SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549




FORM
10-Q




x QUARTERLY REPORT
UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934




For the
quarterly period ended: September 30, 2009




 ̈ TRANSITION REPORT
UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934




For the
transition period from ___________ to _____________




Commission
File Number: 000-50283





RADIANT LOGISTICS,
INC.


(Exact
Name of Registrant as Specified in Its Charter)





Delaware
                    
                    04-3625550(State
      or Other Jurisdiction of
                      Incorporation
      or Organization)
                    
                    (IRS
      Employer Identification
No.)





1227 120th Avenue
N.E., Bellevue, WA 98005





(Address
of Principal Executive Offices)





(425)
943-4599





(Issuer’s
Telephone Number, including Area Code)





N/A





(Former
Name, Former Address, and Former Fiscal Year, if Changed Since Last
Report)





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act 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 has submitted electronically and posted on its corporate Web site, if
any, every Interactive Data File required to be submitted and posted pursuant to
Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12
months (or for such shorter period that the registrant was required to submit
and post such files).Yes  ̈ No  ̈





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of large accelerated filer, accelerated filer and smaller reporting
company in Rule 12b-2 of the Exchange Act. (Check one):





Large
      accelerated filer   ̈
            Accelerated
      filer  ̈Non-accelerated
      filer     ̈
            Smaller
      reporting company x(Do
      not check if a smaller reporting
company)





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





There
were 32,463,810 issued and outstanding shares of the registrant’s common stock,
par value $.001 per share, as of November 13, 2009.


1




RADIANT
LOGISTICS, INC.


TABLE
OF CONTENTS




PART
      I. FINANCIAL INFORMATIONItem
      1.
                                  Condensed
      Consolidated Financial Statements  - Unaudited.Condensed
      Consolidated Balance Sheets at September 30, 2009 and June 30,
      2009
                                  3Condensed
      Consolidated Statements of Operations for the three months ended September
      30, 2009 and 2008
                                  4Condensed
      Consolidated Statement of Stockholders’ Equity for the three months
      ended  September 30, 2009
                                  5Condensed
      Consolidated Statements of Cash Flows for the three months ended September
      30, 2009 and 2008
                                  6Notes
      to Condensed Consolidated Financial Statements
                                  8Item
      2.
                                  Management’s
      Discussion and Analysis of Financial Conditions and Results of
      Operations.
                                  19Item
      4T.
                                  Controls
      and Procedures.
                                  31PART
      II OTHER INFORMATIONItem
      2.
                                  Unregistered
      Sales of Equity Securities and Use of Proceeds.
                                  32Item
      6.
                                  Exhibits
                                  32


2


RADIANT
LOGISTICS, INC.


Condensed
Consolidated Balance Sheets


(unaudited)





September 30,
                                                          
                                                          
                                                          June 30,2009
                                                          
                                                          
                                                          2009ASSETSCurrent
      assets:Cash
      and cash equivalents
                                                          
                                                          $
                                                          809,778
                                                          
                                                          
                                                          $
                                                          890,572Accounts
      receivable, net of allowance of $787,711 and $754,578,
      respectively
                                                          
                                                          
                                                          19,408,004
                                                          
                                                          
                                                          
                                                          17,275,387Current
      portion of employee loan receivable and other receivables
                                                          
                                                          
                                                          450,171
                                                          
                                                          
                                                          
                                                          613,288Income
      tax deposit
                                                          
                                                          
                                                          405,866
                                                          
                                                          
                                                          
                                                          535,074Prepaid
      expenses and other current assets
                                                          
                                                          
                                                          463,696
                                                          
                                                          
                                                          
                                                          305,643Deferred
      tax asset
                                                          
                                                          
                                                          418,966
                                                          
                                                          
                                                          
                                                          427,713Total
      current assets
                                                          
                                                          
                                                          21,956,481
                                                          
                                                          
                                                          
                                                          20,047,677Furniture
      and equipment, net
                                                          
                                                          
                                                          663,741
                                                          
                                                          
                                                          
                                                          760,507Acquired
      intangibles, net
                                                          
                                                          
                                                          2,870,719
                                                          
                                                          
                                                          
                                                          3,179,043Goodwill
                                                          
                                                          
                                                          494,291
                                                          
                                                          
                                                          
                                                          337,000Employee
      loan receivable, net of current portion
                                                          
                                                          
                                                          40,000
                                                          
                                                          
                                                          
                                                          40,000Investment
      in real estate
                                                          
                                                          
                                                          40,000
                                                          
                                                          
                                                          
                                                          40,000Deposits
      and other assets
                                                          
                                                          
                                                          336,557
                                                          
                                                          
                                                          
                                                          359,606Total
      long term assets
                                                          
                                                          
                                                          3,781,567
                                                          
                                                          
                                                          
                                                          3,955,649Total
      assets
                                                          
                                                          $
                                                          26,401,789
                                                          
                                                          
                                                          $
                                                          24,763,833LIABILITIES
      AND STOCKHOLDERS' EQUITY (DEFICIT)Current
      liabilities:Accounts
      payable and accrued transportation costs
                                                          
                                                          $
                                                          14,075,519
                                                          
                                                          
                                                          $
                                                          13,249,628Commissions
      payable
                                                          
                                                          
                                                          1,764,717
                                                          
                                                          
                                                          
                                                          1,323,004Other
      accrued costs
                                                          
                                                          
                                                          542,240
                                                          
                                                          
                                                          
                                                          472,202Due
      to former Adcom shareholder
                                                          
                                                          
                                                          2,008,923
                                                          
                                                          
                                                          
                                                          2,153,721Total
      current liabilities
                                                          
                                                          
                                                          18,391,399
                                                          
                                                          
                                                          
                                                          17,198,555Long
      term debt
                                                          
                                                          
                                                          8,582,371
                                                          
                                                          
                                                          
                                                          7,869,110Deferred
      tax liability
                                                          
                                                          
                                                          283,577
                                                          
                                                          
                                                          
                                                          352,387Total
      long term liabilities
                                                          
                                                          
                                                          8,865,948
                                                          
                                                          
                                                          
                                                          8,221,497Total
      liabilities
                                                          
                                                          
                                                          27,257,347
                                                          
                                                          
                                                          
                                                          25,420,052Stockholders'
      equity (deficit):Radiant
      Logistics, Inc. stockholders' equity (deficit):Preferred
      stock, $0.001 par value, 5,000,000 shares authorized; no shares issued or
      outstanding
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          -Common
      stock, $0.001 par value, 50,000,000 shares
      authorized,  32,757,310 and 34,106,960 shares issued and
      outstanding, respectively
                                                          
                                                          
                                                          16,157
                                                          
                                                          
                                                          
                                                          16,157Additional
      paid-in capital
                                                          
                                                          
                                                          7,943,665
                                                          
                                                          
                                                          
                                                          7,889,458Treasury
      stock, at cost, 1,944,650 and 595,000 shares, respectively
                                                          
                                                          
                                                          (528,886
                                                          )
                                                          
                                                          
                                                          (138,250
                                                          )Retained
      deficit
                                                          
                                                          
                                                          (8,309,441
                                                          )
                                                          
                                                          
                                                          (8,425,491
                                                          )Total
      Radiant Logistics, Inc. stockholders’ equity (deficit)
                                                          
                                                          
                                                          (878,505
                                                          )
                                                          
                                                          
                                                          (658,126
                                                          )Non-controlling
      interest
                                                          
                                                          
                                                          22,947
                                                          
                                                          
                                                          
                                                          1,907Total
      stockholders’ equity (deficit)
                                                          
                                                          
                                                          (855,558
                                                          )
                                                          
                                                          
                                                          (656,219
                                                          )Total
      liabilities and stockholders’ equity (deficit)
                                                          
                                                          $
                                                          26,401,789
                                                          
                                                          
                                                          $
                                                          24,763,833





The
accompanying notes form an integral part of these condensed consolidated
financial statements.


3


RADIANT
LOGISTICS, INC.


Condensed
Consolidated Statements of Operations


(unaudited)





THREE MONTHS ENDED
                                        SEPTEMBER 30,2009
                                      
                                      
                                      2008Revenue
                                      
                                      $
                                      34,028,336
                                      
                                      
                                      $
                                      32,403,220Cost
      of transportation
                                      
                                      
                                      23,479,447
                                      
                                      
                                      
                                      21,219,498Net
      revenue
                                      
                                      
                                      10,548,889
                                      
                                      
                                      
                                      11,183,722Agent
      commissions
                                      
                                      
                                      7,455,206
                                      
                                      
                                      
                                      7,553,153Personnel
      costs
                                      
                                      
                                      1,422,397
                                      
                                      
                                      
                                      1,613,699Selling,
      general and administrative expenses
                                      
                                      
                                      1,096,273
                                      
                                      
                                      
                                      1,117,033Depreciation
      and amortization
                                      
                                      
                                      409,781
                                      
                                      
                                      
                                      315,356Restructuring
      charges
                                      
                                      
                                      -
                                      
                                      
                                      
                                      220,000Total
      operating expenses
                                      
                                      
                                      10,383,657
                                      
                                      
                                      
                                      10,819,241Income
      from operations
                                      
                                      
                                      165,232
                                      
                                      
                                      
                                      364,481Other
      income (expense):Interest
      income
                                      
                                      
                                      1,184
                                      
                                      
                                      
                                      988Interest
      expense
                                      
                                      
                                      (56,508
                                      )
                                      
                                      
                                      (25,697
                                      )Other
                                      
                                      
                                      98,309
                                      
                                      
                                      
                                      53,084Total
      other income
                                      
                                      
                                      42,985
                                      
                                      
                                      
                                      28,375Income
      before income tax expense
                                      
                                      
                                      208,217
                                      
                                      
                                      
                                      392,856Income
      tax expense
                                      
                                      
                                      (71,127
                                      )
                                      
                                      
                                      (152,659
                                      )Net
      income
                                      
                                      
                                      137,090
                                      
                                      
                                      
                                      240,197Less:
      Net (income) loss attributable to non-controlling interest
                                      
                                      
                                      (21,040
                                      )
                                      
                                      
                                      9,990Net
      income attributable to Radiant Logistics, Inc.
                                      
                                      $
                                      116,050
                                      
                                      
                                      $
                                      250,187Net
      income  per common share – basic
                                      
                                      $
                                      .00
                                      
                                      
                                      $
                                      .01Net
      income  per common share – diluted
                                      
                                      $
                                      .00
                                      
                                      
                                      $
                                      .01Weighted
      average shares outstanding:Basic
      shares
                                      
                                      
                                      33,367,940
                                      
                                      
                                      
                                      34,695,166Diluted
      shares
                                      
                                      
                                      33,548,186
                                      
                                      
                                      
                                      34,800,257




The
accompanying notes form an integral part of these condensed consolidated
financial statements.


4




RADIANT
LOGISTICS, INC.


Condensed
Consolidated Statement of Stockholders’ Equity


(unaudited)





RADIANT LOGISTICS, INC. STOCKHOLDERSCOMMON STOCK
                                
                                
                                ADDITIONAL
                                  PAID-IN
                                
                                
                                TREASURY
                                
                                
                                RETAINED
                                  EARNINGS
                                
                                
                                NONCONTROLLING
                                
                                
                                TOTAL
                                  STOCKHOLDERS’SHARES
                                
                                
                                AMOUNT
                                
                                
                                CAPITAL
                                
                                
                                STOCK
                                
                                
                                (DEFICIT)
                                
                                
                                INTEREST
                                
                                
                                EQUITY (DEFICIT)Balance
      at June 30, 2009
                                
                                
                                34,106,960
                                
                                
                                $
                                16,157
                                
                                
                                $
                                7,889,458
                                
                                
                                $
                                (138,250
                                )
                                
                                $
                                (8,425,491
                                )
                                
                                $
                                1,907
                                
                                
                                $
                                (656,219
                                )Repurchase
      of common stock
                                
                                
                                (1,349,650
                                )
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (390,636
                                )
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (390,636
                                )Share-based
      compensation
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                54,207
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                54,207Net
      income for the three months ended September 30, 2009
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                116,050
                                
                                
                                
                                21,040
                                
                                
                                
                                137,090Balance
      at September 30, 2009
                                
                                
                                32,757,310
                                
                                
                                $
                                16,157
                                
                                
                                $
                                7,943,665
                                
                                
                                $
                                (528,886
                                )
                                
                                $
                                (8,309,441
                                )
                                
                                $
                                22,947
                                
                                
                                $
                                (855,558
                                )




The
accompanying notes form an integral part of these condensed consolidated
financial statements.


5


RADIANT
LOGISTICS, INC.


