**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**




**FORM
      10-Q**




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




For
      the
      quarterly period ended: September 30, 2007




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




For
      the
      transition period from ___________ to  _____________




Commission
      File Number: 000-50283





**RADIANT
      LOGISTICS, INC.** ****


**(Exact
      Name of Registrant as Specified in Its Charter)**





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





1227
      120thAvenue
      N.E., Bellevue, WA 98005


(Address
      of Principal Executive Offices)





(425)
      943-4599


(Issuer’s
      Telephone Number, including Area Code)





N/A


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





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Exchange Act during the past 12 months
      (or
      for such shorter period that the registrant was required to file such reports),
      and (2) has been subject to such filing requirements for the past 90 days.
      Yes x No o





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




Large accelerated filer o
            Accelerated
                filer o
            Non-accelerated
                filer x





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).


Yes
o  No x





There
      were 33,961,639 issued and outstanding shares of the registrant’s common stock,
      par value $.001 per share, as of November 9, 2007.









**RADIANT
      LOGISTICS, INC.**


**(f/k/a
      Golf Two, Inc.)**




**TABLE
      OF CONTENTS**




PART
                I. FINANCIAL INFORMATIONItem
                1.
            
            Condensed
                Consolidated Financial Statements - UnauditedCondensed
                Consolidated Balance Sheets at September 30, 2007 and June 30,
                2007
            
            
            3Condensed
                Consolidated Statements of Operations for the three months ended
                September
                30, 2007 and 2006
            
            
            4Condensed
                Consolidated Statements of Stockholders’ Equity at September 30,
                2007
            
            
            5Condensed
                Consolidated Statements of Cash Flows for the three months ended
                September
                30, 2007 and 2006
            
            
            6-7Notes
                to Condensed Consolidated Financial Statements
            
            
            8Item
                2.
            
            Management’s
                Discussion and Analysis of Financial Conditions and Results of
                Operations
            
            
            21Item
                3.
            
            Quantitative
                and Qualitative Disclosures about Market Risk
            
            
            29Item
                4.
            
            Controls
                and Procedures
            
            
            29PART
                II OTHER INFORMATIONItem
                1.
            
            Legal
                Proceedings
            
            
            30Item
                5.
            
            Other
                Information
            
            
            30Item
                6.
            
            Exhibits
            
            
            30





2




**RADIANT
      LOGISTICS, INC.**


**(f/k/a
      Golf Two, Inc.)**


**Condensed
      Consolidated Balance Sheets**


September
                  30,
                2007
              
              June
                  30,
                2007(unaudited)ASSETSCurrent
                  assets -Cash
                  and cash equivalents
              
              $
              409,361
              
              $
              719,575Accounts
                  receivable, net of allowance
              
              
              17,503,002
              
              
              15,062,910for
                  doubtful accounts of $286,255 at September 30, 2007 and$259,960
                  at June 30, 2007Current
                  portion of employee loan receivable andother
                  receivables
              
              
              40,816
              
              
              42,800Prepaid
                  expenses and other current assets
              
              
              152,426
              
              
              59,328Deferred
                  tax asset
              
              
              256,468
              
              
              234,656Total
                  current assets
              
              
              18,362,073
              
              
              16,119,269Property
                  and equipment, net
              
              
              918,653
              
              
              844,919Acquired
                  intangibles, net
              
              
              1,652,933
              
              
              1,789,773Goodwill
              
              
              5,532,223
              
              
              5,532,223Employee
                  loan receivable
              
              
              80,000
              
              
              80,000Investment
                  in real estate
              
              
              40,000
              
              
              40,000Deposits
                  and other assets
              
              
              1,069,658
              
              
              618,153Total
                  long term assets
              
              
              8,374,814
              
              
              8,060,149$
              27,655,540
              
              $
              25,024,337LIABILITIES
                  AND STOCKHOLDERS' EQUITYCurrent
                  liabilities -Notes
                  payable - current portion of long term debt
              
              $
              800,000
              
              $
              800,000Accounts
                  payable
              
              
              11,540,517
              
              
              11,619,579Accrued
                  transportation costs
              
              
              2,059,105
              
              
              1,651,177Commissions
                  payable
              
              
              786,903
              
              
              700,020Other
                  accrued costs
              
              
              241,481
              
              
              344,305Income
                  taxes payable
              
              
              117,116
              
              
              224,696Total
                  current liabilities
              
              
              15,545,122
              
              
              15,339,777Long
                  term debt
              
              
              4,314,520
              
              
              1,974,214Deferred
                  tax liability
              
              
              561,997
              
              
              608,523Total
                  long term liabilities
              
              
              4,876,517
              
              
              2,582,737Total
                  liabilities
              
              
              20,421,639
              
              
              17,922,514Commitments
                  & contingencies
              
              
              -
              
              
              -Minority
                  interest
              
              
              39,870
              
              
              57,482Stockholders'
                  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;issued
                  and outstanding: 33,961,639 at September 30, 2007and
                  June 30, 2007
              
              
              15,417
              
              
              15,417Additional
                  paid-in capital
              
              
              7,199,032
              
              
              7,137,774Accumulated
                  deficit
              
              
              (20,418
              )
              
              (108,850
              )Total
                  Stockholders’ equity
              
              
              7,194,031
              
              
              7,044,341$
              27,655,540
              
              $
              25,024,337




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




3


**RADIANT
      LOGISTICS, INC.**


**(f/k/a
      Golf Two, Inc.)**


**Condensed
      Consolidated Statements of Operations**


**(unaudited)**


For
                  three months ended
                September
                  30,2007
              
              2006Revenue
              
              $
              25,557,234
              
              $
              14,417,101Cost
                  of transportation
              
              
              17,116,375
              
              
              9,423,319Net
                  revenues
              
              
              8,440,859
              
              
              4,993,782Agent
                  Commissions
              
              
              5,851,818
              
              
              3,727,317Personnel
                  costs
              
              
              1,546,934
              
              
              507,032Selling,
                  general and administrative expenses
              
              
              694,867
              
              
              405,905Depreciation
                  and amortization
              
              
              239,868
              
              
              186,106Total
                  operating expenses
              
              
              8,333,487
              
              
              4,826,360Income
                  from operations
              
              
              107,372
              
              
              167,422Other
                  income (expense):Interest
                  income
              
              
              1,200
              
              
              1,805Interest
                  expense
              
              
              (25,740
              )
              
              (7,491
              )Other
              
              
              (19,743
              )
              
              (402
              )Total
                  other income (expense)
              
              
              (44,283
              )
              
              (6,088
              )Income
                  before income tax expense (benefit)
              
              
              63,089
              
              
              161,334Income
                  tax expense (benefit)
              
              
              (7,731
              )
              
              1,808Income
                  before minority interest
              
              
              70,820
              
              
              159,526Minority
                  interest
              
              
              (17,612
              )
              
              -Net
                  income
              
              $
              88,432
              
              $
              159,526Net
                  income per common share - basic
              
              $
              0.00
              
              $
              0.00Net
                  income per common share - basic and diluted
              
              $
              0.00
              
              $
              0.00Weighted
                  average basic common shares outstanding
              
              
              33,961,639
              
              
              33,652,400Weighted
                  average diluted common shares outstanding
              
              
              34,442,963
              
              
              36,137,182




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




4




**RADIANT
      LOGISTICS, INC.**


**(f/k/a
      Golf Two, Inc.)**


**Condensed
      Consolidated Statement of Stockholders’ Equity**


ADDITIONAL
              
              
              
              TOTALCOMMON
                  STOCK
              
              PAID-IN
              
              ACCUMULATED
              
              STOCKHOLDERS'SHARES
              
              AMOUNT
              
              CAPITAL
              
              DEFICIT
              
              EQUITYBalance
                  at June 30, 2007
              
              
              33,961,639
              
              $
              15,417
              
              $
              7,137,774
              
              $
              (108,850
              )
              $
              7,044,341Share
                  based compensation(unaudited)
              
              
              -
              
              
              -
              
              
              61,258
              
              
              -
              
              
              61,258Net
                  income for the three months endedSeptember
                  30, 2007(unaudited)
              
              
              -
              
              
              -
              
              
              -
              
              
              88,432
              
              
              88,432Balance
                  at September 30, 2007
              
              
              33,961,639
              
              $
              15,417
              
              $
              7,199,032
              
              $
              (20,418
              )
              $
              7,194,031





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




5




**RADIANT
      LOGISTICS, INC.**


**(f/k/a
      Golf Two, Inc.)**


**Condensed
      Consolidated Statements of Cash Flows**


**(unaudited)**


For
                  three months ended
                September
                  30,2007
              
