UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                   FORM 10-QSB
(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

                FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2006

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

                  FOR THE TRANSITION PERIOD FROM______ TO _____

                         Commission File Number 0-25753

                           FITTIPALDI LOGISTICS, INC.
                           --------------------------
        (Exact name of small business issuer as specified in its charter)

            Nevada                                      87-04496677
            ------                                      -----------
(State or other jurisdiction of           (I.R.S. Employer Identification No.)
 incorporation or organization)

         902 Clint Moore Road, Suite 204, Boca Raton, Florida 33487-2802
         ---------------------------------------------------------------
                    (Address of principal executive offices)

                                 (561) 998-7557
                                 --------------
                           (Issuer's telephone number)

                                 not applicable
                                 --------------
         (Former name, former address and former fiscal year, if changed
                               since last report)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 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
[X] No [ ]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of February 20, 2007, the number
of outstanding shares of the issuer's common stock was 132,779,438.

     Transitional Small Business Disclosure Format (check one): Yes [  ] No [X]
------------------------------------------------------------------------------
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                                          TABLE OF CONTENTS
                                          -----------------



                                                                                                           Page
                                                                                                           ----
<S>      <C>                                                                                               <C>
PART I.  FINANCIAL INFORMATION
------   ---------------------
Item 1.  Financial Statements (Unaudited):

         Consolidated Balance Sheet, December 31, 2006                                                       3

         Consolidated Statements of Operations, Three and Six Months Ended
            December 31, 2006 and 2005                                                                       4

         Consolidated Statements of Cash Flows, Six Months Ended
            December 31, 2006 and 2005                                                                       5

         Notes to Consolidated Financial Statements                                                          6

Item 2.  Management's Discussion and Analysis or Plan of Operation                                          23

Item 3.  Controls and Procedures                                                                            31

PART II. OTHER INFORMATION                                                                                  32
-------  -----------------
Item 1.  Legal Proceedings                                                                                  32

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds                                        32

Item 3.  Defaults Upon Senior Securities                                                                    32

Item 4.  Submission of Matters to a Vote of Security Holders                                                32

Item 5.  Other Information                                                                                  32

Item 6.  Exhibits                                                                                           33
</TABLE>
           Cautionary Statements Regarding Forward Looking Information

         Certain statements in this quarterly report contain or may contain
forward-looking statements that are subject to known and unknown risks,
uncertainties and other factors which may cause actual results, performance or
achievements to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. These
forward-looking statements were based on various factors and were derived
utilizing numerous assumptions and other factors that could cause our actual
results to differ materially from those in the forward-looking statements. These
factors include, but are not limited to, our ability to implement our business
model, raise sufficient capital to fund our operating losses and pay our ongoing
obligations, economic and market conditions and fluctuations, government and
industry regulation, competition, and other factors. Most of these factors are
difficult to predict accurately and are generally beyond our control. You should
consider the areas of risk described in connection with any forward-looking
statements that may be made herein. Readers are cautioned not to place undue
reliance on these forward-looking statements and readers should carefully review
this quarterly report in its entirety. Except for our ongoing obligations to
disclose material information under the Federal securities laws, we undertake no
obligation to release publicly any revisions to any forward-looking statements,
to report events or to report the occurrence of unanticipated events. These
forward-looking statements speak only as of the date of this quarterly report,
and you should not rely on these statements without also considering the risks
and uncertainties associated with these statements and our business.

                                       2
<PAGE>
                         PART I. FINANCIAL INFORMATION
                         -----------------------------

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
<TABLE>
<CAPTION>
                   FITTIPALDI LOGISTICS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                               December 31, 2006
                                   (UNAUDITED)
<S>                                                                                        <C>
     ASSETS
     Current assets:
        Cash and cash equivalents                                                          $    323,329
        Accounts receivable, net of allowance of $97,287                                      1,517,029
        Prepaid expenses                                                                        220,866
                                                                                           ------------
             Total current assets                                                             2,061,224

     Property and equipment                                                                     620,409
          Less: accumulated depreciation                                                       (306,768)
                                                                                           ------------
             Net property and equipment                                                         313,641

     Software development costs, net of accumulated amortization
          of $180,385                                                                         1,156,451
     Intangible asset, net of accumulated amortization of $34,221                               404,801
     Restricted cash for interest on debentures                                                   2,395
     Other assets                                                                               324,846
                                                                                           ------------
     Total assets                                                                          $  4,263,358
                                                                                           ============
     LIABILITIES AND STOCKHOLDERS' DEFICIT

     Current liabilities:
        Notes payable - short term                                                         $     41,280
        Convertible notes payable                                                             3,522,000
        Lines of credit                                                                         708,191
        Accounts payable                                                                        974,501
        Accrued expenses                                                                        638,988
        Accrued salaries                                                                        270,646
                                                                                           ------------
            Total current liabilities                                                         6,155,606

     Long term debt:
        Long term notes payable                                                                  40,660
        Convertible notes payable less discount of $260,768                                     104,217
                                                                                           ------------
            Total liabilities                                                                 6,300,483

     Stockholders' deficit :
     Preferred stock, $.01 par value, 1,000,000 shares authorized:
        Series B convertible preferred stock, $.01 par value, 200,000
           shares authorized; 151,600 shares issued and outstanding                               1,516
        Series C convertible preferred stock, $.01 par value, 20,000
           shares authorized; 832 shares issued and outstanding                                       8
        Series D convertible preferred stock, $.01 par value, 40
           shares authorized; 38 shares issued and outstanding                                        -
        Series E convertible preferred stock, $.01 par value, 1,600
           shares authorized; 0 shares issued and outstanding                                         -
        Series F convertible preferred stock, $.01 par value, 500,000
           shares authorized; 140 shares issued and outstanding                                       1
        Series G convertible preferred stock, $.01 par value, 6
           shares authorized; 2 shares issued and outstanding                                         -
        Series Y convertible preferred stock, $.01 par value, 87,000
           shares authorized; 87,000  shares issued and outstanding                                 870
        Common stock, $.001 par value, 250,000,000 shares
           authorized; 116,781,661 issued and outstanding                                       116,782
        Deferred compensation                                                                  (144,322)
        Additional paid-in capital                                                           25,810,861
        Accumulated deficit                                                                 (27,822,841)
                                                                                           ------------
            Total stockholders' deficit                                                      (2,037,125)
                                                                                           ------------
     Total liabilities and stockholders' deficit                                           $  4,263,358
                                                                                           ============
</TABLE>
            See notes to unaudited consolidated financial statements
                                        3
<PAGE>
<TABLE>
<CAPTION>
                   FITTIPALDI LOGISTICS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

                                                         For the Three Months Ended          For the Six Months Ended
                                                                December 31,                       December 31,
                                                      ---------------------------------  ----------------------------------
                                                           2006              2005               2006              2005
                                                      ---------------   ---------------  ----------------  ----------------
<S>                                                   <C>               <C>              <C>               <C>
Revenue:
Freight transportation                                $     4,772,053   $     8,001,444  $     11,159,749  $     16,201,042
Implementation services                                             -                 -                 -             5,668
                                                      ---------------   ---------------  ----------------  ----------------

       Total revenue                                        4,772,053         8,001,444        11,159,749        16,206,710

Operating expenses:
   Freight transportation                                   4,529,845         7,112,211        10,292,369        14,432,467
   Selling, general and administrative:
        Salaries, benefits and consulting fees                950,819           999,201         1,695,788         2,000,029
        Other selling, general and administrative             544,263           536,806         1,068,036         1,148,190
                                                      ---------------   ---------------  ----------------  ----------------

       Total operating expenses                             6,024,927         8,648,218        13,056,193        17,580,686
                                                      ---------------   ---------------  ----------------  ----------------

       Loss from operations                                (1,252,874)         (646,774)       (1,896,444)       (1,373,976)
                                                      ---------------   ---------------  ----------------  ----------------

Other income (expense):
   Loss on asset disposal                                     (23,649)                -           (23,649)            1,415
   Forgiveness of debt                                              -                 -           (94,864)                -
   Interest expense, net                                     (323,444)         (361,225)       (1,096,103)         (832,806)
   Other income                                                19,590                 -            19,590             2,906
                                                      ---------------   ---------------  ----------------  ----------------

       Total other expense                                   (327,503)         (361,225)       (1,195,026)         (828,485)
                                                      ---------------   ---------------  ----------------  ----------------

Net loss                                              $    (1,580,377)  $    (1,007,999) $     (3,091,470) $     (2,202,461)
                                                      ===============   ===============  ================  ================

Loss per share-basic and diluted                      $         (0.02)  $         (0.01) $          (0.03) $          (0.03)
                                                      ===============   ===============  ================  ================

Weighted average shares outstanding
      - basic and diluted                                  99,152,180        74,666,383        95,864,208        71,996,823
                                                      ===============   ===============  ================  ================
</TABLE>
            See notes to unaudited consolidated financial statements
                                        4
<PAGE>
<TABLE>
<CAPTION>
                   FITTIPALDI LOGISTICS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                                                               For the Six Months Ended
                                                                                     December 31,
                                                                          --------------------------------
                                                                                2006             2005
                                                                          ---------------   --------------
<S>                                                                         <C>               <C>
Cash flows from operating activities:
   Net loss                                                                 $ (3,091,470)     $(2,202,461)
   Adjustments to reconcile net loss to
      net cash used in operating activities:
        Depreciation                                                              61,024           53,724
        Amortization of software development costs                                27,046           27,046
        Amortization of intangible asset                                          31,115           64,876
        Amortization of deferred compensation                                    264,574          189,149
        Amortization of deferred financing costs                                  69,475          301,429
        Amortization of discount on notes payable                                737,857          181,595
        Loss on asset disposal                                                    23,649                -
        Increase in allowance for doubtful accounts                                    -               62
        Loss on forgiveness of debt                                               94,864                -
        Issuance of stock options and warrants for services                      361,160           54,851
        Issuance of stock for services, interest and litigation settlement        11,699          106,060
        Changes in operating assets and liabilities:
            Decrease (increase) in accounts receivable                         1,255,990         (305,294)
            Decrease in prepaid expenses                                          49,941            7,561
            Decrease (increase) in other assets                                  128,382         (178,018)
           (Decrease) increase in accounts payable and accrued expenses       (1,078,036)         547,783
                                                                         ---------------   --------------

               Net cash used in operating activities                          (1,052,730)      (1,151,637)
                                                                         ---------------   --------------
Cash flows from investing activities:
   Purchases of property and equipment                                           (15,399)         (77,303)
   Capitalized costs of software development                                    (149,971)        (186,634)
                                                                         ---------------   --------------

