Mail Stop 3551
February 3, 2006
Mr. William L. Yde III
Global Traffic Network, Inc.
7521 West Lake Mead Boulevard
Suite 300
Las Vegas, Nevada 89128
Re: Global Traffic Network, Inc.
Amendment No. 1 to Registration Statement on Form S-1
Filed January 25, 2006
File No. 333-130417
Dear Mr. Yde:
We have reviewed your filing and have the following
comments.
Please amend the registration statement in response to these
comments.
Prospectus Summary, page 1
1. You indicate here and elsewhere in the prospectus that you
began
generating "limited revenue" from your Canadian operations in
January
2006. Please clarify what you mean.
Risk Factors, page 8
2. We note that most of your assets and operations are located in
Australia and Canada. In your response letter, please discuss the
ability of investors to bring and enforce judgments obtained in US
courts against persons located outside of the US based upon the
civil
liability provisions of the US federal securities laws; the
ability
of investors to enforce, in an appropriate foreign court,
judgments
of US courts based upon the civil liability provisions of the US
federal securities laws; and the ability of investors to bring an
original action in an appropriate foreign court to enforce
liabilities against the company or any person based upon the
federal
securities laws. To the extent these matters create material
risks
or uncertainties, provide appropriate risk factor disclosure.
Management`s Discussion and Analysis of Financial Condition and
Results of Operations, page 26
Overview, page 26
Our Sources of Revenue - Sale of Commercial Airtime Inventory,
page
27
3. We note the statement in the second paragraph that you
currently
generate "limited revenue" from commercial airtime inventory
received
in exchange for your radio news reports and TV reports in
Australia.
Please clarify and explain the reason(s) why revenue in these
sectors
has been limited.
4. We note the statement in the same paragraph that there is
generally a delay between acquiring commercial airtime inventory
from
new or expanded operations and the realization of increasing
revenue
from the sale of such inventory. Please discuss the reasons why
there is a delay.
5. We note your response to prior comment 26 in our letter dated
January 13, 2006. We are in receipt of your request for
confidential
treatment and will respond under cover of a separate letter.
Historical and Pro forma Consolidated Financial Data, page 35
6. Please refer to prior comment 35 in our letter dated January
13,
2006. Although your voting control is identical for both Global
Traffic Network and The Australia Traffic Network as a result of
the
voting agreements, it appears your ownership interest is not
identical. Tell us the consideration you gave to the difference
in
common stock ownership in evaluating the guidance in SFAS 141 to
determine the appropriate accounting for the Share Transaction.
7. Tell us the business reasons why Thomas Gilligan did not
subscribe
to all of the shares that he was entitled to in the initial
formation
of The Global Traffic Network, in order to maintain the same
ownership in both GTN and ATN. In your response to prior comment
52
in our letter dated January 13, 2006, you indicate that all
shareholders agreed to subscribe for shares of Global Traffic
Network
based on their ownership percentage in Australia Traffic Network.
8. Describe for us the significant terms of all agreements among
the
shareholders of ATN and GTN. For example, we note the reference
to
an option agreement in the voting agreement between Thomas
Gilligan
and William Yde III.
Certain Relationships and Related Transactions, page 61
9. As requested in prior comment 50 in our letter dated January
13,
2006, please disclose the material terms, including payment terms,
of
the Mutual Sales Representation Agreement and the Traffic Data
Agreement between CTN and Metro Networks.
10. We note the significant increase in the amounts owed to the
Australia Traffic Network at June 30, 2005 and September 30, 2005.
Please discuss the reasons for the increase.
11. Please identify the stockholders or entities controlled by
such
stockholders with whom you contract for services.
Financial Statements
Note 2 - Summary of Significant Accounting Policies
d) Station compensation and reimbursement, page F-17
12. Please refer to prior comment 53. Revise your disclosure to
provide all costs for which you are contractually obligated under
the
station obligations.
Australia Traffic Network
Financial Statements
h) Intangible assets, page F-19
13. Please refer to prior comment 54 in our letter dated January
13,
2006. The nature of capitalized costs for obtaining aircraft
licenses and the reasons you believe these are indefinite lived
assets is not apparent from your response. Please address the
following items:
a. Provide us with additional information describing the nature,
amount and type of these costs.
b. Describe the future benefit you obtain through license
ownership.
c. Discuss how often licenses are renewed, the criteria for
renewal
and what your renewal experience has been.
d. Explain why it is appropriate to capitalize the costs of
developing these licenses and discuss how you applied the guidance
in
paragraph 10 of SFAS 142.
14. If you continue to believe these licenses represent indefinite
lived assets, revise your impairment approach to determine the
fair
value of the licenses for your annual impairment test. Also tell
us
the methodology you will use to estimate the fair value.
Closing Statement
Please amend your registration statement in response to
these
comments. You may wish to provide us with marked copies of the
amendment to expedite our review. Please furnish a response
letter
with your amendment that keys your responses to our comments and
provides any requested supplemental information. Please submit
the
response letter on EDGAR as correspondence. Detailed response
letters greatly facilitate our review. Please understand that we
may
have additional comments after reviewing your amendment and
responses
to our comments.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
You may contact David Walz, Staff Accountant, at (202) 551-
3358
or Terry French, Accounting Branch Chief, at (202) 551-3828 if you
have questions regarding comments on the financial statements and
related matters. Please contact William Bennett, Staff Attorney,
at
(202) 551-3389, Kathleen Krebs, Special Counsel, at (202) 551-
3810,
or me at (202) 551-3810 with any other questions.
Sincerely,
Larry Spirgel
Assistant Director
cc: William M. Mower
Fax: (612) 672-8397
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Mr. William L. Yde III
Global Traffic Network, Inc.
February 3, 2006
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