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: December 31, 2010
   ̈ 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.)
 
 405 114thAve S.E., Bellevue, WA
    98004(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 30,514,759 issued and outstanding shares of the registrant’s common stock,
par value $.001 per share, as of February 11, 2011.
  
  RADIANT
LOGISTICS, INC.
 TABLE
OF CONTENTS
  PART
      I. FINANCIAL INFORMATIONItem
      1.
                                        
                                        Condensed
      Consolidated Financial Statements - UnauditedCondensed
      Consolidated Balance Sheets at December 31, 2010 and June 30,
      2010
                                        
                                        3Condensed
      Consolidated Statements of Operations for the three and six months ended
      December 31, 2010 and 2009
                                        
                                        5Condensed
      Consolidated Statement of Stockholders’ Equity for the six months ended
      December 31, 2010
                                        
                                        6Condensed
      Consolidated Statements of Cash Flows for the six months ended December
      31, 2010 and 2009
                                        
                                        7Notes
      to Condensed Consolidated Financial Statements
                                        
                                        9Item
      2.
                                        
                                        Management’s
      Discussion and Analysis of Financial Conditions and Results of
      Operations
                                        
                                        20Item
      4.
                                        
                                        Controls
      and Procedures
                                        
                                        31PART
      II OTHER INFORMATIONItem
      1.
                                        
                                        Legal
      Proceedings
                                        
                                        32Item
      2.
                                        
                                        Unregistered
      Sales of Equity Securities and Use of Proceeds
                                        
                                        32Item
      6.
                                        
                                        Exhibits
                                        
                                        33
  2
  RADIANT
LOGISTICS, INC.
 Condensed
Consolidated Balance Sheets
 (unaudited)
 
 DECEMBER 31,
                        
                        
                        JUNE 30,2010
                        
                        
                        2010ASSETSCurrent
      assets:Cash
      and cash equivalents
                        
                        $
                        98,042
                        
                        
                        $
                        682,108Accounts
      receivable, net of allowance of $474,258 and $626,401,
      respectively
                        
                        
                        23,783,074
                        
                        
                        
                        21,442,023Current
      portion of employee loan receivable
                        
                        
                        18,001
                        
                        
                        
                        13,100Current
      portion of  station and other receivables
                        
                        
                        110,822
                        
                        
                        
                        195,289Prepaid
      expenses and other current assets
                        
                        
                        1,779,261
                        
                        
                        
                        1,104,211Deferred
      tax asset
                        
                        
                        316,740
                        
                        
                        
                        402,428Total
      current assets
                        
                        
                        26,105,940
                        
                        
                        
                        23,839,159Furniture
      and equipment, net
                        
                        
                        880,678
                        
                        
                        
                        881,416Acquired
      intangibles, net
                        
                        
                        1,526,182
                        
                        
                        
                        2,019,757Goodwill
                        
                        
                        1,011,310
                        
                        
                        
                        982,788Employee
      loan receivable, net of current portion
                        
                        
                        29,526
                        
                        
                        
                        38,000Station
      and other receivables, net of current portion
                        
                        
                        136,051
                        
                        
                        
                        151,160Investment
      in real estate
                        
                        
                        40,000
                        
                        
                        
                        40,000Deposits
      and other assets
                        
                        
                        177,785
                        
                        
                        
                        153,116Deferred
      tax asset – long term
                        
                        
                        190,718
                        
                        
                        
                        106,023Total
      long term assets
                        
                        
                        3,111,572
                        
                        
                        
                        3,490,844Total
      assets
                        
                        $
                        30,098,190
                        
                        
                        $
                        28,211,419LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      liabilities:Accounts
      payable and accrued transportation costs
                        
                        $
                        18,023,253
                        
                        
                        $
                        16,004,814Commissions
      payable
                        
                        
                        1,965,506
                        
                        
                        
                        2,119,503Other
      accrued costs
                        
                        
                        684,796
                        
                        
                        
                        538,854Income
      taxes payable
                        
                        
                        212,410
                        
                        
                        
                        76,309Due
      to former Adcom shareholder
                        
                        
                        36,708
                        
                        
                        
                        603,205Other
      current liabilities
                        
                        
                        75,000
                        
                        
                        
                        -Total
      current liabilities
                        
                        
                        20,997,673
                        
                        
                        
                        19,342,685Long
      term debt
                        
                        
                        6,319,629
                        
                        
                        
                        7,641,021Other
      long term liabilities
                        
                        
                        611,024
                        
                        
                        
                        439,905Total
      long term liabilities
                        
                        
                        6,930,653
                        
                        
                        
                        8,080,926Total
      liabilities
                        
                        
                        27,928,326
                        
                        
                        
                        27,423,611
  3
  RADIANT
LOGISTICS, INC.
 Condensed
Consolidated Balance Sheets (continued)
 (unaudited)
 
 DECEMBER 31,
                        
                        
                        JUNE 30,2010
                        
                        
                        2010Stockholders'
      equity:Radiant
      Logistics, Inc. stockholders' equity: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,  29,782,721 and 31,273,461 shares issued and
      outstanding, respectively
                        
                        
                        16,157
                        
                        
                        
                        16,157Common
      stock issuable, $0.001 par value, 732,038 and 0 shares,
      respectively
                        
                        
                        732
                        
                        
                        
                        -Additional
      paid-in capital
                        
                        
                        8,446,788
                        
                        
                        
                        8,108,239Treasury
      stock, at cost, 4,919,239 and 3,428,499 shares,
    respectively
                        
                        
                        (1,407,455
                        )
                        
                        
                        (936,190
                        )Retained
      deficit
                        
                        
                        (4,967,738
                        )
                        
                        
                        (6,466,946
                        )Total
      Radiant Logistics, Inc. stockholders’ equity
                        
                        
                        2,088,484
                        
                        
                        
                        721,260Non-controlling
      interest
                        
                        
                        81,380
                        
                        
                        
                        66,548Total
      stockholders’ equity
                        
                        
                        2,169,864
                        
                        
                        
                        787,808Total
      liabilities and stockholders’ equity
                        
                        $
                        30,098,190
                        
                        
                        $
                        28,211,419
 
 The
accompanying notes form an integral part of these condensed consolidated
financial statements.
  4
  RADIANT
LOGISTICS, INC.
 Condensed
Consolidated Statements of Operations
 (unaudited)
 
 THREE MONTHS ENDED
                                                        DECEMBER 31,
                                                      
                                                      
                                                      SIX MONTHS ENDED
                                                        DECEMBER 31,2010
                                                      
                                                      
                                                      2009
                                                      
                                                      
                                                      2010
                                                      
                                                      
                                                      2009Revenue
                                                      
                                                      $
                                                      44,496,820
                                                      
                                                      
                                                      $
                                                      39,115,845
                                                      
                                                      
                                                      $
                                                      90,857,877
                                                      
                                                      
                                                      $
                                                      73,144,179Cost
      of transportation
                                                      
                                                      
                                                      30,314,763
                                                      
                                                      
                                                      
                                                      27,611,567
                                                      
                                                      
                                                      
                                                      62,557,124
                                                      
                                                      
                                                      
                                                      51,091,017Net
      revenues
                                                      
                                                      
                                                      14,182,057
                                                      
                                                      
                                                      
                                                      11,504,278
                                                      
                                                      
                                                      
                                                      28,300,753
                                                      
                                                      
                                                      
                                                      22,053,162Agent
      commissions
                                                      
                                                      
                                                      9,850,191
                                                      
                                                      
                                                      
                                                      7,838,360
                                                      
                                                      
                                                      
                                                      19,682,651
                                                      
                                                      
                                                      
                                                      15,293,565Personnel
      costs
                                                      
                                                      
                                                      1,561,268
                                                      
                                                      
                                                      
                                                      1,531,465
                                                      
                                                      
                                                      
                                                      3,118,428
                                                      
                                                      
                                                      
                                                      2,953,862Selling,
      general and administrative expenses
                                                      
                                                      
                                                      1,140,135
                                                      
                                                      
                                                      
                                                      1,153,161
                                                      
                                                      
                                                      
                                                      2,203,417
                                                      
                                                      
                                                      
                                                      2,249,433Depreciation
      and amortization
                                                      
                                                      
                                                      326,808
                                                      
                                                      
                                                      
                                                      385,937
                                                      
                                                      
                                                      
                                                      652,066
                                                      
                                                      
                                                      
                                                      795,717Total
      operating expenses
                                                      
                                                      
                                                      12,878,402
                                                      
                                                      
                                                      
                                                      10,908,923
                                                      
                                                      
                                                      
                                                      25,656,562
                                                      
                                                      
                                                      
                                                      21,292,577Income
      from operations
                                                      
                                                      
                                                      1,303,655
                                                      
                                                      
                                                      
                                                      595,355
                                                      
                                                      
                                                      
                                                      2,644,191
                                                      
                                                      
                                                      
                                                      760,585Other
      income (expense):Interest
      income
                                                      
                                                      
                                                      5,630
                                                      
                                                      
                                                      