               Net cash used in investing activities                            (165,370)        (263,937)
                                                                         ---------------   --------------
Cash flows from financing activities:
   Proceeds from convertible promissory notes net of costs of $0
       and $0, respectively                                                            -          320,000
   Proceeds from promissory notes                                                176,000          400,000
   Proceeds from notes receivable                                                      -           50,000
   Proceeds from exercise of stock options                                        12,500                -
   Proceeds from line of credit net of costs of $0 and $0, respectively                -          172,168
   Repayments of line of credit                                                 (204,096)               -
   Proceeds from sale of preferred stock and warrants net of costs of $0
      and $0,  respectively                                                    1,333,500                -
   Proceeds from sale of common stock and warrants net of costs of $0
      and $0, respectively                                                             -          832,500
                                                                         ---------------   --------------

               Net cash provided by financing activities                       1,317,904        1,774,668
                                                                         ---------------   --------------
               Net increase in cash and cash equivalents                          99,804          359,094

Cash and cash equivalents, beginning of period                           $       223,525   $      837,753
                                                                         ---------------   --------------
Cash and cash equivalents, end of period                                 $       323,329   $    1,196,847
                                                                         ===============   ==============
</TABLE>
            See notes to unaudited consolidated financial statements
                                        5

<PAGE>
                   FITTIPALDI LOGISTICS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1 - DESCRIPTION OF BUSINESS

Organization
------------
Fittipaldi Logistics, Inc. (the "Company"), formerly Power2Ship, Inc., was
incorporated in Nevada on October 28, 1987. On March 11, 2003, the Company
merged with Freight Rate, Inc. which became a wholly owned subsidiary. The
Company is a technology company that specializes in providing pertinent,
real-time information to the worldwide transportation and security industries.
Its technological solutions integrate disparate legacy systems, and synthesize
historically fragmented inaccessible data. This data is then reformatted into
valuable, actionable information, and delivered to appropriate end users across
the logistics value chain. Specific applications of our technology include:
vehicle tracking, inventory/asset visibility, secure trucking, and matching
available freight with available trucks. The Company is licensed by the United
States Department of Transportation as a broker, arranging for transportation of
freight (except household goods) by motor carriers. The Company has a patent
pending solution for providing freight carriers (currently trucking companies),
shippers (companies sending or receiving freight) and their customers with
supply chain, tracking and other logistics information.

On February 25, 2005, the Company formed P2S Holdings, Inc., a Florida
corporation, as a wholly owned subsidiary. Then, on March 21, 2005, Commodity
Express Transportation, Inc. ("CXT"), a wholly owned subsidiary of P2S Holdings
formed as a Delaware corporation on March 21, 2002, acquired certain assets and
liabilities representing the business of Commodity Express Transportation, Inc.,
a South Carolina based company engaged in the business of motor carriage
specializing in full truckload transportation services primarily using dry vans
(see Note 8 - "Acquisitions" for further details). CXT presently serves the
southeastern United States from its South Carolina base with a fleet of 92
tractors comprised of 45 owned units and 47 owner-operator units with which it
has independent contractor lease agreements and 285 trailers. In addition, CXT
rents a 137,000 square foot warehouse facility in South Carolina to service its
largest customer and provides freight transportation brokerage services through
its wholly owned subsidiary, Commodity Express Brokerage, Inc., a Florida
corporation formed on March 3, 2005.

Also, on March 21, 2005, Power2Ship Intermodal, Inc. ("P2SI"), a wholly owned
subsidiary of CXT formed as a Delaware corporation on March 21, 2002, acquired
certain assets and liabilities representing the business of GFC, Inc. It was a
New Jersey based company in the business of motor carriage specializing in
intermodal drayage transportation services. Effective June 30, 2006, management
chose to cease the operations of P2SI as it had not been profitable since being
acquired (see Note 8 - "Acquisitions" for further details).

The accompanying unaudited financial statements for the period ended December
31, 2006 have been prepared in accordance with generally accepted accounting
principles for interim financial information and with instructions to Form
10-QSB. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles as would be included in
audited financial statements and should be read in conjunction with the audited
financial statements and notes contained in the Company's Annual Report on Form
10-KSB for the year ended June 30, 2006. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. The results of operations for the three
month period ended December 31, 2006 are not necessarily indicative of the
results to be expected for the fiscal year ended June 30, 2007.
                                       6
<PAGE>
NOTE 1 - DESCRIPTION OF BUSINESS, continued

The Company has experienced losses and negative cash flows from operations since
its inception. As of December 31, 2006, it had an accumulated deficit of $27.8
million, a stockholders' deficit of $2.0 million, and its independent auditors'
report on its financial statements for fiscal year 2006 contained an explanatory
paragraph regarding its ability to continue as a going concern. Its ability to
continue as a going concern is dependent upon its ability to obtain the
necessary financing to meet its obligations and repay its liabilities when they
become due and to increase its revenue and generate profitable operations in the
future. The Company plans to continue to provide for its capital requirements
through the sale of equity or debt securities; however, it has no firm
commitments from any third parties to provide this financing and no assurance
can be provided that it will be successful in raising working capital as needed.
There are no assurances that it will have sufficient funds to execute its
business plan, pay its obligations as they become due or generate positive
operating results. If the Company is unable to raise additional capital, it may
be required to reduce or eliminate certain of its operations.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND OTHER MATTERS

Principles of Consolidation
---------------------------
The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiaries. All material intercompany transactions have been
eliminated.

Reclassifications
-----------------
Certain prior period balances have been reclassified to conform to the current
year's presentation. These reclassifications had no impact on previously
reported results of operations or stockholders' deficit.

Cash and Cash Equivalents
-------------------------
The Company considers all unrestricted deposits and highly liquid investments,
readily convertible to known amounts, with an original maturity of three months
or less, to be cash equivalents.

Property and Equipment
----------------------
Property and equipment is stated at cost. Depreciation on property and equipment
is calculated using the straight-line method over the estimated useful lives of
the assets. Expenditures for major renewals and betterments that extend the
useful lives of the assets are capitalized. Expenditures for maintenance and
repairs of the assets are charged to expense as incurred.

Income Taxes
------------
Under the asset and liability method of FASB Statement 109, deferred tax assets
and liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities, and their respective tax bases and operating loss and tax
credit carryforwards. 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. Deferred
tax assets are reduced by a valuation allowance, when in the Company's opinion
it is likely that some portion or the entire deferred tax asset will not be
realized.
                                       7
<PAGE>
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND OTHER MATTERS, continued

Revenue Recognition
-------------------
The Company follows the guidance of the Securities and Exchange Commission's
Staff Accounting Bulletin 104 for revenue recognition. In general, the Company
records revenue when persuasive evidence of an arrangement exists, services have
been rendered or product delivery has occurred, the sales price to the customer
is fixed or determinable, and collectability is reasonably assured. The
following policies reflect specific criteria for the reported revenue streams of
the Company:

         Freight transportation revenue consists of the total dollar value of
         services purchased from us by our customers. The Company recognizes
         freight transportation revenue when shipments of goods reach their
         destinations and the receiver of the goods acknowledges their receipt
         by signing a bill of lading. At that time, our obligations to the
         customer are completed and collection of receivables is reasonably
         assured. Emerging Issues Task Force Issue No. 99-19, "Reporting Revenue
         Gross as a Principal versus Net as an Agent", establishes the criteria
         for recognizing revenues on a gross or net basis. When we provide these
         freight transportation services, we are the primary obligor, we are a
         principal to the transaction not an agent, we have the risk of loss for
         collection, we have discretion to select the supplier when we do not
         supply the services and we have latitude in pricing decisions.

Stock-Based Compensation
------------------------
The Company previously accounted for stock-based compensation issued to its
employees using the intrinsic value method. Accordingly, compensation cost for
stock options issued was measured as the excess, if any, of the fair value of
our common stock at the date of grant over the exercise price of the options.
The pro forma net loss and per share amounts as if the fair value method had
been applied to employee stock options granted are presented below for the six
months ended December 31, 2005 and the actual net loss and per share amounts are
presented below for the six months ended December 31, 2006 in accordance with
the Company's adoption of SFAS 123(R) effective January 1, 2006.

For purposes of the following disclosures during the transition period of
adoption of SFAS 123(R), the weighted-average fair value of options has been
estimated on the date of grant using the Black-Scholes option pricing model with
the following weighted average assumptions used for grants for the six months
ended December 31, 2006: no dividend yield; expected volatility of 174%; risk
free interest rate of 4.5%; and the actual term of options granted. Had the
compensation cost for the six months ended December 31, 2005 been determined
based on the fair value at the grant dates, our net loss and basic and diluted
loss per share would have been reduced to the pro forma amount for that period










                                       8
<PAGE>
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND OTHER MATTERS, continued

indicated in the table below. For the six months ended December 31, 2006, the
net loss and loss per share reflect the actual deduction for option expense as
compensation. Compensation recorded for stock options is a non-cash expense
item.
<TABLE>
<CAPTION>
                                                                      Six Months Ended         Six Months Ended
                                                                      December 31, 2006        December 31, 2005
                                                                      -----------------        -----------------
<S>                                                                      <C>                      <C>
Loss available to common shareholders, as reported                       $ (3,091,470)            $ (2,202,461)

Less: Stock-based employee compensation expense
      determined under fair value based method, net of
      related tax effects                                                           -                  (25,908)

Net loss                                                                 $ (3,091,470)            $ (2,228,369)

Loss per share:
  Basic and diluted - as reported                                        $       (.03)            $       (.03)

  Basic and diluted - pro forma                                          $       (.03)            $       (.03)
</TABLE>

Use of Estimates
----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.

Impairment of long-lived assets
-------------------------------
The Company evaluates the recoverability and carrying value of its long-lived
assets at each balance sheet date, based on guidance issued in SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets." Among other
factors considered in such evaluation is the historical and projected operating
performance of business operations, the operating environment and business
strategy, competitive information and market trends. At December 31, 2006, the
Company had no assets which were considered to be impaired.

Research and Development
------------------------
Research and development costs are expensed as incurred. No research and
development expenses were incurred for the six months ended December 31, 2006
and 2005.