              2006CASH
                  FLOWS PROVIDED BY (USED FOR) OPERATING ACTIVITIES:Net
                  income
              
              $
              88,432
              
              $
              159,526ADJUSTMENTS
                  TO RECONCILE NET INCOME TO NET CASHPROVIDED
                  BY (USED FOR) OPERATING ACTIVITIES:non-cash
                  compensation expense (stock options)
              
              
              61,258
              
              
              44,992amortization
                  of intangibles
              
              
              136,840
              
              
              152,959amortization
                  of deferred tax
              
              
              (46,526
              )
              
              (52,006
              )depreciation
              
              
              95,875
              
              
              25,994amortization
              
              
              7,153
              
              
              7,153minority
                  interest in income of subsidiaries
              
              
              (17,612
              )
              
              -provision
                  for doubtful accounts
              
              
              26,265
              
              
              -change
                  in fair value of accounts receivable
              
              
              -
              
              
              (6,128
              )CHANGE
                  IN ASSETS AND LIABILITIES -accounts
                  receivable
              
              
              (2,466,357
              )
              
              197,207employee
                  receivable and other receivables
              
              
              1,984
              
              
              (1,600
              )prepaid
                  expenses and other current assets
              
              
              (574,099
              )
              
              103,562accounts
                  payable
              
              
              (79,062
              )
              
              583,935accrued
                  transportation costs
              
              
              407,928
              
              
              61,499commissions
                  payable
              
              
              86,883
              
              
              77,664other
                  accrued costs
              
              
              (102,823
              )
              
              (47,639
              )income
                  taxes payable
              
              
              (107,580
              )
              
              (246,546
              )Net
                  cash provided by (used for) operating activities
              
              
              (2,481,441
              )
              
              1,060,572CASH
                  FLOWS USED FOR INVESTING ACTIVITIES:purchase
                  of property and equipment
              
              
              (169,079
              )
              
              (74,733
              )Net
                  cash used for investing
              
              
              (169,079
              )
              
              (74,733
              )CASH
                  FLOWS PROVIDED BY (USED FOR) FINANCING ACTIVITIES:proceeds
                  from (payments to) credit facility
              
              
              2,340,306
              
              
              (602,098
              )Net
                  cash provided by(used for)financing activities
              
              
              2,340,306
              
              
              (602,098
              )NET
                  INCREASE (DECREASE) IN CASH
              
              
              (310,214
              )
              
              383,741CASH,
                  BEGINNING OF THE PERIOD
              
              
              719,575
              
              
              510,970CASH,
                  END OF PERIOD
              
              $
              409,361
              
              $
              894,711SUPPLEMENTAL
                  DISCLOSURE OF CASH FLOW INFORMATION:Income
                  taxes paid
              
              $
              168,350
              
              $
              187,023Interest
                  paid
              
              $
              25,740
              
              $
              7,491




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




6




**RADIANT
      LOGISTICS, INC.**


**(f/k/a
      Golf Two, Inc.)**


**Condensed
      Consolidated Statements of Cash Flows**


**(unaudited)**





**Supplemental
      disclosure of non-cash financing activities:**





In
      September 2006, the Company issued 250,000 shares, of its common stock, at
      $1.01
      per share, in exchange for $252,500, in value, of domestic and international
      freight training materials for the development of its employees and exclusive
      agent offices.




7




**RADIANT
      LOGISTICS, INC.**


**(f/k/a
      Golf Two, Inc.)**


**Notes
      to Condensed Consolidated Financial Statements**


**(unaudited)**





**NOTE
      1 - NATURE OF OPERATION AND BASIS OF PRESENTATION**





**General**





Radiant
      Logistics, Inc. (formerly known as “Golf Two, Inc”) (the “Company”) was formed
      under the laws of the state of Delaware on March 15, 2001. From inception
      through the third quarter of 2005, the Company's principal business strategy
      focused on the development of retail golf stores. In October 2005, the Company’s
      management team completed a change of control transaction acquiring a majority
      of the Company’s outstanding securities from the Company’s former officers and
      directors in privately negotiated transactions. In conjunction with the change
      of control transaction, the Company: (i) elected to discontinue the Company’s
      former business model; (ii) repositioned itself as a global transportation
      and
      supply chain management company; and (iii) changed its name to
      “Radiant Logistics, Inc.” to, among other things, better align the name with the
      Company’s new business focus.




The
      Company completed the repositioning of its business model when it completed
      the
      acquisition of Airgroup Corporation (“Airgroup”) effective January 1, 2006.
      Airgroup is a Seattle, Washington based non-asset based logistics company that
      provides domestic and international freight forwarding services through a
      network of exclusive agent offices across North America. Airgroup services
      a
      diversified account base including manufacturers, distributors and retailers
      using a network of independent carriers and international agents positioned
      strategically around the world.





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





The
      Company’s growth strategy will 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 acquisition of Airgroup in January 2006, management focused
      its efforts on the build-out of the Company’s network of exclusive agency
      offices, as well as enhancing its back-office infrastructure and transportation
      and accounting systems.





As
      the
      Company continues to build out its network of exclusive agent locations to
      achieve a level of critical mass and scale, it intends to implement an
      acquisition strategy to develop additional growth opportunities. Implementation
      of an acquisition strategy will rely upon two primary factors: first,
      management’s ability to identify and acquire target businesses that fit within
      the Company’s general acquisition criteria and, second, the continued
      availability of capital and financing resources sufficient to complete these
      acquisitions. Following the acquisition of Airgroup, management has from
      time-to-time identified a number of additional companies as suitable acquisition
      candidates. However, for a variety of reasons, primarily due to pricing
      concerns, due diligence issues or risks associated with operational integration,
      the Company has not yet completed a follow-on transaction to its platform
      acquisition. On a longer-term basis, the Company remains committed to its
      acquisition strategy and continues to search for targets that fit within its
      acquisition criteria. Management’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 the Company’s securities, neither of which can be
      assured.





The
      Company’s growth strategy has been designed to take advantage of shifting market
      dynamics. The third party logistics industry continues to grow as an increasing
      number of businesses outsource their logistics functions to more cost
      effectively manage and extract value from their supply chains. The industry
      is
      positioned for further consolidation as it remains highly fragmented, and as
      customers are demanding the types of sophisticated and broad reaching service
      offerings that can more effectively be handled by larger more diverse
      organizations.




8





Successful
      implementation of the Company’s growth strategy depends upon a number of
      factors, including management’s 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 management’s ability to achieve the Company’s
      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.





**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. 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, although the Company’s
      management believes that the disclosures are adequate to make the information
      presented not misleading. The Company’s management suggests that these condensed
      financial statements 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, 2007.





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





**Basis
      of Presentation**





Historically,
      the Company had a fiscal year that ended December 31. After acquiring Airgroup
      in January 2006, the Company changed its fiscal year to June 30 **.** As
      of
      January 1, 2006, the Company was no longer considered to be a development stage
      company due to the acquisition of Airgroup. Airgroup is a wholly owned
      subsidiary of the Company and its results are consolidated within the Company’s
      consolidated financial statements.





The
      consolidated financial statements also include the accounts of Radiant
      Logistics, Inc. and its wholly-owned subsidiaries as well as a single
      variable interest entity, Radiant Logistics Partners LLC which is 40% owned
      by
      Airgroup, a wholly owned subsidiary of the Company, whose
      accounts are included in the consolidated financial statements in accordance
      with Financial Accounting Standards Board (“FASB”) Interpretation No. 46(R)
      consolidation of “Variable Interest Entities” (See Note 7). All
      significant inter-company 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 of America
      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, accounting
      for
      the issuance of shares and share based compensation, the assessment of the
      recoverability of long-lived assets (specifically goodwill and acquired
      intangibles), the establishment of an allowance for doubtful accounts and the
      valuation allowance for deferred tax assets. Estimates and assumptions are
      reviewed periodically and the effects of revisions are reflected in the period
      that they are determined to be necessary. Actual results could differ from
      those
      estimates.




9





**b)**  **Cash
      and Cash Equivalents**





For
      purposes of the statement 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.





**c)**  **Concentration**





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.





**d)**  **Accounts
      Receivable**





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





**e)
      Property 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 and
      the
      double declining balance method. Computer software is depreciated over a three
      year life using the straight line method of depreciation. For leasehold
      improvements, the cost is depreciated over the shorter of the lease term or
      useful life on a straight line basis. Upon retirement or other disposition
      of
      these assets, the cost and related accumulated depreciation are removed from
      the
      accounts and the resulting gain or loss, if any, is reflected in other income
      or
      expense. Expenditures for maintenance, repairs and renewals of minor items
      are
      charged to expense as incurred. Major renewals and improvements are capitalized.




