4. MARKETABLE SECURITIES - RESTRICTED

12 Months Ended

Jun. 30, 2012

Investments, Debt and Equity Securities [Abstract]

MARKETABLE SECURITIES - RESTRICTED

4.      MARKETABLE SECURITIES – RESTRICTED

At June 30, 2012, the Company had Marketable Securities - Restricted in the amount of $3,572,600 representing the June 30, 2012 market value ($3.26 per share) of 1,095,884 ORBCOMM Common Shares (NASDAQ: ORBC) received as partial consideration in the May 2011 sale of StarTrak, net of an estimated 83,306 shares to be returned to ORBCOMM for settlement of obligations under the escrow agreements more fully discussed in Note 7 – Sale of Operating Segments.  The net cost basis of the estimated 83,306 shares at June 30, 2012 and 2011 is $2.91 per share or $242,400.

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 June 30, 2012 and 2011. The fair value measurement at June 30, 2012 and 2011 is based upon quoted prices from similar assets in active markets and thus represents a Level 2 fair value measurement.  The restriction discussed above is why ORBCOMM’s Common 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 $3.26 per share at June 30, 2012, the Company recorded an unrealized gain on marketable securities held at June 30, 2012 (presented in the Consolidated Statements of Comprehensive Income (Loss)), of $142,500, offset by an adjustment for unrealized gains previously recorded related to securities sold during the period.  The actual gain or loss of securities sold is reported in the Statement of Operations.  At June 30, 2012 and 2011, the Accumulated Unrealized Gain on Marketable Securities, net of tax, of $383,600 and $466,500 respectively, was presented in the Shareholders’ Equity section of the Consolidated Balance Sheets.

The Company’s Marketable Securities at both June 30, 2012 and 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 impairment as an investment loss in its Statement of Operations.  As of close of market on September 24, 2012, the per share value of the ORBCOMM Common Stock was $3.74, $.83 per share above the cost basis of $2.91 per share and above the June 30, 2012 valuation of $3.26 per share as presented on the attached balance sheet.  No impairment related to an other-than-temporary decline was recorded during the years ended June 30, 2012 and 2011.

During the fiscal year ended June 30, 2012, the Company sold a total of 993,661 shares of ORBCOMM, Inc. Common Stock for total proceeds of $3,278,000, and an average selling price of approximately $3.30 per share, resulting in gains of $394,700 offset by losses of ($8,000) for a net gain of $386,700.  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.  Finally, 29,990 shares were distributed to ORBCOMM from the litigation escrow account with the balance distributed to the Company resulting in miscellaneous income of $9,700 (3,332 shares).  Considering shares transferred and sold during the year ended June 30, 2012, the Company disposed of 1,057,921 shares.

The following table summarizes the activities related to investment in Marketable Securities for the year ended June 30, 2012.

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		5,118,000		137,300		-
Shares sold	(539,809)		2.91		(1,570,800)
March 31, 2012	1,171,884		2.91		3,409,900		3.85		4,511,600		1,101,700		-
Shares sold or transferred	(76,000)		2.91		(220,900)
June 30, 2012	1,095,884	$	2.91	$	3,189,000	$	3.26	$	3,572,600	$	383,600	$	-