Computer Software and Web Site Development Costs
------------------------------------------------
The Company has adopted the provisions of AICPA Statement of Position ("SOP")
98-1, Accounting for the Costs of Software Developed or Obtained for Internal
Use, and Emerging Issues Task Force ("EITF") Consensus #00-2, Accounting for Web
Site Development Costs. The type of costs incurred by the Company in developing
its internal use software and Web site include, but are not limited to, payroll
and payroll-related costs (e.g. fringe benefits) for employees who devote time
to the internal use computer software or Web site project, consulting fees, the
price of computer software purchased from third parties and travel expenses
incurred by employees or consultants in their duties directly associated with
                                       9
<PAGE>
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND OTHER MATTERS, continued

developing the software. These costs are either expensed or capitalized
depending on the type of cost and the stage of development of the software and
Web site. SOP 98-1 and EITF #00-2 define three stages of development:

       - the preliminary or planning stage includes all activities related to
         conceptualizing, evaluating and selecting the alternatives for
         implementing the project including, but not limited to, developing a
         project plan, determining desired functionalities and content,
         identifying required hardware and software tools and selecting external
         vendors and consultants. All internal and external costs during the
         preliminary project stage are expensed as incurred.

       - the application and infrastructure development stage begins immediately
         upon conclusion of the preliminary or planning stage and includes, but
         is not limited to, all activities related to designing the software
         configuration and software interfaces, acquiring or customizing the
         software necessary to build the application, coding, hardware
         installation and testing, including parallel processing. Generally, any
         internal and external costs incurred during the application and
         infrastructure development stage are capitalized and amortized on a
         straight-line basis over the estimated economic life of the software of
         three to five years. General and administrative costs and overhead
         costs are not capitalized. Amortization for each module or component of
         software begins after all substantial testing is completed and it is
         deemed to be ready for its intended use. The only exception to
         beginning amortization at that time would be if the functionality of
         that module or component is entirely dependent on the completion of
         other modules or component in which case the amortization would begin
         when both the module and the other modules upon which it is
         functionally dependent are ready for their intended use.

       - the post-implementation/operation stage includes, but is not limited
         to, activities related to training, user administration, application
         maintenance, system backups, routine security reviews, the costs of
         which are expensed as incurred. Also, upgrades and enhancements that
         result in additional functionality may occur during this stage, the
         costs of which are amortized on a straight-line basis over the
         estimated economic life of the upgrade or enhancement of three to five
         years.

At December 31, 2006, the net book value of capitalized software was $1,156,451.
Amortization expense was $27,046 for the six months ended December 31, 2006
and 2005.

The Company makes ongoing evaluations of the recoverability of its capitalized
internal use software and Web site by comparing the amount capitalized for each
module or component of software to their estimated net realizable values. If
such evaluations indicate that the unamortized costs exceed the net realizable
values, the Company writes off the amount by which the unamortized costs exceed
the net realizable values.

Concentrations of Credit Risk and Accounts Receivable
-----------------------------------------------------
Financial assets that potentially subject the Company to significant
concentrations of credit risk consist primarily of cash and cash equivalents and
accounts receivable. The Company's investment policy is to invest in low risk,
highly liquid investments. The Company does not believe it is exposed to any
significant credit risk in its cash investments.
                                       10
<PAGE>
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND OTHER MATTERS, continued

The Company maintains its cash balances at financial institutions that are
insured by the Federal Deposit Insurance Corporation or the Securities Investor
Protection Corporation up to $100,000 per institution. At December 31, 2006, the
Company's cash balances exceeded the insured limits by approximately $140,000.
The Company has not experienced any losses in such accounts and believes it is
not exposed to any significant credit risk on cash on deposit.

The Company performs on-going credit evaluations of its customer base including
those that represent its accounts receivable at December 31, 2006. The Company
maintains reserves for potential credit losses and such losses historically have
been within management's expectations.

NOTE 3 - CONCENTRATIONS

During the period ended December 31, 2006, one customer accounted for $3,062,341
or approximately 64% of the Company's revenue and that same customer accounted
for $252,614 or approximately 17% of accounts receivable as of December 31,
2006. No other customer accounted for more than 10% of revenue or accounts
receivable.

NOTE 4 - NOTE RECEIVABLE

In May 2005, the Company loaned $50,000 to an unrelated third party that issued
the Company a short-term promissory note with a term of sixty days and an
interest rate of 10%. The note was repaid with interest in October 2005.

NOTE 5 - INTANGIBLE ASSETS

In October 2006, the Company entered into an Amendment to a License Agreement
dated March 1, 2005 with EF Marketing, LLC and Emerson Fittipaldi. The Amendment
included provisions providing the Company with the exclusive right to use the
property licensed from EF Marketing globally rather than solely in the United
States and its territories and the right to change its corporate name to include
the name Fittipaldi. Also, the term of the License Agreement was changed from 5
years to an ongoing basis. In consideration for these and other amendments, the
Company agreed to provide EF Marketing with a percentage of the net operating
cash (as defined in the Amendment) generated by the Company's operations, a
five-year warrant to purchase 8,000,000 shares of its common stock at an
exercise price of $0.025 per share. The Company valued the warrant utilizing the
Black-Scholes options pricing model at approximately $0.049 per share or
$393,097 and, accordingly, recorded an intangible asset of $393,097.

In March 2005, the Company allocated $89,874 of the purchase price for certain
assets of Commodity Express Transportation, Inc. These intangible assets are
being amortized over their estimated useful lives of 5 years. In March 2006, the
Company determined that the net realizable value of the intangible assets of
Commodity Express Transportation, Inc. should be reduced to $45,925 and recorded
$43,949 of impairments to intangible assets.

Also, in March 2005, the Company allocated $334,600 of the purchase price for
certain assets of GFC, Inc. to intangible assets attributable to the customer
lists of these businesses. These intangible assets were being amortized over
their estimated useful lives of 5 years. In March 2006, the Company entered into
a settlement agreement and mutual release with the parties that sold it the GFC
assets in which the Company agreed to issue the seller 300,000 shares of its
common stock valued at $38,700 and to pay the seller a total of $36,000 over two
years in full settlement of the $191,667 outstanding balance of the purchase
price. Based on this settlement, the Company determined that the net realizable
value of the intangible assets purchased from GFC should be reduced to $220,933
and recorded a $113,667 impairment to intangible assets. Power2Ship Intermodal
                                       11
<PAGE>
NOTE 5 - INTANGIBLE ASSETS, continued

ceased operations effective June 30, 2006 and the Company recorded a $185,578
impairment to reduce the intangible assets to $0.

In July and August, 2004, the Company entered into Intellectual Property
Assignment Agreements with three of its executives pursuant to which each of
them assigned to the Company all of their right, title and interest in and to
all the intellectual property which they had contributed to the Company in the
past in consideration for an aggregate of 600,000 shares of the Company's common
stock that was issued in January 2005. The Company believes that there are no
other parties with any claims to any right, title and interest in and to any of
the Company's intellectual property. The shares issued in this transaction were
valued at their fair market value of $226,000 and recorded as an intangible
asset which was amortized over its estimated useful life of 24 months from the
effective dates of the Intellectual Property Assignment Agreements.

The Company recorded amortization expense for its intangible assets for the six
months ended December 31, 2006 and 2005 of $31,115 and $41,262, respectively. At
December 31, 2006, future amortization expense for these intangible assets was
as follows:

                                                2007               $   43,629
                                                2008                   87,259
                                                2009                   87,259
                                                2010                   85,102
                                                2011                   78,619
                                                2012                   22,933
                                                                   ----------
                                                                   $  404,801
                                                                   ==========
NOTE 6 - NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE

As of December 31, 2006, the balance on the Company's revolving line of credit
with Branch Banking and Trust Company was $708,191.

As of December 31, 2006, the Company owed $44,624 to a vendor for software
maintenance services of which $23,280 was recorded as short term, and $21,344 as
long term, notes payable.

As of December 31, 2006, the sole holder of the Company's Series B 5% secured
convertible debentures had converted $250,000 of the debentures into 5,725,248
shares of common stock leaving an outstanding balance of $1,750,000. These
debentures were not repaid when due in June and September 2006. In January 2007,
the Company reached agreement with the debenture holder with respect to these
debentures and $350,000 of its 14.25% secured convertible debentures due
December 31, 2006 also held by the same party (see Note 10 - "Subsequent Events"
for additional information related to these debentures).

During the six months ended December 31, 2006, three debenture holders converted
an aggregate of $325,000 principal amount of Series D 8% unsecured convertible
debentures, and $8,898 of accrued interest thereon, into 15,737,074 shares of
common stock and three debenture holders exchanged an aggregate of $250,000 of
these debentures into $250,000 of Series D convertible preferred stock. The
outstanding balance of the debentures as of December 31, 2006 was $365,000.

During the six months ended December 31, 2006, two debenture holders converted
an aggregate of $105,000 principal amount of Series C 10% unsecured, convertible
debentures, and $11,549 of accrued interest thereon, into 5,827,440 shares of
common stock and two debenture holders exchanged an aggregate of $40,000 of
these debentures into $40,000 of Series D convertible preferred stock. The
outstanding balance of the Series C convertible debentures as of December 31,
2006 was $0.
                                       12
<PAGE>
NOTE 6 - NOTES PAYABLE AND CONVERTIBLE NOTES PAYABLE, continued

During the six months ended December 31, 2006, the Company did not repay any
of its liability to the seller of GFC, Inc. As of December 31, 2006, the
outstanding balance of the liability to the seller was $31,500 of which $18,000
is recorded as current notes payable and $13,500 as long term notes payable.

In September 2006, the Company entered into a Separation and Severance Agreement
with the Chairman in which he agreed to settle all outstanding claims against
the Company, including a $115,000 8% convertible promissory note and accrued
interest thereon, and to permit the cancellation of all options previously
granted to him, in consideration for $20,000 and a five-year warrant to purchase
11,000,000 shares of common stock for $0.025 per share.

In August 2006, the Company issued a $40,000 short-term 10% promissory note to
one accredited investor. In October 2006, the holder exchanged the $40,000 note
for 1.6 shares of the Series D convertible preferred stock.

In July 2006, the Company issued $36,000 short-term 10% promissory notes to five
accredited investors. In October 2006, one holder exchanged a $10,000 note for
0.4 shares of the Series D convertible preferred stock and the other four
holders exchanged $26,000 of these notes for 5.2 shares of Series F convertible
preferred stock.

In June 2006, the Company issued a $50,000 short-term promissory note to one
accredited investor. The note had an interest rate of 10% and a maturity date of
September 25, 2006. In September 2006, the holder exchanged this note for two
shares of the Series D convertible preferred stock.

As of December 31, 2006 the outstanding balance of the Company's 14.25% secured
convertible debentures was $1,597,000. These debentures were not repaid when due
on December 31, 2006. If the Company receives notices of noncompliance and
potential default from one or more debenture holders, the Company would have an
obligation to rectify or otherwise receive a waiver from the debenture holders
within ten business days of such notice. Although the Company had not received
any such notices as of December 31, 2006, if notices are provided in the future
then, unless rectified or the debenture holders provide waivers, the Company
would be in default under its agreements with, and obligations to, such
debenture holders. Any default could accelerate the Company's obligations to the
debenture holders of the remaining principal amount together with all accrued
and unpaid interest thereon and perhaps other obligations owed to other parties.
We cannot assure you that we would be in a position to arrange alternative
financing to satisfy these obligations in the event of a default and, if not,
the debenture holders could foreclose on the Company's tangible and intangible
assets securing the debentures which could result in the termination of some or
all of the Company's operations (see Note 10 - "Subsequent Events" for
additional information related to these debentures).

