3. Marketable Securities - Restricted

3 Months Ended

Sep. 30, 2013

Investments, Debt and Equity Securities [Abstract]

MARKETABLE SECURITIES - RESTRICTED

At September 30, 2013, the Company had net Marketable Securities - Restricted in the amount of $1,293,700 representing the market value ($5.24 per share) of 246,893 ORBCOMM Common Shares (NASDAQ: ORBC) received as partial consideration in the May 16, 2011 sale of StarTrak, net of an estimated 83,306 shares to be returned to ORBCOMM for settlement of obligations under the escrow agreement more fully discussed in our Form 10-K filed for the fiscal year ended June 30, 2013.  The net cost basis of these shares at September 30, 2013 and June 30, 2013 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 monthly.  The Company has classified these securities as available-for-sale at both September 30, 2013 and June 30, 2013. The fair value measurement on the date indicated is based upon quoted prices for 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 $4.49 per share at June 30, 2013 to $5.24 per share at September 30, 2013, the Company recorded an unrealized gain on marketable securities held at September 30, 2013 (presented in the Condensed Consolidated Statements of Comprehensive Income (Loss)), of $185,200.  The actual gain or loss on securities sold is reported in the Condensed Consolidated Statements of Operations.  At September 30, 2013, the Accumulated Other Comprehensive Income of $575,300 was presented in the Shareholders’ Equity section of the Condensed Consolidated Balance Sheet.

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 November 5, 2013, the per share value of the ORBCOMM Common Stock was $6.11, $3.20 per share above the cost basis of $2.91 per share and above the June 30, 2013 valuation of $4.49 per share as presented on the attached balance sheet.

The Company sold a total of 101,118 shares of ORBCOMM, Inc. Common Stock during the three months ended September 30, 2013 for total proceeds of $499,100, and an average selling price of approximately $4.94 per share, resulting in a net gain of $204,800.  The remaining net shares at September 30, 2013 of 246,893 include approximately 83,300 shares that are still held in escrow.

The following table summarizes the activities related to investment in Marketable Securities for the three months ended September 30, 2013:

				Marketable Securities
				Cost Basis							Accumulated
	Net			at $2.91			Market Value				Unrealized
	Shares			Per Share			Per Share		Total Value		Gain		(Loss)
June 30, 2013		348,011		$	1,012,700		$	4.49	$	1,562,600	$	549,900	$	-
Shares sold		(101,118	)		(294,300	)
September 30, 2013		246,893		$	718,400		$	5.24	$	1,293,700	$	575,300	$	-