, or the Company’s cost basis of $2.91 per share, in payment of obligations related to the sale to past employees and officers of StarTrak Systems, LLC. Considering shares transferred and sold during the quarter ended December 31, 2011, the Company disposed of 408,790 shares.

The following table summarizes the activities related to investment in Marketable Securities for the six months ended December 31, 2011.

Marketable Securities

											Accumulated
	Net		Cost Basis				Market Value				Unrealized
	Shares		Per Share		Total Cost		Per Share		Total Value		Gain		(Loss)
June 30, 2011	2,120,483	$	2.91	$	6,170,600	$	3.13	$	6,637,100	$	466,500	$	-

Shares sold	-		-		-

September 30, 2011	2,120,483		2.91		6,170,600		2.55		5,407,200		-		(763,400)

Shares sold or transferred	(408,790)		2.91		(1,189,900)

December 31, 2011	1,711,693	$	2.91	$	4,980,700	$	2.99	$	5,177,700	$	197,000	$	-

- Definition

Tabular disclosure of securities and other investments for which the market is not readily realizable, including thinly traded securities or investments, restricted securities, securities in nonpublic entities. Also includes financial instruments for which there are no readily available price quotations or for which the readily available price quote is deemed unreliable. Disclosure includes accounting policy, description of financial instrument, total value of the financial instrument as measured by the quoted market price, if available, total value reported in the state of financial condition, and the methods and significant assumptions used to value the security at lower than the quoted market price.

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