As of December 31, 2006, $175,000 of an 8% unsecured convertible promissory
note, and accrued interest thereon, due on June 30, 2006 had not been paid. The
note holder has notified the Company that it is seeking full repayment. We are
seeking to negotiate a settlement with the note holder but cannot assure you
that we will be able to do so and, may not be in a position to arrange
alternative financing to satisfy this note and obligations to other parties that
may become accelerated.

NOTE 7 - STOCKHOLDERS' DEFICIT

Preferred Stock
---------------
In December 2006, the Company issued six shares of Series G preferred stock upon
conversion of $150,000 10% short-term promissory notes to three debenture
                                       13
<PAGE>
NOTE 7 - STOCKHOLDERS' DEFICIT, continued

holders and issued 4,000,000 shares of common stock upon conversion of four of
these shares. As of December 31, 2006, there were 2 shares of Series G
convertible preferred stock issued and outstanding.

During the six months ended December 31, 2006, the Company issued approximately
140 shares of Series F convertible preferred stock of which approximately 135
shares were purchased for $673,500 and approximately five shares were issued
upon conversion of $26,000 10% short-term promissory notes by four note holders.
As of December 31, 2006, there were approximately 140 shares of Series F
convertible preferred stock issued and outstanding.

During the six months ended December 31, 2006, the Company issued 40 shares of
its Series D convertible preferred stock consisting of:

         -  26.4 shares issued for $660,000; and

         -  13.6 shares issued upon the exchange of $250,000 of Series D 8%
            unsecured convertible debentures by three debenture holders, the
            exchange of $40,000 of Series C 10% unsecured convertible debentures
            by two debenture holders and the exchange of a $50,000 10% unsecured
            short-term promissory note by one note holder.

In October 2006, one preferred stockholder converted two shares of Series D
convertible preferred stock into 2,000,000 shares of common stock. As of
December 31, 2006, there were 38 shares of Series D convertible preferred stock
issued and outstanding.

During the six months ended December 31, 2006, two preferred stockholders
converted 4,000 shares of Series B convertible preferred stock into 80,000
shares of common stock. As of December 31, 2006, there were 151,600 shares of
Series B convertible preferred stock issued and outstanding.

Common Stock
------------
During the six months ended December 31, 2006, the Company issued an aggregate
of 32,433,911 shares of its common stock consisting of:

         -  4,000,000 shares issued upon conversion of four shares of Series G
            convertible preferred stock by two preferred stockholders;

         -  2,000,000 shares issued upon conversion of two shares of Series D
            convertible preferred stock by one preferred stockholder;

         -  80,000 shares issued upon the conversion of 4,000 shares of Series B
            convertible preferred stock by two preferred stockholders.

         -  15,737,074 shares issued upon conversion of $325,000 Series D 8%
            unsecured convertible debentures and accrued interest to three
            debenture holders;

         -  4,166,245 shares issued upon the conversion of $150,000 Series B 5%
            secured convertible debentures to its sole debenture holder;

         -  5,827,440 shares issued upon conversion of $105,000 of 10%
            short-term promissory notes and accrued interest to two note
            holders;

         -  500,000 shares issued in connection with the exercise of stock
            warrants at $0.025 per share for $12,500; and

                                       14
<PAGE>
NOTE 7 - STOCKHOLDERS' DEFICIT, continued

         -  123,152 shares issued for consulting services that were valued at
            their fair market value on the date of grant of $0.095 per share or
            $11,699 and recorded as stock-based consulting expense.

Options and Warrants
--------------------
The Company's board of directors has the authority to determine when and to whom
it grants options and warrants to purchase shares of the Company's common stock.
In addition, the board determines the number of options and warrants to be
granted and all other terms and conditions related to these securities such as
the recipients' vesting schedules, expiration dates, exercise prices and
restrictions.

Stock options
-------------
The Company adopted SFAS 123(R), "Accounting for Stock-Based Compensation",
effective March 31, 2006. Accordingly, the Company now measures the cost of
employee services received in exchange for stock options based on the grant-date
fair value of the options. This cost is recognized over the vesting period, if
any, specified in the stock option agreement. Prior to adopting SFAS 123(R), the
Company had chosen to account for stock-based compensation using the intrinsic
value method prescribed by Accounting Principles Board Opinion No. 25 in which
the cost of employee stock options was measured as the excess, if any, of the
estimated fair value of the Company's stock on the grant date over the exercise
price of the stock options.

During the six months ended December 31, 2006, the Company granted five-year
options to purchase an aggregate of 35,000,000 shares of common stock with an
exercise price of $0.025 per share in connection with employment agreements with
two of its officers, both of which also are directors, and three employees. The
Company accounts for stock options issued to employees in accordance with the
provisions of SFAS 123R and related interpretations. The fair value of these
option grants were estimated on the dates they were granted using the
Black-Scholes option-pricing model with the following weighted-average
assumptions: dividend yield of 0%; expected volatility of 199%; risk-free
interest rate of 4.39% to 4.67% and an expected holding period of five years. In
connection with these options, the Company recorded stock-based compensation
expense of $208,778 for the six months ended December 31, 2006.

In September 2006, the Company entered into a Separation and Severance Agreement
with the Company's previous Chief Executive Officer in which he agreed to the
cancellation of 5,785,392 options previously granted to him and settled all
outstanding claims with the Company, primarily a convertible promissory note and
accrued interest thereon of $147,241 and accrued salary of $292,495, in
consideration for a future payment of $20,000 and a warrant to purchase
11,000,000 shares of common stock for $0.025 per share that expires in five
years. The Company valued the warrant utilizing the Black-Scholes options
pricing model at approximately $0.048 per share or $534,600 and recorded a net
loss on forgiveness of debt of $94,864.

In October 2006, the Company granted five-year options to purchase 9,900,000
shares of common stock at an exercise price of $.025 per share to some of its
employees. The Company accounts for stock options issued to employees in




                                       15
<PAGE>
NOTE 7 - STOCKHOLDERS' DEFICIT, continued

accordance with the provisions of SFAS 123R and related interpretations. The
fair value of this option grant was estimated on the date of grant using the
Black-Scholes option-pricing model with the following weighted-average
assumptions: dividend yield of 0%; expected volatility of 199%; risk-free
interest rate of 4.8% and an expected holding period of five years. In
connection with these options, the Company recorded stock-based compensation
expense of $146,891 for the six months ended December 31, 2006. Simultaneously
with the granting of these options, the Company cancelled options to its
employees to purchase an aggregate of 3,146,033 shares of its common stock for
prices ranging from $0.15 to $0.52 per share expiring from 2006 through 2008.

In November 2006, the Company granted a five-year stock option to purchase
250,000 shares of its common stock at an exercise price of $.025 per share to
one of its employees. The Company accounts for stock options issued to employees
in accordance with the provisions of SFAS 123R and related interpretations. The
fair value of this option grant was estimated on the date of grant using the
Black-Scholes option-pricing model with the following weighted-average
assumptions: dividend yield of 0%; expected volatility of 199%; risk-free
interest rate of 4.6% and an expected holding period of five years. In
connection with these options, the Company recorded stock-based compensation
expense of $766 for the six months ended December 31, 2006.
<TABLE>
<CAPTION>
A summary of the stock option activity is as follows:

                                                                                    Weighted
                                                                                    Average
                                                                                    Exercise       Number       Exercise Price
                                                                                      Price      of Options       Per Option
                                                                                      -----      ----------       ----------
<S>                                                                                  <C>         <C>            <C>     <C>
       Outstanding options at June 30, 2006                                          $0.35       13,600,741     $0.15 - $1.01
       Granted.........................................................              $0.025      45,150,000         $0.025
       Expired.........................................................              $0.43         (265,516)    $0.38 - $0.50
       Cancelled.......................................................              $0.34       (8,931,425)    $0.15 - $0.52
                                                                                                 ----------
       Outstanding options at December 31, 2006                                      $0.06       49,553,800     $0.025 - $1.01
                                                                                                 ==========
       Exercisable options at December 31, 2006                                      $0.06       40,244,425     $0.025 - $1.01
                                                                                                 ==========
</TABLE>
The following table summarizes information concerning stock options outstanding
and exercisable at December 31, 2006:
<TABLE>
<CAPTION>
                                  Options Outstanding                                         Options Exercisable
          -------------------------------------------------------------------------    ---------------------------------
                                                      Weighted
                                                      Average            Weighted                              Weighted
                                                     Remaining           Average                               Average
             Range of             Number             Contractual         Exercise            Number            Exercise
          Exercise Price       Outstanding              Life              Price           Exercisable           Price
          ---------------    ----------------      --------------      -----------     -----------------     -----------
<S>       <C>                      <C>                 <C>             <C>                    <C>            <C>
          $        0.025           45,150,000          4.78 Years      $     0.025            35,840,625     $     0.025
              0.15 -0.40            4,103,800          0.72 Years             0.34             4,103,800            0.34
                    1.01              300,000          0.80 Years             1.01               300,000            1.01
                             ----------------                          -----------     -----------------     -----------
                                   49,553,800                          $      0.06            40,244,425     $      0.06
                             ================                          ===========     =================     ===========
</TABLE>
                                       16
<PAGE>
NOTE 7 - STOCKHOLDERS' DEFICIT, continued

Warrants
--------
In September 2006, the Company entered into a Separation and Severance Agreement
with the Company's previous Chief Executive Officer in which he settled all
outstanding claims with the Company, including a convertible promissory note and
accrued interest thereon, and agreed to the cancellation of 5,785,392 options
previously granted to him in consideration for $20,000 and a warrant to purchase
11,000,000 shares of common stock for $0.025 per share that expires in five
years. The Company valued the warrant utilizing the Black-Scholes options
pricing model at approximately $0.048 per share or $534,600

In October 2006, the Company entered into an Amendment to the License Agreement
dated March 1, 2005 with EF Marketing, LLC and Emerson Fittipaldi. The Amendment
included provisions providing the Company with the exclusive right to use the
property licensed from EF Marketing globally rather than solely in the United
States and its territories and the right to change its corporate name to include
the name Fittipaldi. Also, the term of the License Agreement was changed from 5
years to an ongoing basis. In consideration for these and other amendments, the
Company agreed to provide EF Marketing with a percentage of the net operating
cash (as defined in the Amendment) generated by the Company's operations, a
five-year warrant to purchase 8,000,000 shares of its common stock at an
exercise price of $0.025 per share. The Company valued the warrant utilizing the
Black-Scholes options pricing model at approximately $0.049 per share or
$393,097 and, accordingly, recorded an intangible asset of $393,097.