Condensed
Consolidated Statements of Cash Flows


(unaudited)





THREE MONTHS
                                                            ENDED
                                                            SEPTEMBER 30,
                                                            2009
                                                          
                                                          
                                                          THREE MONTHS
                                                            ENDED
                                                            SEPTEMBER 30,
                                                            2008CASH
      FLOWS PROVIDED BY (USED FOR) OPERATING ACTIVITIES:Net
      income
                                                          
                                                          $
                                                          116,050
                                                          
                                                          
                                                          $
                                                          250,187ADJUSTMENTS
      TO RECONCILE NET INCOME TO NET CASH  PROVIDED BY (USED FOR)
      OPERATING ACTIVITIES:non-cash
      compensation expense (stock options)
                                                          
                                                          
                                                          54,207
                                                          
                                                          
                                                          
                                                          47,913non-cash
      issuance of common stock (services)
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          12,084amortization
      of intangibles
                                                          
                                                          
                                                          308,324
                                                          
                                                          
                                                          
                                                          217,015deferred
      income tax expense (benefit)
                                                          
                                                          
                                                          (60,063
                                                          )
                                                          
                                                          
                                                          47,940depreciation
      and leasehold amortization
                                                          
                                                          
                                                          101,457
                                                          
                                                          
                                                          
                                                          98,341amortization
      of bank fees
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          3,414change
      in non-controlling interest of subsidiaries
                                                          
                                                          
                                                          21,040
                                                          
                                                          
                                                          
                                                          (9,990
                                                          )provision
      for doubtful accounts
                                                          
                                                          
                                                          105,413
                                                          
                                                          
                                                          
                                                          95,414CHANGE
      IN OPERATING ASSETS AND LIABILITIES:accounts
      receivable
                                                          
                                                          
                                                          (2,165,750
                                                          )
                                                          
                                                          
                                                          (163,920
                                                          )employee
      loan receivable and other receivables
                                                          
                                                          
                                                          174,947
                                                          
                                                          
                                                          
                                                          (40,326
                                                          )prepaid
      expenses and other assets
                                                          
                                                          
                                                          (135,004
                                                          )
                                                          
                                                          
                                                          152,605accounts
      payable and accrued transportation costs
                                                          
                                                          
                                                          821,616
                                                          
                                                          
                                                          
                                                          913,584commissions
      payable
                                                          
                                                          
                                                          441,713
                                                          
                                                          
                                                          
                                                          69,644other
      accrued costs
                                                          
                                                          
                                                          (209,450
                                                          )
                                                          
                                                          
                                                          230,424income
      taxes receivable/payable
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          (413,114
                                                          )income
      tax deposit
                                                          
                                                          
                                                          129,208
                                                          
                                                          
                                                          
                                                          (433,417
                                                          )Net
      cash provided by (used for) operating activities
                                                          
                                                          
                                                          (296,292
                                                          )
                                                          
                                                          
                                                          1,077,888CASH
      FLOWS USED FOR INVESTING ACTIVITIES:Acquisition
      of Adcom Express, Inc., net of acquired cash, including an additional
      $62,246 of costs incurred post-closing
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          (4,803,605
                                                          )Purchase
      of furniture and equipment
                                                          
                                                          
                                                          (4,690
                                                          )
                                                          
                                                          
                                                          (50,475
                                                          )Issuance
      of notes receivable, net of payments made
                                                          
                                                          
                                                          -
                                                          
                                                          
                                                          
                                                          (23,887
                                                          )Payments
      made to former Adcom shareholder
                                                          
                                                          
                                                          (102,437
                                                          )
                                                          
                                                          
                                                          -Net
      cash used for investing activities
                                                          
                                                          
                                                          (107,127
                                                          )
                                                          
                                                          
                                                          (4,877,967
                                                          )CASH
      FLOWS PROVIDED BY FINANCING ACTIVITIES:Proceeds
      from credit facility, net of credit fees
                                                          
                                                          
                                                          713,261
                                                          
                                                          
                                                          
                                                          4,305,403Purchases
      of treasury stock
                                                          
                                                          
                                                          (390,636
                                                          )
                                                          
                                                          
                                                          -Net
      cash provided by financing activities
                                                          
                                                          
                                                          322,625
                                                          
                                                          
                                                          
                                                          4,305,403NET
      INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
                                                          
                                                          
                                                          (80,794
                                                          )
                                                          
                                                          
                                                          505,324CASH
      AND CASH EQUIVALENTS, BEGINNING OF  THE YEAR
                                                          
                                                          
                                                          890,572
                                                          
                                                          
                                                          
                                                          392,223CASH
      AND CASH EQUIVALENTS, END OF YEAR
                                                          
                                                          $
                                                          809,778
                                                          
                                                          
                                                          $
                                                          897,547SUPPLEMENTAL
      DISCLOSURE OF CASH FLOW INFORMATION:Income
      taxes paid
                                                          
                                                          $
                                                          1,983
                                                          
                                                          
                                                          $
                                                          951,250Interest
      paid
                                                          
                                                          $
                                                          55,200
                                                          
                                                          
                                                          $
                                                          24,427




The
accompanying notes form an integral part of these condensed consolidated
financial statements.


6





RADIANT
LOGISTICS, INC.


Condensed
Consolidated Statements of Cash Flows


(unaudited)





Supplemental
disclosure of non-cash investing and financing activities:




In
September 2009, the Company finalized its purchase price allocation relating to
the acquisition of Adcom, resulting in an increase of net assets acquired by
$151,550 due to increased transaction costs and other adjustments to the fair
value of the acquired assets. The effect of this transaction was an increase to
goodwill of $157,291, with the offsetting changes to other balance sheet amounts
as follows: a decrease to the allowance for doubtful accounts of $72,280, an
increase in other receivables of $11,831, an increase in accounts payable
$4,275, an increase of other accrued costs of $279,488, and a decrease in the
amount due to the former Adcom shareholder of $42,361.


7


RADIANT
LOGISTICS, INC.


Notes
to Condensed Consolidated Financial Statements


(unaudited)





NOTE
1 – THE COMPANY AND BASIS OF PRESENTATION




The
Company




Radiant
Logistics, Inc. (the "Company") was incorporated in the State of Delaware on
March 15, 2001. Currently, the Company is executing a strategy to build a global
transportation and supply chain management company through organic growth and
the strategic acquisition of best-of-breed non-asset based transportation and
logistics providers to offer its customers domestic and international freight
forwarding and an expanding array of value added supply chain management
services, including order fulfillment, inventory management and
warehousing.




The
Company completed the first step in its business strategy through the
acquisition of Airgroup Corporation ("Airgroup") effective as of January 1,
2006. Airgroup is a Bellevue, Washington based non-asset based logistics company
providing domestic and international freight forwarding services through a
network which includes a combination of company-owned and exclusive agent
offices across North America. Airgroup has a diversified account base including
manufacturers, distributors and retailers using a network of independent
carriers and international agents positioned strategically around the
world.




By
implementing a growth strategy based on the operations of Airgroup as a
platform, the Company is building a leading global transportation and
supply-chain management company offering a full range of domestic and
international freight forwarding and other value added supply chain management
services, including order fulfillment, inventory management and
warehousing.




The
Company’s growth strategy will continue to focus on both organic growth and
acquisitions. From an organic perspective the Company will focus on
strengthening existing and expanding new customer relationships. One of the
drivers of the Company’s organic growth will be retaining existing, and securing
new exclusive agency locations. Since the Company’s acquisition of Airgroup in
January 2006, the Company has focused its efforts on the build-out of its
network of exclusive agency offices, as well as enhancing its back-office
infrastructure and transportation and accounting systems.




As the
Company continues to build out its network of exclusive agent locations to
achieve a level of critical mass and scale, it is executing an acquisition
strategy to develop additional growth opportunities. The Company’s acquisition
strategy relies upon two primary factors: first, the Company’s ability to
identify and acquire target businesses that fit within its general acquisition
criteria; and second, the continued availability of capital and financing
resources sufficient to complete these acquisitions.




The
Company continues to identify a number of additional companies as suitable
acquisition candidates and has completed two material acquisitions over the past
twenty four months. In November 2007, the Company acquired Automotive Services
Group in Detroit, Michigan to service the automotive industry. In September
2008, the Company acquired Adcom Express, Inc. d/b/a Adcom Worldwide ("Adcom").
Adcom is a Minneapolis, Minnesota based logistics company contributing an
additional 30 locations across North America and augmenting the Company’s
overall domestic and international freight forwarding capabilities.




In
connection with the acquisition of Adcom, the Company changed the name of
Airgroup Corporation to Radiant Global Logistics, Inc. (“RGL”) in order to
better position its centralized back-office operations to service both the
Airgroup and Adcom network brands.




Successful
implementation of the Company’s growth strategy depends upon a number of
factors, including its ability to: (i) continue developing new agency locations;
(ii) locate acquisition opportunities; (iii) secure adequate funding to finance
identified acquisition opportunities; (iv) efficiently integrate the businesses
of the companies acquired; (v) generate the anticipated economies of scale from
the integration; and (vi) maintain the historic sales growth of the acquired
businesses in order to generate continued organic growth. There are a variety of
risks associated with the Company’s ability to achieve its strategic objectives,
including the ability to acquire and profitably manage additional businesses and
the intense competition in the industry for customers and for acquisition
candidates.


8


The
Company will continue to search for targets that fit within its acquisition
criteria. The Company’s ability to secure additional financing will rely upon
the sale of debt or equity securities, and the development of an active trading
market for its securities. Although the Company can make no assurance as to its
long term access to debt or equity securities or its ability to develop an
active trading market, in connection with its acquisition of Adcom the Company
was successful in increasing its credit facility from $10.0 million to $15.0
million.




Interim
Disclosure




The
condensed consolidated financial statements included herein have been prepared,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission (“SEC”).  Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with accounting principles generally accepted in the United States have been
condensed or omitted pursuant to such rules and regulations. The Company’s
management believes that the disclosures are adequate to make the information
presented not misleading.  These condensed financial statements should
be read in conjunction with the financial statements and the notes thereto
included in the Company’s Annual Report on Form 10-K for the year ended June 30,
2009.




The
interim period information included in this Quarterly Report on Form 10-Q
reflects all adjustments, consisting of normal recurring adjustments, that are,
in the opinion of the Company’s management, necessary for a fair statement of
the results of the respective interim periods.  Results of operations
for interim periods are not necessarily indicative of results to be expected for
an entire year.




Basis
of Presentation




The
consolidated financial statements include the accounts of the Company and its
wholly-owned subsidiaries as well as a single variable interest entity, Radiant
Logistics Partners LLC (RLP), which is 40% owned by Radiant Global Logistics
(f/k/a Airgroup Corporation), a wholly-owned subsidiary of the Company, and
whose accounts are included in the consolidated financial statements. All
significant intercompany balances and transactions have been
eliminated.




NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES




a)           Use
of Estimates




The
preparation of financial statements and related disclosures in accordance with
accounting principles generally accepted in the United States 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. Such estimates include revenue
recognition, accruals for the cost of purchased transportation, the fair value
of acquired assets and liabilities, accounting for the issuance of shares and
share based compensation, the assessment of the recoverability of long-lived
assets (specifically goodwill and acquired intangibles), the establishment of an
allowance for doubtful accounts and the valuation allowance for deferred tax
assets. Estimates and assumptions are reviewed periodically and the effects of
revisions are reflected in the period that they are determined to be necessary.
Actual results could differ from those estimates.




b)           Fair
Value Measurements




In
general, fair values determined by Level 1 inputs utilize quoted prices
(unadjusted) in active markets for identical assets or liabilities. Fair values
determined by Level 2 inputs utilize observable inputs other than Level 1
prices, such as quoted prices for similar assets or liabilities, quoted prices
in markets that are not active or other inputs that are observable or can be
corroborated by observable market data for substantially the full term of the
related assets or liabilities. Fair values determined by Level 3 inputs are
unobservable data points for the asset or liability, and include situations
where there is little, if any, market activity for the asset or
liability.


9


c)           Fair
Value of Financial Instruments




The fair
values of the Company’s receivables, income tax deposit, accounts payable and
accrued transportation costs, commissions’ payable, other accrued costs and
amounts due to former Adcom shareholder approximate the carrying values dues to
the relatively short maturities of these instruments. The fair value of the
Company’s long-term debt, if recalculated based on current interest rates, would
not differ significantly from the recorded amount.




d)           Cash
and Cash Equivalents




For
purposes of the statements of cash flows, cash equivalents include all highly
liquid investments with original maturities of three months or less which are
not securing any corporate obligations.




e)           Concentrations




The
Company maintains its cash in bank deposit accounts, which, at times, may exceed
federally insured limits. The Company has not experienced any losses in such
accounts.




f)           Accounts
Receivable




The
Company’s receivables are recorded when billed and represent claims against
third parties that will be settled in cash. The carrying value of the Company’s
receivables, net of the allowance for doubtful accounts, represents their
estimated net realizable value. The Company evaluates the collectability of
accounts receivable on a customer-by-customer basis. The Company records a
reserve for bad debts against amounts due to reduce the net recognized
receivable to an amount the Company believes will be reasonably collected. The
reserve is a discretionary amount determined from the analysis of the aging of
the accounts receivables, historical experience and knowledge of specific
customers.




g)           Furniture
& Equipment




Technology
(computer software, hardware, and communications), furniture, and equipment are
stated at cost, less accumulated depreciation over the estimated useful lives of
the respective assets. Depreciation is computed using five to seven year lives
for vehicles, communication, office, furniture, and computer equipment and the
double declining balance method. Computer software is depreciated over a three
year life using the straight line method of depreciation. For leasehold
improvements, the cost is depreciated over the shorter of the lease term or
useful life on a straight line basis. Upon retirement or other disposition of
these assets, the cost and related accumulated depreciation are removed from the
accounts and the resulting gain or loss, if any, is reflected in other income or
expense. Expenditures for maintenance, repairs and renewals of minor items are
charged to expense as incurred. Major renewals and improvements are
capitalized.




h)           Goodwill




The
Company performs an annual impairment test for goodwill and intangible assets
with indefinite lives. The first step of the impairment test requires the
Company to determine the fair value of each reporting unit, and compare the fair
value to the reporting unit's carrying amount. To the extent a reporting unit's
carrying amount exceeds its fair value, an indication exists that the reporting
unit's goodwill may be impaired and the Company must perform a second more
detailed impairment assessment. The second impairment assessment involves
allocating the reporting unit’s fair value to all of its recognized and
unrecognized assets and liabilities in order to determine the implied fair value
of the reporting unit’s goodwill as of the assessment date. The implied fair
value of the reporting unit’s goodwill is then compared to the carrying amount
of goodwill to quantify an impairment charge as of the assessment date. The
Company typically performs its annual impairment test effective as of April 1 of
each year, unless events or circumstances indicate, an impairment may have
occurred before that time.




i)           Long-Lived
Assets




Acquired
intangibles consist of customer related intangibles and non-compete agreements
arising from the Company’s acquisitions. Customer related intangibles are
amortized using accelerated methods over approximately 5 years and non-compete
agreements are amortized using the straight line method over the term of the
underlying agreements. See Notes 4 and 5.