Under
      the
      provisions of Statement of Position 98-1, “Accounting for the Costs of Computer
      Software Developed or Obtained for Internal Use”, the Company capitalizes costs
      associated with internally developed and/or purchased software systems that
      have
      reached the application development stage and meet recoverability tests.
      Capitalized costs include external direct costs of materials and services
      utilized in developing or obtaining internal-use software, payroll and
      payroll-related expenses for employees who are directly associated with and
      devote time to the internal-use software project and capitalized interest,
      if
      appropriate. Capitalization of such costs begins when the preliminary project
      stage is complete and ceases no later than the point at which the project is
      substantially complete and ready for its intended purpose.





Costs
      for
      general and administrative, overhead, maintenance and training, as well as
      the
      cost of software that does not add functionality to existing systems, are
      expensed as incurred.





**f)**  **Goodwill**





The
      Company follows the provisions of Statement of Financial Accounting Standards
      ("SFAS") No. 142, “Goodwill and Other Intangible Assets.” SFAS No. 142 requires
      an annual impairment test for goodwill and intangible assets with indefinite
      lives. Under the provisions of SFAS No. 142, the first step of the impairment
      test requires the Company to determine the fair value of each reporting unit,
      and compare the fair value to the reporting unit's carrying amount. To the
      extent a reporting unit's carrying amount exceeds its fair value, an indication
      exists that the reporting unit's goodwill may be impaired and the Company must
      perform a second more detailed impairment assessment. The second impairment
      assessment involves allocating the reporting unit’s fair value to all of its
      recognized and unrecognized assets and liabilities in order to determine the
      implied fair value of the reporting unit’s goodwill as of the assessment date.
      The implied fair value of the reporting unit’s goodwill is then compared to the
      carrying amount of goodwill to quantify an impairment charge as of the
      assessment date. In the future, the Company will perform its annual impairment
      test effective as of April 1 of each year, unless events or circumstances
      indicate an impairment may have occurred before that time. As of September
      30,
      2007 there are no indications of an impairment.




10





**g)**  **Long-Lived
      Assets**





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





The
      Company follows the provisions of SFAS No. 144, “Accounting for the Impairment
      or Disposal of Long-Lived Assets,” which establishes accounting standards for
      the impairment of long-lived assets such as property, plant and equipment and
      intangible assets subject to amortization. The Company reviews 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, 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 that no
      impairment of the respective carrying value has occurred as of September 30,
      2007.





**h)**  **Commitments**





The
      Company has operating lease commitments some of which are for office and
      warehouse space and are under non-cancelable operating leases expiring at
      various dates through December 2012. Future annual commitments for years ending
      June 30, 2008 through 2012, respectively, are $232,471, $255,741, $81,518,
      $35,310, and $2,432.





**i)**  **Income
      Taxes**




Taxes
      on
      income are provided in accordance with SFAS No. 109, “Accounting for
      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 and the tax effects of net operating loss and capital loss
      carryforwards. 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.





**j)**  **Revenue
      Recognition and Purchased Transportation Costs**





The
      Company recognizes revenue on a gross basis, in accordance with Emerging Issues
      Task Force ("EITF") 91-9, "Reporting Revenue Gross versus Net," as a result
      of
      the following: 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.




11




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. In accordance with EITF 91-9, revenue
      from freight forwarding and export services is recognized at the time the
      freight is tendered to the direct carrier at origin, and direct expenses
      associated with the cost of transportation are accrued concurrently. At
      the
      time when revenue is recognized on a transportation shipment, the Company
      records costs related to that shipment based on the estimate of total purchased
      transportation costs. The estimates are 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.





**k)**  **Share
      based Compensation**





In
      December 2004, the Financial Accounting Standards Board ("FASB") issued SFAS
      No.
      123R, "Share Based Payment,” a revision of FASB Statement No. 123 ("SFAS 123R").
      This statement requires that the cost resulting from all share-based payment
      transactions be recognized in the Company’s consolidated financial statements.
      In addition, in March 2005 the Securities and Exchange Commission ("SEC")
      released SEC Staff Accounting Bulletin No. 107, "Share-Based Payment" ("SAB
      107"). SAB 107 provides the SEC’s staff’s position regarding the application of
      SFAS 123R and certain SEC rules and regulations, and also provides the staff’s
      views regarding the valuation of share-based payment arrangements for public
      companies. Generally, the approach in SFAS 123R is similar to the approach
      described in SFAS 123. However, SFAS 123R requires all share-based payments
      to
      employees, including grants of employee stock options, to be recognized in
      the
      statement of operations based on their fair values. Pro forma disclosure of
      fair
      value recognition, as prescribed under SFAS 123, is no longer an alternative.
      The Company adopted Statement 123R in October 2005 using the modified
      prospective approach.





For
      the
      three months ended September 30, 2007, the Company recorded a share based
      compensation expense of $61,258, which, net of income taxes, resulted in a
      $40,430 net reduction of net income.





**l)**  **Basic
      and Diluted Income Per Share**





The
      Company uses SFAS No. 128, Earnings Per Share for calculating the 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 had been issued and if the additional common shares were dilutive.
      At September 30, 2007, the weighted average outstanding number of potentially
      dilutive common shares totaled 34,442,963 shares of common stock, including
      options to purchase 3,150,000 shares of common stock at June 30, 2007, of which
      1,145,000 were excluded as their effect would have been antidilutive. The
      following table reconciles the numerator and denominator of the basic and
      diluted per share computations for earnings per share as
      follows.


Three
                  months
                ended
                Sept.
                  30, 2007
              
              Three
                  months
                ended
                Sept.
                  30, 2006Weighted
                  average basic shares outstanding
              
              
              33,961,639
              
              
              33,652,400Options
              
              
              481,324
              
              
              807,955Weighted
                  average dilutive shares outstanding
              
              
              34,442,963
              
              
              34,460,355




12




**NOTE
      3 - ACQUISITION OF AIRGROUP**





In
      January of 2006, the Company acquired 100 percent of the outstanding stock
      of
      Airgroup. Airgroup is a Seattle, Washington based non-asset based logistics
      company that provides domestic and international freight forwarding services
      through a network of exclusive agent offices across North America. Airgroup
      services a diversified account base including manufacturers, distributors and
      retailers using a network of independent carriers and international agents
      positioned strategically around the world. See the Company’s Form 8-K filed on
      January 18, 2006 for additional information.





The
      transaction was valued at up to $14.0 million. This consists of: (i) $9.5
      million payable in cash at closing (before giving effect for $2.8 million in
      acquired cash); (ii) a subsequent cash payment of $.5 million in cash due on
      the
      two year anniversary; (iii)
      as
      amended, an additional base payment of $0.6 million payable in cash with
      $300,000 payable on June 30, 2008 and $300,000 payable on January 1, 2009;
      (iv)
      a base earn-out payment of $1.9 million payable in Company common stock over
      a
      three-year earn-out period based upon Airgroup achieving income from continuing
      operations of not less than $2.5 million per year; and
      (v)
      as additional incentive to achieve future earnings growth, an opportunity to
      earn up to an additional $1.5 million payable in Company common stock at the
      end
      of a five-year earn-out period (the “Tier-2 Earn-Out”). Under Airgroup’s Tier-2
      Earn-Out, the former shareholders of Airgroup are entitled to receive 50% of
      the
      cumulative income from continuing operations in excess of $15,000,000 generated
      during the five-year earn-out period up to a maximum of $1,500,000. With respect
      to the base earn-out payment of $1.9 million, in the event there is a shortfall
      in income from continuing operations, the earn-out payment will be reduced
      on a
      dollar-for-dollar basis to the extent of the shortfall. Shortfalls may be
      carried over or carried back to the extent that income from continuing
      operations in any other payout year exceeds the $2.5 million level. Through
      the
      most recent earn-out period ended June 30, 2007, the former Airgroup
      shareholders earned a total of $214,000 in base earn-out payments.





13




**NOTE
      4 - ACQUIRED INTANGIBLE ASSETS**





The
      table
      below reflects acquired intangible assets related to the acquisition of Airgroup
      on January 1, 2006. The information is for the three months ended September
      30,
      2007 and twelve months ended June 30, 2007. Prior to the Company’s acquisition
      of Airgroup, there were no intangible assets for prior years as this was the
      Company’s first acquisition.