In November 2006, the Company reduced the exercise prices of warrants held by
one investor to purchase an aggregate of 718,375 shares of common stock to $.025
per share and changed their expiration dates to November 17, 2006. During the
six months ended December 31, 2006, the warrant holder exercised warrants to
purchase 500,000 shares for $12,500 and the Company cancelled the remaining
warrants to purchase 218,375 shares.

On November 29, 2006, the Company granted a three-year warrant to purchase
100,000 shares of common stock to a consultant at an exercise price of $.025 per
share. The Company valued these warrants utilizing the Black-Scholes options
pricing model at approximately $0.047 or $4,725 and recorded a stock-based
consulting expense of $4,725 for the six months ended December 31, 2006.
<TABLE>
<CAPTION>
A summary of the warrant activity is as follows:
                                                                                          Weighted
                                                                                          Average
                                                                                          Exercise    Number of   Exercise Price
                                                                                            Price     Warrants      Per Warrant
                                                                                            -----     --------      -----------
<S>                                                                                        <C>        <C>          <C>     <C>
Outstanding warrants at June 30, 2006                                                      $ 0.13     59,912,536   $0.05 - $2.00
Granted..............................................................                      $0.025     19,100,000       $0.025
Exercise.............................................................                      $0.025       (500,000)      $0.025
Cancelled............................................................                          --       (218,375)      $ 0.80
Expired..............................................................                       $0.63     (1,280,850)  $0.05 - $2.00
                                                                                                      ----------
Outstanding warrants at December 31, 2006                                                   $0.10     77,013,311   $0.025 - $0.75
                                                                                                      ==========
Exercisable warrants at December 31, 2006                                                   $0.10     75,602,200   $0.025 - $0.75
                                                                                                      ==========
</TABLE>
                                       17
<PAGE>
NOTE 7 - STOCKHOLDERS' DEFICIT, continued

The following table summarizes information concerning warrants outstanding at
December 31, 2006:
<TABLE>
<CAPTION>
                                                                          Weighted               Weighted
                                                                          Average                Average
                                                                         Remaining               Exercise
             Range of Exercise Price       Number of Warrants          Life in Years              Price
             -----------------------       ------------------          -------------              -----
<S>              <C>       <C>                 <C>                          <C>                  <C>
                 $ 0.025 - $0.15               71,884,627                   2.54                 $  0.08
                  $ 0.20 - $0.50                4,828,684                   1.19                 $  0.40
                      $ 0.75                      300,000                   2.17                 $  0.75
                                              -----------
                                               77,013,311
                                              ===========
</TABLE>
The following table summarizes information concerning warrants exercisable at
December 31, 2006:
<TABLE>
<CAPTION>
                                                                          Weighted
                                                                          Average
                                                                          Exercise
             Range of Exercise Price       Number of Warrants              Price
             -----------------------       ------------------              -----
<S>               <C>       <C>                <C>                         <C>
                  $ 0.025 - 0.15               71,273,516                  $0.08
                  $ 0.20 - $0.50                4,028,684                  $0.38
                      $ 0.75                      300,000                  $0.75
                                               ----------
                                               75,602,200
                                               ==========
</TABLE>
NOTE 8 - ACQUISITIONS

In March 2005, a wholly owned subsidiary of the Company, Commodity Express
Transportation, Inc., purchased certain assets, including customer lists,
maintenance equipment, office equipment, telecommunications equipment, certain
contracts, five vehicles/trucks, and assumed certain liabilities of Commodity
Express Transportation, Inc., a South Carolina company, for a purchase price of
$100,000 in cash and the assumption of liabilities in the amount of $193,655
(see Note 5 "Intangible Assets" for further details). In addition, upon closing
this transaction, the Company replaced certain deposits and a letter of credit
previously made or issued on the seller's behalf with third parties in the
aggregate amount of approximately $145,000 related to the operation of the
seller's business and, after closing, replaced approximately $20,000 of
additional letters of credit. The Company also assumed certain leases related to
the operation of the seller's business, including tractor leases, owner/operator
leases and a warehouse lease. At the closing of this transaction, the Company
entered into a(n):

         -  equipment lease agreement whereby the Company agreed to lease
from the seller certain trailers for terms ranging from twelve to sixty months;

         -  commercial lease pursuant to which the Company agreed to rent
from the seller the commercial property used as the corporate offices for
Commodity Express Transportation for a term of five years for $4,200 per month
with a one-year renewal option for $5,040 per month;

                                       18
<PAGE>
NOTE 8 - ACQUISITIONS, continued

         -  agreement with TPS Logistics, Inc., a company in the
transportation brokerage business in which the president of Commodity Express
Transportation is an officer, to be the exclusive carrier for TPS' largest
customer in consideration for one percent of the gross receipts from such
customer for a term that will terminate on the earlier of March 20, 2010 or when
the agreement between TPS and its largest customer is no longer effective;

         -  consulting agreement with Stokes Logistics Consulting, LLC, a
company in which the president of Commodity Express Transportation is a
principal, having a term of five years which may be extended for two successive
one year terms upon consent of both parties, pursuant to which he will be paid a
monthly consulting fee based upon gross revenue of Commodity Express
Transportation, with the minimum and maximum payable in any one year of $100,000
and $200,000, respectively;

         -  employment agreement with W.A. Stokes, president of Commodity
Express Transportation, having a term of one year which may be extended for two
additional one year terms, pursuant to which he will be paid an annual base
salary of $150,000 and a quarterly bonus based on the gross revenue that Mr.
Stokes is responsible for generating from facilities operated by its current
largest customer other than its South Carolina facility;

         - escrow agreement pursuant to which the Company deposited all the
shares of its wholly owned subsidiary that acquired the assets of Commodity
Express Transportation into an escrow account until March 21, 2007 during which
period the Company retains voting rights over these securities except in the
event of a default under the escrow agreement, which would occur if the net
worth of Commodity Express Transportation dropped below certain levels or if the
Company was delinquent in its payments under the equipment or commercial lease
agreements, consulting agreement or agreement with TPS Logistics, Inc. described
above, in which case(s) the seller would have the right to assume control of
Commodity Express Transportation until such default(s) had been cured; and

         - fee assumption agreement pursuant to which the Company agreed to
assume the seller's liability to pay the business broker involved with this
transaction $100,000 which the Company paid at the closing with the issuance of
370,370 shares of our common stock.

In March 2005, a wholly owned subsidiary of the Company, Power2Ship Intermodal,
Inc., purchased certain assets, including trucking and brokerage authority
permits, contracts with shipping customers, contracts with agents, lease
contracts with owner-operators and escrow deposits from owner-operators and
agents from GFC, Inc., a South Carolina company, for a purchase price of
$300,000, of which $100,000 was paid by canceling the $100,000 secured
promissory note made by the seller to the Company, and $200,000 is to be paid in
twenty-four equal monthly payments of $8,333.33 subject to partial or full
acceleration based on the gross freight revenue of Power2Ship Intermodal
generated during the one month period commencing on March 21, 2006 and the
assumption of those obligations corresponding to owner-operator and agent escrow
deposits. In addition, the Company issued the seller a three-year warrant to
purchase 200,000 shares of the Company's common stock for $.30 per share, which
vests 50% on the closing date and 50% on the one year anniversary of the closing
date which was valued at $34,600 using the fair value estimated on the date of
the grant using the Black-Scholes option-pricing model. In March 2006, the
Company entered into a Settlement Agreement and Mutual General Release that,
among other terms and conditions, the $191,667 outstanding balance of the
promissory note made by the Company to the seller was settled for $30,000,
payable $1,500 per month over consecutive 24 months, and 300,000 shares of the
Company's common stock valued at its fair market value of $42,000. Effective
June 30, 2006, the operations of Power2Ship Intermodal, Inc. ceased to exist
(see Note 5 "Intangible Assets" for further details).
                                       19
<PAGE>
NOTE 8 - ACQUISITIONS, continued

Also, in conjunction with the acquisition of certain assets from GFC, the
Company entered into a consulting agreement with Michael Allora, the former
president of GFC, with a term of five years and automatic one-year extensions
unless terminated prior thereto. The agreement provides for Mr. Allora to earn a
commission based on the annual increases, if any, in the gross revenue of the
acquired business with such commission to be paid in five equal annual
installments as well as a three-year stock option at the end of each yearly
period during which the annual gross revenue of the acquired business has
increased from the prior year and is in excess of $10,000,000. This agreement
was terminated in September 2005 due to certain breaches by Mr. Allora.

NOTE 9 - RELATED PARTY TRANSACTIONS

In September 2006, Richard Hersh resigned as Chief Executive Officer of the
Company and entered into a separation and severance agreement in which he agreed
to the cancellation of all his outstanding options, including options to
purchase an aggregate of 6,182,642 shares of the Company's common stock
exercisable at prices ranging from $0.25 to $0.38 per share and an option to
purchase 10% of the common stock of the Company's subsidiary Commodity Express
Transportation, Inc. for $60,000, to forgive a convertible promissory note with
a principal balance of $115,000 and accrued interest of $32,241, to forego
$313,201 in accrued compensation, and to settle any other claims with, or
obligations by, the Company, in consideration for a future payment of $20,000
and a warrant to purchase 11,000,000 shares of common stock for $0.025 per share
that expires in five years. In addition, Mr. Hersh entered into a consulting
agreement with the Company that has a term of five years and a monthly
consulting fee of $10,000. He will advise the Company's management and board of
directors on various business matters including identifying and introducing the
Company to prospective investors, lenders, strategic partners, acquisition and
merger candidates and joint venture partners.

In September 2006, the Company's Board of Directors elected David S. Brooks
Chief Executive Officer of the Company. Mr. Brooks entered into an employment
agreement with the Company having a term of two years with one-year renewals
thereafter unless terminated by either party prior thereto. Mr. Brooks' annual
base salary of $150,000 may be deferred until the Company has raised an
aggregate of $3,000,000 and he received an option to purchase 9,000,000 shares
of common stock for $0.025 per share that expires in five years. In August 2006,
Mr. Brooks purchased one share of the Company's Series D convertible preferred
stock for $25,000 in a private transaction and in October 2006 purchased five
shares of the Company's Series F convertible preferred stock for $25,000 in a
private transaction.