10


The
Company reviews long-lived assets to be held-and-used for impairment whenever
events or changes in circumstances indicate the carrying amount of the assets
may not be recoverable. If the sum of the undiscounted expected future cash
flows over the remaining useful life of a long-lived asset is less than its
carrying amount, the asset is considered to be impaired. Impairment losses are
measured as the amount by which the carrying amount of the asset exceeds the
fair value of the asset. When fair values are not available, the Company
estimates fair value using the expected future cash flows discounted at a rate
commensurate with the risks associated with the recovery of the asset. Assets to
be disposed of are reported at the lower of carrying amount or fair value less
costs to sell. Management has performed a review of all long-lived assets and
has determined no impairment of the respective carrying value has occurred as of
September 30, 2009.




j)           Commitments




The
Company has operating lease commitments for office space, warehouse space and
equipment rentals under non-cancelable operating leases’ expiring at various
dates through December 2012. Future annual commitments for years ending June 30,
2010 through 2012 are $345,001, $242,123, and $13,674 respectively.





k)           Income
Taxes




Deferred
income tax assets and liabilities are recognized for the expected future tax
consequences of events that have been reflected in the consolidated financial
statements. Deferred tax assets and liabilities are determined based on the
differences between the book values and the tax bases of particular assets and
liabilities. Deferred tax assets and liabilities are measured using tax rates in
effect for the years in which the differences are expected to reverse. A
valuation allowance is provided to offset the net deferred tax assets if, based
upon the available evidence, it is more likely than not that some or all of the
deferred tax assets will not be realized.




The
Company reports a liability for unrecognized tax benefits resulting from
uncertain income tax positions taken or expected to be taken in an income tax
return.  Estimated interest and penalties are recorded as a component
of interest expense or other expense, respectively.




l)           Revenue
Recognition and Purchased Transportation Costs




The
Company is the primary obligor responsible for providing the service desired by
the customer and is responsible for fulfillment, including the acceptability of
the service(s) ordered or purchased by the customer. At the Company’s sole
discretion, it sets the prices charged to its customers, and is not required to
obtain approval or consent from any other party in establishing its prices. The
Company has multiple suppliers for the services it sells to its customers, and
has the absolute and complete discretion and right to select the supplier that
will provide the product(s) or service(s) ordered by a customer, including
changing the supplier on a shipment-by-shipment basis. In most cases, the
Company determines the nature, type, characteristics, and specifications of the
service(s) ordered by the customer. The Company also assumes credit risk for the
amount billed to the customer.




As a
non-asset based carrier, the Company does not own transportation assets. The
Company generates the major portion of its air and ocean freight revenues by
purchasing transportation services from direct (asset-based) carriers and
reselling those services to its customers. Based upon the terms in the contract
of carriage, revenues related to shipments where the Company issues a House
Airway Bill ("HAWB") or a House Ocean Bill of Lading ("HOBL") are recognized at
the time the freight is tendered to the direct carrier at origin. Costs related
to the shipments are also recognized at this same time based upon anticipated
margins, contractual arrangements with direct carriers, and other known factors.
The estimates are routinely monitored and compared to actual invoiced costs. The
estimates are adjusted as deemed necessary by the Company to reflect differences
between the original accruals and actual costs of purchased
transportation.


11


This
method generally results in recognition of revenues and purchased transportation
costs earlier than the preferred methods under generally accepted accounting
principles ("GAAP") which do not recognize revenues until a proof of delivery is
received or which recognize revenues as progress on the transit is made. The
Company’s method of revenue and cost recognition does not result in a material
difference from amounts that would be reported under such other
methods.




m)           Share-Based
Compensation




The
Company accounts for share-based compensation under the fair value recognition
provisions such that compensation cost is measured at the grant date based on
the value of the award and is expensed ratably over the vesting period.
Determining the fair value of share-based awards at the grant date requires
judgment, including estimating the percentage of awards which will be forfeited,
stock volatility, the expected life of the award, and other inputs. If actual
forfeitures differ significantly from the estimates, share-based compensation
expense and the Company's results of operations could be materially
impacted.




For the
three months ended September 30, 2009, the Company recorded share based
compensation expense of $54,207, which, net of income taxes, resulted in a
$33,608 reduction of net income. For the three months ended September 30, 2008,
the Company recorded share based compensation expense of $47,913, which, net of
income taxes, resulted in a $29,706 reduction of net income.




n)           Basic
and Diluted Income Per Share


Basic
income per share is computed by dividing net income (loss) attributable to
common stockholders by the weighted average number of common shares outstanding.
Diluted income per share is computed similar to basic income per share except
that the denominator is increased to include the number of additional common
shares that would have been outstanding if the potential common shares, such as
stock options, had been issued and if the additional common shares were
dilutive.




For the
three months ended September 30, 2009, the weighted average outstanding number
of potentially dilutive common shares totaled 33,548,186 shares of common stock,
including options to purchase 3,620,000 shares of common stock at September
30, 2009, of which 3,060,000 were excluded as their effect would have been
antidilutive. For the three months ended September 30, 2008, the weighted
average outstanding number of potentially dilutive common shares totaled
34,800,257 shares of common stock, including options to purchase 3,410,000
shares of common stock at September 30, 2008, of which 2,985,000 were
excluded as their effect would have been antidilutive.




The
following table reconciles the numerator and denominator of the basic and
diluted per share computations for earnings per share as follows:




Three months ended
                          September 30, 2009
                        
                        
                        Three months ended
                          September 30, 2008Weighted
      average basic shares outstanding
                        
                        
                        33,367,940
                        
                        
                        
                        34,695,166Options
                        
                        
                        180,246
                        
                        
                        
                        105,091Weighted
      average dilutive shares outstanding
                        
                        
                        33,548,186
                        
                        
                        
                        34,800,257





o)           Comprehensive
Income





The
Company has no components of Other Comprehensive Income and, accordingly, no
Statement of Comprehensive Income has been included in the accompanying
consolidated financial statements.




p)           Reclassifications


Certain
amounts for prior periods have been reclassified in the consolidated financial
statements to conform to the classification used in fiscal
2009.


12


q)           Subsequent
Events




The
Company has evaluated subsequent events and any related required disclosures
through November 16, 2009, which is the date this quarterly report on Form
10-Q was submitted for filing with the Securities and Exchange
Commission.




NOTE
3 – RECENT ACCOUNTING PRONOUNCEMENTS




In
June 2009, the Financial Accounting Standards Board ("FASB") issued
guidance now codified in FASB Accounting Standards Codification ("ASC") Topic
105, Generally Accepted Accounting Principles, as the single source of
authoritative nongovernmental GAAP. FASB ASC Topic 105 does not change current
GAAP, but is intended to simplify user access to all authoritative GAAP by
providing all authoritative literature related to a particular topic in one
place. All existing accounting standard documents have been superseded and all
other accounting literature not included in the FASB Codification is now
considered non-authoritative. These provisions of FASB ASC Topic 105 are
effective for interim and annual periods ending after September 15, 2009
and, accordingly, are effective for the Company for the current fiscal reporting
period. The adoption of this guidance did not have an impact on the Company’s
financial condition or results of operations, but will impact its financial
reporting process by eliminating all references to pre-codification standards.
On the effective date of this guidance, the Codification superseded all
then-existing non-SEC accounting and reporting standards, and all other
non-grandfathered, non-SEC accounting literature not included in the
Codification became non-authoritative.




In
August 2009, the FASB issued Accounting Standards Update ("ASU")
No. 2009-05, Fair Value Measurements and Disclosures. The guidance in ASU
2009-05 provides clarification that in circumstances in which a quoted price in
an active market for the identical liability is not available, an entity is
required to measure fair value using certain prescribed valuation techniques.
The amendments in ASU 2009-05 are effective for the Company’s fourth quarter of
2009. The adoption of this guidance is not expected to have a material impact on
the Company’s financial position or results of operations.




NOTE
4 – ACQUISITION OF ADCOM EXPRESS, INC.




On
September 5, 2008, the Company entered into and closed a Stock Purchase
Agreement (the "Agreement") pursuant to which it acquired 100% of the issued and
outstanding stock of Adcom Express, Inc., d/b/a Adcom Worldwide ("Adcom"), a
privately-held Minnesota corporation. For financial accounting purposes, the
transaction was deemed to be effective as of September 1, 2008. The stock was
acquired from Robert F. Friedman, the sole shareholder of Adcom. The total value
of the transaction was $11,050,000, consisting of: (i) $4,750,000 in cash paid
at the closing; (ii) $250,000 in cash payable shortly after the closing, subject
to adjustment, based upon the working capital of Adcom as of August 31, 2008;
(iii) up to $2,800,000 in four "Tier-1 Earn-Out Payments" of up to $700,000
each, covering the four year earn-out period through June 30, 2012, based upon
Adcom achieving certain levels of "Gross Profit Contribution" (as defined in the
Agreement), payable 50% in cash and 50% in shares of Company common stock
(valued at delivery date); (iv) a "Tier-2 Earn-Out Payment" of up to $2,000,000,
equal to 20% of the amount by which the Adcom cumulative Gross Profit
Contribution exceeds $16,560,000 during the four year earn-out period; and (v)
an "Integration Payment" of $1,250,000 payable on the earlier of the date
certain integration targets are achieved or 18 months after the closing, payable
50% in cash and 50% in shares of Company common stock (valued at delivery date).
The Integration Payment, the Tier-1 Earn-Out Payments and certain amounts of the
Tier-2 Payments may be subject to acceleration upon occurrence of a "Corporate
Transaction" (as defined in the Agreement), which includes a sale of Adcom or
the Company, or certain changes in corporate control. The cash component of the
transaction was financed through a combination of existing funds and the
proceeds from the Company’s revolving credit facility.




Founded
in 1978, Adcom provides a full range of domestic and international freight
forwarding solutions to a diversified account base including manufacturers,
distributors and retailers through a combination of three company-owned and
twenty-seven independent agency locations across North America.




The total
purchase price consisted of an initial payment of $4,750,000, acquisition
expenses of $288,346 and $220,000 in restructuring charges.  As of
September 30, 2009 the Company has incurred $212,230 in restructuring costs and
the Company has a residual restructuring liability of $7,770.  Also
included in the acquisition is $1,250,000 in future integration payments and
$319,845 in working capital and other adjustments.  The total net
assets acquired were $6.61 million.  The following table summarizes
the final allocation of the purchase price based on the estimated fair value of
the acquired assets at September 5, 2008.


13





Current
      assets
                      
                      $
                      11,948,619Furniture
      & equipment
                      
                      
                      291,862Notes
      receivable
                      
                      
                      343,602Intangibles
                      
                      
                      3,200,000Goodwill
                      
                      
                      3,248,660Other
      assets
                      
                      
                      325,296Total
      assets acquired
                      
                      
                      19,358,039Current
      liabilities assumed
                      
                      
                      11,533,848Long-term
      deferred tax liability
                      
                      
                      1,216,000Total
      liabilities acquired
                      
                      
                      12,749,848Net
      assets acquired
                      
                      $
                      6,608,191





None of
the goodwill is expected to be deductible for income tax purposes.




The
results of operations related to this acquisition are included in the Company's
statement of income from the date of acquisition in September 2008.




The
following information is based on actual (unaudited) results for the three
months ended September 30, 2009 and pro forma (unaudited) for the three months
ended September 30, 2008 as if the acquisition of the Adcom had occurred as of
July 1, 2008 (in thousands, except earnings per share):




Three months ended September 30,2009
                      
                      
                      2008Total
      revenue
                      
                      $
                      34,028
                      
                      
                      $
                      49,242Net
      income (loss)
                      
                      $
                      116
                      
                      
                      $
                      178Earnings
      per share:Basic
                      
                      $
                      .00
                      
                      
                      $
                      .01Diluted
                      
                      $
                      .00
                      
                      
                      $
                      .01





NOTE
5 – ACQUIRED INTANGIBLE ASSETS




The table
below reflects acquired intangible assets related to the acquisitions of
Airgroup, Automotive Services Group and Adcom:


14




As of
                                  September 30, 2009
                                
                                
                                As of
                                  June 30, 2009Gross
                                  Carrying
                                  Amount
                                
                                
                                Accumulated
                                  Amortization
                                
                                
                                Gross
                                  Carrying
                                  Amount
                                
                                
                                Accumulated
                                  AmortizationAmortizable
      intangible assets:Customer
      related
                                
                                $
                                5,752,000
                                
                                
                                $
                                2,977,248
                                
                                
                                $
                                5,752,000
                                
                                
                                $
                                2,679,547Covenants
      not to compete
                                
                                
                                190,000
                                
                                
                                
                                94,033
                                
                                
                                
                                190,000
                                
                                
                                
                                83,410Total
                                
                                $
                                5,942,000
                                
                                
                                $
                                3,071,281
                                
                                
                                $
                                5,942,000
                                
                                
                                $
                                2,762,957Aggregate
      amortization expense:For
      three months endedSeptember
      30, 2009
                                
                                
                                
                                
                                
                                $
                                308,324For
      three months endedSeptember
      30, 2008
                                
                                
                                
                                
                                
                                $
                                217,015Aggregate
      amortization expense for the year ended June 30:2010
      – For the remainder of the year
                                
                                
                                
                                
                                
                                $
                                850,9622011
                                
                                
                                
                                
                                
                                
                                827,7622012
                                
                                
                                
                                
                                
                                
                                769,7722013
                                
                                
                                
                                
                                
                                
                                374,3442014
                                
                                
                                
                                
                                
                                
                                47,879Total
                                
                                
                                
                                
                                
                                $
                                2,870,719




NOTE
6 – VARIABLE INTEREST ENTITY




Certain
entities in which equity investors do not have the characteristics of a
controlling financial interest or do not have the sufficient equity at risk for
the entity to finance its activities without additional subordinated financial
support from other parties are considered "variable interest entities". RLP is
40% owned by Radiant Global Logistics ("RGL"), qualifies as a variable interest
entity and is included in the Company’s consolidated financial statements (see
Note 7). RLP commenced operations in February 2007. Non-controlling interest
recorded on the income statement for the three months ended September 30, 2009
was an expense of $21,040 and for the three months ended September 30, 2008
was a benefit of $9,990.