Three
                months ended
              September
                30, 2007
            
            Twelve
                months ended
              June
                30, 2007Gross
              carrying
              amount
            
            Accumulated
                Amortization
            
            Gross
              carrying
              amount
            
            AccumulatedAmortizationAmortizable
                intangible assets:Customer
                related
            
            $
            2,652,000
            
            $
            1,057,567
            
            $
            2,652,000
            
            $
            925,227Covenants
                not to compete
            
            
            90,000
            
            
            31,500
            
            
            90,000
            
            
            27,000Total
            
            $
            2,742,000
            
            $
            1,089,067
            
            $
            2,742,000
            
            $
            952,227Aggregate
                amortization expense:For
                three months endedSeptember
                30, 2007
            
            
            
            
            $
            136,840For
                three months endedSeptember
                30, 2006
            
            
            
            
            $
            152,959Aggregate
                amortization expense for the year ended June 30:2008
                - For the remainder of the year
            
            
            
            
            
            410,5192009
            
            
            
            
            
            597,0902010
            
            
            
            
            
            483,1242011
            
            
            
            
            
            162,200Total
            
            
            
            
            $
            1,652,933





For
      the
      three months ended September 30, 2007, the Company recorded an expense of
      $136,840 from amortization of intangibles and an income tax benefit of $46,526
      from amortization of the long term deferred tax liability; both arising from
      the
      acquisition of Airgroup. For the three months ended September 30, 2006, the
      Company recorded an expense of $152,959 from amortization of intangibles and
      an
      income tax benefit of $52,006 from amortization of the long term deferred tax
      liability; both arising from the acquisition of Airgroup. The Company expects
      the net reduction in income, from the combination of amortization of intangibles
      and long term deferred tax liability, will be $361,257 in 2008, $394,079 in
      2009, $318,862 in 2010, and $107,052 in 2011.





14




**NOTE
      5 - PENDING TRANSACTION IN CONJUNCTION WITH EXPANSION INTO THE AUTOMOTIVE SECTOR**





In
      May
      2007 **,** the
      Company launched a new logistics service offering focused on the automotive
      industry through its wholly-owned subsidiary, Radiant Logistics Global Services,
      Inc. (“RLGS”).





In
      connection with the launch of the Company’s automotive services group it entered
      into an Asset Purchase Agreement (the “APA”) with Mass Financial Corporation
      (“Mass”) to acquire certain assets formerly used in the operation of the
      automotive division of Stonepath Group, Inc. (the “Purchased Assets”). In its
      capacity as a senior secured creditor, Mass agreed to sell RLGS the Purchased
      Assets in connection with a foreclosure and disposition process that began
      in
      April 2007. The purchase price consists of a $100,000 refundable deposit,
      $150,000 to be paid at closing, and up to an additional $2.5 million in
      cumulative earn-out payments equal to 25% of the annual earnings before
      interest, taxes, depreciation and amortization, as defined in the APA generated
      from the automotive group in future periods. The APA contains negotiated
      representations, warranties, covenants and indemnities by each party. The APA
      was amended in November of 2007. See Note 14 - Subsequent Events
      below.





Concurrent
      with the execution of the APA, the Company also entered into a Management
      Services Agreement (MSA) with Mass, whereby it agreed to operate the Purchased
      Assets within its automotive services group during the interim period pending
      the closing under the APA. As part of the MSA, Mass agreed to indemnify the
      Company from and against any and all expenses, claims and damages arising out
      of
      or relating to any use by any of the Company’s subsidiaries or affiliates of the
      Purchased Assets and the operation of the business utilizing the Purchased
      Assets.





Shortly
      after commencing operation of the Purchased Assets pursuant to the MSA, a
      judgment creditor of Stonepath (the “Stonepath Creditor”) issued garnishment
      notices to the automotive customers being serviced by the Company disputing
      the
      priority and superiority of the underlying security interest of Mass in the
      Purchased Assets and asserting that the Company was in possession of certain
      accounts receivable or other assets covered by the garnishment notice. This
      resulted in a significant disruption to the automotive business, including
      a
      delay in the payment of outstanding RLGS invoices as the garnishment notices
      required that all such amounts be directed to a court sponsored escrow
      arrangement. Although Mass recently posted a letter of credit that resolved
      the
      outstanding garnishment action, the Company has incurred significant
      out-of-pocket costs while operating the Purchased Assets under the MSA. The
      Company expects to recover a significant amount of its costs as customers begin
      to remit payment for outstanding invoices, or through indemnification claims
      under the MSA.





The
      issue
      of the priority of Mass’s security interest in the former Stonepath assets will
      be determined by the Court after discovery and a possible hearing. If the Court
      determines that the Mass security interest in the former assets of Stonepath
      is
      not superior to the judgment of the Stonepath judgment creditor, such creditor,
      may be entitled to draw upon and satisfy his judgment from the letter of credit
      posted by Mass. If Mass is successful in establishing the superiority of its
      security interest in the subject assets, the Stonepath judgment creditor would
      not be able to draw upon the letter of credit and may or may not pursue other
      enforcement actions, including an action against the Company to recover the
      value of the garnished assets. The Company views any such action as without
      merit, would vigorously defend any such action, and seek all available remedies
      including an indemnification claim against Mass.




On
      or
      about September 28, 2007, Mass commenced an action against the Company and
      Radiant Logistics Global Services, Inc. in the Federal District Court for the
      Western District of the State of Washington at Seattle. In its complaint, Mass
      has sought specific performance, injunctive relief and damages against the
      Company and RLGS, seeking to compel a closing under an unexecuted draft
      amendment to the Asset Purchase Agreement between the parties. The Company
      has
      only recently become aware of this action and believes the claims are without
      merit, will vigorously defend the claims, and bring all available counterclaims
      against Mass. In connection with the completion of a restructured transaction
      completed in November of 2007, Mass has agreed to file with the Court a
      stipulation and order for dismissal of the Lawsuit with prejudice and without
      an
      award of attorney’s fees or costs to any party. See Note 14 - Subsequent Events
      below.




15




Below
      is
      a summary of costs and expenses associated with the APA and MSA agreements
      through September 30, 2007.





Asset
                Purchase:Initial
                down payment
            
            $
            100,000Acquisition
                expenses
            
            
            128,310Vendor
                invoices paid on behalf of Mass
            
            
            14,580242,890Mass
                expenses covered by MSA
              May
                21, 2007 - June 30, 2007
              July
                1, 2007 - September 30, 2007
            
            $
            195,844
              392,593588,437Total
            
            $
            831,327


Under
      the
      APA and MSA agreements with Mass, the Company paid $14,580 of vendor invoices,
      and $588,437 in expenses, respectively, which the Company will either offset
      against future payments to be made by the Company for the Purchased Assets
      or
      seek reimbursement as an indemnity claim pursuant to the MSA. The total $831,327
      appears on the balance sheet as a long term other asset.





**NOTE
      6 - VARIABLE INTEREST ENTITY**





In
      January 2003, the FASB issued FIN46, and revised it in December 2003 FIN46(R),
      which clarified the application of Accounting Research Bulletin No. 51
“Consolidated Financial Statements,” to 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
      (“variable interest entities”). Radiant Logistics Partners LLC (“RLP”) is 40%
      owned by Airgroup Corporation and qualifies under FIN46(R) as a variable
      interest entity and is included in the Company’s consolidated financial
      statements. Minority interest recorded on the income statement for the three
      months ending September 30, 2007 was a loss of $17,612. RLP did not commence
      operations until February 2007 and therefore no minority interest was recorded
      for the three months ending September 30, 2006.





**NOTE
      7 - RELATED PARTY**





RLP
      is
      owned 40% by Airgroup and 60% by an affiliate of the Chief Executive Officer
      of
      the Company, Radiant Capital Partners (RCP). RLP is a certified minority
      business enterprise which was formed for the purpose of providing the Company
      with a national accounts strategy to pursue corporate and government accounts
      with diversity initiatives. As currently structured, RCP’s ownership interest
      entitles it to a majority of the profits and distributable cash, if any,
      generated by RLP. The operations of RLP are intended to provide certain benefits
      to the Company, including expanding the scope of services offered by the Company
      and participating in supplier diversity programs not otherwise available to
      the
      Company. 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. Under FIN46(R), RLP is
      consolidated in the financial statements of the Company (see Note
      6).





16




**NOTE
      8 - PROPERTY AND EQUIPMENT**





The
      Company, prior to acquiring Airgroup, did not carry any fixed assets since
      its
      inception. Property and equipment consists of the following:





September
                30,
            
            June
                30,2007
            
            2007Vehicles
            
            $
            3,500
            
            $
            3,500Communication
                equipment
            
            
            1,353
            
            
            1,353Office
                equipment
            
            
            261,633
            
            
            261,633Furniture
                and fixtures
            
            
            23,379
            
            
            23,379Computer
                equipment
            
            
            259,523
            
            
            232,667Computer
                software
            
            
            712,718
            
            
            570,494Leasehold
                improvements
            
            
            10,699
            
            
            10,6991,272,804
            
            
            1,103,725Less:
                Accumulated depreciation and amortization
            
            
            (354,151
            )
            
            (258,806
            )Property
                and equipment - net
            
            $
            918,653
            
            $
            844,919




Depreciation
      and amortization expense for the three months ended September 30, 2007 and
      2006
      was $95,875 and $25,994, respectively.