                                                      9,563
                                                      
                                                      
                                                      
                                                      11,439
                                                      
                                                      
                                                      
                                                      3,273Interest
      expense
                                                      
                                                      
                                                      (42,179
                                                      )
                                                      
                                                      
                                                      (36,756
                                                      )
                                                      
                                                      
                                                      (84,421
                                                      )
                                                      
                                                      
                                                      (85,791
                                                      )Other
                                                      
                                                      
                                                      63,407
                                                      
                                                      
                                                      
                                                      454
                                                      
                                                      
                                                      
                                                      89,693
                                                      
                                                      
                                                      
                                                      98,765Gain
      (loss) on litigation settlement
                                                      
                                                      
                                                      (150,000
                                                      )
                                                      
                                                      
                                                      354,670
                                                      
                                                      
                                                      
                                                      (150,000
                                                      )
                                                      
                                                      
                                                      354,670Total
      other income (expense)
                                                      
                                                      
                                                      (123,142
                                                      )
                                                      
                                                      
                                                      327,931
                                                      
                                                      
                                                      
                                                      (133,289
                                                      )
                                                      
                                                      
                                                      370,917Income
      before income tax expense
                                                      
                                                      
                                                      1,180,513
                                                      
                                                      
                                                      
                                                      923,286
                                                      
                                                      
                                                      
                                                      2,510,902
                                                      
                                                      
                                                      
                                                      1,131,502Income
      tax expense
                                                      
                                                      
                                                      (413,319
                                                      )
                                                      
                                                      
                                                      (336,539
                                                      )
                                                      
                                                      
                                                      (918,862
                                                      )
                                                      
                                                      
                                                      (407,665
                                                      )Net
      income
                                                      
                                                      
                                                      767,194
                                                      
                                                      
                                                      
                                                      586,747
                                                      
                                                      
                                                      
                                                      1,592,040
                                                      
                                                      
                                                      
                                                      723,837Less:
      Net income attributable to non-controlling interest
                                                      
                                                      
                                                      (50,929
                                                      )
                                                      
                                                      
                                                      (37,638
                                                      )
                                                      
                                                      
                                                      (92,832
                                                      )
                                                      
                                                      
                                                      (58,678
                                                      )Net
      income attributable to Radiant Logistics, Inc.
                                                      
                                                      $
                                                      716,265
                                                      
                                                      
                                                      $
                                                      549,109
                                                      
                                                      
                                                      $
                                                      1,499,208
                                                      
                                                      
                                                      $
                                                      665,159Net
      income per common share – basic and diluted
                                                      
                                                      $
                                                      .02
                                                      
                                                      
                                                      $
                                                      .02
                                                      
                                                      
                                                      $
                                                      .05
                                                      
                                                      
                                                      $
                                                      .02Weighted
      average shares outstanding:Basic
      shares
                                                      
                                                      
                                                      30,122,700
                                                      
                                                      
                                                      
                                                      32,533,680
                                                      
                                                      
                                                      
                                                      30,296,880
                                                      
                                                      
                                                      
                                                      32,950,810Diluted
      shares
                                                      
                                                      
                                                      31,212,861
                                                      
                                                      
                                                      
                                                      32,723,181
                                                      
                                                      
                                                      
                                                      30,968,361
                                                      
                                                      
                                                      
                                                      33,135,684
 
 The
accompanying notes form an integral part of these condensed consolidated
financial statements.
  5
  RADIANT
LOGISTICS, INC.
 Condensed
Consolidated Statement of Stockholders’ Equity
 (unaudited)
  RADIANTLOGISTICS,INC.STOCKHOLDERSCOMMON STOCK
                      
                      
                      COMMON STOCK
                        ISSUABLE
                      
                      
                      ADDITIONAL
                        PAID-IN
                      
                      
                      TREASURY
                      
                      
                      RETAINED
                      
                      
                      NON-
                        CONTROLLING
                      
                      
                      TOTAL
                        STOCKHOLDERS’SHARES
                      
                      
                      AMOUNT
                      
                      
                      SHARES
                      
                      
                      AMOUNT
                      
                      
                      CAPITAL
                      
                      
                      STOCK
                      
                      
                      DEFICIT
                      
                      
                      INTEREST
                      
                      
                      EQUITY(DEFICIT)Balance
      at June 30, 2010
                      
                      
                      31,273,461
                      
                      
                      $
                      16,157
                      
                      
                      
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      8,108,239
                      
                      
                      $
                      (936,190
                      )
                      
                      $
                      (6,466,946
                      )
                      
                      $
                      66,548
                      
                      
                      $
                      787,808Repurchase
      of common stock
                      
                      
                      (1,490,740
                      )
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      (471,265
                      )
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      (471,265
                      )Issuance
      of common stock to the former Adcom shareholder per earn-out agreement at
      $0.35 per share
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      732,038
                      
                      
                      
                      732
                      
                      
                      
                      257,778
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      258,510Share-based
      compensation
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      80,771
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      80,771Distribution
      to non-controlling interest
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      (78,000
                      )
                      
                      
                      (78,000
                      )Net
      income for the six months ended December 31, 2010
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      1,499,208
                      
                      
                      
                      92,832
                      
                      
                      
                      1,592,040Balance
      at December 31, 2010
                      
                      
                      29,782,721
                      
                      
                      $
                      16,157
                      
                      
                      
                      732,038
                      
                      
                      $
                      732
                      
                      
                      $
                      8,446,788
                      
                      
                      $
                      (1,407,455
                      )
                      
                      $
                      (4,967,738
                      )
                      
                      $
                      81,380
                      
                      
                      $
                      2,169,864
 
 The
accompanying notes form an integral part of these condensed consolidated
financial statements.
  6
  RADIANT
LOGISTICS, INC.
 Condensed
Consolidated Statements of Cash Flows
 (unaudited)
 
 SIX MONTHS ENDED
                        DECEMBER 31,2010
                      
                      
                      2009CASH
      FLOWS PROVIDED BY (USED FOR) OPERATING ACTIVITIES:Net
      income
                      
                      $
                      1,499,208
                      
                      
                      $
                      665,159ADJUSTMENTS
      TO RECONCILE NET INCOME TO NET CASH PROVIDED BY (USED FOR) OPERATING
      ACTIVITIES:non-cash
      compensation expense (stock options)
                      
                      
                      80,771
                      
                      
                      
                      108,904amortization
      of intangibles
                      
                      
                      493,575
                      
                      
                      
                      591,978deferred
      income tax expense (benefit)
                      
                      
                      993
                      
                      
                      
                      (261,532
                      )depreciation
      and leasehold amortization
                      
                      
                      158,491
                      
                      
                      
                      203,739change
      in non-controlling interest
                      
                      
                      92,832
                      
                      
                      
                      58,678loss
      (gain) on litigation settlement
                      
                      
                      150,000
                      
                      
                      
                      (354,670
                      )loss
      on disposal of assets
                      
                      
                      11,931
                      
                      
                      
                      -provision
      for (recovery of) doubtful accounts
                      
                      
                      (152,143
                      )
                      
                      
                      143,608CHANGE
      IN OPERATING ASSETS AND LIABILITIES:accounts
      receivable
                      
                      
                      (2,188,908
                      )
                      
                      
                      (4,436,656
                      )employee
      loan receivable
                      
                      
                      3,573
                      
                      
                      
                      33,266station
      and other receivables
                      
                      
                      99,576
                      
                      
                      
                      185,475prepaid
      expenses and other assets
                      
                      
                      (699,719
                      )
                      
                      
                      (80,091
                      )accounts
      payable and accrued transportation costs
                      
                      
                      2,018,439
                      
                      
                      
                      2,383,214commissions
      payable
                      
                      
                      (153,997
                      )
                      
                      
                      (179,945
                      )other
      accrued costs
                      
                      
                      145,942
                      
                      
                      
                      (172,669
                      )other
      long-term liabilities
                      
                      
                      96,119
                      
                      
                      
                      -income
      taxes payable
                      
                      
                      136,101
                      
                      
                      
                      -income
      tax deposit
                      
                      
                      -
                      
                      
                      
                      503,556Net
      cash provided by (used for) operating activities
                      
                      
                      1,792,784
                      
                      
                      
                      (607,986
                      )CASH
      FLOWS USED FOR INVESTING ACTIVITIES:Purchase
      of furniture and equipment
                      
                      
                      (169,684
                      )
                      
                      
                      (11,010
                      )Payments
      made to former Adcom shareholder
                      
                      
                      (336,509
                      )
                      
                      
                      (139,937
                      )Net
      cash used for investing activities
                      
                      
                      (506,193
                      )
                      
                      
                      (150,947
                      )CASH
      FLOWS PROVIDED BY (USED FOR) FINANCING ACTIVITIES:Proceeds
      from (repayments to) credit facility, net of credit fees
                      
                      
                      (1,321,392
                      )
                      
                      
                      838,129Distribution
      to non-controlling interest
                      
                      
                      (78,000
                      )
                      