The
following table summarizes the balance sheets of RLP:




September 30,
                                
                                
                                June 30,2009
                                
                                
                                2009ASSETSAccounts receivable – Radiant
      Logistics
                                
                                $
                                44,891
                                
                                
                                $
                                6,656Prepaid expenses and other
      current assets
                                
                                
                                450
                                
                                
                                
                                2,165Total assets
                                
                                $
                                45,341
                                
                                
                                $
                                8,821LIABILITIES
      AND PARTNERS' CAPITALChecks issued in excess of
      bank balance
                                
                                $
                                3,524
                                
                                
                                $
                                212Other accrued
      costs
                                
                                
                                3,572
                                
                                
                                
                                5,431Total
    liabilities
                                
                                
                                7,096
                                
                                
                                
                                5,643Partners' capital
                                
                                
                                38,245
                                
                                
                                
                                3,178Total liabilities and
      partners' capital
                                
                                $
                                45,341
                                
                                
                                $
                                8,821




15


NOTE
7 – RELATED PARTY




RLP is
owned 40% by RGL and 60% by Radiant Capital Partners, LLC ("RCP"), a company for
which the Chief Executive Officer of the Company is the sole member. RLP is a
certified minority business enterprise which was formed for the purpose of
providing the Company with a national accounts strategy to pursue corporate and
government accounts with diversity initiatives. As currently structured, RCP’s
ownership interest entitles it to a majority of the profits and distributable
cash, if any, generated by RLP. The operations of RLP are intended to provide
certain benefits to the Company, including expanding the scope of services
offered by the Company and participating in supplier diversity programs not
otherwise available to the Company. RGL currently provides administrative
services necessary to operate RLP while RLP continues to develop. As the RLP
operations mature, the Company will evaluate and approve all related service
agreements between the Company and RLP, including the scope of the services to
be provided by the Company to RLP and the fees payable to the Company by RLP, in
accordance with the Company’s corporate governance principles and applicable
Delaware corporation law. This process may include seeking the opinion of a
qualified third party concerning the fairness of any such agreement or the
approval of the Company’s shareholders. RLP is consolidated in the financial
statements of the Company (see Note 6).




NOTE
8 – FURNITURE AND EQUIPMENT




Furniture
and equipment consists of the following:




September 30,
                              
                              
                              June 30,2009
                              
                              
                              2009Vehicles
                              
                              $
                              33,788
                              
                              
                              $
                              33,788Communication
      equipment
                              
                              
                              4,043
                              
                              
                              
                              1,353Office
      equipment
                              
                              
                              311,192
                              
                              
                              
                              309,156Furniture
      and fixtures
                              
                              
                              66,590
                              
                              
                              
                              66,036Computer
      equipment
                              
                              
                              556,799
                              
                              
                              
                              554,337Computer
      software
                              
                              
                              886,549
                              
                              
                              
                              884,384Leasehold
      improvements
                              
                              
                              44,002
                              
                              
                              
                              44,0021,902,963
                              
                              
                              
                              1,893,056Less:  Accumulated
      depreciation and amortization
                              
                              
                              (1,239,222
                              )
                              
                              
                              (1,132,549
                              )Furniture
      and equipment – net
                              
                              $
                              663,741
                              
                              
                              $
                              760,507




Depreciation
and amortization expense related to furniture and equipment was $101,456 and
$98,341 for the three months ended September 30, 2009 and 2008,
respectively.




NOTE
9 – LONG TERM DEBT




In
September 2008, the Company’s $10.0 million revolving credit facility, including
a $0.5 million sublimit to support letters of
credit (collectively,  the “Facility”), was increased to $15.0
million with a maturity date of February 1, 2011. The Facility is collateralized
by accounts receivable and other assets of the Company and its subsidiaries.
Advances under the Facility are available to fund future acquisitions, capital
expenditures or for other corporate purposes. Borrowings under the facility bear
interest, at the Company’s option, at the bank’s prime rate minus 0.15% to
1.00% or LIBOR plus 1.55% to 2.25%, and can be adjusted up or down during the
term of the Facility based on the Company’s performance relative to certain
financial covenants. The Facility provides for advances of up to 80% of the
Company’s eligible domestic accounts receivable and for advances of up to 60% of
eligible foreign accounts receivable.




The terms
of the Facility are subject to certain financial and operational covenants which
may limit the amount otherwise available under the Facility. The first covenant
limits funded debt to a multiple of 3.00 times the Company’s consolidated EBITDA
(as adjusted) measured on a rolling four quarter basis (or a multiple of 3.25 at
a reduced advance rate of 75.0%). The second financial covenant requires the
Company to maintain a basic fixed charge coverage ratio of at least 1.1 to 1.0.
The third financial covenant is a minimum profitability standard that requires
the Company not to incur a net loss before taxes, amortization of acquired
intangibles and extraordinary items in any two consecutive quarterly accounting
periods.


16


Under the
terms of the Facility, the Company is permitted to make additional acquisitions
without the lender's consent only if certain conditions are satisfied. The
conditions imposed by the Facility include the following: (i) the absence of an
event of default under the Facility; (ii) the company to be acquired must be in
the transportation and logistics industry; (iii) the purchase price to be paid
must be consistent with the Company’s historical business and acquisition model;
(iv) after giving effect for the funding of the acquisition, the Company must
have undrawn availability of at least $1.0 million under the Facility; (v) the
lender must be reasonably satisfied with projected financial statements the
Company provides covering a 12 month period following the acquisition; (vi) the
acquisition documents must be provided to the lender and must be consistent with
the description of the transaction provided to the lender; and (vii) the number
of permitted acquisitions is limited to three per calendar year and shall not
exceed $7.5 million in aggregate purchase price financed by funded debt. In the
event that the Company is not able to satisfy the conditions of the Facility in
connection with a proposed acquisition, it must either forego the acquisition,
obtain the lender's consent, or retire the Facility. This may limit or slow the
Company’s ability to achieve the critical mass it may need to achieve its
strategic objectives.




The
co-borrowers of the Facility include Radiant Logistics, Inc., RGL (f/k/a
Airgroup Corporation), Radiant Logistics Global Services Inc. ("RLGS"), RLP, and
Adcom Express, Inc. (d/b/a Adcom Worldwide). RLP is owned 40% by RGL and 60% by
RCP, an affiliate of the Company’s Chief Executive Officer. RLP has been
certified as a minority business enterprise, and focuses on corporate and
government accounts with diversity initiatives. As a co-borrower under the
Facility, the accounts receivable of RLP are eligible for inclusion within the
overall borrowing base of the Company and all borrowers will be responsible for
repayment of the debt associated with advances under the Facility, including
those advanced to RLP. At September 30, 2009, the Company was in compliance with
all of its covenants.




As of
September 30, 2009, the Company had $6,472,093 advances under the Facility and
$2,110,278 in outstanding checks, which had not yet been presented to the bank
for payment. The outstanding checks have been reclassified from our cash
accounts, as they will be advanced from, or against, our Facility when presented
for payment to the bank.  These amounts total long term debt of
$8,582,371.




At
September 30, 2009, based on available collateral and $205,000 in outstanding
letter of credit commitments, there was $3,580,623 available for borrowing under
the Facility based on advances outstanding.




NOTE
10 – PROVISION FOR INCOME TAXES




Deferred
income taxes are reported using the liability method. Deferred tax assets are
recognized for deductible temporary differences and deferred tax liabilities are
recognized for taxable temporary differences. Temporary differences are the
differences between the reported amounts of assets and liabilities and their tax
bases. Deferred tax assets are reduced by a valuation allowance when, in the
opinion of management, it is more likely than not that some portion or all of
the deferred tax assets will not be realized. Deferred tax assets and
liabilities are adjusted for the effects of changes in tax laws and rates on the
date of enactment.




The
acquisitions of Airgroup and Adcom resulted in $2,148,280 of long term deferred
tax liability resulting from certain amortizable intangibles identified during
the Company’s purchase price allocation which are not deductible for tax
purposes. The long term deferred tax liability will be reduced as the
non-deductible amortization of the intangibles is recognized. See Note
5.




For the
three months ended September 30, 2009, the Company recognized net income tax
expense of $71,127 consisting of current income tax expense of $131,190, and
deferred income tax benefit of $60,063.




For the
three months ended September 30, 2008, the Company recognized net income tax
expense of $152,659 consisting of current income tax expense of $104,719 and
deferred income tax expense of $47,940.




The
Company’s consolidated effective tax rate during the three month periods ended
September 30, 2009 and September 30, 2008 was 38.0%.


17


Tax
years which remain subject to examination by federal and state authorities
are the years ended June 30, 2006, through June 30, 2009.




NOTE
11 – STOCKHOLDERS’ EQUITY




Preferred
Stock




The
Company is authorized to issue 5,000,000 shares of preferred stock, par value at
$.001 per share. As of September 30, 2009 and 2008, none of the shares were
issued or outstanding.




Common
Stock Repurchase Program




During
2009, the Company's Board of Directors approved a stock repurchase program,
pursuant to which up to 5,000,000 shares of its common stock could be
repurchased under the program through December 31, 2010.  During the three
months ended September 30, 2009, the Company purchased 1,349,650 shares of its
common stock under this repurchase program at a cost of $390,636.
 Subsequent to quarter end, the Company purchased an additional 293,500
shares of its common stock under this repurchase program at a cost of
$82,530.




NOTE
12 – SHARE-BASED COMPENSATION




During
the three months ended September 30, 2009, the Company issued employee options
to purchase 250,000 stock options at $0.28 per share in August 2009. The options
vest 20% per year over a five year period.  During the three months
ended September 30, 2008, no stock options were granted to
employees.




Share
based compensation costs recognized during the three months ended September 30,
2009, includes compensation costs based on the fair value estimated on the
grant-date for all share based payments granted to date. No options have been
exercised as of September 30, 2009.




During
the three months ended September 30, 2009, the weighted average fair value per
share of employee options granted in August 2009 was $0.15.  The fair
value of each stock option grant is estimated as of the date of grant using the
Black-Scholes option pricing model with the following assumptions for the three
months ended September 30, 2009:




Risk-Free
      Interest Rate
              1.57%Expected
      Term
              6.5
      yearsExpected
      Volatility
              64.3%Expected
      Dividend Yield
              0.00%Forfeiture
      Rate
              0.00%




During
the three months ended September 30, 2009 and 2008 the Company recognized stock
option compensation expense of $54,207 and $47,913, respectively.  The
following table summarizes activity under the plan for the three months ended
September 30, 2009.


18




Number of
                                            Shares
                                          
                                          
                                          Weighted
                                            Average
                                            Exercise Price
                                          
                                          
                                          Weighted
                                            Average
                                            Remaining
                                            Contractual
                                            Life - Years
                                          
                                          
                                          Aggregate
                                            Intrinsic
                                            ValueOutstanding
      at June 30, 2009
                                          
                                          
                                          3,370,000
                                          
                                          
                                          $
                                          0.520
                                          
                                          
                                          7.08
      years
                                          
                                          
                                          $
                                          67,200Granted
                                          
                                          
                                          250,000
                                          
                                          
                                          
                                          0.280
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -Exercised
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -Forfeited
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -Expired
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -
                                          
                                          
                                          
                                          -Outstanding
      at September 30, 2009
                                          
                                          
                                          3,620,000
                                          
                                          
                                          $
                                          0.504
                                          
                                          
                                          7.03
      years
                                          
                                          
                                          $
                                          39,200Exercisable
      at September 30, 2009
                                          
                                          
                                          1,620,000
                                          
                                          
                                          $
                                          0.579
                                          
                                          
                                          6.33
      years
                                          
                                          
                                          $
                                          5,040





NOTE
13 – GEOGRAPHIC SEGMENT INFORMATION




Operating
segments are identified as components of an enterprise about which separate
discrete financial information is available for evaluation by the chief
operating decision-maker, or decision-making group, in making decisions
regarding allocation of resources and assessing performance. The Company's chief
decision-maker is the Chief Executive Officer. The Company continues to operate
in a single operating segment.




The
Company’s geographic operations outside the United States include shipments to
and from Canada, Central America, Europe, Africa, Asia and Australia. The
following data presents the Company’s revenue generated from shipments to and
from these locations for the United States and all other countries, which is
determined based upon the geographic location of a shipment's initiation and
destination points (in thousands):




United States
                                
                                
                                Other Countries
                                
                                
                                Total2009
                                
                                
                                2008
                                
                                
                                2009
                                
                                
                                2008
                                
                                
                                2009
                                
                                
                                2008Three
      months ended September 30,Revenue
                                
                                $
                                18,110
                                
                                
                                $
                                17,752
                                
                                
                                $
                                15,918
                                
                                
                                $
                                14,651
                                
                                
                                $
                                34,028
                                
                                
                                $
                                32,403Cost
      of transportation
                                
                                
                                10,889
                                
                                
                                
                                9,959
                                
                                
                                
                                12,590
                                
                                
                                
                                11,260
                                
                                
                                
                                23,479
                                
                                
                                
                                21,219Net
      revenue
                                
                                $
                                7,221
                                
                                
                                $
                                7,793
                                
                                
                                $
                                3,328
                                
                                
                                $
                                3,391
                                
                                
                                $
                                10,549
                                
                                
                                $
                                11,184





There
have been no material changes in the balances of long-lived assets during the
three months ended September 30, 2009.




ITEM
2.   Management’s Discussion and Analysis of Financial Condition
and Results of Operations




The
following discussion and analysis of our financial condition and result of
operations should be read in conjunction with the financial statements and the
related notes and other information included elsewhere in this
report.