In September 2006, the Company's Board of Directors elected S. Kevin Yates Chief
Operating Officer of the Company. Mr. Yates entered into an employment agreement
with the Company having a term of two years with one-year renewals thereafter
unless terminated by either party prior thereto. Mr. Yates' annual base salary
of $150,000 may be deferred until the Company has raised an aggregate of
$3,000,000 and he received an option to purchase 9,000,000 shares of common
stock for $0.025 per share that expires in five years.

In September 2006, the Company terminated for cause its employment agreement
with Michael Darden, its President. Thereafter, Mr. Darden resigned as a
Director from the Company and its subsidiaries. In October 2006, Mr. Darden
filed a lawsuit in Broward County, Florida naming as defendant Freight Rate,
Inc. d/b/a Power2Ship, Inc. and alleging breach of his employment agreement. The
complaint states that Mr. Darden was damaged pursuant to the termination of his
employment agreement in the amount of $306,428.

In November 2006, the Company filed a counterclaim with the court alleging that
Mr. Darden embezzled $0.05 million from the Company, breached his employment
agreement, defamed the Company, committed tortuous interference with the
                                       20
<PAGE>
NOTE 9 - RELATED PARTY TRANSACTIONS, continued

Company's business relations and prospective business opportunities, breached
his fiduciary duties and committed civil theft.

In August 2006, David S. Brooks and Kevin Yates, the Company's current Chief
Executive Officer and Chief Operating Officer, respectively, entered into a
consulting agreement to provide the Company with business advisory services
including strategic evaluation, planning and advice, fund-raising support, sales
and marketing support, contract negotiation and business development. The term
of the agreement was 12 months with an optional six-month extension. Subject to
the successful completion of various financing activities the Company is
pursuing, the Company agreed to pay each of them a fee of $100,000.

NOTE 10 - SUBSEQUENT EVENTS

In January 2007, the Company:

     -   entered into an agreement with the holder of $350,000 of 14.25% secured
         convertible debentures and $1,750,000 of 5% Series B secured
         convertible debentures pursuant to which the debenture holder agreed
         not to exercise its rights of conversion under, or accrue further
         interest on, the aforementioned debentures until June 30, 2007, subject
         to the Company repaying the debenture holder the $350,000 outstanding
         balance of 14.25% secured convertible debentures over a four month
         period commencing February 1, 2007 and paying the debenture holder a
         lump sum of $2,000,000 and issuing the debenture holder 13,000,000
         shares of its common stock by June 30, 2007 in full settlement of all
         obligations related to the $1,750,000 remaining balance of 5% Series B
         secured convertible debentures payments;

     -   issued approximately 70 shares of its Series H convertible preferred
         stock to one accredited investor in consideration for the exchange of
         $69,898 of the Company's 14.25% secured convertible debentures and
         accrued interest thereon. The preferred stock is convertible into the
         Company's common stock at the greater of a) 100% of the average of the
         three lowest closing bid prices of the Company's common stock, as
         quoted by Bloomberg, LP, for the ten (10) trading days immediately
         preceding the date the Company receives a conversion notice from the
         preferred stockholder or b) $0.025 per share;

     -   issued 28.5 shares of its Series F convertible preferred stock to nine
         accredited investors for $82,500 and the exchange of $60,000 of the
         Company's 14.25% secured convertible debentures. The preferred stock is
         convertible into the Company's common stock at $0.025 per share;

     -   repaid $50,000 of principal to one holder of its 14.25% secured
         convertible debentures;

     -   entered into agreements with five holders of an aggregate of $230,000
         of its 14.25% secured convertible debentures to extend the maturity
         dates of their debentures to June 30, 2007 primarily in consideration
         for a reduction in the conversion price of the debentures from $0.2673
         to $0.025 per share; and

     -   issued 12,557,778 shares of common stock upon the conversion of
         $250,000 of 14.25% secured convertible debentures and $11,156 of
         accrued interest by two debenture holders.

In February 2007, the Company issued 3.44 million shares of common stock to one
stockholder upon the conversion of $0.086 million Series F convertible preferred
stock.
                                       21
<PAGE>
NOTE 10 - SUBSEQUENT EVENTS, continued

On February 14, 2007, the Company received a letter from the holder of $100,000
of 14.25% secured convertible debentures demanding full repayment of principal
and accrued interest within 10 business days. The Company is seeking to raise
sufficient capital to satisfy this demand within the prescribed time period.
However, the Company currently has no commitments for such financing and, should
it be unable to satisfy this demand in time, then the debenture would be in
default. In the event of default, the debenture holder could seek to collect
from the collateral securing the debenture which includes certain of the
Company's tangible and intangible assets. Further, any default could accelerate
the Company's obligations to all remaining debenture holders of 14.25% secured
convertible debentures together with all accrued interest thereon and perhaps
other obligations owed to other parties. The Company currently has no
commitments for such financing and cannot assure you that it would be in a
position to arrange alternative financing to satisfy these obligations in the
event of a default and, if not, could result in the Company reorganizing to seek
protection from its creditors or in having to terminate some or all of its
operations.









































                                       22
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

         The following discussion and analysis of financial condition and
results of our operations should be read in conjunction with the consolidated
financial statements and the notes to those statements included elsewhere in
this report. The figures and percentages in Item 2 are approximations that have
been rounded for presentation purposes.

Forward-looking Information

         This quarterly report on Form 10-QSB, including the discussion and
analysis of our financial condition and results of operations and our
disclosures about market risk, contain certain "forward-looking statements."
These statements represent our expectations, beliefs, intentions, or strategies
concerning future events and by their nature involve risks and uncertainties.
Forward-looking statements include, among others, statements about our future
performance, the continuation of historical trends, the sufficiency of our
sources of capital for future needs, the expected impact of recently issued
accounting pronouncements, and the outcome or effects of litigation. Risks that
could cause actual results to differ materially from our current expectations
include changes in market demand and pricing for our services, the impact of
competition, changes in relationships with our customers, our ability to obtain
sufficient carrier capacity at competitive rates to transport freight, our
ability to retain shippers willing to have us move their freight, the risks
associated with litigation and insurance coverage, the impacts of war on the
economy, and changing economic conditions. Therefore, actual results may differ
materially from our expectations based on these and other risks and
uncertainties.

Critical Accounting Policies

         Financial Reporting Release No. 60, which was released by the SEC,
requires all companies to include a discussion of critical accounting policies
or methods used in the preparation of financial statements. Note 2 to our
consolidated financial statements includes a summary of the significant
accounting policies and methods used in the preparation of our consolidated
financial statements. The following is a brief discussion of the more
significant accounting policies and methods used by us:

         -  General. The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities and the reported
amounts of revenues and expenses. Actual results could differ from those
estimates.

         -  Revenue Recognition. The Company recognizes freight transportation
revenue when shipments reach their destinations and the receiver acknowledges
the receipt of goods by signing a bill of lading.

OVERVIEW

         In March 2005 we acquired certain assets and liabilities of Commodity
Express Transportation, Inc., a South Carolina company, and GFC, Inc., a South
                                       23
<PAGE>
Carolina company. The consolidated financial statements and accompanying notes
thereto included elsewhere in this report reflect the assets, liabilities and
results of operations of these two acquisitions from their respective dates of
acquisition. These two transactions have substantially increased both our
revenues and operating expenses.

         For the fiscal years ended June 30, 2006 and 2005 and the six months
ended December 31, 2006 and 2005, virtually all of our revenue was generated by
providing freight transportation services. Revenue from freight transportation
services includes the total dollar value of services purchased from us by our
customers. We provide freight transportation for our shipper customers using our
own transportation equipment (asset based), on transportation equipment of
owner-operators which are affiliated with our subsidiary CXT as well as numerous
unaffiliated independent carriers located throughout the United States
(non-asset based). We are a principal in the transaction to transport the
freight. By accepting our customer's order, we accept certain responsibilities
for transportation of the load from its origin to its destination. In instances
when we arrange for transportation of the load by an unaffiliated independent
carrier, the carrier's contract is with our company, not our shipper customer,
and we are responsible for prompt payment of carrier charges. We are also
generally responsible to our shipper customer for any claims for damage to
freight while in transit. The price we charge for these freight transportation
services depends largely upon the prices charged by our competitors as well as
upon several factors, including the distance the freight is being transported,
the type of transportation equipment required to move the freight, the distance
that equipment is from the origin of the freight and whether or not that
equipment is available in our fleet, the value of the freight and the
availability of loads near the locations where the freight is to be delivered.

         To a lesser extent, we have historically generated revenues from access
services and implementation services. For the fiscal years ended June 30, 2006
and 2005, less than 1% of our total revenue was attributable to revenue from
access services and we reported no revenue during these periods from
implementation services. For the six months ended December 31, 2006, we reported
no revenue from access or implementation services. Access services revenue
represents revenue generated from the unlimited use of the information available
through our proprietary application for a fixed monthly fee. Implementation
services include design, programming and testing of custom developed interfaces
that permit our proprietary application to communicate and share data with a
customer's existing computer software. While we market these services to our
existing and potential customer base, we cannot predict if we will report
significant revenue from either access services or implementation services in
any future periods.

         During fiscal years ended June 30, 2006 and 2005, revenue generated
from one customer represented 53% and 40%, respectively, of our freight
transportation revenue. For the six months ended December 31, 2006, this same
customer accounted for 62% of our revenue. Because our agreement with that
customer can be terminated upon a 30 days notice to us, our dependence on
revenues from this customer puts us at risk until such time, if ever, that we
can diversify our revenue base. In order to lessen the risks to us from this
dependence on a single customer, we are marketing our services to potential
shipper customer and companies involved in freight security to the maximum
extent permitted by our limited sales and marketing budget.

         Effective June 30, 2006, management decided to cease the operations of
Power2Ship Intermodal as it had been unprofitable since its acquisition.
Excluding changes in revenue and costs by our other operations, we expect this
event to result in freight transportation revenue and expenses for fiscal year
2007 decreasing by $3.2 million, selling, general and administrative expenses

                                       24
<PAGE>
being reduced by $0.06 million and our interest expense declining by $0.06
million.

         Most of our revenue during fiscal year 2007 is expected to be generated
by the assets of a freight transportation company we acquired in March 2005
which now comprise the operations of our CXT subsidiary. CXT is a freight
transportation services provider serving customers located in the southeastern
United States. Its freight transportation services are provided by independent
truck owner-operators under contract with CXT or by independent drivers that
utilize tractors and trailers provided by CXT and other trucking companies
arranged by CXT's freight transportation brokerage.