                      
                      -Purchases
      of treasury stock
                      
                      
                      (471,265
                      )
                      
                      
                      (491,636
                      )Net
      cash provided by (used for) financing activities
                      
                      
                      (1,870,657
                      )
                      
                      
                      346,493NET
      DECREASE IN CASH AND CASH EQUIVALENTS
                      
                      
                      (584,066
                      )
                      
                      
                      (412,440
                      )CASH
      AND CASH EQUIVALENTS, BEGINNING OF  PERIOD
                      
                      
                      682,108
                      
                      
                      
                      890,572CASH
      AND CASH EQUIVALENTS, END OF PERIOD
                      
                      $
                      98,042
                      
                      
                      $
                      478,132SUPPLEMENTAL
      DISCLOSURE OF CASH FLOW INFORMATION:Income
      taxes paid
                      
                      $
                      781,768
                      
                      
                      $
                      177,642Interest
      paid
                      
                      $
                      62,438
                      
                      
                      $
                      82,855
  7
  RADIANT
LOGISTICS, INC.
 Condensed
Consolidated Statements of Cash Flows (continued)
 (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 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 of
$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.
  In
September 2010, the Company revised its estimate of the "Tier-One Earn-Out
Payment" (see Note 4) relating to the acquisition of Adcom for the year ended
June 30, 2010, resulting in an increase to goodwill and the amount due to the
former Adcom shareholder of $28,522.
  In
December 2010, the Company issued 732,038 shares of common stock at a fair value
of $0.35 per share in satisfaction of the $258,510 earn-out payment for the year
ended June 30, 2010, resulting in a decrease to the amount due to former Adcom
shareholder, an increase in common stock issuable of $732 and an increase in
additional paid-in capital of $257,778.
 
 The
accompanying notes form an integral part of these condensed consolidated
financial statements.
  8
  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. 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.
  The
Company continues to identify a number of additional companies as suitable
acquisition candidates and has completed two material acquisitions since its
acquisition of Airgroup.  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"), adding 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.  RGL, through the Airgroup and
Adcom network brands, has a diversified account base including manufacturers,
distributors and retailers using a network of independent carriers and
international agents positioned strategically around the world.
  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.  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.
  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,
2010.
  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.
  9
  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 and goodwill, 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.
  c)
              Fair
      Value of Financial Instruments
  The fair
values of the Company’s receivables, accounts payable and accrued transportation
costs, commissions payable, other accrued costs, income taxes payable, other
current liabilities 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 receivable, historical experience and knowledge of specific
customers.
  10
  On
occasion the Company extends credit to agent-based stations.
  g)
              Furniture
      and 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
using 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. The first step of the
impairment test requires that the Company determine the fair value of its
reporting unit, and compare the fair value to the reporting unit's carrying
amount. The Company has only one reporting unit.  To the extent the
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 performs its annual impairment test effective as of April 1 of each
year, unless events or circumstances indicate impairment may have occurred
before that time. As of December 31, 2010, management believes there are no
indications of impairment.
  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 five years and
non-compete agreements are amortized using the straight line method over the
term of the underlying agreements. See Notes 4 and 5.
  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
December 31, 2010.
  j)
              Commitments
  The
Company has operating lease commitments for equipment rentals, office space, and
warehouse space under non-cancelable operating leases expiring at various dates
through May 2021.  As of December 31, 2010, minimum future lease
payments under these non-cancelable operating leases for the next five fiscal
years ending June 30and thereafter are as follows:
  11
  2011
      (remaining portion)
                    
                    $
                    136,1892012
                    
                    
                    229,5672013
                    
                    
                    221,1582014
                    
                    
                    230,9212015
                    
                    
                    240,223Thereafter
                    
                    
                    1,639,454Total
      minimum lease payments
                    
                    $
                    2,697,512
  Included
in these future commitments are upcoming rental lease payments pertaining to the
Company’s new corporate office location.  The initial term of this
lease commenced on June 1, 2010, and is set to expire on May 31,
2021.  Rent for the first 12-month period has been abated by the
landlord and lease payments will begin on June 1, 2011.
  Rent
expense amounted to $342,559 and $247,690 for the six months ended December 31,
2010 and 2009.
  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.
  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 revenue until a proof of delivery is
received or which recognize revenue 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.
  12
  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 December 31, 2010, the Company recorded share based
compensation expense of $25,833, which, net of income taxes, resulted in a
$16,016 reduction of net income. For the three months ended December 31, 2009,
the Company recorded share based compensation expense of $54,696, which, net of
income taxes, resulted in a $33,912 reduction of net income.
  For the
six months ended December 31, 2010, the Company recorded share based
compensation expense of $80,771, which, net of income taxes, resulted in a
$50,078 reduction of net income. For the six months ended December 31, 2009, the
Company recorded share based compensation expense of $108,904, which, net of
income taxes, resulted in a $67,520 reduction of net income.
  n)
              Basic
      and Diluted Income per Share
  Basic
income per share is computed by dividing net income 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 December 31, 2010, the weighted average outstanding number of
potentially dilutive common shares totaled 31,212,861 shares of common stock,
including options to purchase 3,647,779 shares of common stock at December 31,
2010, of which 1,020,000 were excluded as their effect would have been
anti-dilutive.  For the three months ended December 31, 2009, the
weighted average outstanding number of potentially dilutive common shares
totaled 32,723,181 shares of common stock, including options to purchase
3,620,000 shares of common stock at December 31, 2009, of which 3,060,000 were
excluded as their effect would have been anti-dilutive.
  For the
six months ended December 31, 2010, the weighted average outstanding number of
potentially dilutive common shares totaled 30,968,361 shares of common
stock, including options to purchase 3,647,779 shares of common stock at
December 31, 2010, of which 1,020,000 were excluded as their effect would
have been anti-dilutive.  For the six months ended December 31, 2009,
the weighted average outstanding number of potentially dilutive common shares
totaled 33,135,684 shares of common stock, including options to purchase
3,620,000 shares of common stock at December 31, 2009, of which 3,060,000 were
excluded as their effect would have been anti-dilutive.
  The following table reconciles the
numerator and denominator of the basic and diluted per share computations for
earnings per share as follows:
 
 ThreemonthsendedDecember31,
                    
                    
                    SixmonthsendedDecember31,2010
                    
                    
                    2009
                    
                    
                    2010
                    
                    
                    2009Weighted
      average basic shares outstanding
                    
                    
                    30,122,700
                    
                    
                    
                    32,533,680
                    
                    
                    
                    30,296,880
                    
                    
                    
                    32,950,810Options
                    
                    
                    1,090,161
                    
                    
                    
                    189,501
                    
                    
                    
                    671,481
                    
                    
                    
                    184,874Weighted
      average dilutive shares outstanding
                    
                    
                    31,212,861
                    
                    
                    
                    32,723,181
                    
                    
                    
                    30,968,361
                    
                    
                    
                    33,135,684
 
 o)
              Other
      Comprehensive Income
  The
Company has no components of Other Comprehensive Income and, accordingly, no
Statement of Comprehensive Income has been included in the accompanying
condensed consolidated financial statements.
  13
  p)
              Reclassifications
  Certain
amounts for prior periods have been reclassified in the condensed consolidated
financial statements to conform to the classification used in fiscal
2010.
  q)
              Subsequent
      events
  On or
about February 21, 2007, Team Air Express, Inc. d/b/a Team Worldwide ("Team")
commenced an action against the Company, as well as Texas Time Express, Inc.,
Douglas K. Tabor, and Michael E. Staten, in the District Court of the State of
Texas, Tarrant County (the “Court”) captioned Cause No. 017 222706 07; Team Air
Express, Inc. d/b/a Team Worldwide v. Airgroup Corporation, Texas Time Express,
Inc., Douglas K. Tabor, individually and as officer of Texas Time Express, Inc.,
and Michael E. Staten, individually and as officer of Texas Time Express,
Inc.
  In its
complaint, Team alleged that the Company, in conjunction with the other named
defendants, tortuously interfered with an existing contract Team had in place
with VRC Express, Inc. ("VRC"), its then existing Chicago, Illinois station
location.  In their petition, Team alleged that the Company and other
defendants caused VRC to leave the Team network of companies, and become a
branch office of Airgroup Corporation.  The suit sought unspecified
damages for the loss of business opportunity and profits as a result of VRC
leaving the Team system.
  This
litigation was resolved on January 11, 2011 by agreement amongst the parties to
enter an Agreed Order of Dismissal with prejudice, without admission of guilt
and with affirmation of the parties’ right to freely compete in the marketplace.
In connection with the settlement of the matter, the Company agreed to make a
$150,000 donation to a mutually agreeable IRC 503(c) charitable
organization.  Neither the Company, the co-defendants, nor Team
received any compensation in connection with the settlement of the
matter.
  NOTE
      3 –
              RECENT
      ACCOUNTING PRONOUNCEMENTS
  In
January 2010, the FASB issued ASU No. 2010-06, Improving Disclosures about Fair
Value Measurements. The guidance in ASU 2010-06 provides amendments to
literature on fair value measurements and disclosures currently within the
Accounting Standards Codification ("ASC") by clarifying certain existing
disclosures and requiring new disclosures for the various classes of fair value
measurements.   ASU 2010-06 is effective for interim and annual
periods beginning after December 15, 2009, except for the disclosures about
purchases, sales, issuances, and settlements in the roll forward of activity in
Level 3 fair value measurements, which are effective for fiscal years beginning
after December 15, 2010, and for interim periods within those fiscal
years.  The adoption of this guidance is not expected to have a
material impact on the Company’s financial position or results of
operations.
  In
December 2010, the FASB issued ASU No. 2010-29, Business Combinations (Topic
805): Disclosure of Supplementary Pro Forma Information for Business
Combinations. The guidance in ASU 2010-29 provides amendments to clarify the
acquisition date which should be used for reporting the pro forma financial
information disclosures in Topic 805 when comparative financial statements are
presented. The amendments also improve the usefulness of the pro forma revenue
and earnings disclosures by requiring a description of the nature and amount of
material, nonrecurring pro forma adjustments directly attributable to the
business combination(s). The amendments in this update are effective
prospectively for business combinations for which the acquisition date is on or
after the beginning of the first annual reporting period beginning on or after
December 15, 2010. Early adoption is permitted. 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. 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.
  14
  Contingent
consideration associated with the acquisition of Adcom included "Tier-1 Earn-Out
Payments" of up to $700,000 annually, 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); and 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. 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.
  Mr.
Friedman, the sole shareholder of Adcom, earned $517,019 in Tier-1 earn-out
payment for the year ended June 30, 2010.  This amount was paid 50% in
cash and 50% in stock to Mr. Friedman during the quarter ended December 31,
2010.
  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 achieving Gross Profit Contributions (in
thousands):
  Estimated payment anticipated for fiscal year(1):
                    2012
                    