**NOTE
      9 - LONG TERM DEBT**





In
      February 2007, our
      $10
      million revolving credit facility (Facility) was extended into 2009 with more
      favorable terms to the Company. The
      Facility is collateralized by accounts receivable and other assets of the
      Company and its subsidiaries. Advances under the Facility are available to
      fund
      future acquisitions, capital expenditures or for other corporate purposes.
      Borrowings under the facility bear interest, at the Company’s option, at the
      Bank’s prime rate minus .15% to 1.00% or LIBOR plus 1.55% to 2.25%, and can be
      adjusted up or down during the term of the Facility based on our performance
      relative to certain financial covenants. The Facility provides for advances
      of
      up to 80% of our eligible accounts receivable.





As
      of
      September 30, 2007, the Company had $2.3million outstanding under the Facility
      and had eligible accounts receivable sufficient to support approximately $5.6
      million in borrowings. The terms of the Facility are subject to certain
      financial and operational covenants which may limit the amount otherwise
      available under the Facility. The first covenant limits funded debt to a
      multiple of 3.00 times the Company’s consolidated EBITDA measured on a rolling
      four quarter basis (or a multiple of 3.25 at a reduced advance rate of 70.0%).
      The second financial covenant requires the Company to maintain a basic fixed
      charge coverage ratio of at least 1.1 to 1.0. The third financial covenant
      is a
      minimum profitability standard that requires the Company not to incur a net
      loss
      before taxes, amortization of acquired intangibles and extraordinary items
      in
      any two consecutive quarterly accounting periods.




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 our
      strategic objectives. At September 30, 2007, the Company was in compliance
      with
      all of its covenants.




17





As
      of
      September 30, **** 2007,
      the
      Company had $2,254,517 drawn under the Facility and $1,760,003 in outstanding
      checks which has not yet been presented to the bank for payment. The outstanding
      checks have been reclassified from our cash accounts, as they will be advanced
      from, or against, our Facility when presented for payment to the bank. This
      amount, in addition to a $300,000
      payable to the former shareholders of Airgroup, totals
      long term debt of $4,314,520 .





At September
      30, **** 2007,
      based on available collateral and $315,000 in outstanding letter of credit
      commitments, there was $3,035,719 available for borrowing under the
      Facility.





**NOTE
      10 - PROVISION FOR INCOME TAXES**





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





For
      the
      three months ended September 30, 2007, the Company recognized net
      income tax benefit of $7,731 consisting of $38,795 in income tax expense offset
      by the amortization of the deferred tax liability, $46,526, associated with
      the
      acquisition of Airgroup, in accordance with FASB 109. For
      the
      three months ended September 30, 2006, the Company recognized net
      income tax expense of $1,808 consisting of $53,814 in income tax expense offset
      by the amortization of the deferred tax liability, $52,006, associated with
      the
      acquisition of Airgroup, in accordance with FASB 109.





The
      Company’s consolidated effective tax rate during the three month period ended
      September 30, 2007 and September 30, 2006 was 34.0%.





**NOTE
      11 - STOCKHOLDERS’ EQUITY**





**Preferred
      Stock**





The
      Company is authorized to issue 5,000,000 shares of preferred stock, par value
      at
      $.001 per share. As of September 30, 2007, none of the shares were issued or
      outstanding (unaudited).





**Common
      Stock**





Pursuant
      to an agreement dated May 15, 2007, the Company agreed to issue to up to 200,000
      shares of common stock to a consultant in connection with his agreement to
      assist the Company establish an automotive services segment, with issuance
      of
      the shares to be subject to certain benchmarks. In connection with an agreement
      the Company signed with Mass on May 23, 2007, 50,000 of the shares have vested
      and are yet to be issued. An accrued current liability has been recorded in
      other accrued costs for the 50,000 shares with the offset to other assets.
      Vesting and issuance of the balance of the shares remains subject to
      uncertainty.





In
      September 2006, the Company issued 250,000 shares of our common stock, at $1.01
      per share, in exchange for $252,500, in value, of domestic and international
      freight training materials for the development of its employees and exclusive
      agent offices.





**NOTE
      12 - SHARE BASED COMPENSATION**





The
      Company issued its first employee options in October of 2005 and adopted the
      fair value recognition provisions of SFAF123R concurrent with this initial
      grant.




18




For
      the
      three months ended September 30, 2007, the Company granted no options.





Share
      based compensation costs recognized during the three months ended September
      30,
      2007, includes compensation cost for all share-based payments granted to date,
      based on the grant-date fair value estimated in accordance with the provisions
      of SFAS 123R. No options have been exercised as of September 30,
      2007.





In
      accordance with SFAS123R, the Company is required to estimate the number of
      awards that are ultimately expected to vest. Due to the lack of historical
      information, the Company has not reduced its share based compensation costs
      for
      any estimated forfeitures. Estimated forfeitures will be reassessed in
      subsequent periods and may change based on new facts and
      circumstances.




For
      the
      three months ended September 30, 2007 and 2006, the Company recognized stock
      option compensation costs of $61,258 and $44,992, respectively, in accordance
      with SFAS 123R. The following table summarizes activity under the plan for
      the
      three months ended September 30, 2007.





Number
                of
              shares
            
            Weighted
                Average
              exercise
                price per share
            
            Weighted
                average
              remaining
              contractual
              life
            
            Aggregate
              intrinsic
              valueOutstanding
                at June 30, 2007
            
            
            3,150,000
            
            $
            0.605
            
            
            8.75
                years
            
            $
            175,500Options
                granted
            
            
            
            
            
            
            
            
            -
            
            
            -Options
                exercised
            
            
            -
            
            
            -
            
            
            -
            
            
            -Options
                forfeited
            
            
            -
            
            
            -
            
            
            -
            
            
            -Options
                expired
            
            
            -
            
            
            -
            
            
            -
            
            
            -Outstanding
                at September 30, 2007
            
            
            3,150,000
            
            $
            0.605
            
            
            8.53
                years
            
            $
            227,050Exercisable
                at September 30, 2007
            
            
            514,000
            
            $
            0.606
            
            
            8.17
                years
            
            $
            33,600





**NOTE
      13 - RECENT ACCOUNTING PRONOUNCEMENTS**





There
      are
      no recently issued accounting pronouncements that are expected to have a
      material effect on the Company’s consolidated financial statements.





**NOTE
      14 - SUBSEQUENT EVENTS**





In
      November 2007 **,** the
      Company completed a restructured transaction with Mass Financial Corporation
      (“Mass”) to acquire certain assets formerly used in the operation of the
      automotive division of Stonepath Group, Inc. (the “Purchased Assets”) through
      its wholly-owned subsidiary, Radiant Logistics Global Services, Inc. (“RLGS”).





Under
      the
      terms of the initial agreement, the transaction was valued at up to $2.75 million. As restructured, the purchase
      price has been reduced to $1.56 million, consisting of cash of $560,000 and
      a
      $1.0 million credit in satisfaction of indemnity claims asserted by the Company
      arising from its interim operation of the Purchased Assets since May 22, 2007.
      Of the cash component of the transaction, $100,000 was paid in May of 2007,
      $265,000 was paid at closing and a final payment of $195,000 is to be paid
      in
      November of 2008, subject to off-set of up to $75,000 for certain qualifying
      expenses incurred by the Company. In connection with the completion of a
      restructured transaction, Mass has agreed to file with the Court a stipulation
      and order for dismissal of the pending lawsuit with prejudice and without an
      award of attorney’s fees or costs to any party. See Note 5 for additional detail
      on the original transaction and the legal claims which Mass has agreed to
      dismiss.




19





The
      total
      estimated purchase price of the acquired assets is $1.8 million, which is
      comprised of the $1.56 million purchase price along with an additional $240,000
      in estimated acquisition expenses. The following table summarizes the
      preliminary allocation of the purchase price based on the estimated fair value
      of the acquired assets at November 1, 2007. No liabilities were assumed in
      connection with the transaction:


Furniture
                  and equipment
              
              $
              25,000Goodwill
                  and other intangibles
              
              
              1,775,000Total
                  acquired assets
              
              
              1,800,000Total
                  acquired liabilities
              
              
              -Net
                  assets acquired
              
              $
              1,800,000





The
      above
      allocation is still preliminary and the Company expects to finalize it prior
      to
      the November 2008 anniversary of the acquisition of Purchased Assets as required
      per SFAS 141.