         Another potential source of revenue may be generated for incorporating
our secure, wireless, Internet-based system as a component in the security
solutions being developed by other companies to counteract the threat of
terrorism. Our system is capable of capturing and processing data transmitted
wirelessly from other technologies that may be part of any comprehensive
security system. Examples of these technologies include radio-frequency
identification (RFID) tags fastened to the outside of containers and/or
trailers, smart tags affixed to the goods inside shipping containers, and
electronic seals applied at the time the container is loaded. Further, our
system has the ability to alert a truck's owner or authorities if a vehicle
deviates from its designated route. Because our application was designed to
provide economic benefit to the transportation industry, we believe that it is
uniquely suited to providing a Homeland Security solution without causing
onerous expense to either the private or public sector.

         During the remainder of fiscal year 2007, our greatest challenge will
be raising sufficient capital to fund our ongoing operations, pay our past due
obligations and other obligations as they become due and continue to implement
our business model (see "Liquidity and Capital Resources" for additional
information).

         While we have deferred certain employees' compensation and reduced or
eliminated certain non-essential personnel and administrative costs, if we are
unable to secure additional capital as needed we may be unable to satisfy this
secured and unsecured debt which could adversely affect our ability to continue
our operations as presently conducted, as well as severely limit our ability to
diversify our revenue sources. If we are unable to satisfy the secured debt when
it becomes due, the holders could foreclose on our assets and we would be forced
to cease our operations.

RESULTS OF OPERATIONS

Six Months Ended December 31, 2006 compared to the Six Months Ended December 31,
2005

Revenue

         Total revenue generated during the six months ended December 31, 2006
decreased by $5.04 million or 31% compared with total revenue generated during
the six months ended December 31, 2005. The decrease in revenue for the six
months ended December 31, 2006 included decreases of:

     -   $3.74 million or 98% in freight transportation revenue generated by
         Power2Ship Intermodal, Inc. and the Company's Florida-based freight
         brokerage operation which ceased operations in July 2006;

     -   $1.3 million or 10.5% in freight transportation revenue generated by
         Commodity Express Transportation, Inc. due to a decrease in shipments
                                       25
<PAGE>
         during the last four months of 2006 by our largest customer as a result
         of normal seasonal fluctuations combined with inventory adjustments by
         customers of our largest customer.

         Management expects revenue to increase in the remainder of fiscal year
2007 compared with the first half of fiscal year 2007 due to normal seasonal
increases in demand. Most of our revenue is expected to be generated from
providing freight transportation services using our fleet of tractors and
trailers and from our freight brokerage operations. In addition, we expect to
generate revenue in fiscal year 2007 by providing logistics consulting and
implementation services to large shipper customers such as Averitt Express.
Another source of revenue projected for the latter half of fiscal year 2007 is
providing logistics consulting and implementation services to countries outside
the United States such as Brazil where we are expecting to begin operations in
fiscal year 2007. Finally, we are seeking, subject to the availability of
sufficient financing, to increase our revenue by acquiring one or more trucking
or third party logistics companies. We have entered into one acquisition
agreement as of the date of this quarterly report but provide no assurances that
such acquisition or any others will be consummated.

Operating Expenses

         Total operating expenses incurred during the six months ended December
31, 2006 decreased by $4.5 million or 26% compared with the six months ended
December 31, 2005. The decrease during the six months ended December 31, 2006
primarily was attributed to decreases of:

     -   $4.14 million or 29% in freight transportation expenses, consisting of
         direct costs associated with transporting freight either with our own
         trucks or through non-affiliated trucking companies we hired to move
         loads for our shipper customers, as compared with the three months
         ended December 31, 2005. This decrease was attributed to decreases of:

         -   $1.73 million or 96% by Power2Ship Intermodal, Inc. due to it
             having ceased operations in July 2006

         -   $1.58 million or 100% by the Company's Florida-based freight
             brokerage operation which was merged into Commodity Express
             Transportation, Inc. in the fourth quarter of fiscal year 2006 and

         -   $0.83 million or 7.5% by Commodity Express Transportation, Inc.
             associated with its lower revenue. This percentage decrease in
             freight transportation expense was lower than the percentage
             decrease in revenue reflecting a decrease in the gross margin on
             freight transportation services to 9.2% for the six months ended
             December 31, 2006 versus 10.7% for the six months ended December
             31, 2005.

     -   $0.384 million or 12% in selling, general and administrative expenses
         as compared with the six months ended December 31, 2005 primarily was
         attributed to:

         -   a decrease of $0.304 million or 15% in salaries, benefits and
             consulting fees consisting of:

              -  Salaries and benefits which decreased by $0.22 million or 15%
                 to $1.26 million during the six months ended December 31, 2006
                 from $1.48 million during the six months ended December 31,
                 2005. This decrease was attributed primarily to the elimination
                 of employees of Power2Ship Intermodal, Inc. and the Company's

                                       26
<PAGE>
                 Florida-based freight brokerage operation which ceased
                 operations in July 2006 as well as to a decrease in the number
                 and salaries of certain non-essential administrative and
                 support personnel; and

              -  Consulting fees which decreased by $0.08 million or 16% in the
                 six months ended December 31, 2006 to $0.44 million from $0.52
                 million during the six months ended December 31, 2005. This
                 decrease was a result of a reduction in the quantity of, and
                 fees charged by, consultants engaged by the Company.

                  Management expects salaries and consulting expenses during the
              second half of fiscal year 2007 to be comparable to those incurred
              during the first half.

              -   a decrease of $0.08 million or 7% in other selling, general
                  and administrative expenses during the six months ended
                  December 31, 2006 as compared with the six months ended
                  December 31, 2005. The largest contributors to this decrease
                  included a:

                  -  decrease of $0.042 million or 73% by Power2Ship Intermodal,
                     Inc. due to it having ceased operations in July 2006 and a

                  -  decrease of $0.136 million or 21% by the Company's
                     Florida-based operation primarily attributed to a:

                      -    $0.073 million or 92% decrease in Web hosting
                           expenses as a result of our hosting the system
                           in-house;

                      -    $0.047 million or 83% decrease in amortization
                           of our intellectual property as the amortization
                           period for these intangible assets ended in July and
                           August 2006;

                      -    $0.025 million or 85% decrease in bank service
                           charges resulting primarily from transaction fees
                           incurred to electronically pay our carriers which
                           stopped when we ceased operations; and

                      -    $0.021 million or 35% decrease in travel
                           expenses as we reduced the number of sales-related
                           trips to prospective customers, conventions and trade
                           shows;

                      which partially were offset by a $0.052 increase in legal
              fees; and

              -   an increase of $0.097 million or 22% by Commodity Express
                  Transportation, Inc. which included:

                      -   $0.031 million increase in taxes and licenses due to
                          an increase in the number of owned tractors and
                          trailers;

                      -   $0.025 increase in corporate allocations

                      -   $0.02 increase in administrative expenses primarily
                          due to hiring of one additional administrative
                          employee; and a
                                       27
<PAGE>
                      -   $0.021 million or 25% increase in South Carolina
                          income tax expense

         Management expects other selling, general and administrative expenses
during the second half of fiscal year 2007 to be comparable to those incurred
during the first half.

Other Income (Expenses)

         Total other expenses increased by $0.366 million or 44% during the six
months ended December 31, 2006 as compared with the six months ended December
31, 2005. This increase primarily resulted from increases in interest expense,
net of interest income, of $0.263 million or 32%, loss on forgiveness of debt of
$0.095 million expense and loss on asset disposal of $0.025 million partially
offset by an increase in other income of $0.017 million.

         The increase in interest expense primarily was associated with the
conversion of $0.575 million of Series D convertible debentures in the first
half of fiscal year 2007 resulting in the acceleration of interest expense
associated with these debentures.

         The increase in loss on forgiveness of debt is attributed to the
Separation and Severance Agreement with Richard Hersh, the Company's previous
Chief Executive Officer. The value of the five-year warrant to purchase
11,000,000 shares of common stock for $0.025 per share utilizing the
Black-Scholes options pricing model of approximately $0.048 per share or
$534,600 exceeded the aggregate amount of the convertible promissory note and
accrued interest thereon of $147,241 and accrued salary of $292,495 forgiven by
Mr. Hersh, resulting in a net loss on forgiveness of debt of $94,864.

         Management expects other expenses during the second half of fiscal 2007
to be substantially lower than during the first half of fiscal 2007 primarily
due to a reduction in interest expense associated with the conversion,
forgiveness and repayment of debt during fiscal 2007. During fiscal year 2007,
an aggregate of $1.4 million of debt was converted, forgiven or repaid. Also, we
currently are offering the holders of $1.2 million of our 14.25% secured
convertible debentures to exchange their debentures for our convertible
preferred stock and are negotiating with the holder of $0.175 million principal
amount of our 8% unsecured convertible promissory note to exchange the holder's
debenture for our equity securities. However, we cannot provide any assurance
that such exchanges will occur or such negotiations will be successful and, if
not, if we can raise sufficient capital to satisfy the obligations related to
these debentures and promissory note. Further, if outstanding debt is
re-structured or replaced with other debt, then interest expense could increase
as a result of costs incurred in such lending arrangements that may include
higher interest rates, penalties and other transaction fees.

LIQUIDITY AND CAPITAL RESOURCES

         We have experienced losses and negative cash flows from operations
since our inception. As of December 31, 2006, we had an accumulated deficit of
$27.8 million, a stockholders' deficit of $2.0 million, and our independent
auditors' report on our financial statements for fiscal year 2006 contained an
explanatory paragraph regarding our ability to continue as a going concern. Our
ability to continue as a going concern is dependent upon our ability to obtain
the necessary financing to meet our obligations and repay our liabilities when
they become due and to increase our revenues and generate profitable operations
in the future. We plan to continue to provide for our capital requirements
through the sale of equity or debt securities; however, we have no firm
commitments from any third party to provide this financing and we cannot assure
you we will be successful in raising working capital as needed. There are no
assurances that we will have sufficient funds to execute our business plan, pay
our obligations as they become due or generate positive operating results. If we
                                       28
<PAGE>
are unable to raise additional capital, we may be required to reduce or
eliminate certain of our operations.

         At December 31, 2006, we had a working capital deficit of approximately
$4.1 million as compared with a working capital deficit of $4.85 at June 30,
2006. This approximate $0.75 million reduction in our working capital deficit
during these six months was attributed to a decrease of $1.21 million decrease
in current assets which was more than offset by a decrease in current
liabilities of $1.96 million. The decrease in current assets consisted of
decreases in accounts receivable of $1.26 million primarily due to our decrease
in revenue and in prepaid insurance of $0.05 million partially offset by an
increase of $0.1 million in cash. The decrease in current liabilities consisted
of decreases in short term notes payable of $0.195 million, the current portion
of convertible notes payable of $0.03 million, convertible note payable to
related party of $0.115 million, the outstanding balance of our line of credit
of $0.204 million, accounts payable and accrued expenses of $1.33 million
primarily due to our decrease in revenue and a $0.2 million reduction in accrued
interest to the holder of our Series B 5% convertible debentures, and accrued
salaries of $0.088 million primarily associated with the forgiveness by our
Chairman and former Chief Executive Officer pursuant to his Separation and
Severance Agreement.