                    2013Earn-out period:
                    7/1/2010 –
                      6/30/2011
                    
                    7/1/2011 –
                      6/30/2012Earn-out
      payments:Cash
                    
                    $
                    350
                    
                    
                    $
                    350Equity
                    
                    
                    350
                    
                    
                    
                    350Total
      potential earn-out payments
                    
                    $
                    700
                    
                    
                    $
                    700Total
      gross margin targets
                    
                    $
                    4,320
                    
                    
                    $
                    4,320
  (1)
Earn-out payments are paid October 1 following each fiscal year end in a
combination of cash and Company common stock.
  NOTE 5 –
              ACQUIRED
      INTANGIBLE ASSETS
  The table
below reflects acquired intangible assets related to the acquisitions of
Airgroup, Automotive Services Group and Adcom:
  15
  As of
                      December 31, 2010
                    
                    
                    As of
                      June 30, 2010Gross
                      Carrying
                      Amount
                    
                    
                    Accumulated
                      Amortization
                    
                    
                    Gross
                      Carrying
                      Amount
                    
                    
                    Accumulated
                      AmortizationAmortizable
      intangible assets:Customer
      related
                    
                    $
                    5,752,000
                    
                    
                    $
                    4,268,670
                    
                    
                    $
                    5,752,000
                    
                    
                    $
                    3,796,340Covenants
      not to compete
                    
                    
                    190,000
                    
                    
                    
                    147,148
                    
                    
                    
                    190,000
                    
                    
                    
                    125,903Total
                    
                    $
                    5,942,000
                    
                    
                    $
                    4,415,818
                    
                    
                    $
                    5,942,000
                    
                    
                    $
                    3,922,243Aggregate
      amortization expense:For
      six months endedDecember
      31, 2010
                    
                    
                    
                    
                    
                    $
                    493,575For
      six months endedDecember
      31, 2009
                    
                    
                    
                    
                    
                    $
                    591,978Aggregate
      amortization expense for the years ending June 30:2011
      – For the remainder of the year
                    
                    
                    
                    
                    
                    $
                    334,1852012
                    
                    
                    
                    
                    
                    
                    769,7722013
                    
                    
                    
                    
                    
                    
                    374,3442014
                    
                    
                    
                    
                    
                    
                    47,881Total
                    
                    
                    
                    
                    
                    $
                    1,526,182
  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 condensed consolidated financial
statements (see Note 7). RLP commenced operations in February 2007.
Non-controlling interest recorded as an expense on the statements of
operations was $92,832 and $58,678 for the six months ended December
31, 2010 and 2009, respectively.
  The
following table summarizes the balance sheets of RLP:
  December 31,
                    
                    
                    June 30,2010
                    
                    
                    2010ASSETSAccounts
      receivable
                    
                    $
                    1,689
                    
                    
                    $
                    15,910Accounts
      receivable – Radiant Logistics
                    
                    
                    138,464
                    
                    
                    
                    110,336Prepaid
      expenses and other current assets
                    
                    
                    401
                    
                    
                    
                    950Total
      assets
                    
                    $
                    140,554
                    
                    
                    $
                    127,196LIABILITIES
      AND PARTNERS' CAPITALOther
      accrued costs
                    
                    $
                    4,920
                    
                    
                    $
                    16,284Total
      liabilities
                    
                    $
                    4,920
                    
                    
                    $
                    16,284Partners'
      capital
                    
                    
                    135,634
                    
                    
                    
                    110,912Total
      liabilities and partners' capital
                    
                    $
                    140,554
                    
                    
                    $
                    127,196
  16
  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. 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:
  December 31,
                    
                    
                    June 30,2010
                    
                    
                    2010Vehicles
                    
                    $
                    33,788
                    
                    
                    $
                    33,788Communication
      equipment
                    
                    
                    31,359
                    
                    
                    
                    31,359Office
      equipment
                    
                    
                    311,191
                    
                    
                    
                    311,191Furniture
      and fixtures
                    
                    
                    109,409
                    
                    
                    
                    149,504Computer
      equipment
                    
                    
                    643,689
                    
                    
                    
                    606,405Computer
      software
                    
                    
                    1,007,447
                    
                    
                    
                    884,352Leasehold
      improvements
                    
                    
                    448,502
                    
                    
                    
                    439,1972,585,385
                    
                    
                    
                    2,455,796Less:  Accumulated
      depreciation and amortization
                    
                    
                    (1,704,707
                    )
                    
                    
                    (1,574,380
                    )Furniture
      and equipment – net
                    
                    $
                    880,678
                    
                    
                    $
                    881,416
  Depreciation
and amortization expense related to furniture and equipment was $158,491 and
$203,739 for the six months ended December 31, 2010 and 2009,
respectively.
  NOTE
      9 –
              LONG
      TERM DEBT
  In March
2010, the Company’s $15.0 million revolving credit facility, including a $0.5
million sublimit to support letters of credit (collectively, the "Facility"),
was increased to $20.0 million with a maturity date of March 31, 2012. Advances
under the Facility are available to fund future acquisitions, capital
expenditures or for other corporate purposes, including the repurchase of the
Company’s stock. Borrowings under the facility accrue interest, at the Company’s
option, at the bank’s prime rate minus 0.75% to plus 0.50% or LIBOR plus 1.75%
to 3.00%, 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 is collateralized by accounts receivable and other assets of the
Company and its subsidiaries and provides for advances of up to 80% of 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 4.00 times the Company’s consolidated
earnings before interest, taxes, depreciation and amortization ("EBITDA"), as
adjusted, measured on a rolling four quarter basis. 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 which 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.
  17
  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).  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 December 31, 2010, the Company was in
compliance with all of its covenants.
  As of
December 31, 2010, the Company had $3,904,379 in advances under the
Facility and $2,415,250 in outstanding checks, which had not yet been presented
to the bank for payment. The outstanding checks have been reclassified from our
cash, as they will be advanced from, or against, our Facility when presented for
payment to the bank.  This results in total long term debt of
$6,319,629.
  At
December 31, 2010, based on available collateral and $205,000 in outstanding
letter of credit commitments, there was $7,850,888 available for borrowing under
the Facility based on advances outstanding.
  NOTE
      10 –
              PROVISION
      FOR INCOME TAXES
  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 December 31, 2010, the Company recognized net income tax
expense of $413,319 which consisted of current income tax expense of $293,887
and deferred income tax expense of $119,432.  For the three
months ended December 31, 2009, the Company recognized net income tax expense of
$336,539 which consisted of current income tax expense of $538,008, and deferred
income tax benefit of $201,469.
  For the
six months ended December 31, 2010, the Company recognized net income tax
expense of $918,862 which consisted of current income tax expense of $917,869
and deferred income tax expense of $993.  For the six months
ended December 31, 2009, the Company recognized net income tax expense of
$407,665 which consisted of current income tax expense of $669,197, and deferred
income tax benefit of $261,532.
  Tax years
which remain subject to examination by state authorities are the years ended
June 30, 2008, 2009 and 2010.  Tax years which remain subject to
examination by Federal authorities are the years ended June 30, 2008, 2009 and
2010.
  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 December 31, 2010 and 2009, none of the shares were
issued or outstanding.
  18
  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
six months ended December 31, 2010, the Company purchased 1,490,740 shares of
its common stock under this repurchase program at a cost of
$471,265.
  NOTE
      12 –
              SHARE-BASED
      COMPENSATION
  During
the six months ended December 31, 2010, the Company issued employee options to
purchase 27,779 stock options at a $0.60 price per share in November,
2010.  The options vest 20% per year over a five year
period.
  Share
based compensation costs recognized during the six months ended December 31,
2010, include 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 December 31, 2010.
  During
the six months ended December 31, 2010, the weighted average fair value per
share of employee options granted in November 2010 was $0.29.  The
fair value of options granted were estimated on the date of grant using the
Black-Scholes option pricing model, with the following assumptions for each
issuance of options:
  Risk-Free
      Interest Rate
                0.22%Expected
      Term
                6.5
      yearsExpected
      Volatility
                61.2%Expected
      Dividend Yield
                0.00%Forfeiture
      Rate
                0.00%
  During
the six months ended December 31, 2010 and 2009, the Company recognized stock
option compensation expense of $80,771 and $108,904,
respectively.  The following table summarizes activity under the plan
for the six months ended December 31, 2010.
  Number of
                          Shares
                        