19


CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS




This
report includes forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933 as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, regarding future operating performance,
events, trends and plans. All statements other than statements of historical
fact contained herein, including, without limitation, statements regarding our
future financial position, business strategy, budgets, projected revenues and
costs, and plans and objectives of management for future operations, are
forward-looking statements. Forward-looking statements generally can be
identified by the use of forward-looking terminology such as
"may," "will," "expects," "intends," "plans," "projects," "estimates," "anticipates,"
or "believes" or the negative thereof or any variation thereon or similar
terminology or expressions. We have based these forward-looking statements on
our current expectations and projections about future events. These
forward-looking statements are not guarantees and are subject to known and
unknown risks, uncertainties and assumptions about us that may cause our actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by such forward-looking statements. While it
is impossible to identify all of the factors that may cause our actual operating
performance, events, trends or plans to differ materially from those set forth
in such forward-looking statements, such factors include the inherent risks
associated with our ability to: (i) to use Airgroup as a "platform" upon which
we can build a profitable global transportation and supply chain management
company; (ii) retain and build upon the relationships we have with our exclusive
agency offices; (iii) continue the development of our back office infrastructure
and transportation and accounting systems in a manner sufficient to service our
expanding revenues and base of exclusive agency locations; (iv) maintain the
future operations of Adcom in a manner consistent with its past practices; (v)
integrate the operations of Adcom with our existing operations, (vi) continue
growing our business and maintain historical or increased gross profit margins;
(vii) locate suitable acquisition opportunities; (viii) secure the financing
necessary to complete any acquisition opportunities we locate; (ix) assess and
respond to competitive practices in the industries in which we compete; (x)
mitigate, to the best extent possible, our dependence on current management and
certain of our larger exclusive agency locations; (xi) assess and respond to the
impact of current and future laws and governmental regulations affecting the
transportation industry in general and our operations in particular; and (xii)
assess and respond to such other factors which may be identified from time to
time in our Securities and Exchange Commission ("SEC") filings and other public
announcements including those set forth in Part 1 Item 1A of our Annual Report
on Form 10-K for the fiscal year ended June 30, 2009. All subsequent written and
oral forward-looking statements attributable to us, or persons acting on our
behalf, are expressly qualified in their entirety by the foregoing. 
Readers are cautioned not to place undue reliance on our forward-looking
statements, as they speak only as of the date made. Except as required by law,
we assume no duty to update or revise our forward-looking
statements.




Overview




We are a
Bellevue, Washington based non-asset based logistics company providing domestic
and international freight forwarding services through a network of exclusive
agent offices across North America. Operating under the Airgroup, Adcom and
Radiant Logistics brands, we service a diversified account base including
manufacturers, distributors and retailers using a network of independent
carriers and international agents positioned strategically around the
world.




By
implementing a growth strategy, we intend to build a leading global
transportation and supply-chain management company offering a full range of
domestic and international freight forwarding and other value added supply chain
management services, including order fulfillment, inventory management and
warehousing.




As a
non-asset based provider of third-party logistics services, we seek to limit our
investment in equipment, facilities and working capital through contracts and
preferred provider arrangements with various transportation providers who
generally provide us with favorable rates, minimum service levels, capacity
assurances and priority handling status. Our non-asset based approach allows us
to maintain a high level of operating flexibility and leverage a cost structure
that is highly variable in nature while the volume of our flow of freight
enables us to negotiate attractive pricing with our transportation
providers.




Our
growth strategy continues to focus on both organic growth and acquisitions. From
an organic perspective, we are focused on strengthening existing and expanding
new customer relationships. One of the drivers of our organic growth will be
retaining existing, and securing new exclusive agency locations as well as
enhancing our back-office infrastructure and transportation and accounting
systems.




As we
continue to build out our network of exclusive agent locations to achieve a
level of critical mass and scale, we are executing an acquisition strategy to
develop additional growth opportunities. We continue to identify a number of
additional companies as suitable acquisition candidates and completed our second
material acquisition in September 2008, when we acquired Adcom Express, Inc.
d/b/a Adcom Worldwide ("Adcom"). Adcom is a Minneapolis, Minnesota based
logistics company contributing an additional 30 locations across North America
and augmenting our overall domestic and international freight forwarding
capabilities.




20




We will
continue to search for targets that fit within our acquisition criteria.
Successful implementation of our growth strategy depends upon a number of
factors, including our ability to: (i) continue developing new agency locations;
(ii) locate acquisition opportunities; (iii) secure adequate funding to finance
identified acquisition opportunities; (iv) efficiently integrate the businesses
of the companies acquired; (v) generate the anticipated economies of scale from
the integration; and (vi) maintain the historic sales growth of the acquired
businesses in order to generate continued organic growth. There are a variety of
risks associated with our ability to achieve our strategic objectives, including
the ability to acquire and profitably manage additional businesses and the
intense competition in the industry for customers and for acquisition
candidates.




Performance
Metrics




Our
principal source of income is derived from freight forwarding services. As a
freight forwarder, we arrange for the shipment of our customers’ freight from
point of origin to point of destination. Generally, we quote our customers a
turn-key cost for the movement of their freight. Our price quote will often
depend upon the customer’s time-definite needs (first day through fifth day
delivery), special handling needs (heavy equipment, delicate items,
environmentally sensitive goods, electronic components, etc.) and the means of
transport (truck, air, ocean or rail). In turn, we assume the responsibility for
arranging and paying for the underlying means of transportation.




Our
transportation revenue represents the total dollar value of services we sell to
our customers. Our cost of transportation includes direct costs of
transportation, including motor carrier, air, ocean and rail services. We act
principally as the service provider to add value in the execution and
procurement of these services to our customers. Our net transportation revenue
(gross transportation revenue less the direct cost of transportation) is the
primary indicator of our ability to source, add value to, and resell services
provided by third parties, and is considered by management to be a key
performance measure. In addition, management believes that measuring its
operating costs as a function of net transportation revenue provides a useful
metric, as our ability to control costs as a function of net transportation
revenue directly impacts operating earnings.




Our
operating results will be affected as acquisitions occur. Since all acquisitions
are made using the purchase method of accounting for business combinations, our
financial statements will only include the results of operations and cash flows
of acquired companies for periods subsequent to the date of
acquisition.




Our
GAAP-based net income will be affected by non-cash charges relating to the
amortization of customer related intangible assets and other intangible assets
arising from completed acquisitions. Under applicable accounting standards,
purchasers are required to allocate the total consideration in a business
combination to the identified assets acquired and liabilities assumed based on
their fair values at the time of acquisition. The excess of the consideration
paid over the fair value of the identifiable net assets acquired is to be
allocated to goodwill, which is tested at least annually for impairment.
Applicable accounting standards require that we separately account for and value
certain identifiable intangible assets based on the unique facts and
circumstances of each acquisition. As a result of our acquisition strategy, our
net income will include material non-cash charges relating to the amortization
of customer related intangible assets and other intangible assets acquired in
our acquisitions. Although these charges may increase as we complete more
acquisitions, we believe we will actually be growing the value of our intangible
assets (e.g., customer relationships). Thus, we believe that earnings before
interest, taxes, depreciation and amortization, or EBITDA, is a useful financial
measure for investors because it eliminates the effect of these non-cash costs
and provides an important metric for our business.  Further, the
financial covenants of our credit facility adjust EBITDA to exclude costs
related to share based compensation expense and other non-cash
charges.




Our
compliance with the financial covenants of our credit facility is particularly
important given the materiality of the credit facility to our day-to-day
operations and overall acquisition strategy. Our debt capacity, subject to the
requisite collateral at an advance rate of 80%, is limited to a multiple of 3.00
times our consolidated EBITDA (as adjusted) as measured on a rolling four
quarter basis (or a multiple of 3.25 times our consolidated EBITDA (as adjusted)
at a reduced advance rate of 75.0%). If we fail to comply with the covenants in
our credit facility and are unable to secure a waiver or other relief, our
financial condition would be materially weakened and our ability to fund
day-to-day operations would be materially and adversely affected. Accordingly,
we intend to employ EBITDA and adjusted EBITDA as management tools to measure
our historical financial performance and as a benchmark for future financial
flexibility.


21


Our
operating results are also subject to seasonal trends when measured on a
quarterly basis. The impact of seasonality on our business will depend on
numerous factors, including the markets in which we operate, holiday seasons,
consumer demand and economic conditions.




Since our
revenue is largely derived from customers whose shipments are dependent upon
consumer demand and just-in-time production schedules, the timing of our revenue
is often beyond our control. Factors such as shifting demand for retail goods
and/or manufacturing production delays could unexpectedly affect the timing of
our revenue. As we increase the scale of our operations, seasonal trends in one
area of our business may be offset to an extent by opposite trends in another
area. We cannot accurately predict the timing of these factors, nor can we
accurately estimate the impact of any particular factor, and thus we can give no
assurance any historical seasonal patterns will continue in future
periods.




Results
of Operations




Basis
of Presentation




The
results of operations discussion that appears below has been presented utilizing
a combination of historical and, where relevant, pro forma information to
include the effects on our consolidated financial statements of our acquisition
of Adcom.  The pro forma information has been presented for three
months ended September 30, 2008 as if we had acquired Adcom as of July 1,
2008.  The pro forma results are developed to reflect a consolidation
of the historical results of operations of the Company and adjusted to include
the historical results of Adcom as if we had acquired Adcom as of July 1,
2008.





The pro
forma financial data is not necessarily indicative of results of operations
which would have occurred had this acquisition been consummated at the beginning
of the periods presented or which might be attained in the future.





For
the three months ended September 30, 2009 (actual and unaudited) and September
30, 2008 (actual and unaudited)




We
generated transportation revenue of $34.0 million and $32.4 million,
respectively, and net transportation revenue of $10.5 million and $11.2 million,
respectively, for the three months ended September 30, 2009 and 2008,
respectively.  Net income was $0.12 million for the three months ended
September 30, 2009, compared to net income of $0.25 million for the three months
ended September 30, 2008.




We had
adjusted earnings before interest, taxes, depreciation and amortization
("EBITDA") of $0.7 million and $0.8 million for three months ended September 30,
2009 and 2008, respectively. EBITDA is a non-GAAP measure of income and does not
include the effects of interest and taxes, and excludes the "non-cash" effects
of depreciation and amortization on current assets. Companies have some
discretion as to which elements of depreciation and amortization are excluded in
the EBITDA calculation. We exclude all depreciation charges related to property,
plant and equipment, and all amortization charges, including amortization of
leasehold improvements and other intangible assets. We then further adjust
EBITDA to exclude extraordinary items and costs related to share based
compensation expense and other non-cash charges consistent with the financial
covenants of our credit facility. As explained above, we believe that EBITDA is
useful to us and to our investors in evaluating and measuring our financial
performance.  While management considers EBITDA and adjusted EBITDA
useful in analyzing our results, it is not intended to replace any presentation
included in our consolidated financial statements.




22




The
following table provides a reconciliation of adjusted EBITDA to net income, the
most directly comparable GAAP measure in accordance with SEC Regulation G (in
thousands), for the three months ended September 30, 2009 and 2008:




Three months ended September 30,
                                          
                                          
                                          Change2009
                                          
                                          
                                          2008
                                          
                                          
                                          Amount
                                          
                                          
                                          PercentNet
      income
                                          
                                          $
                                          116
                                          
                                          
                                          $
                                          250
                                          
                                          
                                          $
                                          (134
                                          )
                                          
                                          
                                          (53.6
                                          )%Income
      tax expense (benefit)
                                          
                                          
                                          71
                                          
                                          
                                          
                                          153
                                          
                                          
                                          
                                          (82
                                          )
                                          
                                          
                                          (53.6
                                          )%Net
      interest expense
                                          
                                          
                                          55
                                          
                                          
                                          
                                          25
                                          
                                          
                                          
                                          30
                                          
                                          
                                          
                                          120.0
                                          %Depreciation
      and amortization
                                          
                                          
                                          410
                                          
                                          
                                          
                                          315
                                          
                                          
                                          
                                          95
                                          
                                          
                                          
                                          30.2
                                          %EBITDA
      (Earnings before interest, taxes, depreciation and
      amortization)
                                          
                                          $
                                          652
                                          
                                          
                                          $
                                          743
                                          
                                          
                                          $
                                          (91
                                          )
                                          
                                          
                                          (12.3
                                          )%Share
      based compensation and other non-cash costs
                                          
                                          
                                          70
                                          
                                          
                                          
                                          63
                                          
                                          
                                          
                                          7
                                          
                                          
                                          
                                          11.1
                                          %Adjusted
      EBITDA
                                          
                                          $
                                          722
                                          
                                          
                                          $
                                          806
                                          
                                          
                                          $
                                          (84
                                          )
                                          
                                          
                                          (10.4
                                          )%





The
following table summarizes transportation revenue, cost of transportation and
net transportation revenue (in thousands) for the three months ended September
30, 2009 and 2008 (actual and unaudited):




Three months ended September 30,
                              
                              Change2009
                              
                              2008
                              
                              Amount
                              
                              PercentTransportation
      revenue
                              
                              $
                              34,028
                              
                              
                              $
                              32,403
                              
                              
                              $
                              1,625
                              
                              
                              
                              5.0
                              %Cost
      of transportation
                              
                              
                              23,479
                              
                              
                              
                              21,219
                              
                              
                              
                              2,260
                              
                              
                              
                              10.7
                              %Net
      transportation revenue
                              
                              $
                              10,549
                              
                              
                              $
                              11,184
                              
                              
                              $
                              (635
                              )
                              
                              
                              (5.7
                              )%Net
      transportation margins
                              
                              
                              31.0
                              %
                              
                              
                              34.5
                              %




Transportation
revenue was $34.0 million for the three months ended September 30, 2009, an
increase of 5.0% over transportation revenue of $32.4 million for the three
months ended September 30, 2008.  Domestic transportation revenue
increased by 2.0% to $18.1 million for the three months ended September 30, 2009
from $17.8 million for the three months ended September 30, 2008. International
transportation revenue increased by 8.6% to $15.9 million for the three months
ended September 30, 2009 from $14.7 million for the comparable prior year
period.  The increase in both domestic and international revenues was
primarily due to an extra two months of Adcom revenues included in the current
year quarter, offset by the slowing economy.