         During the six months ended December 31, 2006, our cash balance
increased by $0.1 million. This increase resulted from $1.32 million provided by
financing activities less $1.05 million used in operating activities and $0.17
used in investing activities. This compares with an increase in our cash balance
of $0.36 million during the six months ended December 31, 2005 as a result of
$1.77 million provided by financing activities less $1.15 million used in
operating activities and $0.26 used in investing activities.

         During the six months ended December 31, 2006, the $1.05 million used
in operating activities consisted of our net loss of $3.09 million that was
offset by non-cash expenses including depreciation, amortization, loss on asset
disposal and forgiveness of debt and issuances of stock options and warrants for
services and conversions of $1.68 million and a decrease in cash used for
operating assets and liabilities of $0.36 million. This compares with the $1.15
million used in operating activities during the six months ended December 31,
2005 which consisted of our net loss of $2.2 million that was offset by non-cash
expenses including depreciation, amortization, a change in the allowance for
doubtful accounts and issuances of our common stock, options and warrants as
payment for services, interest and compensation of $0.98 million and an increase
in cash used for operating assets and liabilities of $0.07 million.

         The $0.165 million used in investing activities during the six months
ended December 31, 2006 consisted of $0.15 million of software development costs
and $0.015 million for purchases of property and equipment. This compares with
$0.264 million used in investing activities during the six months ended December
31, 2005 which consisted of $0.187 million of software development costs and
$0.077 million for purchases of property and equipment. Software development
costs primarily consist of the salaries of our information technology employees
who are continually enhancing and making modifications to our internal use
software. These costs are expected to remain relatively constant for the
remainder of fiscal year 2007.

         During the six months ended December 31, 2006, the $1.32 million
generated from financing activities consisted of $1.33 million from the issuance
of convertible preferred stock, $0.18 million from the issuance of promissory
notes and $0.01 million received from the exercise of warrants less $0.2 million
repaid on our line of credit. This compares with $1.77 million provided by
financing activities during the six months ended December 31, 2005 which
                                       29
<PAGE>
consisted of $0.83 million from the issuance of common stock and warrants, $0.72
million from the issuance of promissory notes, $0.05 million from repayment of a
loan to a third party and $0.17 million borrowed from our revolving line of
credit.

         We have a $3.0 million revolving line of credit secured by our accounts
receivable with BB&T Corporation. This facility had a balance on December 31,
2006 of $0.86 million and is in effect until the end of February 2007.

         As of December 31, 2006, we were past due on the repayment of principal
and interest with respect to $1.75 million principal amount of Series B 5%
secured convertible debentures held by one investor. In January 2007, we entered
into an agreement with this investor to pay $2.0 million and 13.0 million shares
of our common stock by June 30, 2007 in full settlement of all obligations
related to these debentures. We intend to repay these debentures with the
proceeds from the sale of our securities. However, we currently have no
commitments for such financing and there can be no assurance that acceptable
financing to repay our debentures can be obtained on suitable terms, if at all.
In the event that we are unable to obtain such financing, the debenture holder
could foreclose on the Company's tangible and intangible assets securing the
debentures which could result in the termination of some or all of the Company's
operations (see Note 10 - "Subsequent Events" for additional information related
to these debentures).

         Also, as of December 31, 2006, we were past due on the repayment of
principal and interest with respect to $0.175 million principal amount of 8%
unsecured convertible promissory note held by one investor. We are negotiating
with the investor to convert or exchange up to the entire amount of the note for
our equity securities or to extend its maturity date. However, we currently have
no commitment for converting, exchanging or extending the maturity date of this
note and there can be no assurance that, in the event the holder does not
convert, exchange or extend the maturity date of the note, that acceptable
financing to repay this note can be obtained on suitable terms, if at all.

         Further, as of December 31, 2006, $1.6 million of our 14.25% secured
convertible debentures, and $0.11 million of interest accrued thereon, were due
and payable. Since January 1, 2007, we have repaid $0.05 million of principal
and $0.02 million of interest, exchanged $0.065 million of the debentures for
Series H convertible preferred stock and extended the maturity dates of an
aggregate of $0.23 million of the debentures to June 30, 2007. Also, in January
2007 we entered into an agreement with one debenture holder to repay $0.35
million of the debentures over a four month period commencing February 1, 2007.
Further, we are offering the remaining debenture holders the ability to exchange
their debentures for our convertible preferred stock or to extend the maturity
dates. However, we currently have no commitments for converting, exchanging or
extending the maturity dates of the debentures and there can be no assurance
that, in the event the holders do not convert, exchange or extend the maturity
dates of the debentures, that acceptable financing to repay these debentures can
be obtained on suitable terms, if at all.

         On February 14, 2007, the Company received a letter from the holder of
$100,000 of 14.25% secured convertible debentures demanding full repayment of
principal and accrued interest within 10 business days. The Company is seeking
to raise sufficient capital to satisfy this demand within the prescribed time
period. However, the Company currently has no commitments for such financing
and, should it be unable to satisfy this demand in time, then the debenture
would be in default. In the event of default, the debenture holder could seek to
collect from the collateral securing the debenture which includes certain of the
Company's tangible and intangible assets. Further, any default could accelerate
the Company's obligations to all remaining debenture holders of 14.25% secured
convertible debentures together with all accrued interest thereon and perhaps
other obligations owed to other parties. The Company currently has no
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<PAGE>
commitments for such financing and cannot assure you that it would be in a
position to arrange alternative financing to satisfy these obligations in the
event of a default and, if not, could result in the Company reorganizing to seek
protection from its creditors or in having to terminate some or all of its
operations.

         Our future capital requirements depend primarily on the rate at which
we can decrease our use of cash to fund operations. Cash used for operations
will be affected by numerous known and unknown risks and uncertainties
including, but not limited to, our ability to successfully market our products
and services, the degree to which competitive products and services are
introduced to the market, and our ability to attract key personnel as we grow.
As long as our cash flow from operations remains insufficient to completely fund
operations, we will continue depleting our financial resources and seeking
additional capital through equity and/or debt financing. We estimate that our
cash on hand at December 31, 2006 and our receipt since then of $142,500 in net
proceeds from sales of shares of our Series F convertible preferred stock and
additional borrowings from our revolving credit facility, should fund our
operating activities for approximately 30 days from the date of filing this
report. Thereafter, we will need additional working capital to fund our
operations or may be forced to curtail some or all of our operations. However,
we currently have no commitments for such working capital and there can be no
assurance that such commitments will be obtained on a timely basis on suitable
terms, if at all.

ITEM 3. CONTROLS AND PROCEDURES

         As required by Rule 13a-15 under the Securities Exchange Act of 1934,
as of the end of the period covered by this report, being December 31, 2006, we
have carried out an evaluation of the effectiveness of the design and operation
of our company's disclosure controls and procedures. This evaluation was carried
out under the supervision and with the participation of our company's
management, including our company's Chief Executive Officer. Based upon that
evaluation, our company's Chief Executive Officer concluded that our company's
disclosure controls and procedures are effective. There have been no changes in
our internal controls over financial reporting that occurred during the period
covered by this quarterly report that have materially affected, or are
reasonably likely to materially affect, our internal controls over financial
reporting.

         Disclosure controls and procedures and other procedures that are
designed to ensure that information required to be disclosed in our reports
filed or submitted under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported, within the time period specified in the
Securities and Exchange Commission's rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed in our reports filed under the
Securities Exchange Act of 1934 is accumulated and communicated to management
including our Chief Executive Officer as appropriate, to allow timely decisions
regarding required disclosure.










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<PAGE>
PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         In October, 2006, Michael J. Darden, former President and Director of
the Company, filed a lawsuit in the Circuit Court in Broward County, Florida
(Case No. 0616408) naming as defendant Freight Rate, Inc. d/b/a Power2Ship, Inc.
alleging that the Company breached his employment agreement. The complaint
states that Mr. Darden was damaged pursuant to the termination of his employment
agreement in the amount of $0.306 million. In November 2006, the Company filed a
counterclaim with the court alleging that Mr. Darden embezzled $0.05 million
from the Company, breached his employment agreement, defamed the Company,
committed tortuous interference with the Company's business relations and
prospective business opportunities, breached his fiduciary duties and committed
civil theft.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

         In January and February 2007, we sold an aggregate of 22.5 shares of
Series F convertible preferred stock to eight accredited investors in a private
placement exempt from registration under the Securities Act of 1933 (the
"Securities Act") in reliance on Section 4(2) of that act. We paid no sales
commissions for these sales and received proceeds of $0.11 million. No general
solicitation or advertising was used in connection with this offering, and the
certificates evidencing the securities that were issued contained a legend
restricting their transferability absent registration under the Securities Act
or the availability of an applicable exemption therefrom. The purchasers
represented that they were acquiring the securities for investment purposes
only, and not with a view towards distribution or resale except in compliance
with applicable securities laws.

         In January 2007, we exchanged approximately 70 shares of Series H
convertible preferred stock for $0.07 million of our 14.25% secured convertible
debentures and accrued interest thereon to one accredited investor in a private
placement exempt from registration under the Securities Act in reliance on
Section 3(a)9 of that act. We paid no sales commissions for this exchange. No
general solicitation or advertising was used in connection with this offering,
and the certificates evidencing the securities that were issued contained a
legend restricting their transferability absent registration under the
Securities Act or the availability of an applicable exemption therefrom. The
purchasers represented that they were acquiring the securities for investment
purposes only, and not with a view towards distribution or resale except in
compliance with applicable securities laws.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

     None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None.

ITEM 5.  OTHER INFORMATION

     None.



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<PAGE>
ITEM 6.  EXHIBITS

(a)  Exhibits

     31.1     Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

     31.2     Rule 13a-14(a)/15d-14(a) Certification of Principal Financial and
              Accounting Officer

     31.2     Certification of Chief Executive Officer and Principal Financial
              and Accounting Officer pursuant to 18 U.S.C. Section 1350


















































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<PAGE>
                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


Date:  February 20, 2007
                                      FITTIPALDI LOGISTICS, INC.

                                      By: /s/ David S. Brooks
                                          -------------------
                                          David S. Brooks
                                          Chief Executive Officer, principal
                                          executive officer and principal
                                          financial and accounting officer













































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