                        Weighted
                          Average
                          Exercise Price
                        
                        Weighted
                          Average
                          Remaining
                          Contractual
                          Life - Years
                        
                        Aggregate
                          Intrinsic
                          ValueOutstanding
      at June 30, 2010
                        
                        3,620,000
                        
                        $
                        0.503
                        
                        6.29
      years
                        
                        $
                        50,400Granted
                        
                        27,779
                        
                        
                        0.600
                        
                        9.89
      years
                        
                        
                        13,890Exercised
                        
                        -
                        
                        
                        -
                        
                        -
                        
                        
                        -Forfeited
                        
                        -
                        
                        
                        -
                        
                        -
                        
                        
                        -Expired
                        
                        -
                        
                        
                        -
                        
                        -
                        
                        
                        -Outstanding
      at December 31, 2010
                        
                        3,647,779
                        
                        $
                        0.504
                        
                        5.81 years
                        
                        $
                        774,090Exercisable
      at December 31, 2010
                        
                        2,799,000
                        
                        $
                        0.562
                        
                        5.27 years
                        
                        $
                        236,280
 NOTE
      13 –
              OPERATING
      AND 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):
  19
 
 UnitedStates
                  
                  
                  OtherCountries
                  
                  
                  Total2010
                  
                  
                  2009
                  
                  
                  2010
                  
                  
                  2009
                  
                  
                  2010
                  
                  
                  2009Three
      months ended December 31:Revenue
                  
                  $
                  25,537
                  
                  
                  $
                  19,385
                  
                  
                  $
                  18,960
                  
                  
                  $
                  19,731
                  
                  
                  $
                  44,497
                  
                  
                  $
                  39,116Cost
      of transportation
                  
                  
                  16,295
                  
                  
                  
                  11,554
                  
                  
                  
                  14,020
                  
                  
                  
                  16,058
                  
                  
                  
                  30,315
                  
                  
                  
                  27,612Net
      revenue
                  
                  $
                  9,242
                  
                  
                  $
                  7,831
                  
                  
                  $
                  4,940
                  
                  
                  $
                  3,673
                  
                  
                  $
                  14,182
                  
                  
                  $
                  11,504
  UnitedStated
                  
                  
                  OtherCountries
                  
                  
                  Total2010
                  
                  
                  2009
                  
                  
                  2010
                  
                  
                  2009
                  
                  
                  2010
                  
                  
                  2009Six
      months ended December 31:Revenue
                  
                  $
                  49,787
                  
                  
                  $
                  37,496
                  
                  
                  $
                  41,071
                  
                  
                  $
                  35,648
                  
                  
                  $
                  90,858
                  
                  
                  $
                  73,144Cost
      of transportation
                  
                  
                  30,918
                  
                  
                  
                  22,443
                  
                  
                  
                  31,639
                  
                  
                  
                  28,648
                  
                  
                  
                  62,557
                  
                  
                  
                  51,091Net
      revenue
                  
                  $
                  18,869
                  
                  
                  $
                  15,053
                  
                  
                  $
                  9,432
                  
                  
                  $
                  7,000
                  
                  
                  $
                  28,301
                  
                  
                  $
                  22,053
  ITEM
2.   Management’s Discussion and Analysis of Financial Condition
and Results of Operations
  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) use our current infrastructure 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) continue growing our business and maintain historical or
increased gross profit margins; (v) locate suitable acquisition opportunities;
(vi) secure the financing necessary to complete any acquisition opportunities we
locate; (vii) assess and respond to competitive practices in the industries in
which we compete; (viii) mitigate, to the best extent possible, our dependence
on current management and certain of our larger exclusive agency locations; (ix)
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 (x) 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 under the
caption “Risk Factors” in Part 1 Item 1A of our annual report on Form 10-K for
the year ended June 30, 2010. 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.
  20
  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.
  Overview
  We are 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.  Operating under the Airgroup, Adcom & Radiant 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.
  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.
  We
continue to identify a number of additional companies as suitable acquisition
candidates and have completed two material acquisitions since our initial
acquisition of Airgroup in January of 2006.  In November 2007, we
acquired certain assets formerly used in the operations of the automotive
division of Stonepath Group, Inc. in Detroit, Michigan to service the automotive
industry. In September 2008, we acquired Adcom Express, Inc. d/b/a Adcom
Worldwide ("Adcom"), adding an additional 30 locations across North America and
augmenting our overall domestic and international freight forwarding
capabilities. In connection with the acquisition of Adcom, we 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.  RGL, through the Airgroup and
Adcom network brands, has a diversified account base including manufacturers,
distributors and retailers using a network of independent carriers and
international agents positioned strategically around the world. We have built a
global transportation and supply chain management company offering our customers
domestic and international freight forwarding services and an expanding array of
value-added supply chain management services, including order fulfillment,
inventory management, and warehousing.
  Our
growth strategy will continue to focus on both organic growth and
acquisitions.  From an organic perspective, we will focus 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. Since our acquisition of Airgroup, we have focused
our efforts on the build-out of our network of exclusive agency offices, as well
as enhancing our back-office infrastructure and transportation and accounting
systems.  We will continue to search for targets that fit within its
acquisition criteria. Our ability to secure additional financing will rely upon
the sale of debt or equity securities, and the development of an active trading
market for our securities.
  21
  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. Our acquisition strategy relies upon
two primary factors:  first, our ability to identify and acquire
target businesses that fit within our general acquisition criteria; and second,
the continued availability of capital and financing resources sufficient to
complete these acquisitions.
  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.
  We will
continue to search for targets that fit within our acquisition criteria. Our
ability to secure additional financing will rely upon the sale of debt or equity
securities, and the development of an active trading market for our
securities.  Although we can make no assurance as to our long term
access to debt or equity securities or our ability to develop an active trading
market, in March of 2010, we were successful in increasing our credit facility
from $15.0 million to $20.0 million.
  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
turnkey 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 and resell services
provided by third parties, and is considered by management to be a key
performance measure. In addition, management believes 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, extraordinary items and other
non-cash charges.
  22
  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% of eligible domestic accounts
receivable and up to 60% of eligible foreign receivables, is limited to a
multiple of 4.00 times our consolidated EBITDA (as adjusted) as measured on a
rolling four quarter basis. 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 materiality 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.
  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
  Three
months ended December 31, 2010 (actual and unaudited) and December 31, 2009
(actual and unaudited)
  We
generated transportation revenue of $44.5 million and $39.1 million and net
transportation revenue of $14.2 million and $11.5 million for the three months
ended December 31, 2010 and 2009, respectively.  Net income was $0.7
million for the three months ended December 31, 2010, compared to net income of
$0.5 million for the three months ended December 31, 2009.
  We had
adjusted EBITDA of $1.7 million and $1.0 million for three months ended December
31, 2010 and 2009, 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, goodwill impairment charges 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.  Set forth below is a reconciliation of EBITDA and
adjusted EBITDA to net income, the most directly comparable GAAP measure for the
three months ended December 31, 2010 and 2009.
  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 December 31, 2010 and 2009:
  Three months ended December 31,
                  
                  
                  Change2010
                  
                  
                  2009
                  
                  
                  Amount
                  
                  
                  PercentNet
      income
                  
                  $
                  716
                  
                  
                  $
                  549
                  
                  
                  $
                  167
                  
                  
                  
                  30.4
                  %Income
      tax expense
                  
                  
                  414
                  
                  
                  
                  337
                  
                  
                  
                  77
                  
                  
                  
                  22.8
                  %Net
      interest expense
                  
                  
                  36
                  
                  
                  
                  27
                  
                  
                  
                  9
                  
                  
                  
                  33.3
                  %Depreciation
      and amortization
                  
                  
                  327
                  
                  
                  