**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
      facts included or incorporated by reference in this report, including, without
      limitation, statements regarding our future financial position, business
      strategy, budgets, projected revenues, projected costs and plans and objectives
      of management for future operations, are forward-looking statements. In
      addition, 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, projections
      and assumptions about future events. These forward-looking statements are not
      guarantees and are subject to known and unknown risks, uncertainties and
      assumptions about us that, if not realized, may cause our actual results, levels
      of activity, performance or achievements to be materially different from any
      future results, levels of activity, performance or achievements expressed or
      implied by such forward-looking statements. While it is impossible to identify
      all of the factors that may cause our actual operating performance, events,
      trends or plans to differ materially from those set forth in such
      forward-looking statements, such factors include the inherent risks associated
      with our ability to: (i) to use Airgroup as a “platform” upon which we can build
      a profitable global transportation and supply chain management company; (ii)
      retain and build upon the relationships we have with our exclusive agency
      offices; (iii) continue the development of our back office infrastructure and
      transportation and accounting systems in a manner sufficient to service our
      expanding revenues and base of exclusive agency locations; (iv) 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 in Item 1A of our Annual Report on Form
      10-K for the year ended June 30, 2007. Furthermore, the general business
      assumptions underlying the forward-looking statements included herein represent
      estimates of future events and are subject to uncertainty due to, among other
      things, changes in economic, legislative, industry, and other circumstances.
      As
      a result, the identification, interpretation and use of data and other
      information in developing and selecting assumptions from and among reasonable
      alternatives require the exercise of judgment. To the extent that the assumed
      events do not occur, the outcome may vary substantially from anticipated or
      projected results, and, accordingly, we can provide no assurance regarding
      the
      achievability of those forward-looking statements. Except as required by law,
      we
      undertake no obligation to publicly release the result of any revision of these
      forward-looking statements to reflect events or circumstances after the date
      they are made or to reflect the occurrence of unanticipated events.




20





**ITEM
      2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS**





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





**Overview**





In
      conjunction with a change of control transaction completed during October 2005,
      we: (i) discontinued our former business model; (ii) adopted a new business
      strategy focused on building a global transportation and supply chain management
      company; (iii) changed our name to “Radiant Logistics, Inc.” to, among other
      things, better align our name with our new business focus; and (iv) completed
      our first acquisition within the logistics industry.




We
      accomplished the first step in our new business strategy by completing the
      acquisition of Airgroup effective as of January 1, 2006. Airgroup is a
      Seattle-Washington based non-asset based logistics company providing domestic
      and international freight forwarding services through a network of exclusive
      agent offices across North America. Airgroup services a diversified account
      base
      including manufacturers, distributors and retailers using a network of
      independent carriers and international agents positioned strategically around
      the world.





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





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





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




Our
      transportation revenue represents the total dollar value of services we sell
      to
      our customers. Our cost of transportation includes direct costs of
      transportation, including motor carrier, air, ocean and rail services. We act
      principally as the service provider to add value in the execution and
      procurement of these services to our customers. Our net transportation revenue
      (gross transportation revenue less the direct cost of transportation) is the
      primary indicator of our ability to source, add value 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.




21




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




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





**Results
      of Operations**





***For
      the three months ended September 30, 2007 (actual and unaudited) and September
      30, 2006 (actual and unaudited)***




We
      generated transportation revenue of $25.6 million and $14.4 million and net
      transportation revenue of $8.4 million and $5.0 million for the three months
      ended September 30, 2007 and 2006 respectively. Net income was $59,000 for
      the
      three months ended September 30, 2007 compared net income of $160,000 for the
      three months ended September 30, 2006.





We
      had
      adjusted earnings before interest, taxes, depreciation and amortization (EBITDA)
      of $427,000 and $398,000 for three months ended September 30, 2007 and 2006,
      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 goodwill,
      leasehold improvements and other intangible assets. We then further adjust
      EBITDA to exclude costs related to share based compensation expense and other
      non-cash charges consistent with the financial covenants of our credit facility.
      While management considers EBITDA and adjusted EBITDA useful in analyzing our
      results, it is not intended to replace any presentation included in our
      consolidated financial statements.




22





Three
                months ended
              September
                30,
            
            Change2007
            
            2006
            
            Amount
            
            PercentNet
                income
            
            $
            88
            
            $
            160
            
            $
            (72
            )
            
            -45.0
            %Income
                tax expense (benefit)
            
            
            (8
            )
            
            2
            
            
            (10
            )
            
            -500.0
            %Interest
                expense - net
            
            
            25
            
            
            5
            
            
            19
            
            
            380.0
            %Depreciation
                and amortization
            
            
            240
            
            
            186
            
            
            54
            
            
            29.0
            %EBITDA
                (Earnings before interest, taxes, depreciation and
                amortization)
            
            $
            345
            
            $
            353
            
            $
            (9
            )
            
            -2.5
            %Share
                based compensation and other non-cash costs
            
            
            82
            
            
            45
            
            
            37
            
            
            82.2
            %Adjusted
                EBITDA
            
            $
            427
            
            $
            398
            
            $
            29
            
            
            7.0
            %





*The
      following table summarizes September 30, 2007 (actual and unaudited) and
      September 30, 2006 (actual and unaudited) transportation revenue, cost of
      transportation and net transportation revenue (in thousands):*




Three
                months ended
              September
                30,
            
            Change2007
            
            2006
            
            Amount
            
            PercentTransportation
                revenue
            
            $
            25,557
            
            $
            14,417
            
            $
            11,140
            
            
            77.3
            %Cost
                of transportation
            
            
            17,116
            
            
            9,423
            
            
            7,639
            
            
            81.1
            %Net
                transportation revenue
            
            $
            8,441
            
            $
            4,994
            
            $
            3,447
            
            
            69.0
            %*Net
                transportation margins*
            
            
            33.0
            %
            
            34.6
            %




Transportation
      revenue was $25.6 million for the three months ended September 30, 2007, an
      increase of 77.3% over total transportation revenue of $14.4 million for the
      three months ended September 30, 2006. Domestic transportation revenue increased
      by 100.4% to $17.1 million for the three months ended September 30, 2007 from
      $8.5 million for the three months ended September 30, 2006. The increase was
      primarily due to increased volume handled by us over 2006. International
      transportation revenue increased by 43.6% to $8.4 million for the three months
      ended September 30, 2007 from $5.9 million for the comparable prior year period,
      mainly attributed to increased air and ocean import freight volume.





Cost
      of
      transportation increased to 67.0% of transportation revenue for the three months
      ended September 30, 2007 from 65.5% of transportation revenue for the three
      months ended September 30, 2006. This reflects increased international volumes
      which historically have higher transportation costs as a percentage of
      revenue.





Net
      transportation margins decreased to 33.0% of transportation revenue for the
      three months ended September 30, 2007 from 34.6% of transportation revenue
      for
      the three months ended September 30, 2006 as a result of factors described
      above.




23





*The
      following table compares certain September 30, 2007 (actual and unaudited)
      and
      September 30, 2006 (actual and unaudited) condensed consolidated statement
      of
      income data as a percentage of our net transportation revenue (in
      thousands):*





Three
                months ended September 30,2007
            
            2006
            
            ChangeAmount
            
            Percent
            
            Amount
            
            Percent
            
            Amount
            
            PercentNet
                transportation revenue
            
            $
            8,441
            
            
            100.0
            %
            $
            4,994
            
            
            100.0
            %
            $
            3,447
            
            
            69.0
            %Agent
                commissions
            
            
            5,852
            
            
            69.3
            %
            
            3,727
            
            
            74.6
            %
            
            2,125
            
            
            57.0
            %Personnel
                costs
            
            
            1,547
            
            
            18.3
            %
            
            507
            
            
            10.1
            %
            
            1,040
            
            
            205.1
            %Other
                selling, general and administrative
            
            
            695
            
            
            8.2
            %
            
            406
            
            
            8.1
            %
            
            289
            
            
            71.2
            %Depreciation
                and amortization
            
            
            240
            
            
            2.8
            %
            
            186
            
            
            3.8
            %
            
            54
            
            
            29.0
            %Total
                operating costs
            
            
            8,334
            
            
            98.7
            %
            
            4,826
            
            
            96.6
            %
            
            3,508
            
            
            72.7
            %Income
                from operations
            
            
            107
            
            
            1.3
            %
            
            168
            
            
            3.4
            %
            
            (61
            )
            
            -36.3
            %Other
                expense - net
            
            
            (45
            )
            
            -0.5
            %
            
            (6
            )
            
            -0.2
            %
            
            (39
            )
            
            NMIncome
                before income taxes andminority
                interests
            
            
            62
            
            
            0.7
            %
            
            162
            
            
            3.2
            %
            
            (100
            )
            
            -62.0
            %Income
                tax expense (benefit)
            
            
            (8
            )
            
            -0.1
            %
            
            2
            
            
            0.0
            %
            
            (10
            )
            
            -500.0
            %Income
                before minority interests
            
            
            70
            
            
            0.8
            %
            
            160
            
            
            3.2
            %
            
            (90
            )
            
            -56.3
            %Minority
                interests
            
            
            18
            
            
            -0.2
            %
            
            -
            
            
            -
            
            
            18
            
            
            NMNet
                income
            
            $
            88
            
            
            1.0
            %
            $
            160
            
            
            3.2
            %
            $
            (72
            )
            
            -45.0
            %




Agent
      commissions were $5.9 million for the three months ended September 30, 2007,
      an
      increase of 57.0% from $3.7 million for the three months ended September 30,
      2006. Agent commissions as a percentage of net transportation revenue decreased
      to 69.3% for three months ended September 30, 2007 from 74.6% for the comparable
      prior year period as a result of the mix of domestic and international
      transportation.