Cost of
transportation increased 10.7% to $23.5 million for the three months ended
September 30, 2009, compared to $21.2 million for the three months ended
September 30, 2008.  Cost of transportation as a percentage of
transportation revenues increased as a result of pricing pressures from
competitors due to current economic conditions.




Net
transportation margins decreased to 31.0% of transportation revenue for the
three months ended September 30, 2009, as compared to 34.5% of transportation
revenue for the three months ended September 30, 2008.  The margin
regression was attributed to higher international sales, which typically yield
lower margins, coupled with pricing pressures from competitors.




The
following table compares certain condensed consolidated statement of income data
as a percentage of our net transportation revenue (in thousands) for the three
months ended September 30, 2009 and 2008 (actual and unaudited):




Three months ended September 30,2009
                                                                                                            
                                                                                                            2008
                                                                                                            
                                                                                                            ChangeAmount
                                                                                                            
                                                                                                            Percent
                                                                                                            
                                                                                                            Amount
                                                                                                            
                                                                                                            Percent
                                                                                                            
                                                                                                            Amount
                                                                                                            
                                                                                                            PercentNet
      transportation revenue
                                                                                                            
                                                                                                            $
                                                                                                            10,549
                                                                                                            
                                                                                                            100.0
                                                                                                            %
                                                                                                            $
                                                                                                            11,184
                                                                                                            
                                                                                                            100.0
                                                                                                            %
                                                                                                            $
                                                                                                            (635
                                                                                                            )
                                                                                                            (5.7
                                                                                                            )%Agent
      commissions
                                                                                                            
                                                                                                            
                                                                                                            7,455
                                                                                                            
                                                                                                            70.7
                                                                                                            %
                                                                                                            
                                                                                                            7,553
                                                                                                            
                                                                                                            67.5
                                                                                                            %
                                                                                                            
                                                                                                            (98
                                                                                                            )
                                                                                                            (1.3
                                                                                                            )%Personnel
      costs
                                                                                                            
                                                                                                            
                                                                                                            1,422
                                                                                                            
                                                                                                            13.5
                                                                                                            %
                                                                                                            
                                                                                                            1,614
                                                                                                            
                                                                                                            14.4
                                                                                                            %
                                                                                                            
                                                                                                            (192
                                                                                                            )
                                                                                                            (11.9
                                                                                                            )%Selling,
      general and administrative
                                                                                                            
                                                                                                            
                                                                                                            1,097
                                                                                                            
                                                                                                            10.4
                                                                                                            %
                                                                                                            
                                                                                                            1,117
                                                                                                            
                                                                                                            10.0
                                                                                                            %
                                                                                                            
                                                                                                            (20
                                                                                                            )
                                                                                                            (1.8
                                                                                                            )%Depreciation
      and amortization
                                                                                                            
                                                                                                            
                                                                                                            410
                                                                                                            
                                                                                                            3.9
                                                                                                            %
                                                                                                            
                                                                                                            315
                                                                                                            
                                                                                                            2.8
                                                                                                            %
                                                                                                            
                                                                                                            95
                                                                                                            
                                                                                                            30.2
                                                                                                            %Restructuring
      charges
                                                                                                            
                                                                                                            
                                                                                                            -
                                                                                                            
                                                                                                            0.0
                                                                                                            %
                                                                                                            
                                                                                                            220
                                                                                                            
                                                                                                            2.0
                                                                                                            %
                                                                                                            
                                                                                                            (220
                                                                                                            )
                                                                                                            (100.0
                                                                                                            )%Total
      operating costs
                                                                                                            
                                                                                                            
                                                                                                            10,384
                                                                                                            
                                                                                                            98.4
                                                                                                            %
                                                                                                            
                                                                                                            10,819
                                                                                                            
                                                                                                            96.7
                                                                                                            %
                                                                                                            
                                                                                                            (435
                                                                                                            )
                                                                                                            (4.0
                                                                                                            )%Income
      from operations
                                                                                                            
                                                                                                            
                                                                                                            165
                                                                                                            
                                                                                                            1.6
                                                                                                            %
                                                                                                            
                                                                                                            365
                                                                                                            
                                                                                                            3.3
                                                                                                            %
                                                                                                            
                                                                                                            (200
                                                                                                            )
                                                                                                            (54.8
                                                                                                            )%Other
      income
                                                                                                            
                                                                                                            
                                                                                                            43
                                                                                                            
                                                                                                            0.4
                                                                                                            %
                                                                                                            
                                                                                                            28
                                                                                                            
                                                                                                            0.2
                                                                                                            %
                                                                                                            
                                                                                                            15
                                                                                                            
                                                                                                            53.6
                                                                                                            %Income
      before income taxes and noncontrolling  interest
                                                                                                            
                                                                                                            
                                                                                                            208
                                                                                                            
                                                                                                            2.0
                                                                                                            %
                                                                                                            
                                                                                                            393
                                                                                                            
                                                                                                            3.5
                                                                                                            %
                                                                                                            
                                                                                                            (185
                                                                                                            )
                                                                                                            (47.1
                                                                                                            )%Income
      tax (expense) benefit
                                                                                                            
                                                                                                            
                                                                                                            (71
                                                                                                            )
                                                                                                            (0.7
                                                                                                            )%
                                                                                                            
                                                                                                            (153
                                                                                                            )
                                                                                                            (1.4
                                                                                                            )%
                                                                                                            
                                                                                                            82
                                                                                                            
                                                                                                            53.6
                                                                                                            %Income
      before noncontrolling interest
                                                                                                            
                                                                                                            
                                                                                                            137
                                                                                                            
                                                                                                            1.3
                                                                                                            %
                                                                                                            
                                                                                                            240
                                                                                                            
                                                                                                            2.2
                                                                                                            %
                                                                                                            
                                                                                                            (103
                                                                                                            )
                                                                                                            (42.9
                                                                                                            )%Noncontrolling
      interest
                                                                                                            
                                                                                                            
                                                                                                            (21
                                                                                                            )
                                                                                                            (0.2
                                                                                                            )%
                                                                                                            
                                                                                                            10
                                                                                                            
                                                                                                            0.1
                                                                                                            %
                                                                                                            
                                                                                                            (31
                                                                                                            )
                                                                                                            (310.0
                                                                                                            )%Net
      income
                                                                                                            
                                                                                                            $
                                                                                                            116
                                                                                                            
                                                                                                            1.1
                                                                                                            %
                                                                                                            $
                                                                                                            250
                                                                                                            
                                                                                                            2.2
                                                                                                            %
                                                                                                            $
                                                                                                            (134
                                                                                                            )
                                                                                                            (53.6
                                                                                                            )%




23


Agent
commissions were $7.5 million for the three months ended September 30, 2009
compared to $7.6 million for the three months ending September 30,
2008.  Agent commissions as a percentage of net transportation revenue
were 70.7% for three months ended September 30, 2009, an increase from 67.5% for
the comparable prior year period.  Agent commissions as a percentage
of gross transportation revenues decreased to 21.9%, compared to 23.3% for the
quarter ending September 30, 2008.  This was due principally to the
reduced year over year contribution of the company-owned locations.




Personnel
costs were $1.4 million for the three months ended September 30, 2009, a
decrease of 11.9% from $1.6 million for the three months ended September 30,
2008.  Personnel costs as a percentage of net transportation revenue
was 13.5% for three months ended September 30, 2009, a decrease from 14.4% for
the comparable prior year period primarily as a result of reduced personnel
costs associated with the integration of the back-office Adcom operations into
the operations of RGL.




Other
selling, general and administrative costs were $1.1 million for the three months
ended September 30, 2009 and 2008. As a percentage of net transportation
revenue, other selling, general and administrative costs increased to 10.4% for
three months ended September 30, 2009, from 10.0% for the comparable prior year
period.




Depreciation
and amortization costs were approximately $0.4 million and $0.3 million for the
three months ended September 30, 2009 and 2008,
respectively.  Depreciation and amortization as a percentage of net
transportation revenue increased from 2.8% to 3.9%.  The increase of
depreciation and amortization costs was a result of having a full quarter of
costs being included in the current quarter compared to only one month of Adcom
depreciation & amortization in the comparable prior year
period.




Restructuring
costs incurred in the three months ending September 30, 2008, were $0.2 million
as a result of the Adcom acquisition and relate to the elimination of redundant
international personnel and facilities costs.  These restructuring
charges were to be paid out over a one year period.  There were no
similar costs for the three months ending September 30, 2009.




Income
from operations was $0.2 million for the three months ended September 30, 2009,
compared to income from operations of $0.4 million for the three months ended
September 30, 2008.




Other
income was $43,000 for the three months ended September 30, 2009, compared to
other income of $28,000 for the three months ended September 30,
2008.




Net
income was $0.1 million for the three months ended September 30, 2009, compared
to net income of $0.3 million for the three months ended September 30,
2008.


24


Supplemental
Pro forma Information




The
following table provides a reconciliation of September 30, 2009 (actual and
unaudited) and September 30, 2008 (pro forma and unaudited) adjusted EBITDA to
net income, the most directly comparable GAAP measure in accordance with SEC
Regulation G (in thousands):




Three months ended September 30,
                                          
                                          
                                          Change2009
                                          
                                          
                                          2008
                                          
                                          
                                          Amount
                                          
                                          
                                          PercentNet
      income
                                          
                                          $
                                          116
                                          
                                          
                                          $
                                          178
                                          
                                          
                                          $
                                          (62
                                          )
                                          
                                          
                                          (34.8
                                          )%Income
      tax expense (benefit)
                                          
                                          
                                          71
                                          
                                          
                                          
                                          109
                                          
                                          
                                          
                                          (38
                                          )
                                          
                                          
                                          (34.9
                                          )%Net
      interest expense
                                          
                                          
                                          55
                                          
                                          
                                          
                                          100
                                          
                                          
                                          
                                          (45
                                          )
                                          
                                          
                                          (45.0
                                          )%Depreciation
      and amortization
                                          
                                          
                                          410
                                          
                                          
                                          
                                          469
                                          
                                          
                                          
                                          (59
                                          )
                                          
                                          
                                          (12.6
                                          )%EBITDA
      (Earnings before interest, taxes, depreciation and
      amortization)
                                          
                                          $
                                          652
                                          
                                          
                                          $
                                          856
                                          
                                          
                                          $
                                          (204
                                          )
                                          
                                          
                                          (23.8
                                          )%Share
      based compensation and other non-cash costs
                                          
                                          
                                          70
                                          
                                          
                                          
                                          63
                                          
                                          
                                          
                                          7
                                          
                                          
                                          
                                          11.1
                                          %Adjusted
      EBITDA
                                          
                                          $
                                          722
                                          
                                          
                                          $
                                          919
                                          
                                          
                                          $
                                          (197
                                          )
                                          
                                          
                                          (21.4
                                          )%




The
following table summarizes September 30, 2009 (actual and unaudited) and
September 30, 2008 (pro forma and unaudited) transportation revenue, cost of
transportation and net transportation revenue (in thousands):




Three months ended September 30,
                                                      
                                                      
                                                      Change2009
                                                      
                                                      
                                                      2008
                                                      
                                                      
                                                      Amount
                                                      
                                                      
                                                      PercentTransportation
      revenue
                                                      
                                                      $
                                                      34,028
                                                      
                                                      
                                                      $
                                                      49,242
                                                      
                                                      
                                                      $
                                                      (15,214
                                                      )
                                                      
                                                      
                                                      (30.9
                                                      )%Cost
      of transportation
                                                      
                                                      
                                                      23,479
                                                      
                                                      
                                                      
                                                      32,458
                                                      
                                                      
                                                      
                                                      (8,979
                                                      )
                                                      
                                                      
                                                      (27.7
                                                      )%Net
      transportation revenue
                                                      
                                                      $
                                                      10,549
                                                      
                                                      
                                                      $
                                                      16,784
                                                      
                                                      
                                                      $
                                                      (6,235
                                                      )
                                                      
                                                      
                                                      (37.1
                                                      )%Net
      transportation margins
                                                      
                                                      
                                                      31.0
                                                      %
                                                      
                                                      
                                                      34.1
                                                      %




Transportation
revenue was $34.0 million for the three months ended September 30, 2009, a
decrease of 30.9% over transportation revenue of $49.2 million for the three
months ended September 30, 2008.  The decrease was attributed to the
weakness in the global economy.




Cost of
transportation decreased 27.7% to $23.5 million for the three months ended
September 30, 2009, compared to $32.5 million for the three months ended
September 30, 2008.




Transportation
margins decreased to 31.0% of transportation revenue for the three months ended
September 30, 2009, as compared to 34.1% of transportation revenue for the three
months ended September 30, 2008.