                  386
                  
                  
                  
                  (59
                  )
                  
                  
                  (15.3
                  )%EBITDA
                  
                  $
                  1,493
                  
                  
                  $
                  1,299
                  
                  
                  $
                  194
                  
                  
                  
                  14.9
                  %Share
      based compensation and other non-cash costs
                  
                  
                  29
                  
                  
                  
                  82
                  
                  
                  
                  (53
                  )
                  
                  
                  (64.6
                  )%Loss
      (gain) on litigation settlement
                  
                  
                  150
                  
                  
                  
                  (355
                  )
                  
                  
                  505
                  
                  
                  
                  (142.3
                  )%Adjusted
      EBITDA
                  
                  $
                  1,672
                  
                  
                  $
                  1,026
                  
                  
                  $
                  646
                  
                  
                  
                  63.0
                  %
  23
  The
following table summarizes transportation revenue, cost of transportation and
net transportation revenue (in thousands) for the three months ended December
31, 2010 and 2009 (actual and unaudited):
  Three months ended December 31,
                  
                  Change2010
                  
                  2009
                  
                  Amount
                  
                  PercentTransportation
      revenue
                  
                  $
                  44,497
                  
                  
                  $
                  39,116
                  
                  
                  $
                  5,381
                  
                  
                  
                  13.8
                  %Cost
      of transportation
                  
                  
                  30,315
                  
                  
                  
                  27,612
                  
                  
                  
                  2,703
                  
                  
                  
                  9.8
                  %Net
      transportation revenue
                  
                  $
                  14,182
                  
                  
                  $
                  11,504
                  
                  
                  $
                  2,678
                  
                  
                  
                  23.3
                  %Net
      transportation margins
                  
                  
                  31.9
                  %
                  
                  
                  29.4
                  %
  Transportation
revenue was $44.5 million for the three months ended December 31, 2010, an
increase of 13.8% over transportation revenue of $39.1 million for the three
months ended December 31, 2009.  Domestic transportation revenue
increased by 31.4% to $25.5 million for the three months ended December 31,
2010, from $19.4 million for the three months ended December 31,
2009.  International transportation revenue decreased by 3.6% to $19.0
million for the three months ended December 31, 2010, from $19.7 million for the
comparable prior year period.   These increases in revenue were
due to a stronger demand for domestic services.
  Cost of
transportation increased to $30.3 million for the three months ended December
31, 2010, compared to $27.6 million for the three months ended December 31,
2009.  The increase is due to increased volume as reflected in our
increased transportation revenues.
  Net
transportation margins increased to 31.9% of transportation revenue for the
three months ended December 31, 2010, as compared to 29.4% of transportation
revenue for the three months ended December 31, 2009.  The margin
expansion was attributed to higher domestic sales, which typically yield higher
margins.
  The
following table compares certain condensed consolidated statement of operations
data as a percentage of our net transportation revenue (in thousands) for the
three months ended December 31, 2010 and 2009 (actual and
unaudited):
  Three months ended December 31,2010
                          
                          
                          2009
                          
                          
                          ChangeAmount
                          
                          
                          Percent
                          
                          
                          Amount
                          
                          
                          Percent
                          
                          
                          Amount
                          
                          
                          PercentNet
      transportation revenue
                          
                          $
                          14,182
                          
                          
                          
                          100.0
                          %
                          
                          $
                          11,504
                          
                          
                          
                          100.0
                          %
                          
                          $
                          2,678
                          
                          
                          
                          23.3
                          %Agent
      commissions
                          
                          
                          9,850
                          
                          
                          
                          69.5
                          %
                          
                          
                          7,838
                          
                          
                          
                          68.1
                          %
                          
                          
                          2,012
                          
                          
                          
                          25.7
                          %Personnel
      costs
                          
                          
                          1,561
                          
                          
                          
                          11.0
                          %
                          
                          
                          1,532
                          
                          
                          
                          13.3
                          %
                          
                          
                          29
                          
                          
                          
                          1.9
                          %Selling,
      general and administrative
                          
                          
                          1,140
                          
                          
                          
                          8.0
                          %
                          
                          
                          1,153
                          
                          
                          
                          10.0
                          %
                          
                          
                          (13
                          )
                          
                          
                          (1.1
                          )%Depreciation
      and amortization
                          
                          
                          327
                          
                          
                          
                          2.3
                          %
                          
                          
                          386
                          
                          
                          
                          3.4
                          %
                          
                          
                          (59
                          )
                          
                          
                          (15.3
                          )%Total
      operating expenses
                          
                          
                          12,878
                          
                          
                          
                          90.8
                          %
                          
                          
                          10,909
                          
                          
                          
                          94.8
                          %
                          
                          
                          1,969
                          
                          
                          
                          18.0
                          %Income
      from operations
                          
                          
                          1,304
                          
                          
                          
                          9.2
                          %
                          
                          
                          595
                          
                          
                          
                          5.2
                          %
                          
                          
                          709
                          
                          
                          
                          119.2
                          %Other
      income (expense)
                          
                          
                          (123
                          )
                          
                          
                          (0.9
                          )%
                          
                          
                          328
                          
                          
                          
                          2.8
                          %
                          
                          
                          (451
                          )
                          
                          
                          (137.5
                          )%Income
      before income taxes and non-controlling interest
                          
                          
                          1,181
                          
                          
                          
                          8.3
                          %
                          
                          
                          923
                          
                          
                          
                          8.0
                          %
                          
                          
                          258
                          
                          
                          
                          27.9
                          %Income
      tax expense
                          
                          
                          (414
                          )
                          
                          
                          (2.9
                          )%
                          
                          
                          (337
                          )
                          
                          
                          (2.9
                          )%
                          
                          
                          (77
                          )
                          
                          
                          22.8
                          %Income
      before non-controlling interest
                          
                          
                          767
                          
                          
                          
                          5.4
                          %
                          
                          
                          586
                          
                          
                          
                          5.1
                          %
                          
                          
                          181
                          
                          
                          
                          30.9
                          %Non-controlling
      interest
                          
                          
                          (51
                          )
                          
                          
                          (0.4
                          )%
                          
                          
                          (37
                          )
                          
                          
                          (0.3
                          )%
                          
                          
                          (14
                          )
                          
                          
                          37.8
                          %Net
      income
                          
                          $
                          716
                          
                          
                          
                          5.0
                          %
                          
                          $
                          549
                          
                          
                          
                          4.8
                          %
                          
                          $
                          167
                          
                          
                          
                          30.4
                          %
  24
  Agent
commissions were $9.9 million for the three months ended December 31, 2010, an
increase of 25.7% from $7.8 million for the three months ended December 31,
2009.  Agent commissions as a percentage of net transportation revenue
increased to 69.5% for the three months ended December 31, 2010, from 68.1% for
the comparable prior year period as a result of increased domestic sales, which
typically yield higher margins and consequently higher commissions.
  Personnel
costs were $1.6 million for the three months ended December 31, 2010, an
increase of 1.9% from $1.5 million for the three months ended December 31,
2009.  Personnel costs as a percentage of net transportation revenue
decreased to 11.0% for the three months ended December 31, 2010, from 13.3% for
the comparable prior year period.  The decrease is primarily
attributed to an increase in net transportation revenues (particularly domestic)
due to strong demand for our services, without the need to increase corporate
personnel proportionately.
  Selling,
general and administrative costs were $1.1 million for the three months ended
December 31, 2010, a decrease of 1.1% from $1.2 million for the three months
ended December 31, 2009.  As a percentage of net transportation
revenue, selling, general and administrative costs decreased to 8.0% for the
three months ended December 31, 2010, from 10.0% for the comparable prior year
period.
  Depreciation
and amortization costs for the three months ended December 31, 2010, were
approximately $0.3 million, a decrease of 15.3% from $0.4 million for the three
months ended December 31, 2009.  Depreciation and amortization as a
percentage of net transportation revenue decreased to 2.3% for the three months
ended December 31, 2010, from 3.4% for the comparable prior year period,
primarily due to lower amortization costs associated with the Airgroup &
Adcom acquisitions.
  Income
from operations was $1.3 million for the three months ended December 31, 2010,
compared to income from operations of $0.6 million for the three months ended
December 31, 2009.
  Other
expense was $0.1 million for the three months ended December 31, 2010, compared
to other income of $0.3 million for the three months ended December 31,
2009.  The decrease is primarily due to a loss on litigation of $150k
in the current quarter versus a gain on litigation of $355k in the prior year
period.
  Net
income was $0.7 million for the three months ended December 31, 2010, compared
to net income of $0.5 million for the three months ended December 31,
2009.
  Six
months ended December 31, 2010 (actual and unaudited) and December 31, 2009
(actual and unaudited)
  We
generated transportation revenue of $90.9 million and $73.1 million and net
transportation revenue of $28.3 million and $22.1 million for the six months
ended December 31, 2010 and 2009, respectively.  Net income was $1.5
million for the six months ended December 31, 2010, compared to net income of
$0.7 million for the six months ended December 31, 2009.
  We had
adjusted EBITDA of $3.4 million and $1.8 million for six months ended December
31, 2010 and 2009, 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, goodwill impairment charges 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.  Set forth below is a reconciliation of EBITDA and
adjusted EBITDA to net income, the most directly comparable GAAP measure for the
six months ended December 31, 2010 and 2009.
  25
  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 six months ended December 31, 2010 and 2009:
  Six months ended December 31,
                  