Personnel
      costs were $1,547,000 for the three months ended September 30, 2007, an increase
      of 205.1% from $507,000 for the three months ended September 30, 2006. Personnel
      costs as a percentage of net transportation revenue increased to 18.3% for
      three
      months ended September 30, 2007 from 10.2% for the comparable prior year period
      primarily as a result of the increased head-count associated with operations
      in
      Detroit.





Other
      selling, general and administrative costs were $695,000 for the three months
      ended September 30, 2007, an increase of 71.2% from $406,000 for the three
      months ended September 30, 2006. As a percentage of net transportation revenue,
      other selling, general and administrative costs increased to 8.2% for three
      months ended September 30, 2007 from 8.1% for the comparable prior year period.
      The $695,000 in other selling, general and administrative costs is net of
      $393,000 in expenses associated with the Detroit operations which we recorded
      as
      an asset on our balance sheet which the we will offset against future payments
      to be made for the acquired assets.




24





Depreciation
      and amortization costs were approximately $240,000 and $186,000 for the three
      months ended September 30, 2007 and 2006 respectively. Depreciation and
      amortization as a percentage of net transportation revenue decreased for three
      months ended September 30, 2006 to 2.8% from 3.7% for the same period last
      year.





Income
      from operations was $107,000 for the three months ended September 30, 2007
      compared to income from operations of $168,000 for the three months ended
      September 30, 2006.





Net
      income was $88,000 for the three months ended September 30, 2007, compared
      to
      net income of $160,000 for the three months ended September 30,
      2006.




**Liquidity
      and Capital Resources**





Effective
      January 1, 2006, we acquired 100 percent 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 in cash due on the two-year anniversary
      of the closing; (iii) as amended, an additional base payment of $0.6 million
      payable in cash with $300,000 payable on June 30, 2008 and $300,000 payable
      on
      January 1, 2009; (iv) a base earn-out payment of $1.9 million payable in Company
      common stock over a three-year earn-out period based upon Airgroup achieving
      income from continuing operations of not less than $2.5 million per year and
      (v)
      as additional incentive to achieve future earnings growth, an opportunity to
      earn up to an additional $1.5 million payable in Company common stock at the
      end
      of a five-year earn-out period (the “Tier-2 Earn-Out”). Under Airgroup’s Tier-2
      Earn-Out, the former shareholders of Airgroup are entitled to receive 50% of
      the
      cumulative income from continuing operations in excess of $15,000,000 generated
      during the five-year earn-out period up to a maximum of $1,500,000. With respect
      to the base earn-out payment of $1.9 million, i n
      the
      event there is a shortfall in income from continuing operations, the earn-out
      payment will be reduced on a dollar-for-dollar basis to the extent of the
      shortfall. Shortfalls may be carried over or carried back to the extent that income
      from continuing operations in
      any
      other payout year exceeds the $2.5 million level. Through the most recent
      earn-out period ended June 30, 2007, the former shareholders of Airgroup earned
      $214,000 in base earn-out payments.




Assuming
      minimum targeted earnings levels are achieved, the following table summarizes
      our contingent base earn-out payments related to the acquisition of Airgroup
      for
      the fiscal years indicated based on results of the prior year (in thousands) (1) :


**2009**
            
            
            **2010**
            
            
            **Total**Earn-out
                payments:Cash
            
            $
            —
            
            $
            —
            
            $
            —Equity
            
            
            633
            
            
            634
            
            
            1,267Total
                potential earn-out payments
            
            $
            633
            
            $
            634
            
            $
            1,267Prior
                year earnings targets (income from continuing operations)(2)Total
                earnings actual and targets
            
            $
            2,500
            
            $
            2,500
            
            $
            5,000Earn-outs
                as a percentage of prior year earnings targets:Total
            
            
            25.3
            %
            
            25.3
            %
            
            25.3
            %




25




In
      preparation for, and in conjunction with, the Airgroup transaction, we secured
      financing proceeds through several private placements of our common stock to
      a
      limited number of accredited investors as follows:




**Date**
            
            **Shares
                Sold**
            
            **Gross
                Proceeds**
            
            **Price
                Per Share**●
                October 2005
            
            
            2,272,728
            
            $
            1,000,000
            
            $
            0.44●
                December 2005
            
            
            10,098,934
            
            $
            4,400,000
            
            $
            0.44●
                January 2006
            
            
            1,009,093
            
            $
            444,000
            
            $
            0.44●
                February 2006
            
            
            1,446,697
            
            $
            645,000
            
            $
            0.44





Net
      proceeds for the above were $986,222, $4,153,150 (net of $63,153 of costs
      arising in 2006), $441,637 and $640,022 respectively.





In
      February 2007, our
      $10
      million revolving credit facility (Facility) was extended into 2009 with more
      favorable terms to the Company. The
      Facility is collateralized by our accounts receivable and other assets of the
      Company and our subsidiaries. Advances under the Facility are available to
      fund
      future acquisitions, capital expenditures or for other corporate purposes.
      Borrowings under the facility bear interest, at the our option, at the Bank’s
      prime rate minus .15% to 1.00% or LIBOR plus 1.55% to 2.25%, and can be adjusted
      up or down during the term of the Facility based on our performance relative
      to
      certain financial covenants. The Facility provides for advances of up to 80%
      of
      our eligible accounts receivable.





As
      of
      October 31, 2007, we had approximately $1.7 million outstanding under the
      Facility and we had eligible accounts receivable sufficient to support
      approximately $5.9 million in borrowings. The terms of the Facility are subject
      to certain financial and operational covenants which may limit the amount
      otherwise available under the Facility. The first covenant limits funded debt
      to
      a multiple of 3.00 times our consolidated EBITDA measured on a rolling four
      quarter basis (or a multiple of 3.25 at a reduced advance rate of 75.0%). The
      second financial covenant requires us to maintain a funded debt to EBDITA ratio
      of 3.25 to 1.0. The third financial covenant requires us to maintain a basic
      fixed charge coverage ratio of at least 1.1 to 1.0. The fourth financial
      covenant is a minimum profitability standard that requires us 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 the our historical business and acquisition model, (iv)
      after
      giving effect for the funding of the acquisition, the 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 we may need to achieve our strategic objectives.





26





Net
      cash
      used by operating activities for three months ended September 30, 2007 was
      $2.5
      million compared to net cash provided by operating activities of $1.1 million
      for the three months ended September 30, 2006. The change was driven primarily
      by an approximate $2.5 million increase in accounts receivable due to delay
      in
      cash collections and difficulty in servicing existing and new customers caused
      by the garnishment action that was initiated against the customers serviced
      in
      Detroit. The garnishment action was ultimately brought to a stand still in
      September 2007 as the result of the letter of credit posted by Mass Financial.





Cash
      used
      for investing for three months ended September 30, 2007, was $169,000 related
      primarily to the upgrade of our SAP accounting system compared to $75,000 in
      purchases of property and equipment for the three months ended September 30,
      2006.





Net
      cash
      provided by financing activity for three months ended September 30, 2007, was
      $2.3 million in advances under our credit facility compared to net cash used
      of
      602,000 used to pay down the credit facility for the same period in 2006.





Non-cash
      financing activities for the three months ended September 30, 2006, consisted
      of
      the Company issuing 250,000 shares of our common stock, at $1.01 per share,
      in
      exchange for training materials.





In
      November 2007 **,** we
      completed a restructured transaction with Mass to acquire the Purchased
      Assets.


As
      restructured, the purchase price has been reduced to $1.56 million, consisting
      of cash of $560,000 and a $1.0 million credit in satisfaction of indemnity
      claims asserted by the Company arising from its interim operation of the
      Purchased Assets since May 22, 2007. Of the cash component of the transaction,
      $100,000 was paid in May of 2007, $265,000 was paid at closing and a final
      payment of $195,000 is to be paid in November of 2008, subject to off-set of
      up
      to $75,000 for certain qualifying expenses incurred by the Company.