The
following table compares certain condensed consolidated statement of income data
as a percentage of our net transportation revenue (in thousands) for the three
months ended September 30, 2009 (actual and unaudited) and September 30, 2008
(pro forma and unaudited):




Three months ended September 30,2009
                                                                                                        
                                                                                                        2008
                                                                                                        
                                                                                                        ChangeAmount
                                                                                                        
                                                                                                        Percent
                                                                                                        
                                                                                                        Amount
                                                                                                        
                                                                                                        Percent
                                                                                                        
                                                                                                        Amount
                                                                                                        
                                                                                                        PercentNet
      transportation revenue
                                                                                                        
                                                                                                        $
                                                                                                        10,549
                                                                                                        
                                                                                                        100.0
                                                                                                        %
                                                                                                        $
                                                                                                        16,784
                                                                                                        
                                                                                                        100.0
                                                                                                        %
                                                                                                        $
                                                                                                        (6,235
                                                                                                        )
                                                                                                        (37.1
                                                                                                        )%Agent
      commissions
                                                                                                        
                                                                                                        
                                                                                                        7,455
                                                                                                        
                                                                                                        70.7
                                                                                                        %
                                                                                                        
                                                                                                        11,913
                                                                                                        
                                                                                                        71.0
                                                                                                        %
                                                                                                        
                                                                                                        (4,458
                                                                                                        )
                                                                                                        (37.4
                                                                                                        )%Personnel
      costs
                                                                                                        
                                                                                                        
                                                                                                        1,422
                                                                                                        
                                                                                                        13.5
                                                                                                        %
                                                                                                        
                                                                                                        2,259
                                                                                                        
                                                                                                        13.5
                                                                                                        %
                                                                                                        
                                                                                                        (837
                                                                                                        )
                                                                                                        (37.1
                                                                                                        )%Selling,
      general and administrative
                                                                                                        
                                                                                                        
                                                                                                        1,097
                                                                                                        
                                                                                                        10.4
                                                                                                        %
                                                                                                        
                                                                                                        1,484
                                                                                                        
                                                                                                        8.8
                                                                                                        %
                                                                                                        
                                                                                                        (387
                                                                                                        )
                                                                                                        (26.1
                                                                                                        )%Depreciation
      and amortization
                                                                                                        
                                                                                                        
                                                                                                        410
                                                                                                        
                                                                                                        3.9
                                                                                                        %
                                                                                                        
                                                                                                        469
                                                                                                        
                                                                                                        2.8
                                                                                                        %
                                                                                                        
                                                                                                        (59
                                                                                                        )
                                                                                                        (12.6
                                                                                                        )%Restructuring
      charges
                                                                                                        
                                                                                                        
                                                                                                        -
                                                                                                        
                                                                                                        0.0
                                                                                                        %
                                                                                                        
                                                                                                        220
                                                                                                        
                                                                                                        1.3
                                                                                                        %
                                                                                                        
                                                                                                        (220
                                                                                                        )
                                                                                                        (100.0
                                                                                                        )%Total
      operating costs
                                                                                                        
                                                                                                        
                                                                                                        10,384
                                                                                                        
                                                                                                        98.4
                                                                                                        %
                                                                                                        
                                                                                                        16,345
                                                                                                        
                                                                                                        97.4
                                                                                                        %
                                                                                                        
                                                                                                        (5,961
                                                                                                        )
                                                                                                        (36.5
                                                                                                        )%Income
      from operations
                                                                                                        
                                                                                                        
                                                                                                        165
                                                                                                        
                                                                                                        1.6
                                                                                                        %
                                                                                                        
                                                                                                        439
                                                                                                        
                                                                                                        2.6
                                                                                                        %
                                                                                                        
                                                                                                        (274
                                                                                                        )
                                                                                                        (62.4
                                                                                                        )%Other
      income
                                                                                                        
                                                                                                        
                                                                                                        43
                                                                                                        
                                                                                                        0.4
                                                                                                        %
                                                                                                        
                                                                                                        (162
                                                                                                        )
                                                                                                        (1.0
                                                                                                        )%
                                                                                                        
                                                                                                        205
                                                                                                        
                                                                                                        126.5
                                                                                                        %Income
      before income taxes and noncontrolling  interest
                                                                                                        
                                                                                                        
                                                                                                        208
                                                                                                        
                                                                                                        2.0
                                                                                                        %
                                                                                                        
                                                                                                        277
                                                                                                        
                                                                                                        1.7
                                                                                                        %
                                                                                                        
                                                                                                        (69
                                                                                                        )
                                                                                                        (24.9
                                                                                                        )%Income
      tax (expense) benefit
                                                                                                        
                                                                                                        
                                                                                                        (71
                                                                                                        )
                                                                                                        (0.7
                                                                                                        )%
                                                                                                        
                                                                                                        (109
                                                                                                        )
                                                                                                        (0.6
                                                                                                        )%
                                                                                                        
                                                                                                        (38
                                                                                                        )
                                                                                                        (34.9
                                                                                                        )%Income
      before noncontrolling interest
                                                                                                        
                                                                                                        
                                                                                                        137
                                                                                                        
                                                                                                        1.3
                                                                                                        %
                                                                                                        
                                                                                                        168
                                                                                                        
                                                                                                        1.0
                                                                                                        %
                                                                                                        
                                                                                                        (31
                                                                                                        )
                                                                                                        (18.5
                                                                                                        )%Noncontrolling
      interest
                                                                                                        
                                                                                                        
                                                                                                        (21
                                                                                                        )
                                                                                                        (0.2
                                                                                                        )%
                                                                                                        
                                                                                                        10
                                                                                                        
                                                                                                        0.1
                                                                                                        %
                                                                                                        
                                                                                                        (31
                                                                                                        )
                                                                                                        (310.0
                                                                                                        )%Net
      income
                                                                                                        
                                                                                                        $
                                                                                                        116
                                                                                                        
                                                                                                        1.1
                                                                                                        %
                                                                                                        $
                                                                                                        178
                                                                                                        
                                                                                                        1.1
                                                                                                        %
                                                                                                        $
                                                                                                        (62
                                                                                                        )
                                                                                                        (34.8
                                                                                                        )%




25


Agent
commissions were $7.5 million for the three months ended September 30, 2009
compared to $11.9 million for the three months ending September 30,
2008.  Agent commissions as a percentage of net transportation revenue
decreased to 70.7% for three months ended September 30, 2009, from 71.0% for the
comparable prior year period.  This was due principally to the reduced
year over year contribution of the company-owned locations.




Personnel
costs were $1.4 million for the three months ended September 30, 2009, a
decrease of 37.1% from $2.3 million for the three months ended September 30,
2008 primarily as a result of reduced personnel costs associated with the
integration of the back-office Adcom operations into the operations of
RGL.  Personnel costs as a percentage of net transportation revenue
was unchanged at 13.5% for both periods.




Other
selling, general and administrative costs were $1.1 million for the three months
ended September 30, 2009 a decrease of 26.1% from $1.5 million for the three
months ended September 30, 2008 due to integrations of the Adcom office into
RLG.  As a percentage of net transportation revenue, other selling,
general and administrative costs increased to 10.4% for three months ended
September 30, 2009, from 8.8% for the comparable prior year period.




Depreciation
and amortization costs were approximately $0.4 million and $0.5 million for the
three months ended September 30, 2009 and 2008,
respectively.  Depreciation and amortization as a percentage of net
transportation revenue increased from 2.8% to 3.9% due to lower net
transportation revenues for the quarter ending September 30, 2009.




Restructuring
costs incurred in the three months ending September 30, 2008, were $0.2 million
as a result of the Adcom acquisition and relate to the elimination of redundant
international personnel and facilities costs.  These restructuring
charges were to be paid out over a one year period.  There were no
similar costs for the three months ending September 30, 2009.




Income
from operations was $0.2 million for the three months ended September 30, 2009,
compared to income from operations of $0.4 million for the three months ended
September 30, 2008.




Other
income was $43,000 for the three months ended September 30, 2009, compared to
other expense of $162,000 for the three months ended September 30,
2008.




Net
income was $0.1 million for the three months ended September 30, 2009, compared
to net income of $0.2 million for the three months ended September 30,
2008.




Liquidity
and Capital Resources




Net cash
used for operating activities was $0.3 million for the three months ended
September 30, 2009, compared to net cash provided by operating activities of
$1.1 million for the three months ended September 30, 2008.  The
change was principally driven by expansion in our accounts receivable balances
as a result of growth in our International forwarding services.




Net cash
used for investing was $0.1 million for the three months ended September 30,
2009, compared to net cash used of $4.9 million for the three months ended
September 30, 2008.  Use of cash for the three months ended September
30, 2009, related primarily to earn-out payments made to the former Adcom
shareholder. Use of cash for the three months ended September 30, 2008 consisted
primarily of approximately $4.8 million spent on the acquisition of Adcom, and
an additional $0.1 million spent for furniture and equipment.


26


Net cash
provided by financing activities was $0.3 million for the three months ended
September 30, 2009, compared to net cash provided by financing activities of
$4.3 million for the three months ended September 30, 2008.  The cash
provided by financing activities for the three months ended September 30, 2009,
consisted primarily of borrowings from our credit facility of $0.7 million,
offset by purchases of treasury stock of $0.4 million.  The cash
provided by financing activities for the three months ended September 30, 2008,
consisted primarily of borrowings from our credit facility for the acquisition
of Adcom.




Acquisitions




Below are
descriptions of material acquisitions made since 2006 including a breakdown of
consideration paid at closing and future potential earn-out payments. We define
"material acquisitions" as those with aggregate potential consideration of $1.0
million or more.




Effective
January 1, 2006, we acquired all of the outstanding stock of Airgroup. The
transaction was valued at up to $14.0 million. This consisted of: (i) $9.5
million payable in cash at closing; (ii) a subsequent cash payment of $0.5
million, which was paid on December 31, 2007; (iii) as amended, an additional
base payment of $0.6 million payable in cash, $0.3 million of which was paid on
June 30, 2008 and $0.3 million was paid on January 1, 2009; (iv) a base earn-out
payment of $1.9 million payable in Company common stock over a three year
earn-out period based upon Airgroup achieving income from continuing operations
of not less than $2.5 million per year; and (v) as additional incentive to
achieve future earnings growth, an opportunity to earn up to an additional $1.5
million payable in Company common stock at the end of a five-year earn-out
period (the "Tier-2 Earn-Out"). Under Airgroup’s Tier-2 Earn-Out, the former
shareholders of Airgroup are entitled to receive 50% of the cumulative income
from continuing operations in excess of $15.0 million generated during the
five-year earn-out period up to a maximum of $1.5 million. With respect to the
base earn-out payment of $1.9 million, in the event there is a shortfall in
income from continuing operations, the earn-out payment will be reduced on a
dollar-for-dollar basis to the extent of the shortfall. Shortfalls may be
carried over or carried back to the extent that income from continuing
operations in any other payout year exceeds the $2.5 million level. For the
years ended June 30, 2009 and 2008, the former shareholders of Airgroup earned
$633,000 and $417,000 in base earn-out payments, respectively.




During
the quarter ended December 31, 2007, we adjusted the estimate of accrued
transportation costs assumed in the acquisition of Airgroup which resulted in
the recognition of approximately $1.4 million in non-recurring
income.  Pursuant to the acquisition agreement, the former
shareholders of Airgroup have indemnified us for taxes of $0.5 million
associated with the income recognized in connection with this change in
estimate, which has been reflected as a reduction of the additional base payment
otherwise payable to the former shareholders of Airgroup.




In
November 2008, we amended the Airgroup Stock Purchase Agreement and agreed to
unconditionally pay the former Airgroup shareholders an earn-out payment of
$633,333 for the earn-out period ending June 30, 2009, to be paid on or about
October 1, 2009 by delivery of shares of common stock of the Company. In
consideration for the certainty of the earn-out payment, the former Airgroup
shareholders agreed (i) to waive and release us from any and all further
obligations to pay any earn-outs payments on account of shortfall amounts, if
any, which may have accumulated prior to June 30, 2009; (ii) to waive and
release us from any and all further obligation to account for and pay the Tier-2
earn-out payment; and (iii) that the earn-out payment to be paid for the
earn-out period ended June 30, 2009 would constitute a full and final payment to
the former Airgroup shareholders of any and all amounts due to the former
Airgroup shareholders under the Airgroup Stock Purchase Agreement. In March
2009, Airgroup shareholders agreed to receive $0.4 million in cash on an
accelerated basis rather than the $0.6 million in Company shares due in October
of 2009. No further payments of purchase price are due in connection with this
acquisition.




In May
2007, we launched a new logistics service offering focused on the automotive
industry through our wholly owned subsidiary, Radiant Logistics Global Services,
Inc. ("RLGS"). We entered into an Asset Purchase Agreement (the “APA”) with Mass
Financial Corporation ("Mass") to acquire certain assets formerly used in the
operations of the automotive division of Stonepath Group, Inc. The original
agreement provided for a purchase price of up to $2.75 million, and was later
reduced due to indemnity claims asserted against Mass.


27


In
November 2007, the purchase price was reduced to $1.6 million, consisting of
cash of $0.6 million and a $1.0 million credit in satisfaction of indemnity
claims asserted by us arising from our interim operation of the Purchased Assets
since May 22, 2007. Of the cash component, $0.1 million was paid in May of 2007,
$0.3 million was paid at closing, and a final payment of $0.2 million was to be
paid in November of 2008, subject to off-set of up to $0.1 million for certain
qualifying expenses incurred by us. Net of qualifying expenses and a discount
for accelerated payment, the final payment was reduced to $0.1 million and paid
in June of 2008. No further payments of purchase price are due in connection
with this acquisition.




Effective
September 5, 2008, we acquired all of the outstanding stock of Adcom Express,
Inc. The transaction was valued at up to $11,050,000, consisting of: (i)
$4,750,000.00 in cash paid at the closing; (ii) $250,000 in cash payable shortly
after the closing, subject to adjustment, based upon the working capital of
Adcom as of August 31, 2008; (iii) up to $2,800,000 in four "Tier-1 Earn-Out
Payments" of up to $700,000 each, covering the four year earn-out period through
2012, based upon Adcom achieving certain levels of "Gross Profit Contribution"
(as defined in the stock purchase agreement), payable 50% in cash and 50% in
shares of our common stock (valued at delivery date); (iv) a "Tier-2 Earn-Out
Payment" of up to a maximum of $2,000,000, equal to 20% of the amount by which
the Adcom cumulative Gross Profit Contribution exceeds $16,560,000 during the
four year earn-out period; and (v) an "Integration Payment" of $1,250,000,
payable (a) on the earlier of the date certain integration targets are achieved
or 18 months after the closing, and (b) payable 50% in cash and 50% in our
shares of our common stock (valued at delivery date).