                  
                  Change2010
                  
                  
                  2009
                  
                  
                  Amount
                  
                  
                  PercentNet
      income
                  
                  $
                  1,499
                  
                  
                  $
                  665
                  
                  
                  $
                  834
                  
                  
                  
                  125.4
                  %Income
      tax expense
                  
                  
                  920
                  
                  
                  
                  408
                  
                  
                  
                  512
                  
                  
                  
                  125.5
                  %Net
      interest expense
                  
                  
                  72
                  
                  
                  
                  82
                  
                  
                  
                  (10
                  )
                  
                  
                  (12.2
                  )%Depreciation
      and amortization
                  
                  
                  652
                  
                  
                  
                  796
                  
                  
                  
                  (144
                  )
                  
                  
                  (18.1
                  )%EBITDA
                  
                  $
                  3,143
                  
                  
                  $
                  1,951
                  
                  
                  $
                  1,192
                  
                  
                  
                  61.1
                  %Share
      based compensation and other non-cash costs
                  
                  
                  88
                  
                  
                  
                  154
                  
                  
                  
                  (66
                  )
                  
                  
                  (42.9
                  )%Loss
      (gain) on litigation settlement
                  
                  
                  150
                  
                  
                  
                  (355
                  )
                  
                  
                  505
                  
                  
                  
                  (142.3
                  )%Adjusted
      EBITDA
                  
                  $
                  3,381
                  
                  
                  $
                  1,750
                  
                  
                  $
                  1,631
                  
                  
                  
                  93.2
                  %
  The
following table summarizes transportation revenue, cost of transportation and
net transportation revenue (in thousands) for the six months ended December 31,
2010 and 2009 (actual and unaudited):
  Six months ended December 31,
                  
                  Change2010
                  
                  2009
                  
                  Amount
                  
                  PercentTransportation
      revenue
                  
                  $
                  90,858
                  
                  
                  $
                  73,144
                  
                  
                  $
                  17,714
                  
                  
                  
                  24.2
                  %Cost
      of transportation
                  
                  
                  62,557
                  
                  
                  
                  51,091
                  
                  
                  
                  11,466
                  
                  
                  
                  22.4
                  %Net
      transportation revenue
                  
                  $
                  28,301
                  
                  
                  $
                  22,053
                  
                  
                  $
                  6,248
                  
                  
                  
                  28.3
                  %Net
      transportation margins
                  
                  
                  31.1
                  %
                  
                  
                  30.2
                  %
  Transportation
revenue was $90.9 million for the six months ended December 31, 2010, an
increase of 24.2% over transportation revenue of $73.1 million for the six
months ended December 31, 2009.  Domestic transportation revenue
increased by 32.8% to $49.8 million for the six months ended December 31, 2010,
from $37.5 million for the six months ended December 31,
2009.  International transportation revenue increased by 15.4% to
$41.1 million for the six months ended December 31, 2010, from $35.6 million for
the comparable prior year period.   These increases in revenue
were due to a stronger domestic and international demand for our
services.
  Cost of
transportation increased to $62.6 million for the six months ended December 31,
2010, compared to $51.1 million for the six months ended December 31, 2009 as a
result of increased volume as reflected in our increased transportation
revenues.
  Net
transportation margins increased to 31.1% of transportation revenue for the six
months ended December 31, 2010, as compared to 30.2% of transportation revenue
for the six months ended December 31, 2009.  The margin expansion was
attributed to a higher proportion of domestic sales, which typically yield
higher margins.
  The
following table compares certain condensed consolidated statement of operations
data as a percentage of our net transportation revenue (in thousands) for the
six months ended December 31, 2010 and 2009 (actual and unaudited):
  Six months ended December 31,2010
                    
                    
                    2009
                    
                    
                    ChangeAmount
                    
                    
                    Percent
                    
                    
                    Amount
                    
                    
                    Percent
                    
                    
                    Amount
                    
                    
                    PercentNet
      transportation revenue
                    
                    $
                    28,301
                    
                    
                    
                    100.0
                    %
                    
                    $
                    22,053
                    
                    
                    
                    100.0
                    %
                    
                    $
                    6,248
                    
                    
                    
                    28.3
                    %Agent
      commissions
                    
                    
                    19,683
                    
                    
                    
                    69.5
                    %
                    
                    
                    15,293
                    
                    
                    
                    69.3
                    %
                    
                    
                    4,390
                    
                    
                    
                    28.7
                    %Personnel
      costs
                    
                    
                    3,118
                    
                    
                    
                    11.0
                    %
                    
                    
                    2,954
                    
                    
                    
                    13.4
                    %
                    
                    
                    164
                    
                    
                    
                    5.6
                    %Selling,
      general and administrative
                    
                    
                    2,203
                    
                    
                    
                    7.8
                    %
                    
                    
                    2,249
                    
                    
                    
                    10.2
                    %
                    
                    
                    (46
                    )
                    
                    
                    (2.0
                    )%Depreciation
      and amortization
                    
                    
                    652
                    
                    
                    
                    2.3
                    %
                    
                    
                    796
                    
                    
                    
                    3.6
                    %
                    
                    
                    (144
                    )
                    
                    
                    (18.1
                    )%Total
      operating expenses
                    
                    
                    25,656
                    
                    
                    
                    90.6
                    %
                    
                    
                    21,292
                    
                    
                    
                    96.5
                    %
                    
                    
                    4,364
                    
                    
                    
                    20.5
                    %Income
      from operations
                    
                    
                    2,645
                    
                    
                    
                    9.4
                    %
                    
                    
                    761
                    
                    
                    
                    3.5
                    %
                    
                    
                    1,884
                    
                    
                    
                    247.6
                    %Other
      income (expense)
                    
                    
                    (133
                    )
                    
                    
                    (0.5
                    )%
                    
                    
                    371
                    
                    
                    
                    1.7
                    %
                    
                    
                    (505
                    )
                    
                    
                    (142.3
                    )%Income
      before income taxes and non-controlling interest
                    
                    
                    2,512
                    
                    
                    
                    8.9
                    %
                    
                    
                    1,132
                    
                    
                    
                    5.1
                    %
                    
                    
                    1,380
                    
                    
                    
                    121.9
                    %Income
      tax expense
                    
                    
                    (920
                    )
                    
                    
                    (3.3
                    )%
                    
                    
                    (408
                    )
                    
                    
                    (1.9
                    )%
                    
                    
                    (512
                    )
                    
                    
                    125.5
                    %Income
      before non-controlling interest
                    
                    
                    1,592
                    
                    
                    
                    5.6
                    %
                    
                    
                    724
                    
                    
                    
                    3.3
                    %
                    
                    
                    868
                    
                    
                    
                    119.9
                    %Non-controlling
      interest
                    
                    
                    (93
                    )
                    
                    
                    (0.3
                    )%
                    
                    
                    (59
                    )
                    
                    
                    (0.3
                    )%
                    
                    
                    (34
                    )
                    
                    
                    57.6
                    %Net
      income
                    
                    $
                    1,499
                    
                    
                    
                    5.3
                    %
                    
                    $
                    665
                    
                    
                    
                    3.0
                    %
                    
                    $
                    834
                    
                    
                    