During
      the early portion of fiscal 2008, our cash flow was adversely affected as a
      result of the garnishment proceeding instituted by a Stonepath judgment creditor
      which temporarily frustrated our ability to collect outstanding customers
      receivables and service new and existing customers. For the period from May
      22,
      2007 through September 30, 2007, while operating the Purchased Assets under
      the
      MSA with Mass, we incurred an aggregate of $588,000 of reimbursable operating
      expenses (of which approximately $392,000 were incurred in the quarter ended
      September 30, 2007). These expenses were, to a large extent, influenced by
      the
      decrease in revenue caused by the garnishment proceedings, and in any event,
      were subject to indemnification obligations that were covered within our
      restructured closing with Mass. Subsequent to September 30, 2007, the
      garnishment proceeding was brought to a standstill. While operating the
      Purchased Assets under the MSA we have exited certain low margin business and
      secured additional new business. While we believe we have secured a profitable
      core group of customers from which to operate in Detroit going forward, we
      may
      be required to make further cash outlays in the launch of our automotive
      services group which would require increased draws against our
      Facility.





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





**Off
      Balance Sheet Arrangements**





As
      of
      September 30, 2007, 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.





27




**Critical
      Accounting Policies**





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





We
      follow
      the provisions of Statement of Financial Accounting Standards ("SFAS") No.
      142,
      Goodwill and Other Intangible Assets. SFAS No. 142 requires an annual impairment
      test for goodwill and intangible assets with indefinite lives. Under the
      provisions of SFAS No. 142, 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. In the future, we will perform
      our annual impairment test during our fiscal fourth quarter unless events or
      circumstances indicate an impairment may have occurred before that
      time.





Acquired
      intangibles consist of customer related intangibles and non-compete agreements
      arising from our acquisitions. Customer related intangibles will be amortized
      using accelerated methods over approximately 5 years and non-compete agreements
      will be amortized using the straight line method over a 5 year
      period.





We
      follow
      the provisions of SFAS No. 144, Accounting for the Impairment or Disposal of
      Long-Lived Assets, which establishes accounting standards for the impairment
      of
      long-lived assets such as property, plant and equipment and intangible assets
      subject to amortization. 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 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.





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. In accordance with Emerging Issues Task Force ("EITF") 91-9 "Revenue
      and Expense Recognition for Freight Services in Process", revenue from freight
      forwarding and export services is recognized at the time the freight is tendered
      to the direct carrier at origin, and direct expenses associated with the cost
      of
      transportation are accrued concurrently. These
      accrued purchased transportation costs are estimates 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 to reflect differences between the
      original accruals and actual costs of purchased transportation.




28





We
      recognize revenue on a gross basis, in accordance with EITF 99-19, "Reporting
      Revenue Gross versus Net", as a result of the following: We are the primary
      obligor responsible for providing the service desired by the customer and are
      responsible for fulfillment, including the acceptability of the service(s)
      ordered or purchased by the customer. We, at our sole discretion, set the prices
      charged to our customers, and are not required to obtain approval or consent
      from any other party in establishing our prices. We have multiple suppliers
      for
      the services we sell to our customers, and have 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, we determine the nature, type,
      characteristics, and specifications of the service(s) ordered by the customer.
      We also assume credit risk for the amount billed to the customer.




**Item
      3. Quantitative and Qualitative Disclosures About Market
      Risk.**




Our
      exposure to market risk for changes in interest rates relates primarily to
      our
      short-term cash investments and its line of credit. We are averse to principal
      loss and ensure the safety and preservation of its invested funds by limiting
      default risk, market risk and reinvestment risk. The Company invests its excess
      cash in institutional money market accounts. We do not use interest rate
      derivative instruments to manage its exposure to interest rate changes. If
      market interest rates were to change by 10% from the levels at September 30,
      2007, the change in interest expense would have had an immaterial impact on
      our
      results of operations and cash flows.




**Item
      4.**  **Controls
      and Procedures.**





**Evaluation
      of disclosure controls and procedure**





An
      evaluation of the effectiveness of our "disclosure controls and procedures"
      (as
      such term is defined in Rules 13a-15(e) or 15d-15(e) of the Securities Exchange
      Act of 1934, as amended (the "Exchange Act") as of September 30, 2007 was
      carried out by our management under the supervision and with the participation
      of our Chief Executive Officer ("CEO")/Chief Financial Officer ("CFO"). Based
      upon that evaluation, our CEO/CFO concluded that, as of the end of the period
      covered by this Annual Report, 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 were no changes to our
      internal control over financial reporting during the fiscal quarter ended
      September 30, 2007 that materially affected, or are reasonably likely to
      materially affect, the Company's internal control over financial reporting.





29




**PART
      II. OTHER INFORMATION**




**Item
      1. Legal Proceedings.**




From
      time
      to time, our operating subsidiary, Airgroup, is involved in legal matters or
      named as a defendant in legal actions arising in its ordinary course of
      business. Management believes that these matters will not have a material
      adverse effect on our financial statements.





*Mass
      Proceeding*





On
      or
      about September 28, 2007, Mass Financial Corp. (“Mass”) commenced an action
      against the Company and Radiant Logistics Global Services, Inc. (“RLGS”) in the
      Federal District Court for the Western District of the State of Washington
      at
      Seattle. In its complaint, Mass has sought specific performance, injunctive
      relief and damages against the Company and RLGS, seeking to compel a closing
      under an unexecuted draft amendment to the Asset Purchase Agreement between
      the
      parties. In November of 2007, in connection with the completion of a
      restructured transaction, Mass has agreed to file with the Court a stipulation
      and order for dismissal of the Lawsuit with prejudice and without an award
      of
      attorney’s fees or costs to any party.




**Item
      5. Other Information.**





*Acquisition
      of Automotive Assets in Detroit*





The
      information set forth below is included herewith for the purpose of providing
      the disclosure required under “Item 1.01- Entry into a Material Definitive
      Agreement” of Form 8-K.





On
      November 11, 2007 **,** we
      entered into an amendment (the “Amendment”) to the Asset Purchase Agreement
      dated May 21, 2007 by and between Mass Financial Corporation (“Mass”) and our
      wholly-owned subsidiary, Radiant Logistics Global Services, Inc. (“RLGS”).
      Pursuant to the Amendment, which was effective as of November 1, 2007, we
      completed a restructured transaction with Mass to acquire certain assets
      formerly used in the operation of the automotive division of Stonepath Group,
      Inc. (the “Purchased Assets”).





Under
      the
      terms of the initial agreement, the transaction was valued at up to $2.75 million. As restructured, the purchase
      price has been reduced to $1.56 million, consisting of cash of $560,000 and
      a
      $1.0 million credit in satisfaction of indemnity claims asserted by us arising
      from the interim operation of the Purchased Assets since May 22, 2007. Of the
      cash component of the transaction, $100,000 was paid in May of 2007, $265,000
      was paid at closing and a final payment of $195,000 is to be paid in November
      of
      2008, subject to off-set of up to $75,000 for certain qualifying expenses
      incurred by us and set off to satisfy and indemnification claims under the
      Amendment. In connection with the completion of a restructured transaction,
      Mass
      filed with the court a stipulation and order for dismissal of the pending
      lawsuit with prejudice and without an award of attorney’s fees or costs to any
      party.




The
      foregoing description of the Amendment is qualified in its entirety by reference
      to the complete text of the Amendment which is filed as Exhibit 10.1 to this
      report and incorporated herein by this reference.




**Item
      6. Exhibits**




**Exhibit**
              **No.**
            
            **Exhibit**
            
            **Method
                of**
              **Filing**10.1
            
            Amendment
                to Asset Purchase Agreement effective the 1st day of November, 2007,
                by
                and between Mass Financial Corp. and Radiant Logistics Global Services,
                Inc., for the purpose of amending the Asset Purchase Agreement dated
                May
                21, 2007.
            
            Filed
                herewith31.1
            
            Certification
                by Principal Executive Officer and Principal Financial Officer pursuant
                to
                Section 302 of the Sarbanes-Oxley Act of 2002
            
            Filed
                herewith32.1
            
            Certification
                by the Principal Executive Officer and Principal Financial Officer
                Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002
            
            Filed
                herewith99.1
            
            Press
                Release dated November 14, 2007
            
            Filed
              Herewith





30





SIGNATURES




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




RADIANT
                LOGISTICS, INC.Date:
                November 14, 2007
            
            /s/
                Bohn H. CrainBohn
                H. Crain
              Chief
                Executive Officer




31




**EXHIBIT
      INDEX**




**Exhibit**
              **No.**
            
            **Exhibit**10.1
            
            Amendment
                to Asset Purchase Agreement effective the 1st day of November, 2007,
                by
                and between Mass Financial Corp. and Radiant Logistics Global Services,
                Inc., for the purpose of amending the Asset Purchase Agreement dated
                May
                21, 2007.31.1
            
            Certification
                by Principal Executive Officer and Principal Financial Officer pursuant
                to
                Section 302 of the Sarbanes-Oxley Act of 200232.1
            
            Certification
                by Principal Executive Officer/Principal Financial Officer pursuant
                to
                Section 906 of the Sarbanes-Oxley Act of 200299.1
            
            Press
                Release dated November 14 , 2007




32