A dispute
has arisen between us and Robert Friedman, the former shareholder of Adcom
regarding, among other things, the final purchase price based upon the closing
date working capital, as adjusted, of Adcom. Mr. Friedman has filed an
arbitration claim against us. We have fully accrued for all amounts potentially
due Mr. Friedman in connection with the stock purchase agreement, but believe
these amounts could be reduced by more than $630,000 pending the resolution of
the disputed amounts in our favor. A hearing has commenced and is expected to
resume in December, 2009.  We are not able to provide any definitive
guidance on the likely outcome of this matter.




For the
year ended June 30, 2009, the former Adcom shareholder earned approximately
$337,000. This amount is included in "Due to former Adcom shareholder" on the
face of our balance sheet and was payable on October 1, 2009, in a combination
of cash and Company common stock. On or about September 30, 2009, we received
written notice of a claim by Ryder Truck Rental, Inc. in the amount of
approximately $500,000 alleging breach of an alleged guaranty agreement executed
by Adcom. We have commenced the process of seeking indemnification from the
former shareholder of Adcom in accordance with the stock purchase agreement
related to the Adcom acquisition. We have also asserted our rights under the
stock purchase agreement to set off payments under the Stock Purchase Agreement
as a result of this claim, including the $337,000 referenced above.




Assuming
minimum targeted earnings levels are achieved, the following table summarizes
our contingent base earn-out payments related to the acquisition of Adcom, for
the fiscal years indicated based on results of the prior year (in
thousands):




Estimated payment anticipated for fiscal year(1):
                        2011
                        
                        2012
                        
                        2013Earn-out period:
                        7/1/2009 –
                          6/30/2010
                        
                        7/1/2010 –
                          6/30/2011
                        
                        7/1/2011 –
                          6/30/2012Earn-out
      payments:Cash
                        
                        $
                        350
                        
                        
                        $
                        350
                        
                        
                        $
                        350Equity
                        
                        
                        350
                        
                        
                        
                        350
                        
                        
                        
                        350Total
      potential earn-out payments
                        
                        $
                        700
                        
                        
                        $
                        700
                        
                        
                        $
                        700Total
      gross margin targets
                        
                        $
                        4,320
                        
                        
                        $
                        4,320
                        
                        
                        $
                        4,320




28


(1)
Earn-out payments are paid October 1 following each fiscal year end in a
combination of cash and Company common stock.




Credit
Facility




We
currently have a $15.0 million revolving credit facility, including a $500,000
sublimit for letters of credit (the “Facility”), with Bank of America, NA (the
“Bank”) which expires in February 2011. The Facility is collateralized by
accounts receivable and other assets of the Company and our subsidiaries.
Advances under the Facility are available to fund future acquisitions, capital
expenditures or for other corporate purposes. Borrowings under the facility bear
interest, at our option, at the Bank’s prime rate minus .15% to 1.00% or LIBOR
plus 1.55% to 2.25%, and can be adjusted up or down during the term of the
Facility based on our performance relative to certain financial covenants. The
Facility provides for advances of up to 80% of our eligible domestic accounts
receivable and for advances of up to 60% of our eligible foreign accounts
receivable.




The terms
of the Facility are subject to certain financial and operational covenants which
may limit the amount otherwise available under the Facility. The first covenant
limits funded debt to a multiple of 3.00 times our consolidated EBITDA measured
on a rolling four quarter basis (or a multiple of 3.25 at a reduced advance rate
of 75.0%). The second financial covenant requires us to maintain a basic fixed
charge coverage ratio of at least 1.1 to 1.0. The third financial covenant is a
minimum profitability standard that requires that we not incur a net loss before
taxes, amortization of acquired intangibles and extraordinary items in any two
consecutive quarterly accounting periods.




Under the
terms of the Facility, we are permitted to make additional acquisitions without
the Bank’s consent only if certain conditions are satisfied. The conditions
imposed by the Facility include the following: (i) the absence of an event of
default under the Facility; (ii) the company to be acquired must be in the
transportation and logistics industry; (iii) the purchase price to be paid must
be consistent with the our historical business and acquisition model; (iv) after
giving effect for the funding of the acquisition, we must have undrawn
availability of at least $1.0 million under the Facility; (v) the Bank must be
reasonably satisfied with projected financial statements that we provide
covering a 12 month period following the acquisition; (vi) the acquisition
documents must be provided to the Bank and must be consistent with the
description of the transaction provided to the Bank; and (vii) the number of
permitted acquisitions is limited to three per calendar year and shall not
exceed $7.5 million in aggregate purchase price financed by funded debt. In the
event that we are not able to satisfy the conditions of the Facility in
connection with a proposed acquisition, we must forego the acquisition, obtain
the Bank’s consent, or retire the Facility. This may limit or slow our ability
to achieve the critical mass we may need to achieve our strategic
objectives.




Given our
continued focus on the build-out of our network of exclusive agency locations,
we believe that our current working capital and anticipated cash flow from
operations are adequate to fund existing operations. However, continued growth
through strategic acquisitions, will require additional sources of financing as
our existing working capital is not sufficient to finance our operations and an
acquisition program. Thus, our ability to finance future acquisitions will be
limited by the availability of additional capital. We may, however, finance
acquisitions using our common stock as all or some portion of the consideration.
In the event that our common stock does not attain or maintain a sufficient
market value or potential acquisition candidates are otherwise unwilling to
accept our securities as part of the purchase price for the sale of their
businesses, we may be required to utilize more of our cash resources, if
available, in order to continue our acquisition program. If we do not have
sufficient cash resources through either operations or from debt facilities, our
growth could be limited unless we are able to obtain such additional
capital.




We have
used a significant amount of our available capital to finance the acquisition of
Adcom. As of September 30, 2009, we have approximately $3.6 million in remaining
availability under the Facility to support future acquisitions and our on-going
working capital requirements. We expect to structure acquisitions with certain
amounts paid at closing, and the balance paid over a number of years in the form
of earn-out installments which are payable based upon the future earnings of the
acquired businesses payable in cash, stock or some combination thereof. As we
continue to execute our acquisition strategy, we will be required to make
significant payments in the future if the earn-out installments under our
various acquisitions become due. While we believe that a portion of any required
cash payments will be generated by the acquired businesses, we may have to
secure additional sources of capital to fund the remainder of any cash-based
earn-out payments as they become due. This presents us with certain business
risks relative to the availability of capacity under our Facility, the
availability and pricing of future fund raising, as well as the potential
dilution to our stockholders to the extent the earn-outs are satisfied directly,
or indirectly, from the sale of equity.


29


Off
Balance Sheet Arrangements




As of
September 30, 2009, we did not have any relationships with unconsolidated
entities or financial partners, such as entities often referred to as structured
finance or special purpose entities, which had been established for the purpose
of facilitating off-balance sheet arrangements or other contractually narrow or
limited purposes. As such, we are not materially exposed to any financing,
liquidity, market or credit risk that could arise if we had engaged in such
relationships.




Critical
Accounting Policies




Accounting
policies, methods and estimates are an integral part of the consolidated
financial statements prepared by management and are based upon management’s
current judgments. Those judgments are normally based on knowledge and
experience with regard to past and current events and assumptions about future
events. Certain accounting policies, methods and estimates are particularly
sensitive because of their significance to the financial statements and because
of the possibility that future events affecting them may differ from
management’s current judgments. While there are a number of accounting policies,
methods and estimates that affect our financial statements, the areas that are
particularly significant include the assessment of the recoverability of
long-lived assets, specifically goodwill, acquired intangibles, and revenue
recognition.




We
perform an annual impairment test for goodwill and intangible assets with
indefinite lives. The first step of the impairment test requires that we
determine the fair value of each reporting unit, and compare the fair value to
the reporting unit’s carrying amount. To the extent a reporting unit’s carrying
amount exceeds its fair value, an indication exists that the reporting unit’s
goodwill may be impaired and we must perform a second more detailed impairment
assessment. The second impairment assessment involves allocating the reporting
unit’s fair value to all of its recognized and unrecognized assets and
liabilities in order to determine the implied fair value of the reporting unit’s
goodwill as of the assessment date. The implied fair value of the reporting
unit’s goodwill is then compared to the carrying amount of goodwill to quantify
an impairment charge as of the assessment date. We typically perform our annual
impairment test effective as of April 1 of each year, unless events or
circumstances indicate, an impairment may have occurred before that
time.




Acquired
intangibles consist of customer related intangibles and non-compete agreements
arising from our acquisition. Customer related intangibles will be amortized
using accelerated methods over approximately 5 years and non-compete agreements
will be amortized using the straight line method over the term of the underlying
agreement.




We review
long-lived assets to be held-and-used for impairment whenever events or changes
in circumstances indicate that the carrying amount of the assets may not be
recoverable. If the sum of the undiscounted expected future cash flows over the
remaining useful life of a long-lived asset is less than its carrying amount,
the asset is considered to be impaired. Impairment losses are measured as the
amount by which the carrying amount of the asset exceeds the fair value of the
asset. When fair values are not available, we estimated fair value using the
expected future cash flows discounted at a rate commensurate with the risks
associated with the recovery of the asset. Assets to be disposed of are reported
at the lower of carrying amount or fair value less costs to sell.




As a
non-asset based carrier, we do not own transportation assets. We generate the
major portion of our air and ocean freight revenues by purchasing transportation
services from direct (asset-based) carriers and reselling those services to its
customers. Based upon the terms in the contract of carriage, revenues related to
shipments where we issue a House Airway Bill ("HAWB") or a House Ocean Bill of
Lading ("HOBL") are recognized at the time the freight is tendered to the direct
carrier at origin. Costs related to the shipments are also recognized at this
same time based upon anticipated margins, contractual arrangements with direct
carriers, and other known factors. The estimates are routinely monitored and
compared to actual invoiced costs. The estimates are adjusted as deemed
necessary by us to reflect differences between the original accruals and actual
costs of purchased transportation.


30


This
method generally results in recognition of revenues and purchased transportation
costs earlier than the preferred methods under generally accepted accounting
principles ("GAAP") which do not recognize revenues until a proof of delivery is
received or which recognize revenues as progress on the transit is made. Our
method of revenue and cost recognition does not result in a material difference
from amounts that would be reported under such other methods.




Item
4T.          Controls and
Procedures.




An
evaluation of the effectiveness of our "disclosure controls and procedures" (as
such term is defined in Rules 13a-15(e) or 15d-15(e) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") as of September 30, 2009, was
carried out by our management under the supervision and with the participation
of our Chief Executive Officer ("CEO") who also serves as our Chief Financial
Officer ("CFO"). Based upon that evaluation, our CEO/CFO concluded that, as of
September 30, 2009, our disclosure controls and procedures were effective to
provide reasonable assurance that information we are required to disclose in
reports that we file or submit under the Exchange Act is (i) recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission rules and forms and (ii) accumulated and
communicated to our management, including our CEO/CFO, as appropriate to allow
timely decisions regarding disclosure.




There
have not been any changes in our internal control over financial reporting (as
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred
during the fiscal quarter ended September 30, 2009, which have materially
affected, or are reasonably likely to materially affect, our internal control
over financial reporting.


31


PART
II. OTHER INFORMATION




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




We have a
share repurchase program that authorizes us to purchase up to 5,000,000 shares
of common stock through December 31, 2010.  The share repurchases may
occur from time-to-time through open market purchases at prevailing market
prices or through privately negotiated transactions as permitted by securities
laws and other legal requirements.  The following table sets forth
information regarding our repurchases or acquisitions of common stock during the
three month period ended September 30, 2009:





Period
                          
                          Total
                            Number of
                            Shares (or
                            Units)
                            Purchased
                          
                          
                          Average
                            Price Paid
                            per Share
                            (or Unit)
                          
                          
                          Total Number
                            of Shares
                            Purchased as Part
                            of Publicly
                            Announced Plans
                            or Programs
                          
                          
                          Maximum Number
                            (or Approximate
                            Dollar
                            Value) of Shares that
                            May Yet Be
                            Purchased Under the
                            Plans or Programs (1)Repurchases
      from July 1, 2009 through July 31, 2009
                          
                          
                          475,000
                          
                          
                          $
                          0.30
                          
                          
                          
                          475,000
                          
                          
                          
                          3,930,000Repurchases
      from August 1, 2009 through August 31, 2009
                          
                          
                          508,750
                          
                          
                          $
                          0.28
                          
                          
                          
                          983,750
                          
                          
                          
                          3,421,250Repurchases
      from September 1, 2009 through September 30, 2009
                          
                          
                          365,900
                          
                          
                          $
                          0.29
                          
                          
                          
                          1,349,650
                          
                          
                          
                          3,055,350Total
                          
                          
                          1,349,650
                          
                          
                          $
                          0.29
                          
                          
                          
                          1,349,650
                          
                          
                          
                          3,055,350





(1)
            In
      May 2009, our Board of Directors authorized the repurchase of up to
      5,000,000 shares of our common
stock.





Item
6. Exhibits




Exhibit
                      No.
                    
                    Exhibit
                    
                    Method of
                      Filing31.1
                    
                    Certification
      by Principal Executive Officer and Principal Financial Officer pursuant
      to  Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act
      of 1934, as amended, as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002
                    
                    Filed
      herewith32.1
                    
                    Certification
      by the Principal Executive Officer and Principal Financial Officer
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002
                    
                    Filed
      herewith99.1
                    
                    Press
      Release dated November 16, 2009
                    
                    FiledHerewith




32





SIGNATURES




Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.




RADIANT
      LOGISTICS, INC.Date:
      November 16, 2009
                /s/ Bohn H. CrainBohn
      H. CrainChief
      Executive Officer and Chief Financial
Officer




Date:
      November 16, 2009
              /s/ Todd E. MacomberTodd
      E. MacomberSenior
      Vice President and Chief Accounting
Officer


33




EXHIBIT
INDEX




Exhibit
                    No.
                  
                  Exhibit31.1
                  
                  Certification
      by Principal Executive Officer and Principal Financial Officer pursuant to
      Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as
      amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
      200232.1
                  
                  Certification
      by Principal Executive Officer/Principal Financial Officer pursuant to 18
      U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 200299.1
                  
                  Press
      Release dated November 16 ,
2009


34