                    125.4
                    %
  26
  Agent
commissions were $19.7 million for the six months ended December 31, 2010, an
increase of 28.7% from $15.3 million for the six months ended December 31,
2009.  Agent commissions as a percentage of net transportation revenue
increased slightly to 69.5% for the six months ended December 31, 2010, from
69.3% for the comparable prior year period.  The increase is due to
increased domestic sales, which typically yield higher margins and consequently
higher commissions.
  Personnel
costs were $3.1 million for the six months ended December 31, 2010, an increase
of 5.6% from $3.0 million for the six months ended December 31,
2009.  Personnel costs as a percentage of net transportation revenue
decreased to 11.0% for the six months ended December 31, 2010, from 13.4% for
the comparable prior year period. The decrease is primarily attributable to an
increase in net transportation revenues due to strong demand for our services,
without the need to increase corporate personnel proportionately.
  Selling,
general and administrative costs remain unchanged at $2.2 million for the six
months ended December 31, 2010 and 2009.  As a percentage of net
transportation revenue, other selling, general and administrative costs
decreased to 7.8% for the six months ended December 31, 2010, from 10.2% for the
comparable prior year period.
  Depreciation
and amortization costs for the six months ended December 31, 2010, were
approximately $0.7 million, a decrease of 18.1% from $0.8 million for the six
months ended December 31, 2009.  Depreciation and amortization as a
percentage of net transportation revenue decreased to 2.3% for the six months
ended December 31, 2010, from 3.6% for the comparable prior year period,
primarily due to lower amortization costs associated with the Airgroup &
Adcom acquisitions.
  Income
from operations was $2.6 million for the six months ended December 31, 2010,
compared to income from operations of $0.8 million for the six months ended
December 31, 2009.
  Other
expense was $0.1 million for the six months ended December 31, 2010, compared to
other income of $0.4 million for the six months ended December 31, 2009,
primarily due to a loss on litigation of $150k in the current period versus a
gain on litigation of $355k in the prior year period.
  Net
income was $1.5 million for the six months ended December 31, 2010, compared to
net income of $0.7 million for the six months ended December 31,
2009.
  Liquidity and Capital
Resources
  Net cash
provided by operating activities was $1.8 million for the six months ended
December 31, 2010, compared to net cash used of $0.6 million for the six months
ended December 31, 2009.  The change was principally driven by growth
in transportation revenue as well as an increase in net collections on
outstanding receivables, partially offset by income taxes, and prepaid
expenses.
  Net cash
used in investing activities was $0.5 million for the six months ended December
31, 2010, compared to $0.2 million for the six months ended December 31,
2009.  Use of cash for the six months ended December 31, 2010,
consisted of the purchase of $0.2 million of fixed assets and payments made to
the former Adcom shareholder totaling $0.3 million. Use of cash for the six
months ended December 31, 2009 consisted of the purchase of less than $0.1
million in fixed assets and payments made to the former Adcom shareholder
totaling $0.1 million.
  27
  Net cash
used in financing activities was $1.9 million for the six months ended December
31, 2010, compared to net cash provided of $0.3 million for the six months ended
December 31, 2009.  The cash used for financing activities for the six
months ended December 31, 2010, consisted primarily of $0.5 million of treasury
stock purchases, a distribution to the non-controlling interest of a subsidiary
of $0.1 million and net repayments to our credit facility of $1.3
million.  The cash provided by financing activities for the six months
ended December 31, 2009, consisted of borrowings from our credit facility of
$0.8 million, offset by $0.5 million of treasury stock purchases.
  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"). 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 ended 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.
  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.
  28
  Effective
September 1, 2008, we acquired all of the outstanding stock of Adcom Express,
Inc. The transaction was valued at up to $11.05 million, consisting of: (i)
$4.75 million in cash paid at the closing; (ii) $$0.25 million 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 $2.8 million in four "Tier-1
Earn-Out Payments" of up to $0.7 million 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 $2.0 million, equal to 20% of the amount
by which the Adcom cumulative Gross Profit Contribution exceeds $16.56 million
during the four year earn-out period; and (v) an "Integration Payment" of $1.25
million, 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).
  As of
December 31, 2010, we owe Mr. Friedman $36,708 in cash.
  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):
                                  
                                  2012
                                  
                                  
                                  2013Earn-out period:
                                  
                                  7/1/2010 –
                                    6/30/2011
                                  
                                  
                                  7/1/2011 –
                                    6/30/2012Earn-out
      payments:Cash
                                  
                                  $
                                  350
                                  
                                  
                                  $
                                  350Equity
                                  
                                  
                                  350
                                  
                                  
                                  
                                  350Total
      potential earn-out payments
                                  
                                  $
                                  700
                                  
                                  
                                  $
                                  700Total
      gross margin targets
                                  
                                  $
                                  4,320
                                  
                                  
                                  $
                                  4,320
  (1)
Earn-out payments are paid October 1 following each fiscal year end in a
combination of cash and Company common stock.
  Credit
Facility
  In March
2010, our $15.0 million revolving credit facility, including a $0.5 million
sublimit to support letters of credit (collectively, the "Facility"), was
increased to $20.0 million with a maturity date of March 31, 2012. 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, including
the repurchase of the Company’s stock. Borrowings under the facility bear
interest, at our option, at the bank’s prime rate minus 0.75% to plus 0.50% or
LIBOR plus 1.75% to 3.00%, 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 is collateralized by accounts receivable and other
assets of the Company and our subsidiaries and provides for advances of up to
80% of 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 4.00 times the Company’s consolidated EBITDA
(as adjusted) measured on a rolling four quarter basis. 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.
  Under the
terms of the Facility, we are 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 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 lender must be
reasonably satisfied with projected financial statements we provide 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
we are not able to satisfy the conditions of the Facility in connection with a
proposed acquisition, we must either forego the acquisition, obtain the lender's
consent, or retire the Facility. This may limit or slow our ability to achieve
the critical mass it may need to achieve its strategic
objectives.
  29
  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 December 31, 2010, we were in compliance
with all of its covenants.
  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 for the next twelve months.
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
in payment of 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.
  Advances
made under our $20.0 million Facility are limited to the eligible accounts
receivable available to support our borrowings.  As of December 31,
2010, we have approximately $12.0 million in eligible accounts receivable and,
net of advances outstanding, approximately $7.9 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. Except
for the acquisition of our agent based stations, we would generally expect our
acquisitions to contribute additional eligible accounts receivable to our
borrowing base and create capacity for additional borrowings under our Facility.
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 or issuance of equity.
  Off Balance Sheet
Arrangements
  As of
December 31, 2010, 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 which affect our financial statements, the areas of
particular significance include the assessment of the recoverability of
long-lived assets (including acquired intangibles), recoverability of goodwill,
and revenue recognition.
  30
  We
perform an annual impairment test for goodwill. 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 covenants not to compete
("CNTC") agreements arising from our acquisitions. Customer related intangibles
will be amortized using accelerated methods over approximately 5 years and CNTC
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 estimate 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 our
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.
  This
method generally results in recognition of revenues and purchased transportation
costs earlier than the preferred methods under GAAP which do not recognize
revenue until a proof of delivery is received or which recognize revenue as
progress on the transit is made. Our method of revenue and cost recognition does
not result in a material difference from amounts which would be reported under
such other methods.
  Item
4.   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 December 31, 2010, 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
December 31, 2010, 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
December 31, 2010, which have materially affected, or are reasonably likely to
materially affect, our internal control over financial
reporting.
  31
  PART
II. OTHER INFORMATION
  Item
1.  Legal Proceedings.
  On or
about February 21, 2007, Team Air Express, Inc. d/b/a Team Worldwide ("Team")
commenced an action against the Company, as well as Texas Time Express, Inc.,
Douglas K. Tabor, and Michael E. Staten, in the District Court of the State of
Texas, Tarrant County (the “Court”) captioned Cause No. 017 222706 07; Team Air Express, Inc. d/b/a Team
Worldwide v. Airgroup Corporation, Texas Time Express, Inc., Douglas K. Tabor,
individually and as officer of Texas Time Express, Inc., and Michael E. Staten,
individually and as officer of Texas Time Express, Inc.
  In its
complaint, Team alleged that we, in conjunction with the other named defendants,
tortuously interfered with an existing contract Team had in place with VRC
Express, Inc. ("VRC"), its then existing Chicago, Illinois station
location.  In their petition, Team alleged that we and other
defendants caused VRC to leave the Team network of companies, and become a
branch office of Airgroup Corporation.  The suit sought unspecified
damages for the loss of business opportunity and profits as a result of VRC
leaving the Team system.
  This
litigation was resolved on January 11, 2011 by agreement amongst the parties to
enter an Agreed Order of Dismissal with prejudice, without admission of guilt
and with affirmation of the parties’ right to freely compete in the marketplace.
In connection with the settlement of the matter, we agreed to make a $150,000
donation to a mutually agreeable IRC 503(c) charitable
organization.  Neither the Company, the co-defendants, nor Team
received any compensation in connection with the settlement of the
matter.
  Item
2. Unregistered Sales of Equity Securities and Use of Proceeds.
  We had a
share repurchase program that authorized us to purchase up to 5,000,000 shares
of common stock through December 31, 2010.  Under the program, the
share repurchases could be made 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 December 31,
2010:
  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 October 1, 2010 through October 31, 2010
                  
                  
                  111,700
                  
                  
                  $
                  0.478
                  
                  
                  
                  111,700
                  
                  
                  
                  80,761Repurchases
      from November 1, 2010 through November 30, 2010
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Repurchases
      from December 1, 2010 through December 31, 2010
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Total
                  
                  
                  111,700
                  
                  
                  $
                  0.478
                  
                  
                  
                  111,700
                  
                  
                  
                  80,761
 
 (1)
              In
      May 2009, our Board of Directors authorized the repurchase of up to
      5,000,000 shares of our common stock through December 31,
      2010.
  32
  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 February 14, 2011
                      
                      FiledHerewith
  33
  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:
      February 14, 2011
                  
                  /s/ Bohn H.
      CrainBohn
      H. CrainChief
      Executive Officer and Chief Financial
Officer
  Date:
      February 14, 2011
                  
                  /s/ Todd E.
      MacomberTodd
      E. MacomberSenior
      Vice President and Chief Accounting
Officer
  34
  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 February 14,
2011
  35